Notre Dame Football Joined a Conference—For the BCS

Notre Dame joined a conference—for the bowl season—courtesy of the BCS in 2006-07.  Now that two years of the four-year BCS contract have elapsed, it is time to analyze the results.

BCS Contract Changes for Notre Dame—What Happened

Effective the 2006-2007 bowl season, the Bowl Championship Series expanded their number of bowl games to five by adding a separate National Championship game—10 slots for BCS games.

Notre Dame, with former athletic director Kevin White negotiating, agreed to accept second-place (in a conference) money—$4.5 million—for any BCS bowl appearance.  Previously, Notre Dame received a conference champion’s share, which has since grown to $17 million.

Automatic qualification for Notre Dame was changed from the top six to the top eight.  Qualification for selection remained at the top 12 with nine wins.

If Notre Dame did not go to a BCS bowl, it would receive the equivalent of a Big East non-participating team share—$1.3 million.   

Many ND alumni and fans were immediately upset with this agreement—and rightfully so.  The bowls were pleased to get Notre Dame for one-fourth the cost.

What it meant for Notre Dame, who does not need the $1.3 million per year if it doesn't make the BCS, is this:

• Under the prior agreement, one BCS bowl in four years would be $17 million.

• Under the new agreement, four BCS bowls in four years would be $18 million ($4.5 million x 4).

• Under the new agreement, one BCS bowl in four years would be $8.4 million ($4.5 million + (3 x $1.3 million or $3.9 million)).

Anything fewer than four BCS bowls in four years is less money than one BCS bowl under the prior contract—and that assumes the conference champion’s share does not continue to go up. 

Notre Dame could be ranked number one, higher than any conference champion, play for the national championship, and get the same $4.5 million—second-place money.

In adding the fifth game, the BCS would guarantee at least two at-large spots for second-place BCS conference teams.  With ten spots—minus six automatically going to the conference champions—two of the remaining four could possibly go to a non-BCS team and to Notre Dame—as in 2006-07.  Two more would be available for other BCS teams.

Non-BCS teams—Boise State and Hawaii—have met automatic qualifier status in the first two years of the new rules. Last year, when Notre Dame did not qualify, three spots went to BCS at-large teams.

Of course, if neither ND nor a non-BCS team qualifies, four slots would be open to BCS conference teams.  Under the prior agreement, in 2005-06 with only four BCS games, Penn State and Notre Dame filled the only two at-large slots available.    

In short, the BCS conferences exchanged a negligible change in qualification status to ND for much less money and increased the number of second-place conference teams in BCS bowls

The Notre Dame Impact on a Bowl

Bowl chairmen are first and foremost businessmen.  They recognize Notre Dame will fill bowl seats, bring higher TV ratings and advertising revenue, fill hotels, and please corporate sponsors and community businessmen.  Bowl selections are all about generating revenue.

Last year, ESPN ran a poll of the most popular football teams regionally and nationally.  Notre Dame was the only team in the top five for all regions of the country and finished number one overall. 

TV ratings: Many people will watch a Notre Dame game and root for a loss.  Notre Dame has been to two Fiesta Bowls (2006 and 2001)—which rank first and third in Fiesta Bowl TV rankings, excluding national championship games.

The average TV rating for a Fiesta Bowl when ND participates is 11.8.   Without ND, the average Fiesta Bowl TV rating is 9.225.  The difference is approximately 2.7 million households.

Overall, the BCS has had the highest TV ratings in its history in 2005-06 when Notre Dame played.  Ratings tanked last year due to disinterest in uncompelling match ups. 

Notre Dame’s trip to the Sugar Bowl in 2007 was rated the third highest non-championship Sugar Bowl in TV ratings. 

Ticket demand: For the 2006 Fiesta Bowl, Notre Dame received over 45,000 ticket requests for 22,000 tickets.  Notre Dame has a national fan base that is willing to travel.

In comparison, for the 2008 Fiesta Bowl, West Virginia was allotted 17,500 tickets, but sold only 7,981 which included 1,345 guest tickets for coaches and family and two planeloads of band members.  The guest tickets were paid for by the university at $130 per ticket.

Economic Impact on the Community: New Orleans enjoyed an economic impact of $126.7 million from the 2007 Sugar Bowl between Notre Dame and LSU.  Sixty percent of the game attendees stayed at local hotels with an average hotel stay of 2.46 nights.  With LSU playing in their home state, the vast majority of hotel night stays were due to Notre Dame fans for a revenue of $21.02 million.

The Sugar Bowl paid $9 million for ND and LSU, since each received $4.5 million. 

For all these economic impacts, Notre Dame and its fans are hugely attractive to BCS bowls.  For all these reasons, the BCS, with negotiations for a new TV deal beginning in September this year, has a vested interest in maintaining Notre Dame’s partnership.

Possible Resolutions

While the current BCS agreement that established a coalition with the bowls has two years remaining, TV networks negotiating this fall for a four-year agreement will want Notre Dame included.  Weis and his coaching staff are working on a fourth top-10 recruiting class and most of the team are talented freshmen, sophomores, and juniors.

Since Kevin White has now departed for Duke, the new Athletic Director may well have BCS financial decisions at the top of his list.

Some Specific Possible Solutions

1.  All BCS bowl teams receive the same amount.  

     This would equalize any disparities between Notre Dame, non-BCS teams, and conference second-place teams.  While it is highly unlikely that a non-BCS team or a second-place conference team would play for a national championship, it is possible Notre Dame could in the near future.

2.  Notre Dame’s share could be changed back to a conference champion’s share.

3.  A Sliding Scale for Notre Dame. 

     If ND finishes in the top six, higher than at least one conference champion, they would receive a champion’s share.  If ND finishes from seven to 12, they would receive a second-place share.

     This would mimic the results from 2005 when Notre Dame finished sixth, ahead of two conference champions, receiving a champion's share under the prior agreement—and also 2006 when ND finished 11^th  and received a second-place share under the new agreement

Outside possiblities:

1.  The bowls and TV networks negotiate independently of the BCS with a separate Notre Dame.     

2.  A non-BCS bowl decides to offer Notre Dame significantly more money than the current BCS contract provides.

These solutions would appeal to all the free market enterprise proponents.

Arguments

The argument has been made that Notre Dame, since it does not have to share its BCS money with a conference, should not net more money than conference champions who go to the same bowls.  Notre Dame also cannot share expenses.

Here are the NCAA Postseason Financials.  ND's net profit from the 2007 Sugar Bowl was $1.6 million—slightly more than the share if they had not gone to a BCS bowl, or 1.13% of total bowl profits that year.

In the first year of the contract (2006-07 bowl season when ND went to the Sugar Bowl), total payouts to conferences and ND increased by $26 million over the previous year.  Conference championship shares increased a total of $18 million (from $14 million to $17 million—$3 million x 6) as Notre Dame’s share decreased by $9.5 million.

Since $9 million went to the that year's non-BCS qualifying school, Boise State, the difference in the contracts Notre Dame signed went to the BCS conferences.

The SEC made the most profit that year—$28 million for its twelve teams – or 19% of the total profit.  The Big East made the least - $15 million for 8 teams. 

(From the link above)

Conferences (# of Teams)	Bowl Profit	Avg. profit per team
SEC (12)	$28,387,595	2.37 million
Big Ten (11)	$24,596,178	2.24 mil
Big East (8)	$15,379,427	1.92 mil
Pac 10 (10)	$18,129,063	1.81 mil
Big 12 (12)	$20,337,305	1.69 mil
ACC (12)	$19,561,526	1.63 mil

The “conference share” of $1.3 million that Notre Dame receives if they do not go to a BCS bowl is now less than any BCS conference team’s share.

Conclusion

Since Notre Dame’s involvement in the BCS benefits all, and since the apparent inequities need to be addressed, changes in the current BCS contract would make good business sense.