You saw right through them, didn’t you?

Academic initiatives? The betterment of student-athletes? Fan-friendly schedules? Please. You knew better.

Money, you said, drove the Atlantic Coast Conference to court four Big East schools. Money, you knew, led Miami and Virginia Tech to agree to dance. And money, you fumed, left Syracuse and Boston College at the altar.

You know what? SU Director of Athletics Jake Crouthamel agreed.

‘All the decisions were made from a financial standpoint, based primarily on finances,’ Crouthamel said. ‘It is not cheap to run a Division I-A program like ours.

‘It’s a business. A fairly significant business.’

But money, Crouthamel said, is about more than greed. Money funds student-athlete services like academic support. Money stops him from eliminating sports. And money is what many athletic departments are hurting for most.

More than two months after Miami and Virginia Tech bolted to the ACC, Syracuse and the remaining 12 Big East schools stand on dubious financial grounds. Simply put, to continue operating effectively, they need money.

Where is it going to come from? Right now, your guess is as good as theirs.

Two problems

Your first lesson in college sports economics: Most programs lose money.

Sixty-five percent of Division I athletic departments break even or worse. Even winners on the field lose in the checkbook. Two seasons ago, Miami won the football national championship but reportedly lost $1.5 million.

The problem is two-fold: The growing popularity of college sports has touched off a ‘collegiate arms race’ that threatens to bring economic destruction to some schools, and the cost of Title IX compliance continues to grow, said Dennis Howard, a professor of sports marketing at Oregon.

‘A lot of it is self-inflicted,’ Howard said. ‘Programs are spending at enormous rates.’

Universities – including Connecticut and West Virginia in the Big East – have poured money into new facilities in hopes of attracting fans and top recruits. But costs have become so exorbitant that expenses are outweighing returns, Howard said.

Title IX – legislation requiring schools to strive toward gender equity in sports – has stripped some universities of money-making men’s programs and replaced them with non-revenue women’s programs, Howard said.

‘The general population thinks all of us here at the university are rolling in cash,’ Crouthamel said.

‘They think, ‘I bring my wife, son and daughter to a football game, and I pay exorbitant prices for a ticket’ – by the way, we’re seventh lowest in the Big East – ‘and these high prices for a hot dog. After it’s all done, I’ve spent $100 or $200, and that’s all profit to the university. There are no expenses. They’re rolling in dough. Everything is profit.’ ‘

Like most schools, SU relies on ticket sales as one of its most significant revenue sources, Crouthamel said.

But the athletic department receives virtually no money from concessions, parking or other Carrier Dome amenities, Crouthamel said, because some of those services are contracted out.

Large private schools, like Syracuse and Miami, burn at least $8 to $10 million in scholarships, salaries and travel expenses, Crouthamel said.

‘Now take that right off the top,’ he said. ‘You can’t make it.’

Two solutions

All of that, of course, is not to say athletic programs are poverty-stricken. Fat conference contracts help trump some expenses.

Aside from ticket sales, athletic departments rely heavily on two revenue sources from conference affiliations: television contracts, and, for six lucky conferences, lucrative affiliations with the Bowl Championship Series.

The Big East’s future in both is questionable.

Its football television contract with ABC Sports and ESPN expires in 2007, but ABC has the right to renegotiate next season when Miami and Virginia Tech leave.

Men’s basketball-wise, the Big East should be stable. The NCAA has an 11-year, $6 billion contract with CBS, and Miami and Virginia Tech’s moves should not drastically affect the Big East’s regional deal. But the football contract generates far more revenue.

The Big East will certainly lose television money, Crouthamel said, and even if the conference adds two football schools, the hit could be significant.

‘You find out when you get back to the table with these people what the damage really is,’ Crouthamel said.

Big East schools can probably weather a watered-down football television contract, but only if the conference maintains its position in the BCS, a much more significant revenue source supplying about $16 million annually to the conference.

‘If we find out we’re in the BCS, we’re going to make it,’ Crouthamel said.

But the Big East’s position there is even more uncertain. The BCS agreement expires in 2005. After that, three things could happen: the BCS could continue with the Big East as a member, the BCS could continue without the Big East or the BCS could cease to exist.

‘My opinion is if the BCS remains in existence, the Big East drops out,’ said professor Daniel Fulks, a Transylvania (Ky.) accounting professor who prepares the NCAA’s revenues and expenses report.

In Indianapolis this summer, Fulks met with a major conference commissioner during a committee meeting. Casually, the commissioner mentioned five BCS conferences, even though there are currently six.

Fulks asked him, ‘Aren’t you jumping the gun? Or have you already eliminated the Big East?”

The commissioner laughed.

Two philosophies

The Big East and ACC differ in how they distribute BCS and television revenues to their individual schools, and Miami left the Big East largely because of those differences.

Think of each conference’s revenue as a pizza.

The ACC gives one slice to each school, regardless of performance. In 2001-02, each piece was reportedly worth $9.7 million.

The Big East, meanwhile, gives one smaller slice to each school, reportedly worth about $1.5 million to $2 million. But in the Big East, schools can earn toppings through performance incentives.

For instance, according to reports, Miami earns an extra $4 million for its BCS berth. Universities also gain incentives through national-television appearances and other bowl games.

‘The incentive system rewards those who actually generate the money,’ Fulks said. ‘The even split is better for the have-nots. It’s socialism at its finest, whereas the incentive system is more like capitalism.

‘Do you want to reward those who actually generate the revenue? Or do you want to hand out to the poor?’

Even though the Big East system has rewarded Miami because of its strong football program – and even though the Big East offered Miami a reported five-year, $45 million deal to stay – President Donna Shalala and Athletics Director Paul Dee favored the long-term stability of the ACC’s system.

‘It wasn’t the money, because frankly the Big East made a better financial offer over the next five years,’ Shalala told reporters in June. ‘It was a sense of the future.’

The Big East’s future may be a system closer to the ACC’s. Though Crouthamel believes the Big East will keep incentives, it will lower the incentives and raise the base distributions.

In other words, there are fewer toppings, but each team starts with extra cheese.

Infinite possibilities

For Syracuse and the rest of the Big East, the only thing certain right now is uncertainty, and it’s likely to last until the BCS and television contracts have been settled.

Should the Big East add two football-playing schools and remain in the BCS, Syracuse could operate without any noticeable changes, even if television revenues were stifled, Crouthamel said.

‘It will be apparent budget-wise,’ Crouthamel said. ‘But it won’t be apparent to you or anyone else.’

If the Big East loses its BCS position, changes could be sweeping. The Big East could disintegrate, spawning an earthquake that would dramatically shake the college sports landscape. Or the Big East could operate as a virtual mid-major conference. Or it could fracture into two conferences, with the football schools separating themselves.

‘I don’t know where the Big East ends up,’ said Fulks, the professor who compiles the NCAA revenues and expenses report. ‘Who do you have? Boston College and Pittsburgh? That’s not BCS material. The Big East should probably go away, and remaining members should align themselves with other conferences.’

But Crouthamel has been steadfast in his desire to see the Big East rebuilt into a national power.

You laughed at him for that. A Big East without its top football schools? No chance, you said.

This time, Crouthamel disagreed.

‘What you’re saying is we’re hanging on Virginia Tech and Miami’s coattails,’ Crouthamel said. ‘Well, we don’t have their coattails anymore. So let’s the rest of us step up. That’s what we’re going to do. There’s no alternative for us.’

Published on September 16, 2003 at 12:00 pm