Why Mediocre College Football Teams Make More TV Money Than Notre Dame

The Irish’s independence might be enviable in the midst of conference chaos, but those Purdue-Minnesota matchups are more lucrative than you think. posted on

Seen as recently as October as a declining power whose on-field performance was gradually choking off once-strong TV ratings, Notre Dame’s football team put together a 12-0 campaign at the perfect time. As new TV deals and the sport’s forthcoming playoff provide revenue windfalls, the re-established and still-independent Irish will benefit significantly from the rising tide. Maintaining their standalone status (while moving to the ACC in their other sports) also has allowed the Irish to ensure their schedules won’t have to feature Tulane or Houston anytime soon.

Notre Dame’s resurgence — and the Big Ten’s penny-wise-but-possibly-pound-foolish decision to add Maryland and Rutgers — ignited a discussion in BuzzFeed’s office, where rivalry banter between a Michigan fan and an Ohio State fan led to a serious question: Should either (or both) of those schools consider going it alone, and leave the Big Ten? Would they be better off not having to play (or share money with) the Purdues and Marylands of the world? I was brought in to consult.

Here’s how the numbers break down. Thanks in part to its BCS title game berth, Notre Dame is making about $24 million this year in TV and bowl income. The largest chunk of that is the $15 million they get from NBC for football rights. NBC already has expressed interest in renewing the deal, and however Notre Dame chooses to leverage the situation, there will be a sizable increase in the annual fee. A conservative estimate puts rights for the Irish at $20 million a year starting in 2016. It very well could be higher than that. Meanwhile, they’ll be getting a guaranteed $4 million a season (with the chance for significantly more if they make football’s “final four” or the Orange Bowl) from the playoff system that launches in 2014.

Teams like Michigan (especially) and Ohio State also have the kind of premium brands that, on the surface, would make them viable stand-alone candidates. Michigan currently is the fifth-largest brand in the country; Notre Dame was ninth before this fall’s bounce. Whether either school could approach Notre Dame’s national appeal in terms of a stand-alone TV contract is debatable. But when you look at the numbers, it seems very unlikely they would even want to: In 2012, the Big Ten paid each of its full members $25 million, a million dollars more than Notre Dame made — and their profits are about to go way up.

Contracts for the Big Ten’s first-tier football rights (i.e., the premium games — the rest goes to the Big Ten Network, which is its own huge income stream), championship game and select basketball games will be up for renewal in a few years. It will be the only conference on the market in the next decade, and it’s a mortal lock that the new contracts will pay more than the old. Meanwhile, the new playoff will pay the Big Ten (and three other conferences) a minimum of around $92 million a year. All together, the new playoff system in conjunction with the traditional bowls will pay each Big Ten school somewhere between $7 million and $9 million each season. Notre Dame will have to make the final four or the Orange Bowl a huge percentage of the time to make that much money.

Once all of the new TV contracts are in place, the Big Ten will easily be the nation’s richest conference; even its weaker performers will be swimming in cash. (Note: Notre Dame still makes more in ticket sales and merchandise than, say, Purdue — overall, they cleared $46 million in football profit last year. The question here is whether a team of comparable brand stature could benefit by going indie, and the answer is no, because of TV.) Why does this happen? Largely because conferences’ television “inventory” — i.e., the sheer number of games they provide — has massive value for programmers. Every weekend, Notre Dame plays once. The expanded Big Ten can have up to 14 non-conference games and seven league matchups each weekend. Iowa-Indiana may not look desirable, but it’s 3.5 hours of football that fills a slot that would otherwise have to go to something else — and in the United States, “something else” almost always gets lower ratings than even the most tepid football game.

If the networks simply had a choice between broadcasting Notre Dame and broadcasting Michigan, they might pick Notre Dame. But Michigan is part of a package deal that saves broadcasters the trouble of having to find more programming to put on TV. It’s not just Michigan vs. Notre Dame, it’s “Michigan and six other conference football games” versus “Notre Dame and other lower-rated sports programming.” (Why does the BCS, which doesn’t have a ton of slots to fill, value any given Big Ten team more than Notre Dame? I’m not entirely sure — but what matters for our purposes is simply that this is how the system works. Independents don’t get the same guaranteed money as conference members.)

As it stands, only one other university — top-ranked licensing brand Texas — has been able to parlay its market position and reach into additional stand-alone revenue. And while the ESPN-produced Longhorn Network has been a short-term financial boon for the school (providing them an extra $15 million a year), it’s been considered an execution flop, its distribution limited and its relentless coverage proving irritating to athletes and coaches. It’s hard to imagine another single-school project like this in the near future. (BYU, also currently an independent like the Irish, has its own TV network in about 65 million homes, but the channel is primarily used for religious-based programming by the Church of Jesus Christ of Latter-Day Saints.)

What’s more, there’s no reason that, say, Penn State or Nebraska would be obligated to play a secessionist Michigan or Ohio State. Neither would the Big Ten allow seceding teams to leave their non-football sports in conference, which means having to find another home for those athletes.

In total, independence is a difficult road, even for an elite brand. It’s hard to find any university with both the national appeal and relative lack of current conference revenues to make a move to independence worthwhile. It certainly wouldn’t be anyone in the most lucrative league in the land. Notre Dame’s unsplit pot of gold looks inviting, but in this environment, the better question may be: Why shouldn’t the Irish join the Big Ten?

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