monkey mail december 13 2015

 

Dear GoldRusher,

 

This is a great question and one I always try and break down prior to the New Year’s Six games.  Last year’s article highlighted the multiple ways everyone has paid and tried to mock out what it would look like this year, if last year’s final rankings were in place.

One thing to keep in mind is that this is a 12 year contract and the average reported figures you read about in the media occur in the middle of the contract, e.g. around year six. That’s why these projections are lower than the reported average, it is only year two.   In year eight it will be higher than the average.

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All in all though, we have a much different break out in this year’s rankings than last year, so let’s get to the updated numbers.

When looking at the total revenue paid out to the conferences, the Big Ten is this year’s winner, topping $91 million in revenue.  This is aided by two things: the Rose Bowl isn’t a playoff bowl this year and the Big Ten put three teams in the New Year’s Six (Michigan State, Iowa, and Ohio State).  That was the highest percent of teams from a conference as well.

The Big 12 and SEC tied for second, hauling in nearly $88 million from the Playoff Bowls.  Each conference put one school in the playoff and one school in the Sugar.  The Big 12 edged out the SEC, however, because they put 20% of their conference within the New Year’s Six and had the largest return per school at $8.76 million or nearly $2 million more per school than the next closest conference. 

What I find really interesting though is that the Pac 12, with an 8.33% participation due to Stanford playing in the Rose, makes just $5.5 million less than the Big 12 and SEC.  A year ago you had hordes of people lamenting the death of a conference if they didn’t compete in the playoff for all the money they’d lose.   Well, the Pac 12 schools will take in more from the playoffs than the Big Ten schools, even with only one team representing in a non-playoff, contract bowl. 

This is why you’re not going to see them getting upset if left out and pushing for expanding the playoffs in the near future.  Everyone knows their turn will come when they miss out and, yes, everyone.   If Alabama had another loss or if Notre Dame ran the table this year’s top four would look much different.  However, even when only participating in the conference contract bowl, the Pac 12 still makes money.   Imagine it was the Big 12, they’d still be making $8.2 million per team in the Pac 12’s shoes.

Lastly, we have the ACC.  The numbers are significantly lower than the other conferences, even with Clemson in the playoffs.   This is the opposite of what you’d expect, especially from our recent discussion of the Pac 12.  However, this is the ACC’s lowest payout year because the Orange Bowl, which pays the ACC around $27.5 million on average, is used as a Playoff Bowl.  

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In those years, no conference receives revenue from their contract bowl, which was the case last year when the Sugar and Rose were playoff bowls.  What is very noticeable, when looking at the difference between last year and this year above, is that the ACC is significantly behind the other four Power Five conferences in terms of revenue from the Playoff system, due to two factors:

 – The Orange Bowl, while better than nothing, is 31% less valuable than the Rose/Sugar.  The decision for the SEC to partner with the Big 12 instead of the ACC will amount to more than $100 million that the Big 12 will earn, as a conference, over the ACC within the next decade.

 – They simply have too many teams.  Last year was the lowest payout year the Big 12 would have had throughout the entire contract with no team represented in the playoff and no Sugar Bowl.  Even with that it matched the ACC’s per team payout when the ACC had all of its revenue streams paying out with a team in the Playoff and the contract game with the Orange. 

Less value divided by more people has the ACC at a disadvantage.

You can also see from this list the value the Orange truly has, keeping the Big Ten and SEC fairly even financially.  The SEC played in the Orange last year with the contract between them, the Big Ten and the ACC.  In a year without the Sugar, and with three teams in the New Year’s Six, they only made $10 million less than this year, with the Sugar and two teams represented. 

We say Power Five a lot, but when you look at the numbers, it is actually the Power Four, plus one.

 

If you have any questions or would like some numbers discussed, contact The Number Monkey via “Ask the Monkey” in our forum, on Twitter @TheNumberMonkey or by email [email protected].

 

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