Expansion Project Vol I
Expansion Project Vol II
ACT II – Part 5
As the Big 12 grows nearer to expanding back to 12 teams I’m going to continue looking at all of the factors to be considered in expansion candidates. This is just one piece of a much larger project analyzing each possible team in the entire FBS. If this is your first article in the series, I invite you to read back through the rest of the project that has been released over the past year.
Back when looking at the overall finances of the FBS and its conferences, three key points tended to stand out when evaluating the financial health of an athletic department; Total Revenue, Profit After Subsidies (P.A.S.), and Fan Support.
Revenue and Profit after Subsidies were reviewed separately as I started building a financial health scorecard for every school within the FBS. The findings showed that numerous expansion candidates have severe financial strains placed upon them to even attempt to compete with the Power Five teams, let alone with the financial juggernauts of college sports.
The financial health of an athletic department doesn’t reply solely on dollars, however, because the greatest contributor to the rise or fall of an athletic department’s riches is the fan support the university receives. This is generally tied with two key areas we’ve previously discussed; performance and alumni. Alumni tend to serve as the fervent back bone of any fan base, rising more quickly and falling more slowly than a casual fan. Performance, however, increases the reach a school has into fans who may never have stepped on campus. Not all Duke fans went to school there, most just like that they are consistently competitive in men’s basketball. Along that same vein, most Notre Dame fans support the Irish football team and may have for generations, based off the success the school had in the early days of the sport, not because they are alumni.
Most of the value of the casual fan shows up in merchandising, which was analyzed within the branding segment of the Expansion Project. This measures who buys logoed apparel, flags, coffee mugs, etc and who watches the team on television. Sometimes this group is called “T-Shirt Fans”. However this piece pales in comparison to ticket sales. It is one thing to drive someone to sit on their couch and watch a single game on television. It is quite another prospect to entice someone to buy season tickets to watch all of the games, in person, perhaps for multiple sports. The athletic departments that sell the most tickets tend to have a stronger financial future than ones who subsidizes athletics due to poor attendance.
Last year Ohio State made $167 million in athletic department revenue, the largest segment of that, $63 million, was ticket sales. The University of Texas had a similar figure, selling $63 million in ticket sales, the largest category, on $183 million in total revenue. These mega brands in the college sports world are out pacing their competitors on the field by filling seats. In comparison, both Indiana and Kansas State had $15 million in ticket sales last year. Unlike media rights that tend to be shared, that is a sizable advantage for the larger brands.
It also highlights the key benefit of filling seats, you can control the outcome more closely. If your teams are winning, consistently, seats start to be filled. When demand outstrips supply, you raise ticket prices. When supply outstrips demand, the opposite occurs. Even schools who do not raise the money like the mega brands when it comes to ticket sales have a financial potential energy of sorts if they are filling their stadiums in multiple sports at their current ticket price. Continued winning means higher revenue per seat, which drives more money into the program to support more winning, which increases ticket prices, etc. If you’re not filling seats, however, you cannot raise more income quickly. This could be the difference of an expansion candidate being able to compete in the Big 12 or being punching bag for years to come, stifling their future growth.
Setting the Baseline
The numbers show a vast difference even between schools in Power Five conferences. Outside the mega brands discussed, who don’t really need conferences as much as conferences need them, the remaining schools fall into three main categories:
Large Fan Base: Some schools have very large fan bases, regardless of how much the athletic department charges per ticket. Many schools keep their ticket prices deflated to ensure it doesn’t out price the local market, but at the end of the day, the support is high. Any time someone offers to buy tickets to your events, it is a good thing.
Underutilized Fan Base: These are schools who have respectable numbers, but who either price themselves out of the market or haven’t had the performance at a high enough level to warrant greater fan support.
Apathetic Fan Base: These are schools that, regardless of winning, are not selling many tickets.
To measure the schools within the FBS I looked at three main sports; football and men’s and women’s basketball. Football is the big money sport out there, followed by men’s basketball, so those two had to be compared. Below that women’s basketball provides a few key benefits over the next closest sport, men’s baseball. First, it is fielded by the entire FBS, baseball is not, so women’s basketball has more data points. Second, it competes while school is in session, which leads to more reliable attendance figures than baseball. And, thirdly, the audience demographic for women’s sports is vastly different from men’s basketball and football. While there definitely has some crossover, many are additional fans, indicating a depth to a total fan base, outside just filling massive football stadiums.
The following graph highlights the average attendance per conference for all three sports. Within the Power Five, the SEC leads in football attendance, the Big Ten in basketball attendance, and the Big 12 is strong in all three. While the Pac 12 has slightly more football attendance than the ACC, the ACC crushes the Pac 12 in both basketball figures.
Where the numbers start to drift heavily is after you leave the Power Five. Average attendance for football for the other conferences is nearly half of the big conferences, even if basketball tends to drift off more slowly. This makes some sense considering most basketball arenas only fill 9,000 to 15,000 people, as opposed to football stadiums, which are closer to 50,000 or more. Either way, the ACC struggles to keep up with the SEC in terms of football attendance, it is even more difficult for the teams outside the Power Five to do the same.
While it is interesting to see how the current conference make ups shake it, it is important to note that it is the teams that matter in expansion, not just the conferences. When the Pac 12 expanded with Utah and Colorado, their averages dropped. When the Big Ten expanded with Rutgers and Maryland, their numbers dropped. Before looking at if a team will benefit or be hindered with a move to the Big 12, let’s look at how the Big 12 performs against itself first.
As mentioned previously, the Big 12 does well, on average, from top to bottom in the conference. They don’t lead any of the ratings, but are in the top three in all of them. The bulk of that comes from football. The Big 12 average is nearly the same as the Power Five average, which you’d imagine it would do since the Big 12 is in third place within the Power Five. Outside Kansas, the rest of the league scores more than 70, while all of the state schools score more than 80. Baylor and TCU, while scoring low for total attendance, do fill out their stadiums and, as private universities with smaller enrollment, it makes little sense for them to build giant 100,000 seat venues. Both will likely top out around 50,000. Iowa State should also be making a jump on this list, as these scores haven’t fully taken into effect the increase in seating the Cyclones just finished. If they sell out next year they will jump up near Texas Tech’s range in points, who also just increased capacity.
Within both sets of basketball comparisons we see a juggling of position within the Big 12 and the first indication that, for many schools, fan support is not consistent between sports.
Within men’s basketball Kansas flips to the top of the list, selling out Allen Fieldhouse since probably before it was even built. A consistently sold out Hilton Coliseum follows close behind, only because it has less seats. Four other schools have attendance above the Power Five average. The attendance of the bottom four teams seems odd. I’d expect more from both WVU and Baylor, since both have had success lately, but the attendance for all games has been inconsistent. TCU and Tech will likely remain near the bottom for some time, even with TCU’s hiring of Jamie Dixon away from Pitt.
Surprisingly, it is within women’s basketball attendance where the Big 12 really starts to shine, with 80% of the teams having attendance higher than the Power Five average. This isn’t really going to change the world, women’s basketball isn’t a major revenue sport nor is it going to change the overall financial health of an athletic department. However, as mentioned earlier, it does indicate how deeply a school’s fan base runs. If they are flocking to all of the sports, including women’s basketball, then they are likely attending other non-revenue sports as well.
As you probably noticed, the scoring is weighted so that football, as the major realignment sport, receives a greater share of the total attendance figure than women’s sport. A basketball power will even the score, but never outshine a football power. A school good in both, or all three sports as the case may be here, will rise above schools who excel in only one. And that, at the end of the day, is what we want to measure; the breadth and depth of a university’s fan base.
When we add the three weighted shares up we get the following scores for all of the Big 12 schools. Not surprisingly, Texas and Oklahoma lead the list. Perhaps a bit more surprisingly, Iowa State and Kansas State jump into the next two spots due to their stronger consistency across all sports than the rest of the schools. TCU and Baylor bring up the rear and Kansas makes up for some of its poor football performance in men’s basketball, but not enough to bring it into the top half of the league. It should be noted though that the Jayhawk’s football attendance was so bad that they’d only need to average 50,000 in attendance to make huge jumps in their point total.
What does this tell us? Well, primarily that the closer a school scores to the Power Five or Big 12 average, the more likely they will be to be able to compete, year in and year out, with the rest of the schools. While not the only factor to be considered, a fervent fan base gives an athletic department a lot of advantages if it can cultivate it.
While most Power Five schools would be able to enter the Big 12 and compete, let’s take a moment and look at how the bottom of the Power Five scored to get some indication as to where a non-Power Five school may reside. The chart on the right highlights that bottom ten schools (technically eleven, we had a tie, but bottom ten scores). TCU was the only Big 12 school to make the list that was dominated by the Pac 12. Several of the schools on this list are small private schools, which indicates that while it would be easier to compete with the largest fan base attainable, it is still possible to compete at a high level with limited fan presence, if a school invests well. That is why these scores will eventually be combined with the financial numbers to give us a complete picture. Fan base and Finances work together, one won’t solve the failings of the other. However, if Stanford makes $100 million and has a respectable attendance, that will outweigh a school that has low finances and low attendance.
Now that we have the Power Five average, the Big 12 average and the average score form the lowest ten scores in the Power Five, let’s see how schools outside the Power Five stack up.
Out of the Non-Power Five schools, only BYU has a sizable and consistent fan base across multiple sports. It is also the only school outside the Power Five that ranks above the Power Five average and the Big 12 Average. The Cougars would rank fourth in the Big 12 in total attendance, just behind Iowa State and slightly above Kansas State.
Memphis has a respectable showing for a school in the AAC. While it definitely within the lower half of the Power Five scores, it ranks considerably higher than the Power Five Bottom Ten average. With some cultivating, investment, marketing, and increased competition at home games, Memphis could easily jump into the middle of the Power Five, much like Louisville did a decade earlier. It already has the facilities in place and strong attendance in men’s basketball. It just needs to add some consistency to its home football games at the Liberty Bowl, which is already in the top half of the Big 12 in terms of Stadium size.
The University of Connecticut also performs well against the bottom ten of the Power Five, largely due to high attendance in both men’s and women’s basketball. Numerous championships in both over several decades helps cultivate a loyal following.
What is a little surprising is how poorly Cincinnati and the two Florida schools in the AAC did, all of which have very large enrollments. South Florida and Cincinnati have less football attendance than Kansas, which is a bit of a red flag, and Central Florida barely has any attendance for the other sports measured.
Missing from this top fifteen list entirely are other expansion schools; Tulane and Houston. Houston scored far lower than Kansas in football and had no other attendance to make up the difference. Marshall, Army and SMU all had more attendance overall than Houston. Tulane was even worse. Its total score was less than Kansas scored for football alone.
As I mentioned earlier, attendance is but one factor to measure when looking at the financial health of an athletic department. It is already difficult for schools like Iowa State or Kansas to compete in football within the Big 12 and they both have very strong fan bases supporting them. West Virginia and TCU came into the Big 12 with lower support than the Big 12 average and struggled to compete and they were very strong expansion candidates. An expansion candidate needs to come in and compete soon if they want to increase their fan base. If they cannot compete there is a concern the lower performance could stunt any fan base for good. That doesn’t help the Big 12, they need expansion candidates who add their fans to the mix.
In the next article I will be combining the financial health score card with the attendance numbers to provide a full picture of each expansion candidate’s value to the Big 12.
©2016 Number Monkey Media