Money, exposure hold keys if Big Ten attempts to expand

Published 5:43 am Tuesday, March 2, 2010

CHAMPAIGN, Ill. — Big Ten university presidents and athletic directors say a handful of factors will determine whether the conference expands. Listen closely, though, and it sounds like one outweighs them all: Money.

The Big Ten generates more money than any other conference, thanks in part to its one-of-a-kind Big Ten Network. And no one in the conference, not even enthusiastic expansion advocates such as Wisconsin athletic director Barry Alvarez, wants to sacrifice a dime of the roughly $22 million each school gets a year.

“You just don’t jump into the league and get a full share of what everyone else in this league has established over time,” Alvarez said. “I think someone has to buy their way into the league.”

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Alvarez sees expansion as a path toward the kind of football title game that keeps the SEC and other conferences on national TV and fans’ radar after Thanksgiving, when the Big Ten typically begins a multiweek break before the bowls.

“You take a look at the championship week in December and we’re non-players,” said Alvarez, the former coach who led Wisconsin to football prominence. “We’re irrelevant.”

Texas, Missouri, Rutgers, Syracuse, Pitt and Notre Dame have all been mentioned as possible targets since the Big Ten announced in December that it was evaluating the possibility of expanding the 11-team conference.

“If you look at the college landscape across the country, look at television contracts that are coming up over the next 5-8 years, this is probably the right time for us to see if there is there any value in trying to add a team or teams,” Ohio State athletic director Gene Smith said at the time.

The three big factors Big Ten presidents and ADs say any new member would have to bring to the discussion are academic credentials, a strong geographic fit and money.

Stanley Ikenberry was the president at Illinois the last time the Big Ten expanded, adding Penn State in 1990. He says the decision to admit Penn State was driven less by money than by academics — the Nittany Lions were a good scholarly fit as long as they didn’t cost the conference money.

Ikenberry, now back as interim president while Illinois searches for a new leader, acknowledges that this time, money will be a much bigger factor.

Schools around the country are struggling to pay their bills, and no conference pays its members more than the Big Ten, thanks to its TV network.

Neither the Big Ten nor the network discusses its finances publicly and both declined requests for interviews. But according to tax forms the nonprofit conference is required to make public, it generated $217.7 million and paid each school about $18.8 million in 2007, the most recent year for which tax forms are available.

The next year, according to the Sports Business Journal, the new TV network added another $66 million to the pot. That pushed the per-team payout to about $22 million each, a figure officials from several Big Ten schools confirm remains accurate.

The next most prosperous conference, the SEC, paid its member schools about $11 million each in 2007, according to tax documents.

The Pac-10 — now considering expansion and the creation of a TV network, too — paid its members from about $7 million to $11.5 million in 2007, while the ACC pays from $11.2 to $12.2 million each, the Big 12 about $7 million to $12 million to each school and the Big East $4.5 million or less to its schools.

The moneymaker the SEC has that the Big Ten lacks is a football championship game.

The SEC says it made $14.3 million off its title game last year. But David Carter, an economist at Southern California who studies sports, doubts a Big Ten game would generate that much money, certainly not right away.

“You have to look back at just how embedded the SEC is, their deal with CBS, their incredible tradition,” he said.

Even if it did approach the SEC game, that’s still not enough money to guarantee that existing members wouldn’t give up some money by expanding. It seems clear any new team would have to add at least enough money to prevent current members from giving up anything.

“We’ve created such an asset in the Big Ten channel,” outgoing Michigan athletic director Bill Martin said, echoing Alvarez. “I cannot see our 11 institutions simply saying we’re going to divide our pie up into more pieces from Day 1.”

Illinois’ athletic director Ron Guenther doesn’t even want a title game. He doubts fans would pay to go to one and then turn around and head to a bowl a couple of weeks later.

Geography, another of the key factors, boils down to money, too.

First, athletic directors like Guenther say they’d like any addition to be contiguous with the current Big Ten or close to it.

Talking about Texas, Guenther foresees big, expensive travel headaches for sports like soccer and volleyball that already can’t cover their costs.

“You’d have to really restructure the way you’re currently competing,” he said.

The second piece of the geographic consideration is television: Expansion makes more sense if it turns big TV markets like New York or Texas’ big cities into Big Ten markets, both for the Big Ten Network and CBS, ESPN and ABC.

Penn State, according to University of Chicago economist Allen Sanderson, hasn’t delivered as much of the East Coast TV audience as the Big Ten would have liked.

“For New Yorkers, they think Penn State is somewhere right around California,” he said.

Few of the schools mentioned as potential Big Ten targets have said anything publicly about the possibility. Notre Dame insists it isn’t interested and Longhorns AD DeLoss Dodds told The AP this week that Texas hasn’t been approached by the Big Ten — in spite of media reports to the contrary — and is happy in the Big 12.

Alvarez said recently that Big Ten commissioner Jim Delany could make a recommendation to conference presidents on expansion as soon as this summer. When a decision is made, Carter thinks the Big Ten will expand.

“The allure of being able to extend the footprint of the conference and the potential to generate sizable incremental revenue,” he said, “makes all the sense of the world.”

Ikenberry disagrees.

Speaking in the same campus office he occupied when the Nittany Lions joined almost two decades ago, he says that, in addition to protecting their revenue stream, universities have something else to guard.

“There’s a lot of tradition and, as the Big Ten changes, that tradition gets tweaked over time,” he said. “Wise heads at the end of the day may conclude that, yes, there are a number of theoretical options out there for possible new members of the conference, but, at the end of the day, the Big Ten tradition is better preserved with the status quo.”