Late last week, the Pac-12, Mountain West and Mid-American conferences reversed course and announced their intent to play football this fall, which means 127 of 130 FBS programs will be in action by early November (UConn, New Mexico State and Old Dominion are the exceptions). Bowl season was always going to take place this year, even if college football was short a few conferences. “There might have been a handful of [bowl] games that decided to take the year off, but the majority wanted to play. Now, with all of the conferences coming back on, it looks like [there will be] a full lineup,” Nick Carparelli (executive director, Football Bowl Association) said.
However, putting on a game without fans in the stands will be economically challenging for many bowls. As Ali Farhang (founder, NOVA Home Loans Arizona Bowl) explained, the lack of ticket- and attendance-related revenue means that a reduction in expenses, including conference partner payouts, will almost “certainly have to be part of the conversation.” That could make for a difficult decision for some universities, particularly those not slated to play in a top-tier game. Schools will have already incurred large additional expenses and experienced so much uncertainty just to get through the season. It’s reasonable to wonder if some administrations will question the additional expenditure to participate when they will already have to make such dramatic cuts in other areas.
Our Take: Bowl games have three primary sources of revenue: ticket sales, corporate sponsorships and television. While the percentage breakdown varies from bowl to bowl, “across the board it’s probably one-third each,” estimated Carparelli.
It is too early to say definitively that postseason college football games will be played without fans. But with sponsorship sales also expected to be down, it’s realistic to suggest bowl revenues could drop 50% YoY. While there will be some savings on the expense side as bowls pass on the ancillary events and pageantry typically associated with their games, “There will not be much excess revenue being generated this year if any.” Carparelli said.
Even though most of the bowls will not be profitable, operators are sufficiently motivated to host games this year. “A lot of the money [bowls spend] to run their games [such as staff and marketing] is spent over the course of the year, so [operators] are pretty well invested in this year’s game already,” said Carparelli. “[Bowls also] have corporate sponsorship revenue that has come in. They need the game to be played if they are going to keep that money. And, obviously, in order to get the television money the game has to be played.” There is also a branding and market relevance component to hosting the game. “If you’re a sports brand and everyone else is playing, you don’t want to be invisible for a year,” the FBA executive added. While conversations with the Mountain West and MAC are just beginning, Farhang said it is his group’s “objective to operate the [Arizona Bowl]” in December.
It remains to be seen how many schools will be eager to participate in a bowl game at their own expense (or at an increased expense). Remember, bowl payouts typically cover at least a portion of the institutional per diem and travel expenses associated with the game. Oklahoma athletic director Joe Castiglione acknowledged, “There very well could be schools with an opportunity to participate in a bowl that decide the costs— and risks—way outnumber any of the possible benefits [to playing in the game].”
For perspective, “the expenses of the four or five days at the bowl and the transportation to the bowl site cost at least $1 million for a team no matter where they go,” Wake Forest athletic director John Currie said. But it’s important to remember that schools participating in bowl games this year will also be forced to bear the expenses associated with keeping players on campus for the three weeks between the end of the regular season and the bowl game (most schools are not bringing students back after Thanksgiving). “That means three more weeks of testing at $35,000+ per week, three more weeks of housing, three more weeks of unlimited meals and so on; and that doesn’t even get into whether athletic departments pay bowl bonuses to coaches, extra duty pay for support staff and that kind of stuff,” the Wake Forest A.D. added.
Then again it’s likely the costs associated with bowl participation will be down significantly this year. Castiglione said, “There may not be as many expenses because participating teams may not choose or need to be at the bowl site for as long as they typically would be.” If bowl games are made-for-TV showcases without all of the ancillary events and pageantry, there is no reason teams couldn’t fly in and out within a day or two. Without fans, schools should also realize significant savings on minimum ticket guarantees.
There is a strong argument to be made that even without financial upside, schools will be motivated to participate in college football’s postseason. As Carparelli reminds, it is an opportunity for the student-athletes to participate in one extra game and the marketing and branding exposure the university gains from playing is “very real.”
Castiglione said that even if there are additional costs, he anticipates “a fair number of teams will want to play [in a bowl game]”—including those that may not typically qualify on a year-to-year basis and schools in leagues playing just six-, seven- or eight-game schedules. Count Wake Forest among the schools that would not let the lack of a bowl payout prevent its team from participating in the postseason. Currie said his university would “be willing to make the investment to reward our student-athletes for hanging in there during [the pandemic] and to continue to grow our football program. For us, it’s going to come down to safety and what our head coach and student-athletes think. If our student-athletes earn the opportunity and want to go play, we’re going to go play.”
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