The Viability of FBS Football for G5 Schools

[UB92]

There is an increasing number of schools (and their finances) being thrust into the limelight because of the oversized subsidy that many (most?) schools have to provide to support their athletics programs (namely football).

State schools rely on an ever-decreasing state appropriation.  State schools are also often limited by state-mandated caps on tuition.  Combine that with unionized faculty wage increases and you basically have a financial mess.  If you haven't really paid much attention, colleges/universities don't have a sustainable model at the moment and, thus, cutting expenses is occurring at most places. 

Here is an example at Cincinnati.   Scroll to the bottom for more details.

https://www.boldlybankrupt.com/

 

While one can debate some of the nuances of what is there, the point is that many stakeholders across the country are now looking at athletics as being subsidized too much at their school.  Sure...there are a several top-tier programs in FBS that are doing well.  But there are like 130 FBS programs and I would wager that more than half are struggling big time with their athletics subsidy.

 

So...what's next?   It won't happen tomorrow or next year or the year after that (maybe), but some time this decade I feel there will be a big reshuffling of P5 and G5.  Many P5 programs will want to move to G5 and some G5 programs may get an opportunity to move to P5.   Oh....and I believe G5 will change dramatically.  Partial scholarships, caps on salaries, caps on # of coaches, etc.  Basically, the G5 (or whatever it is called) will be much closer to what FCS is now than P5.

How it will happen?  I think it may happen where many/most/all teams in a conference agree to do this.  Imagine all of the MAC Presidents at their annual meeting all agree to say "no...we can't afford to be in G5 anymore...we are moving, as a conference, to FCS" (or something similar...the logistics will dictate how that actually occurs...but you get the gist).

 

 

[rma]

I don’t think any P5 will want to move to G5 because the money is too good. 
 

As for the site itself, the athletics subsidy is essentially marketing for prospective students and alumni donations. See: Flutie effect. 
 

“In 2009, the administrative budget was$16,553,039, but by 2016, it had risen to $29,618,276, almost doubling its budget in a 7 year period.”

You will find this at most schools. As money became cheap and plentiful, schools need(ed) to have more things to attract students. D1 sports, air conditioned dorms, student programming, renovated libraries and classrooms, etc. It’s turned into a keeping up with the joneses situation. To run these programs, you need more administrators.

[ChicagoBull]

I anticipate a break-up of college football, due to the payment of some players, new (lower) payments for broadcast rights, and the escalation of head coach salaries.  Essentially, I anticipate a pre-NFL league in which players are fully paid.  If you want to play football and make money, try to get into this league.  This is the only way that anything like current college football can survive.  

[UB77]

8 hours ago, ChicagoBull said:

... If you want to play football and make money, try to get into this league.  This is the only way that anything like current college football can survive.  

I've often thought about a professional college football league. The university would spin off their profit making (or potentially profit making) team and license the rights to the university's name and logo. So the Ohio State Buckeyes would be a wholly own entity of the Ohio State University, but NOT a college team. The players would be paid without academic restrictions (though scholarships could be a team perk) and the fans could still root for the old Alma Mater. The league would be a little bit like a combination of the Big 10 and a working NFL minor leagues. Student Athletes would just be working athletes and get paid. Salary caps, signing rules, possible school subsidies and all of that would need to be worked out. I see it as more like hockey's junior leagues than baseball's minor leagues. Teams (schools) that don't make money could fold. 

The rest of the 18-21 year old football world, beyond the elite athlete, would still be good ole fashion amateur football.

Hey I'm old. I like to dream.

[UB92]

9 minutes ago, UB77 said:

I've often thought about a professional college football league. The university would spin off their profit making (or potentially profit making) team and license the rights to the university's name and logo. So the Ohio State Buckeyes would be a wholly own entity of the Ohio State University, but NOT a college team. The players would be paid without academic restrictions (though scholarships could be a team perk) and the fans could still root for the old Alma Mater. The league would be a little bit like a combination of the Big 10 and a working NFL minor leagues. Student Athletes would just be working athletes and get paid. Salary caps, signing rules, possible school subsidies and all of that would need to be worked out. I see it as more like hockey's junior leagues than baseball's minor leagues. Teams (schools) that don't make money could fold. 

The rest of the 18-21 year old football world, beyond the elite athlete, would still be good ole fashion amateur football.

Hey I'm old. I like to dream.

Hmm.  This is a possibility.  I think there may be some steps that happen before this point, however.  Or maybe this doesn't happen.  But it could. 

I tend to think that there would be less interest among alumni of, say, Ohio State, if they aren't actually students who are playing.   So that's why I think there would need to be some steps in between if this were to happen.

[ChicagoBull]

25 minutes ago, UB77 said:

I've often thought about a professional college football league. The university would spin off their profit making (or potentially profit making) team and license the rights to the university's name and logo. So the Ohio State Buckeyes would be a wholly own entity of the Ohio State University, but NOT a college team. The players would be paid without academic restrictions (though scholarships could be a team perk) and the fans could still root for the old Alma Mater. The league would be a little bit like a combination of the Big 10 and a working NFL minor leagues. Student Athletes would just be working athletes and get paid. Salary caps, signing rules, possible school subsidies and all of that would need to be worked out. I see it as more like hockey's junior leagues than baseball's minor leagues. Teams (schools) that don't make money could fold. 

The rest of the 18-21 year old football world, beyond the elite athlete, would still be good ole fashion amateur football.

Hey I'm old. I like to dream.

 

While I see something like this coming, here are the problems I see:

1.  As long as there is still huge interest in the non-pro college league, you are going to have players not being paid though generated great revenue for the university.

2.  There will be huge advantages for the colleges with pro teams, not unlike colleges that also have "regional training centers" for wrestling.  

But I think something along the lines of colleges having the opportunity to have both pro and non-pro teams is coming.

 

[UB92]

19 hours ago, rma said:

I don’t think any P5 will want to move to G5 because the money is too good. 
 

As for the site itself, the athletics subsidy is essentially marketing for prospective students and alumni donations. See: Flutie effect. 
 

“In 2009, the administrative budget was$16,553,039, but by 2016, it had risen to $29,618,276, almost doubling its budget in a 7 year period.”

You will find this at most schools. As money became cheap and plentiful, schools need(ed) to have more things to attract students. D1 sports, air conditioned dorms, student programming, renovated libraries and classrooms, etc. It’s turned into a keeping up with the joneses situation. To run these programs, you need more administrators.

There is a chunk of this that is "funny money".

It is the money that the university counts as a subsidy because it is not going to the general fund -- it is subsidized by the university through athletic scholarship. So it shows up as lost revenue from some eyes because people will think if you have 50 athletic scholarships then you would easily replace that by 50 paying students (minus whatever general fund scholarships they would get).

Another "funny money" outlay for football is the cost of the university buying seats to get to the 15k number (or whatever it is that the NCAA requires).  Certainly this impacts the MAC.  The university "buys" its own seats to get to the number required.  The last game of the season for Akron looked like a bad HS team with its attendance.  But on ESPN it said 21,414.   The university buys the tickets for the attendance and then the money goes back to the university.  It just leaves one column and goes back to another column.  I believe some schools may count "buying those tickets" as an athletics subsidy.

Of course, there are real dollar outlays for football (coaching salaries, staff, travel, room/board for scholarship athletes, etc., etc.).   And that part still has to be subsidized.  The Flutie effect happened at BC and that was in the 1980s.  We are in 2020 now.

 

Regarding P5 moving to G5... you are right...the money is too good.  I guess that is why teams lobby so hard to get into P5. 

Each MAC school is getting only $700,000 a year from ESPN for that football contract where they play in front of (mostly) empty stands in November.  A good buy game gets them more.  By comparison, in the AAC each team gets nearly $7M annually for their ESPN deal.  The Big10?  Close to an order of magnitude higher (about $50M per team).

And those gaps get wider each year and as each TV contract is negotiated.  It is sobering to consider that type of money.   G5 is going to have to think of another model.  Those G5 teams that don't get swept up into the P5 in the next several years...I don't see how they can survive trying to play in that way.  They are going to have to do their own thing.

What happens to the AAC will be interesting in the future.

 

 

[ChicagoBull]

There is another funny money phenomenon when one state school pays another state school for a "buy game."  That is money the moves from the budget of one government entity to the budget of another.  It is fundamentally different that when a non-state school is involved in the transaction for a "buy game."