Post by 01- PirateDave on Mar 13, 2015 11:43:39 GMT -6
Chris SmithChris Smith Forbes Staff
I cover the business of sports.
SPORTSMONEY 3/13/2015 @ 10:53AM 391 views
College Basketball's Conference Championships Don't Come Cheap
There are just a few days left before the NCAA Selection Committee sends offices across the country to a screeching halt with the release of this year’s NCAA Tournament bracket. But while the committee will choose the majority of the field, 32 of the bracket’s 68 berths will be automatically filled by conference champions. And though the Ivy League’s rep is decided on the regular season, the remaining 31 must win their way in through conference tournaments.
A dozen teams have achieved that feat so far, and the rest of the automatic qualifiers will be decided throughout the weekend. The conference tournaments offer a bit of pre-NCAA Tournament postseason excitement for fans, and for many of the teams involved they represent the last chance to break into the Big Dance. But winning a conference championship also comes with a very real cost. In fact, over the last decade the typical conference champion has seen its spending increase by almost 14% over the previous season.
The reasons for the increase are pretty simple. Teams must spend more on food and lodging throughout a conference tournament, and winning it adds extra spending on coaching staff bonuses. Qualifying for an NCAA Tournament berth means traveling to play in the first round, not to mention more food and lodging costs there. And if the team does well, those logistical and bonus expenses continue to climb throughout a tournament run.
Teams are obviously happy to spend for on-court success, and those expenses are often later replaced by increased revenue from the national exposure related to winning in the postseason. But I was curious about just what sort of immediate impact a conference title could have on a team’s books, and so turned to Department of Education’s financial database.
I pulled the numbers for every auto-qualifying conference tournament champion over the last decade, which provided a pool of 301 teams – 30 per season except for last year, when the division of the old Big East added an extra AQ conference. It turns out that, on average, those conference champs experienced a 13.8% increase in spending over the previous season.
LAS VEGAS, NV – MARCH 10: (L-R) Kyle Wiltjer #33, Gary Bell Jr. #5, Domantas Sabonis #11, Byron Wesley #22 and Kevin Pangos #4 of the Gonzaga Bulldogs celebrate with the trophy after defeating the Brigham Young Cougars 91-75 to win the championship game of the West Coast Conference Basketball tournament at the Orleans Arena on March 10, 2015 in Las Vegas, Nevada. (Photo by Ethan Miller/Getty Images)
It’s harder to gauge how revenues were affected – the Dept. of Education’s financial filings are notoriously shaky, as athletic departments can adjust revenue line items to hide exact losses – but there are still some reliable stats to be pulled. The 124 teams that reported exact profits both the year before and the year of their conference wins saw profitability fall 33% year-over-year. And in that pool of 301 teams, 31 of them (or more than 10%) went from being profitable to losing money. That’s a pretty big deal considering that basketball, along with football, is often one of an athletic department’s key revenue generators. In many instances, basketball profits are relied on to fund non-revenue sports like softball and swimming.
So does every conference champion need to worry about watching the coffers run dry? Not quite. The impact described above doesn’t adjust for teams that win consecutive championships or take on added expenses by making deep runs in the NCAA Tournament. For many conference champions, a trip to the Big Dance ends after a single game. So what’s the impact of a conference championship alone? In order to find out, I eliminated from our pool the conference champs that neither won their conference the year before nor went on to make it past the second round in the NCAA Tournament. That left 94 teams, which saw basketball expenses increase by 10.6% over the prior year. As expected, a conference title is expensive, but not quite so much if it’s not followed by tournament success.
I cover the business of sports.
SPORTSMONEY 3/13/2015 @ 10:53AM 391 views
College Basketball's Conference Championships Don't Come Cheap
There are just a few days left before the NCAA Selection Committee sends offices across the country to a screeching halt with the release of this year’s NCAA Tournament bracket. But while the committee will choose the majority of the field, 32 of the bracket’s 68 berths will be automatically filled by conference champions. And though the Ivy League’s rep is decided on the regular season, the remaining 31 must win their way in through conference tournaments.
A dozen teams have achieved that feat so far, and the rest of the automatic qualifiers will be decided throughout the weekend. The conference tournaments offer a bit of pre-NCAA Tournament postseason excitement for fans, and for many of the teams involved they represent the last chance to break into the Big Dance. But winning a conference championship also comes with a very real cost. In fact, over the last decade the typical conference champion has seen its spending increase by almost 14% over the previous season.
The reasons for the increase are pretty simple. Teams must spend more on food and lodging throughout a conference tournament, and winning it adds extra spending on coaching staff bonuses. Qualifying for an NCAA Tournament berth means traveling to play in the first round, not to mention more food and lodging costs there. And if the team does well, those logistical and bonus expenses continue to climb throughout a tournament run.
Teams are obviously happy to spend for on-court success, and those expenses are often later replaced by increased revenue from the national exposure related to winning in the postseason. But I was curious about just what sort of immediate impact a conference title could have on a team’s books, and so turned to Department of Education’s financial database.
I pulled the numbers for every auto-qualifying conference tournament champion over the last decade, which provided a pool of 301 teams – 30 per season except for last year, when the division of the old Big East added an extra AQ conference. It turns out that, on average, those conference champs experienced a 13.8% increase in spending over the previous season.
LAS VEGAS, NV – MARCH 10: (L-R) Kyle Wiltjer #33, Gary Bell Jr. #5, Domantas Sabonis #11, Byron Wesley #22 and Kevin Pangos #4 of the Gonzaga Bulldogs celebrate with the trophy after defeating the Brigham Young Cougars 91-75 to win the championship game of the West Coast Conference Basketball tournament at the Orleans Arena on March 10, 2015 in Las Vegas, Nevada. (Photo by Ethan Miller/Getty Images)
It’s harder to gauge how revenues were affected – the Dept. of Education’s financial filings are notoriously shaky, as athletic departments can adjust revenue line items to hide exact losses – but there are still some reliable stats to be pulled. The 124 teams that reported exact profits both the year before and the year of their conference wins saw profitability fall 33% year-over-year. And in that pool of 301 teams, 31 of them (or more than 10%) went from being profitable to losing money. That’s a pretty big deal considering that basketball, along with football, is often one of an athletic department’s key revenue generators. In many instances, basketball profits are relied on to fund non-revenue sports like softball and swimming.
So does every conference champion need to worry about watching the coffers run dry? Not quite. The impact described above doesn’t adjust for teams that win consecutive championships or take on added expenses by making deep runs in the NCAA Tournament. For many conference champions, a trip to the Big Dance ends after a single game. So what’s the impact of a conference championship alone? In order to find out, I eliminated from our pool the conference champs that neither won their conference the year before nor went on to make it past the second round in the NCAA Tournament. That left 94 teams, which saw basketball expenses increase by 10.6% over the prior year. As expected, a conference title is expensive, but not quite so much if it’s not followed by tournament success.
good luck to all!