Negative Economic Impacts of College Football Bowl Games
Alexander Kuhnle
Each year the college football season is capped off with 44 bowl games including 2 College Football Playoff games, and a national championship game. Each bowl game is played between division 1 teams with 6 or more wins, and teams are placed in tiers based on skill level and popularity. Bowl games bring in great revenue for the participating athletic programs and grow exposure from a regional to a national level. However, the economic impacts that each game has on the schools, teams, players, and fans tend to be far more negative than positive.
Recently, NCAA student-athletes gained the ability to profit off of their NIL(name, image, likeness), essentially allowing for a long-awaited payment system in college sports. Top talent players in each sport have been able to make money off of brand deals, merchandise, and social media presence. Even less popular sports and players have been able to generate profits for themselves while balancing a student and athlete lifestyle. Yet, schools still profit marginally more than a collective sum of each college athlete. Bowl games are a frequent example of poor wealth distribution by the NCAA. The TV revenue, sponsorship money, and ticket sales go largely towards the university. Thus, players are earning more money for filming a commercial than playing for millions to see. A frequent trend for NFL prospects is to sit out what they view as meaningless exhibition games. In one of the premier games, the Chick-fil-A Peach Bowl, the two most talented players, Pitt's Kenny Pickett and Michigan State’s Kenneth Walker III, both sat out to stay healthy in preparation for the upcoming NFL draft. In turn, the game had an attendance of 41,230 compared to a less popular bowl played in the same stadium earlier in December, the Celebration Bowl with 48,653. Prospects sit out these games because when healthier they have an increased chance at being selected higher in the NFL draft, which increases initial contract value. For players, the trade-offs of playing in the game means engaging in a non-profitable activity, diminished draft stock, and risk of injury.
While each bowl brings in large amounts of revenue for each team, programs actually lose money each year if they become eligible to play in a bowl game. There are 10 conferences in college football, and each consists of 10 to 14 teams. Part of the annual revenue that each team generates is shared equally throughout their conference. According to Business of College Sports, Wisconsin just earned around $2,900,00 from participating in the SRS Distribution Las Vegas Bowl. This figure is added to a pool of earnings shared with every other Big Ten member . Meaning, Wisconsin will receive a fraction of the full Las Vegas Bowl payout to put back into their program. Additionally, each bowl game requires athletic programs to purchase more than 10,000 tickets to their game to resell to fans and students. In 2018, Western Michigan had 10,000 unsold tickets to the Famous Idaho Potato Bowl, costing the university over $400,000. Schools must also help fund the travel expenses for the team to each bowl game such as airfare, hotels, and events. As well as expenses for staff members, cheerleaders, and the band. Athletic programs gain exposure for upcoming recruits through bowl games but also endure essentially a taxation of their earnings.
Every bowl game is forced into some form of a sponsorship deal or large-scale advertisement by broadcasting programs like ESPN and CBS. Whether it be outright naming a bowl game after a brand like the Cheez-It Bowl, Outback Bowl, and Guaranteed Rate Bowl, or obscure naming rights added onto traditional titles, like the Jimmy Kimmel LA Bowl presented by Stifel, or the Taxslayer Gator Bowl, each game is plastered with advertisements. Depending on the scale of the game, 3-year sponsorship contracts can add up to more than 20 million dollars. The naming rights include logos on the field and embedded commercials during the game. Yet, only the New Year’s Six bowl games generate enough return on investment for these sponsor companies. New Year’s Six bowls(Rose, Orange, Sugar, Fiesta, Cotton, and Peach) are the highest tier largely played between the top teams and conference winners in the country. The other tiers consist of Power 5 vs Power 5, Power 5 vs Group of 5, and Group of 5 vs Group of 5(Power 5 conferences, SEC, Big 12, Big 10, ACC, PAC-12. Group of 5 conferences, C-USA, MAC, AAC, Sun Belt, MW). The P5 vs P5 games bring in large amounts of revenue due to larger fan bases and support, yet still not enough for sponsorship companies to break even with the large advertisement deals. NY6 games can generate such large earnings because over 70% can be attributed to costly items like lodging and food/beverage, not to mention marginally higher national TV viewership. As shown from a study by SDSU on the Economic Impact of Bowl Games, while G5 vs G5 games have the highest percentage of food and beverage earnings, those earnings are still vastly lower than every other level. Those low-tier games have around 10,000-20,000 in attendance, compared to 40,000-90,000 for the NY6. As more fans at those more prestigious games mean more consumers, and thus a higher revenue in each category. In total, sponsors rarely make a return on their huge investments because of a lack of demand both on TV and at the game for a majority of the annual bowls.
Works Cited
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Humphreys, Brad. “More on the Economics of Bowl Games.” The Sports Economist, 27 Sept. 2019, thesportseconomist.com/more-on-the-economics-of-bowl-games/.
Kristi A. Dosh “College Football Playoff Payouts 2021-22.” Business of College Sports, 23 Dec. 2021, businessofcollegesports.com/college-football-playoff-payouts/.
Mosley, Kyle T. “Celebration Bowl Attendance, Viewers Outpaced Several FBS Bowl Games.” HBCU Legends, HBCU Legends, 1 Jan. 2022, www.si.com/college/hbcu/celebration-bowl/celebration-bowl-attendance-viewers-outpaced-several-fbs-bowl-games.
Rishe, Patrick. “Do The Economics Of Bowl Games Make Sense For Schools, Sponsors?” Forbes, Forbes Magazine, 1 Jan. 2014, www.forbes.com/sites/prishe/2014/01/01/do-the-economics-of-bowl-games-make-sense-for-schools-sponsors/?sh=21b11a2213cf.
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