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  • How Television is Affecting College Sports

    by AB Editors October 1984

    This article originally appeared in the October 1984 issue of AB with the title, “Football & TV: Where Do We Go from Here?”

     

    Ever since the U.S. Supreme Court handed down its historic decision on June 27, ruling that the NCAA football television package was in violation of anti-trust laws, the most debated and talked-about question in town has been, how will this affect college football and, indeed, college athletics in general?

    It didn’t take long to find out one thing: with the NCAA’s tight-fisted rein on exclusionary broadcasts released, the market value of each individual event was down significantly. Separate packages negotiated with ABC Sports, ESPN and CBS in August produced notably lower prices than those attracted by the NCAA package. The product had been diluted and the networks clearly anticipated lower ratings.

    By some estimates, the total loss in television revenues among NCAA institutions will be between $30 million and $35 million. The NCAA itself estimates that it will lose between $3.5 million and $4.5 million, “which is minimal in terms of the overall operating budget,” says David Cawood, assistant executive director in charge of communications.

     

    Who Are the Losers?

    A $30-35 million loss is nothing to sneeze at, however its distributed, but clearly some stand to lose more than others.

    To begin with, there are the indirect effects that may eventually ripple through the world of intercollegiate athletics. The NCAA’s share of the TV package was used primarily to fund the championship events for non-revenue sports and to pay travel and per diems for teams participating in Division IAA, Division II and Division III football championships.

    The affected institutions will not likely suffer immediate significant losses; however, The NCAA will continue to fund those events in 1984-85 with other revenue sources, which include the newly-negotiated basketball tournament TV contract, according to Cawood.

    There may be other sources as well, according to Roy Kramer, athletic director at Vanderbilt University and former chairman of the Athletics Division in the Southeast Conference.

    “In addition to the basketball contract, I think there is a lot of sympathy among the CFA, Big 10 and Pac 10 schools to set aside money from television to help finance the non-revenue sport championships,” says Kramer.

    On the other hand, the football championships in the lower divisions were included in the NCAA TV contract, says Cawood, “and to this point we have not been able to market the Division IAA, II and III championships to television.”

    Participants in the football championships have traditionally shared in the profits from those events, but without a good television contract, the events could run at a deficit.

    Each Division IAA conference will also lose the two television appearances every two years guaranteed them under the NCAA package, but some will make that up with regional conference packages of their own.

    Kramer, a former NCAA II Coach of the Year at Central Michigan University, where his team won the 1974 Division II championship, thinks the new television situation could prove to be a boon for Divisions II and III.

    “You have a different market you’re dealing with—very localized, very alumni-oriented,” says Kramer. “Televised football may become so common and overexposed that people won’t stay home watch it, except when there’s a game of national significance.”

    Other estimates as to who will lose what depend on who you’re talking to, but about 80 percent of the television revenue from the NCAA package went to schools who are members of the CFA, which negotiated contracts with ABC and ESPN, and the Big 10-Pac 10 Conferences, which together negotiated a pact with CBS.

    How much an institution might stand to lose will depend on which conference it belongs to. The NCAA package called for the revenues from each contest to be split among the participating schools and the NCAA. The schools, in turn, generally shared the revenue with other schools in their conferences, according to a formula established by each conference.

    Independents are another story. The big independents with national followings, like Notre Dame and Penn State, will likely suffer least, since they will get their exposure regardless. The smaller independents, like Memphis State or Southern Mississippi, may have difficulty getting exposure and don’t have the support of a conference to draw shared revenues from.

    As individual institutions suffer, of course, the question becomes a matter of either finding a way to replace lost revenues or cutting programs, most likely in men’s and women’s non-revenue sports. Replacing lost television revenues will not be easy.

    “It will require us to greatly expand our fundraising efforts and perhaps look at where we are in regard to tickets,” says Kramer. “But I also know that we’re just about at the limit of what we can do on ticket prices.”

    Raising ticket prices, of course, penalizes the attending fans, who may already be inconvenienced by the TV blitz.

    “I’m particularly worried about changing game times to accommodate television,” says Kramer. “I think we have to be very careful here because we’re penalizing the season ticket holder in order to help someone who is going to prop his feet up and watch in his living room. I think that’s a very dangerous precedent if we get too far down that path.

    “The thing that’s made college football great is the enthusiasm and the loyalty of the fans, and if we lose them because of television, we will lose much of the color and excitement of college football.”

     

    How Bad Is It?

    Not everyone believes that Doomsday is imminent for college sports. Donna Lopiano, director of women’s athletics at the University of Texas at Austin, says it may be time to bring college sports back to reality anyway.

    “I’ve always said that too many programs—men’s and women’s—are trying to live above their means,” says Lopiano. “They don’t have the resources to compete at the big-time level, and yet they’re trying to. Ant the NCAA package, by mandating exposure for less-than-quality teams, gave them a fix—so to speak—to enable them to do that.

    “I really don’t think it would be harmful for college sports to settle down to their real level, without the artificial financial fix,” says Lopiano. “People adjust. No one’s going to die off. In college sports, it’s not a matter of play or don’t play. You play big time or medium big time or small time. But you play.”

    The Doomsday talk has its purpose, though, says Lopiano because it frightens people into reacting.

    “Everyone’s predicting crisis and dire outcome and I think that’s inclined to be a self-defeating prophecy. When you scare people, they take a more considered approach to the problem and I think that’s very healthy.”

     

    What’s Next?

    Most observers seem to agree that the real test of the court’s decision will come in future years, after all the parties have a chance to adjust to the new rules.

    “I believe this is perhaps the most difficult year we will face,” says Kramer. “In the future we will have more lead time to negotiate television contracts, more time to be innovative in the way we put the packages together and market them.”

    Kramer, whose institution is part of the SED’s TV package with the Turner Broadcasting System and the CFA’s ABC-ESPN package, believes the secret will be a coalition of the major schools, chiefly those in the CFA, the Big 10 and the Pac 10. The Big 10 and Pac 10 rejected the CFA package in August, choosing instead to negotiate their own deal with CBS.

    “I think there is a great deal of misunderstanding between the two groups,” says Kramer, “but there’s much more in common among these schools than there is dividing them. I think we’ll realize that and we’ll get together”

    Kramer thinks such a comprehensive package could avoid the type of legal problems encountered by the NCAA if it is set up properly.

    “Unlike the NCAA, this organization wouldn’t have monopolistic controls,” says Kramer. “One of the things you had with the NCAA was that you were either in the NCAA package or you weren’t in the NCAA. That barred your basketball team form the tournament, your track team from the NCAA meet and so on.

    “With the CFA or whatever the coalition package might be, if a school felt it could come off better going its own way, it could do that and still have its basketball team in the NCAA tournament. There is no sanction for not participating in the package.”

    There is some disagreement, though, on the ability of CFA-type packages to withstand legal challenge.

    “I think the exclusive thing is going to go by the wayside because it’s constantly going to be tested in the courts,” says Russ Potts, president of Lorimar Sports Network, and independent production company that syndicates television packages for high school and college sports. “Every time exclusivity has been tested in the courts, it’s lost. AT&T lost the NCAA lost and if the CFA is tested in court, it will lose.”

    The next challenge will likely come from television stations who are effectively prohibited from televising major college sports on Saturday night because of the CFA contact with ESPN, says Potts.

    “It’s ludicrous that college football’s only exposure on Saturday night, which should be our biggest audience draw, is on cable,” says Potts, a former athletic director at Southern Methodist university and former head of cable television operations for the Chicago White Sox.

    The end result, says Potts, is that most television packages will be conference-based rather than coalition-based and that sooner or later the over-exposure of televised football will be reduced

    “What’s going to happen is that an era of realism is going to set in on both sides of the table as everyone realizes how saturated the market is. It’s like any other marketplace and a lot of things are going to wash out I think advertiser demand will be reduced and television stations will cut back,” says Potts “And the schools themselves will, too. A lot of leagues have done that voluntarily in basketball.”

    “Nobody in their right mind is going to try to oversell the product,” agrees Lopiano. “So now what is the middle ground that people are going to come to? It’s going to be very interesting to see how many selfish people and how many smart people there are.”

    Despite the unsettling effect on college football this season, Potts thinks it’s too early to judge the wisdom of the court’s decision or of the suit by the Universities of Oklahoma and Georgia that brought it about in the first place.
    “You have to give the thing time. They’ve taken some heat, but it’s like the quarterback who goes in there his first game and throws three interceptions. You can’t judge him on one game. We just have to wait and see what happens.”