CONFERENCE EXPANSION: The Pac-12 will make more money, but just how much will it help WSU?

Even with the money that's going to be coming from a new Pac-12 television contract, this man still has his work cut out for him. (via www.wsutoday.wsu.edu, used with permission)

A few weeks ago, AOL Fanhouse published an interesting three-part series examining Football Bowl Subdivision schools' spending and revenue in their football and men's basketball programs using data from the U.S. Department of Education.

Not surprisingly, WSU didn't stack up very well. These are the 2008-09 figures (view it and sort it yourself here -- 2008 Football BCS Revenue and Expenses):

  • Money spent on football: $8.93 million -- last in the Pac-10, last among BCS programs
  • Gross revenue from football: $11.42 million -- last in the Pac-10, 64th out of 66 BCS programs
  • Net revenue from football: $2.48 million -- ninth in the Pac-10, 56th out of 66 BCS programs

What the Fanhouse series tried to do was somewhat correlate spending and revenue to results, and not surprisingly, they found that teams that spend and make more money generally are more successful on the field.*

*Of course, that's not always the case -- I'll happily point out that Washington was third in the Pac-10 in spending and second in revenue, yet hasn't been to a bowl game since 2002.

You might be asking yourself, "Why the focus on football?" Because football revenue outpaces other sports' revenues at virtually every BCS school by a WIDE margin. For better or worse, the health of a football program is a barometer of the health of an athletic department.

Now, we could get into a bit of a chicken-and-egg argument -- do teams spend and earn more because they're more successful, or are teams more successful because they spend and earn more? -- but as the first story in the Fanhouse series shows, teams that spend more money than their opponents usually win. From 2004-2008, the team that spent more money on its football program won 1,503 of the 2,210 matchups -- a 68 percent clip!*

*Again, I'll happily point out that UW was the exception -- the Huskies were 13-33 over that time frame against programs they spent more than. Sad face.

 

 

In essence, we were all correct in assuming that the potential revenue boost from the expanded conference should help us out. Our revenue goes up, our spending goes up, and we're able to at least get on reasonably level footing with the big boys again.

Right?

Maybe not. There are two big issues I see with this line of reasoning.

  1. We've got a loooooooong way to go to truly catch up to other schools in spending. The median program in the BCS spends about $15.9 million, while the median program in the Pac-10 spends about $16.5 million. Both figures are more than $7 million more than we spent in 2008-09. Yes, the new television contract is going to add revenue that would presumably be pumped back into the program, but we can assume it won't all be going into football.
  2. Our main competition is going to be getting richer, too. When that TV contract kicks in, the median in the Pac-10 isn't going to be $16.5 million anymore. Additionally, if Dan Beebe is actually able to deliver on his promise, most Big 12 teams will see an increase in revenue. That's 21 of the other 65 BCS schools that will be seeing an uptick in revenue in the next few years.

The bottom line? Relative to other programs, even with an influx of television money, we're still going to be one of the have-nots in BCS football terms. The TV contract is unlikely to be the panacea that a lot of people seem to be hoping for.

Of course, there are a at least a couple of counterarguments to this.

First off, WSU has done more with less for decades, and the marginal value of millions of dollars to WSU is greater than most of the other schools in the conference. For example, if every Pac-10 program added $5 million to its spending, that would represent a more than 50 percent increase in WSU's budget, while that would be anywhere between a 20 percent and 40 percent increase for most other schools. Beyond that, you can also make the argument that there is a line of diminishing returns on football spending somewhere, and that the top spenders are likely approaching it.

Second, if -- and this is a large if -- Larry Scott actually makes good on his suggestion that schools would share equally in revenue in the expanded conference, that would level the playing field a bit, too. If we look at those 2008 revenues, here's how things would have changed under an equal split (actual payouts listed here):

Institution Name Gross Revenues

With Theoretical Equal
TV Revenue

University of Southern California $35,203,483 $33,058,899
University of Washington-Seattle Campus $34,177,030 $33,761,512
Oregon State University $30,874,059 $30,334,488
Arizona State University $29,857,334 $30,090,557
University of California-Berkeley $27,747,396 $27,684,237
University of California-Los Angeles $26,640,759 $26,059,837
University of Oregon $24,789,755 $25,147,031
University of Arizona $20,927,253 $21,909,994
Stanford University $14,178,256 $15,053,295
Washington State University $11,415,496 $12,710,970

Certainly, the influx of television money should help WSU more than everyone else. But as you can see, it's not going to help WSU so much more so as to close the growing competitive gap between the Cougars and their peers.

I don't want to be Debbie Downer here, but I think we've all been guilty of a little bit of wishful thinking. At some point, Cougar fans have to realize that simply making adequate progress financially just isn't enough. Sure, you can be moving forward, but if your competition is moving forward at a rate equal to or greater than you, the gap just becomes bigger and bigger -- as it has over the past decade.

The reality is that if WSU truly wants to catch up -- just to the middle, mind you, which is what we should be shooting for -- we're going to have to close that spending gap by adding revenue in other ways, both creative (Pac-10 games at Qwest Field, renovating Martin Stadium) and standard (donations). If we all just sit back and wait for the Pac-12 money to come rolling in to solve our problems, we're likely to find the same problems.

This is the reality of being in big-time athletics, and people are going to have to wake up to that fact. Don't think we couldn't have been left out of conference realignment the same way Iowa State, Kansas State and Baylor nearly were. Had it been the Big 12 gobbling up the Pac-10, we would have been the ones sweating.

Somehow, some way, we've got to start outpacing people. When Bill Moos asks to you give in some way -- donating, giving up a home game, etc. -- resist the urge to say, "Didn't we just get a bunch of money from the new conference?" Because we've got a long way to go.

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