The $1 Million Reason College Football Season Starts with Blowouts

Good post from the Priceonomics blog as to why there are so many lousey NCAA games to start the football season:

The main consideration in scheduling cupcake games is that the NCAA has no rules about playing an equal number of home and away games - or how you share revenue with visiting teams. So, universities like Ohio State that sell out their 100,000 person stadium for every game gladly pay teams like Buffalo to give up one of their own home games to play at Ohio State.

The weaker opponent may be less of a draw for ESPN and television networks, but universities are largely shielded from the financial consequences of scheduling patsy opponents as they split television revenues with their conference. Colleges pay cupcake opponents $400,000 to over $1 million because an extra home game brings in as much as $4 million to $5 million in additional revenue for the biggest programs. And during a mediocre season, that extra victory could be the difference in earning six wins and a profitable trip to a postseason bowl game.

In return, small programs receive increased exposure, a pipe dream of victory, and a check for as much as two thirds of their football budget and 20% of their athletic budget in a single game. (Head coaches are sometimes literally handed a six or seven figure check after the game.)

Despite the opulence of elite college football programs, the financial logic of the exchange is just as necessary for the elite teams as their cupcake opponents. As Priceonomics wrote in a prior article about the NCAA:

University presidents overwhelmingly view the high cost of athletics as a problem and athletic directors are busy cutting their budgets - a process only accelerated by the recession. Just over half of elite football and basketball programs turn a profit. Only 14 out of 120 athletic departments in the upper tier of Division I cover their costs. The remainder run a median deficit of $10 million.

Of the schools in the top conferences, only a quarter play a balanced schedule of 6 home games and 6 away games. The remainder schedule a guarantee game in order to play 7 home games or a game at a neutral site where they can split ticket revenue with their opponent.

The small school players may often be victims on the field, but their administrators are in the position of power. Every major program wants to schedule their guarantee games in September as the pollsters that rank teams and influence bowl placements give less credence to early games. That means the supply of small schools with amenable schedules is limited. Ohio State’s athletic director told USA News "Sometimes they've got you over a barrel.”