Bowl Games Cost Teams Big Money-LINK

Bowls (and conference revenue sharing programs in general) are big business and are wealth generating machines for both the individual teams and the conferences as a whole. The system does seem to favor the weaker schools which contribute very little money, but still get a big payday from their equal share of the final pot of money. But, over the course of a year and over time, it generally works out well for all teams as they gain access to much more money than they could otherwise attain on their own year to year through multiple sources of income as they are protected from the ups and downs that come with most programs over time.

I believe that it is misleading to say that a school attending a BCS bowl actually incurred a loss. Yes, the final payout from the conference shared revenue plan may be less than the total expenses. But, that is not a loss in a real sense as expenses are paid by the school before its monies are added to the shared pot.

Not to forget, in addition to bowl monies, teams will draw additional sources of shared revenue over the full course of a fiscal year from all football television contracts, the conference championships, basketball television contracts, Conference and post-season Bball tourneys, etc. Plus, most conferences provide that revenue “derived by the institutions from its local media packages as well as from other conference initiatives are not included” in the shared wealth, so it creates more opportunity for conference members to gain wealth both from the sharing plans and through their own initiatives.

It would not make sense for a school to commit to a conference income distribution plan that divided its bowl payout monies before expenses were paid. If that were the case, the schools attending the higher end and BCS bowls would always have a loss as it much more expensive to attend those games as the promotion costs involved are much higher (shared advertising costs, obligation to share in expense of ticket sales, etc). So, some of these teams that have been on long BCS bowl streaks (USC, tOSU, etc.) would be in a hurt locker by now as they would have been bleeding money for much of the last decade every bowl season.

Obviously that is not the case as the universities attending bowls are allowed to retain money to cover expenses. So, if University X generates 17 million for playing the Rose Bowl and his expenses were 3.5 million. The amount added to his collective conference distribution pot would be 13.5 million to ensure all expenses are paid. Then University X is set to receive an equal share from all the after-expense monies gathered from the income of all other conference teams in bowl games. The final payout to University X may only be 3 million from bowl game generated money after providing an initial 17 million for the conference which would appear as a 500k dollar loss for playing in a major bowl game, but it is not a loss as expenses are already paid from the initial bowl payout money. Again, this is my understanding of it (which I believe to be correct and common to all conferences) as any other method wouldn't pass the common sense test from a business perspective.