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Sunday, May 20, 2018

Should KU be worried about getting dumped from a Power 5 Conference? The financial stakes are huge

Big 12 commissioner Bob Bowlsby, left, and Kansas athletic director Sheahon Zenger laugh while taking reporters' questions after the first day of the conference's meeting Thursday, Feb. 4, 2016, in Irving, Texas. (AP Photo/LM Otero)

Big 12 commissioner Bob Bowlsby, left, and Kansas athletic director Sheahon Zenger laugh while taking reporters' questions after the first day of the conference's meeting Thursday, Feb. 4, 2016, in Irving, Texas. (AP Photo/LM Otero)

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“Power” may not be a strong enough word to describe the financial benefits of being a member of a Power 5 Conference.

The term Power 5 Conference refers to the five big, football-dominated college athletic conferences that get the lion’s share of college television revenue. With its membership in the Big 12, the University of Kansas is part of the club.

But due to its struggles on the football field, KU certainly isn’t in the top tier of schools in the Power 5 conferences. When you are in the bottom tier, there are seemingly endless questions hanging in the air: Will there be conference reorganization? Will the Power 5 consolidate into the Power 4? Would we make the cut in a new world order?

About this series

When KU announced in September plans to build $350 million in new facilities, primarily for football, it marked the beginning of one of the biggest financial bets the program has ever made. The Journal-World decided to study the financial books, talk to leaders and give readers a better understanding of the money game that is constantly a part of big-time college athletics. To see more articles go to: ljworld.com/kuath

The financial stakes are huge. While the Journal-World’s review of Kansas Athletics showed its finances unbalanced in some regards, it is nothing compared to some of the schools that have been left out of a Power 5 conference. The hallmarks of their budgets often are large amounts of student fees to support athletics, plus multimillion-dollar subsidies from the general university. Kansas’ budget does not show those signs.

The Journal-World looked at the finances of two mid-major schools in an effort to see how different the world might be if Kansas ever fell out of a Power 5 conference. Like KU, the University of Connecticut strives to be a national power in men’s basketball, having won four national championships since 1999. But despite its location in one of the richest states in America — and having arguably the most successful women’s basketball program in history — the University of Connecticut’s finances look nothing like KU’s.

In 2016, UConn received $26.9 million in direct subsides — such as dollars from the university’s general fund — to support athletics. Kansas Athletics receives about $1.5 million a year in general state funds to pay some salaries of the athletic department. In addition, UConn levied $8.2 million in student fees to support the athletic program. KU levies about $300,000 in student fees to support the athletic department.

The big difference between the two schools is which conference they are in. UConn is in the American Athletic Conference. UConn’s conference revenues, TV revenues and NCAA distributions totaled about $10.1 million. KU, as a member of the Big 12 Conference, gets about $32 million.

Ohio University competes in the Mid-America Conference, a classic home for “mid-major” schools. But don’t let that label fool you. Ohio is a statewide research university that actually has several thousand more students that KU. It also is an example of a mid-major school that arguably has passed Kansas in terms of football prowess. Ohio has beaten KU each of the last two years.

But because it is not a part of a Power 5 conference, its athletic budget isn’t even in the same universe, let alone the same league, as KU’s.

In 2016, Ohio University levied $17.7 million in student fees to support the athletic department. Even with its success on the football field, it sold less than $800,000 in football tickets, compared to $3.4 million for KU, which is thought to be one of the lowest totals of any Power 5 school.

Ohio’s conference, TV and NCAA revenues totaled about $2.5 million, nearly $30 million less than KU’s.

While Ohio’s student body has had football bragging rights over KU, think of this: Those students are paying nearly $20 million a year to have athletic teams that are still largely confined to an off-Broadway status.

KU Athletic Director Sheahon Zenger said Kansas can’t allow itself to be in position where students or the general university is picking up that type of tab for athletics. But he said the fact so many institutions willingly pay that type of money for athletics is a sign of how valuable being in the top tier has become.

“You often find enormous student fees at those schools because those students want so badly to have what we have,” Zenger said. “You will find extreme hunger and sacrifice to get what we have.”

So, what are the prospects of Kansas keeping its place in a Power 5 conference? Views vary, although no one the Journal-World talked with felt KU was in any immediate jeopardy of falling out of a Power 5 conference. The Big 12 Conference’s television contract runs into the next decade, which provides some stability.

David Ridpath, an associate professor of sports business at Ohio University and board president of the Drake Group, an organization that advocates for more financial responsibility in college athletics, said Kansas’ national reputation as a “blue-blood” program should keep it solidly in a Power 5 conference, even if conference realignment does happen in the future.

“I think that cachet may be enough for them,” Ridpath said.

Murray Sperber, a professor emeritus at the University of California-Berkeley and a longtime critic of the excesses of college sports, isn’t so sure. He said there are two trends for KU to watch closely.

One would be if the college football playoff system gets expanded. That could be bad news for KU, he argues. Sperber believes some of the Power 5 conferences are choosing to have a large number of members because only conferences of a certain size can have a conference championship game for football. Those games generate millions in revenues for a conference. But if the college football playoffs grow to 12 or 16 teams, which some have suggested, that may make the conference championship games less lucrative or feasible. If so, the need to have large conferences would be less.

The second trend is if television networks decide to change their models. Right now they deal with conferences, who then split the money fairly equally among their members. But Sperber thinks it is possible television companies may want to start dealing with schools directly. Why pay Kansas big-time football money when it struggles to beat mid-major teams and consistently produces poor TV ratings?

“Five years ago, I would have said, ‘no, KU will always be in big time college football, no matter what,’” Sperber said. “I’m not so sure anymore.”

In September 2017, when KU announced plans to build $350 million in new facilities, primarily for football, it marked the beginning of one of the biggest financial bets the program has ever made. The Journal-World decided to study the financial books, talk to leaders and give readers a better understanding of the money game that is constantly a part of big-time college athletics. These are the resulting stories from spring 2018.



April 29 — A look at the finances of Kansas Athletics: Rising revenues, soaring costs, big bets

April 29 — KU basketball saves athletic department budget, allows leaders to dream of ‘blue sky potential’

May 6 — KU football ticket sales down about $6 million per year; some question whether $300 million in new facilities will help

May 13 — Administrative salaries jumped by 42 percent in a single year at Kansas Athletics; KU salaries top K-State’s

May 13 — How much does KU spend on athletics? More than the city spends on police, fire and roads, but returns are big too

May 20 — Girod: Athletics important to KU, but there is a “disconnect” too

May 20 — Should KU be worried about getting dumped from a Power 5 Conference? The financial stakes are huge

May 22 — Rock Chalk Park started as $39 million deal for KU; now it may top $100 million after KU allowed lease to be changed

Comments

Brett McCabe 6 months, 3 weeks ago

KU's biggest challenge would be if the P5 conferences effectively merged, or a number of them merged in some way (Big 10 and ACC, for example). Right now, the Big 12 needs KU, but a Big 12 merged with another conference might not. Or, if another conference waves enough money at Texas, then the conference effectively evaporates and we would be in trouble.

The saddest part of this is that the bar has been set so low, and still we've been unable to get over it. Win 3 non-cons, go 3-6 in the league and maybe get to a bowl (assuming no FCS games). Do that a couple of times, build on it, start going 7-5 and you are safe.

However, ineptitude of the highest order in the AD office and the football HC office can't even get the basics right. It reminds me of the Twit of the Year sketch on Monty Python: "And Oliver has run himself over".

Dane Pratt 6 months, 3 weeks ago

They should have listened to you when you lobbied for Gill to return for his 3rd season. We would have been better off in the long run if they had. Now we have to bite the bullet with Beaty and give him more time as well.

George Johnston 6 months, 3 weeks ago

How much money does KU generate for the Big 12 and how much money does the conference pay KU? Won't that be a factor in realignment?

Robert Brock 6 months, 3 weeks ago

The GOR runs out in a handful of years. I don’t expect the Big 12 will survive. Football may drive KU to the Mountain West or Big East.

Brad Farha 6 months, 3 weeks ago

To be fair, it expires in 7 years (2025). We are still in trouble if we don't show improvement soon.

John Joseph Gorski 6 months, 3 weeks ago

Football won't be the only factor that drives realignment. 50% will be athletics and 50% will be academics though 80% of that 50% of athletics will like be based on football. The school has to fit all around.

Craig Carson 6 months, 3 weeks ago

KU FB is bad but the basketball program alone will entice every remaining power 5 to offer membership..the only current B12 schools who could be forced into the MWC would be ISU, Texas Tech and maybe TCU

Brad Farha 6 months, 3 weeks ago

Iowa State is a member of the AAU (just like Kansas and Texas). I have to think that academic pedigree is worth something. The Big Ten used to proudly state that all of its schools were AAU members.

John Brazelton 6 months, 3 weeks ago

As a baby, you first have to crawl before you walk, you then have to walk before your can run. Right now KU football is in the crawling stage, they have to become competitive before they can win. The 2018 season will determine whether or not they can beat pre-conference teams and then be competitive with the lower division of the Big 12 (K-State and I-State). And then prevent blow-outs with the top of the Big 12 (OU, Texas and TCU).

Len Shaffer 6 months, 3 weeks ago

I disagree, John. I would argue that KU football has not yet reached the crawling stage ...

Chris Bailey 6 months, 3 weeks ago

Wait, you're putting K-State in the "lower" end? I'd argue they've consistently been middle up in recent years. Texas Tech, ISU, Baylor and KU are the bottom without question. So K-state sits at 5th best in any given year on average. Briles is gone from Baylor and so to are their winning ways. 2011, 2012 and 2014 the cats finished the season ranked in the top 25. Last year a respectable 8-5 good for 4th in the conference.

Marius Rowlanski 6 months, 3 weeks ago

KState, worst football program in D1 football until Coach Snyder shows up and immediately turns the team around.

Why not KU? We've been this bad before and turned it around and now with the new AD, new facilities, and a new attitude, maybe it happens sooner than late.

Dane Pratt 6 months, 3 weeks ago

If we can get the stadium upgrades before the next realignment I think we will be fine. As a fan I’d rather watch good theatre than have a good theatre but the stadium is more important in terms of realignment.

[''] 6 months, 3 weeks ago

This is hilarious. We can't get 30,000 into Memorial but a fancy stadium will move the needle? What lemonade stand are you running?

Craig Carson 6 months, 3 weeks ago

a new stadium might attract better recruits...KU essentially plays in a HS stadium..UK built a new stadium and they started to attract some better recruits..though thy have a better HC than KU does..but a newer stadium would go a long way

Dane Pratt 6 months, 3 weeks ago

Brings the facilities up to P5 conference standards and shows a commitment to football.

Marius Rowlanski 6 months, 3 weeks ago

I think it will help initially. Fans will want to see the new facilities and recruits won't feel like they are playing in a national historic site.

Long term success depends on bringing in a competitive team that regularly beats FBS schools, winning a majority of our home conference games and make visible strides forward.

Is Beaty the right man for the job?

Brad Avery 6 months, 3 weeks ago

There was a day when college athletics was about more than just its ability to generate revenue for the athletic department. I, as a likely minority of one, would personally be happy to sacrifice new stadiums, workout facilities and 45 percent raises for personnel in the athletic department for the opportunity to see my alma mater compete, especially in football, in a conference that is appropriate to its in-state recruiting base and geographical location. The Big 12 may be many things, but it does not fit that criteria.

Marius Rowlanski 6 months, 3 weeks ago

I think our basketball program will keep us in any power five or power four conference but complacency and ineptitude (thank you Brett) could change that. The new facilities couldn't be more timely, unless it had been started at any date earlier, and maybe some of Coach David Beaty's recruits will start playing up to their potential.

Chris Bailey 6 months, 3 weeks ago

My guess is Beaty has this year and next and he's gone. He'll never win but at this point we pay the buyout whether we keep him one year or two. I hope I'm wrong.

Chris DeWeese 6 months, 3 weeks ago

I agree. The KU Jayhawks are actually an international brand (they watch our games in Japan for crying out loud). Any P5 conference would love to have us based on our basketball program alone. However, I also agree that complacency could be a recipe for disaster. We have to move forward with stadium and facility upgrades to remain competitive. Even if we don't get the stadium upgrades done in time for the new GOR, I still think we'll land in a P5 conference (assuming something happens to the B12).

Jeff Coffman 6 months, 3 weeks ago

It'll be interesting. I actually don't think KU is near the bottom of the P5. When you take the 5 conferences SEC 14, B12 10, BTen 14, ACC 14, and Pac12 there are 64 team's. BYU and ND actually have better programs than the current 64 teams. I'm guessing there are a few others potentially there too.

But remember you have to have large concentrated bases that can be marketed and sold. A reorganization bring all universities in play at all P5. When you are looking at teams, you have to sell a market. KU has a solid market of KC and a healthy set of suburbs. There aren't many college towns that can sell but the city it resides in. Indirectly, because KC is in two separate states, it actually is twice as fruitful.

The other significant issue, is ESPN is struggling. I believe the issue is not live games, but more the other junk they have. Sportscenter isn't the same and has anyone even seen get up with the ten million in salaries. With Disney putting on pressure Fox might be the survivor and the B12 has a great relationship with them.

I don't know the order of team's and who will or won't survive, but there are a lot of schools who should be worried. Just thinking out loud in our conference alone Baylor, ISU KSU. But don't count out ok State. Outside of our conference and I haven't studied this, but WF, Rutgers, northwestern, among others. MY should be fine, but we have to more for football including the coach.

Bj Cassady 6 months, 3 weeks ago

I remember when KU was dominant in swimming, track and was competitive in football. All it takes is getting the right people in the right places. Football drives the engine. Right now it is pathetic. We have to get the right coach, not a has been, not a name but a real winner and not a wiener, like a Mike Leach, a Pederson. That or we are in the WAC.

David Howell 6 months, 2 weeks ago

KU's biggest problem will be similar to the Tulsa Basketball head coach over the past 30 years. You get a decent coach, experience some success, and someone else is willing to pay them more then KU can afford ( TU lost Danny Manning, Buzz Peterson, Bill Self and Tubby Smith amongst others)

Craig Carson 6 months, 3 weeks ago

we all know that KU will never be a major player in Football..BUT, their basketball program alone will get them an invite to a major power 5 conference...there arent too many blue blood basketball programs that can generate massive profits floating around out there..besides, KU does have some FB tradition and if KSU can hire 1 (Snyder)coach that took them from garbage to respectable then why couldnt it happen to KU..also, Indiana FB sucks as well and noone is suggesting they get booted from the Big 10

Brian Skelly 6 months, 3 weeks ago

It staggers the imagination that Zenger is still employed.    He cannot be allowed to hire another football coach.    He just can't.    And the fact that he's still around -- as is Beaty -- speaks to how little imagination and urgency anyone has about this that matters.
Hey, they're all still getting paid, right?

Whomever is the last one out the door, turn off the lights please.

Layne Pierce 6 months, 3 weeks ago

Another way to look at it is which conference would we like to be in ideally. I would say that the answer is the Big 10. The fact is, however, as Nebraska found out, it is a beast in football, and in basketball. But they like schools that are part of the American Association of Universities, which KU is. But they already have Rutgers, so probably don't need another step-child. Unless we start getting serious.

If we don't start getting serious about football, just be competitive, let alone good. Then we are setting ourselves up for a fall into a conference, that we don't really want to be in.

How about just quitting football, and joining Wichita State in the American Conference, ...not!!! But give Mr. Zenger five more years, and that's where we're headed, my friends.

Joe Black 6 months, 3 weeks ago

The power conferences will always need a team in their conference that they can pick up easy wins again so KU will be fine.

Craig Carson 6 months, 3 weeks ago

yep..the BIG 10 added Rutgers for that reason..sure they wanted more market exposure but I dont hear the Big 10 complaining about how bad they have been at FB AND BBALL

Lance Meier 6 months, 2 weeks ago

!st, I don't even want to read this article... The F ing Big XII screwed itself (bigxii commissioner did) by treating schools like crap... All the Big XII needed to do was add a few schools: no better then Memphis/Louisville/Cincinnati, could have added 2 of the 3... NEW MARKETS and quality teams, too bad the Big XII is the DUMBEST bunch of MORONS ever!!! The commissioner has DONE NOTHING TO BETTER THE Big XII's spot in the college football landscape... Looks to me like he's done nothing but screw the Big XII teams out of $$$ and possible financial "FREEDOM"!!!

Big XII commissioner has too go!!!

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