In FY20, revenue from media rights rose for most of the Power 5, NCAA distributions decreased for (almost) all
Media rights made up more than a quarter of public Power 5 schools' total operating revenue last fiscal year
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After compiling the NCAA Membership Financial Reporting System (FRS) reports for every public Power 5 institution for the 2020 fiscal year, I wrote in yesterday’s newsletter that the 52 public Power 5 athletic departments reported a combined, year-over-year decrease in revenue of $205 million, or a decline of roughly $3.9 million per school.
Today’s newsletter dives into some of the categories that are among the primary, or most publicized, sources of revenue for athletic departments: media rights, conference and NCAA distributions, and contributions.
Media rights continue to climb
The 52 public Power 5 institutions examined reported a combined $1.67 billion in revenue from media rights during the 2020 fiscal year, which was a slight, year-over-year increase of roughly $33 million, or an average increase of almost $650,000 per school. Given that most Power 5 schools reported a year-over-year increase in media rights in a fiscal year in which their average revenue took a slight hit, media rights made up a larger percentage of their overall revenue, increasing by more than a percentage point to an average of 25.7 percent of total athletic department revenue in 2020.
Media rights are defined on FRS reports as all revenue received for TV, radio, internet, digital and e-commerce rights, including the portion of conference distributions that’s related to media rights. While there’s some overlap between what an institution reports in its media rights revenue and what a conference reports it distributed to its member schools, those two figures are different.
The disparity in revenue from media rights across the Power 5 conferences grew last fiscal year. Fourteen of the 52 public Power 5 schools reported a year-over-year decrease in media rights from the 2019 fiscal year to 2020. Seven are in the Big 12 and four are in the ACC. Given that Big 12 member institutions Baylor and TCU are private, which means they’re not subject to Public Information Act requests, the University of Texas is the only Big 12 institution that we can publicly confirm reported a year-over-year increase in its reported media rights – an increase of $236,000.
The two conferences whose members reported the most valuable media rights, on average – the SEC and Big Ten – also saw the value of their media rights increase during the 2020 fiscal year, according to their FRS reports, while two of their peer conferences in the Power 5 – the ACC and Big 12 – reported average year-over-year decreases in their media rights revenue.
Notably, the value of the Pac-12’s media rights increased by roughly $1 million, or 4.4 percent, on average, from the 2019 fiscal year to 2020.
The table below lists the Power 5 conferences in descending order of their public institutions’ average revenue from media rights in the 2020 fiscal year.
This is literally a case of the rich getting richer.
As mentioned in Tuesday’s newsletter, Maryland and Rutgers both report their revenue from media rights as part of their conference distributions, even though FRS reports instruct institutions to exclude media rights from that category. So the figures above aren’t perfect, but that’s arguably fitting of FRS reports, where different institutions can follow different accounting principles and interpretations, preventing many head-to-head comparisons between athletic departments.
Media rights are in fact worth much, much more than the $0 that the two Big Ten East schools reported on their FRS reports.
The bar charts below show the four public Power 5 institutions that reported the most revenue from their media rights in the 2020 fiscal year, as well as the trajectory of their respective media rights since the 2015 fiscal year, when FRS reports began using their current definition of media rights.
As hinted at earlier, the phrase “conference distributions” can mean two different things, depending on the context. There’s the low-to-mid eight-figure amount that a Power 5 conference pays to each of its full-time members annually, then there are conference distributions, as sort of vaguely defined by NCAA FRS reports – “all revenues received by conference distribution, excluding portions of distribution relating to media rights or NCAA distributions.”
We’ll start with the former.
USA Today reported that the Power 5 conferences made the following average conference payouts to their respective members, based on each conference’s 2020 tax filings:
Big Ten: $54.3 million to its 12 longest-standing members (a decrease of roughly $1.3 million)
Big 12: $37 million to $40.5 million per school (a decrease of more than $1 million)
ACC: $30.9 million to $37 million per school (an increase)
Pac-12: $33.6 million per school (an increase of roughly $1.2 million)
However, in the context defined by FRS reports, “conference distributions” often range from several hundred thousand dollars to several million dollars, depending on the school and the conference.
On the whole, the conference distributions reported by the 52 public Power 5 schools on their FRS reports were down a combined $19 million year over year, from $235 million to $216 million, or an average decrease of roughly $370,000 per school.
Conference distributions of bowl-generated revenue are itemized in a different category. The average distributions of bowl-generated by conference are listed in the table below, listed in descending order of bowl revenue from the 2020 fiscal year.
The impact of the widening gap in the value of media rights and conference distributions between the Big Ten and SEC, and the rest of the Power 5 conferences – but especially the ACC and Pac-12 – could have a continued trickledown effect on the coaching market. In USA Today’s college football coaches’ salaries database, five of the seven highest-paid head coaches last season coached in the SEC, which also had eight of the top 16.
The Big Ten had six of the top 20.
The Big Ten’s 11th-highest-paid head coach, Rutgers’ Greg Schiano, was paid more than the fifth-highest-paid head coach in the Big 12 – Iowa State’s Matt Campbell. The Pac-12’s highest-paid coach, Stanford’s David Shaw, ranked 18th nationally, while the ACC’s second-highest-paid head coach, Virginia Tech’s Justin Fuente, ranked 25th.
NCAA distributions almost universally declined
Fifty-one of the 52 public Power 5 schools examined reported a year-over-year decrease in NCAA distributions, with only Oregon State reporting an increase in its NCAA distributions by $109,691 from the 2019 fiscal year to 2020.
On average, public Power 5 schools reported a combined $104-million, year-over-year decrease in NCAA distributions, as their average NCAA distributions fell by about $2 million from roughly $3.5 million per school in FY19 to just shy of $1.5 million in FY20.
While NCAA distributions represented an average of only 2.7 percent of public Power 5 athletic departments’ total operating revenue during the 2019 fiscal year, they made up an average of just 1.2 percent in 2020.
While this newsletter series focuses on the Power 5, minutes taken at a meeting for the Missouri Valley Conference Joint Committee, which were obtained by Out of Bounds, note that the conference’s 2020 NCAA men’s basketball pool distribution was $2.4 million less than anticipated. The minutes stated the NCAA’s “equal conference fund” was unaffected by the pandemic, as it distributed almost $1.7 million to the conference for its six automatic qualifiers from the six previous NCAA tournaments, prior to the canceled 2020 NCAA Tournament. However, the NCAA’s “basketball performance fund” decreased by 68.6 percent, distributing only $1.2 million to the Missouri Valley Conference.
The minutes also reference how “an unanticipated NCAA supplemental distribution of $341,413 … helped soften the impact.”
The financial impact of the canceled 2020 NCAA men’s basketball tournament will continue to be felt by athletic departments for the next half-decade. The NCAA’s distribution system rewards conferences for each NCAA men’s basketball tournament bid and every tournament win prior to the Final Four that its member schools earn, and NCAA tournament units are paid out over the course of six years after a tournament concludes. The canceled 2020 NCAA Tournament will count as a “zero” in the formula, according to the meeting minutes from the Missouri Valley Conference.
Reported contributions were down, but is that a result of a decline in giving or a decline in spending, or both?
“Contributions” is the official terminology on FRS reports that applies to amounts received by athletic departments from individuals, corporations, associations or other organizations for operations of an athletic department; funds provided for the payment of debt service, lease payments or rental fees for athletic facilities; and amounts received for tickets above face value. Contributions include funds from those categories that were provided to an athletic department and then also used by the athletic department in the given reporting year.
That last part is important, because only the contributions that were used in the 2020 fiscal year were reported on last year’s FRS report.
On average, reported contributions were down more than $2 million, year over year, for public Power 5 schools from the 2019 fiscal year ($26.6 million) to 2020 ($24.6 million). Across the 52 Power 5 athletic departments examined, their combined year-over-year contributions decreased by more than $104 million, based on their FRS reports.
Given that contributions must be spent in order to be reflected on a school’s FRS report, this could means that some of the reported decreases in contributions could be the result of an intentional pullback on spending by athletic departments late in the fiscal year, after they had already received funds from donors.
But you could also make the case that contributions are one of the categories listed on FRS reports in which the COVID-19 pandemic could’ve had a direct and immediate effect on the final financial numbers for 2020 fiscal year. The pandemic effectively shut down college sports on March 12, 2020 and the fiscal year ended June 30, leaving about three and a half months of the fiscal year exposed to the financial consequences of the pandemic. Contributions, especially those potentially tied to football season ticket renewals or offseason fundraising initiatives, could have reasonably decreased in frequency and size soon after American sports were shut down in March and as donors faced an uncertain financial future.
Plus, I’ve previously written about the current challenges involved in athletic department fundraising, as player-led social and racial justice movements can potentially turn off boosters – just look at “The Eyes of Texas” situation at the University of Texas, or the effects of Kentucky men’s basketball team kneeling during the national anthem. Decisions to eliminate athletic programs can impact fundraising, as can an evergreen flashpoint in college athletics during a coaching carousel, such as the decision to keep an unpopular coach with an expensive buyout or getting rid of one who was beloved by the fan base.
For 30 of the 52 athletic departments examined, or almost 58 percent, contributions made up a smaller percentage of their total operating revenue in the 2020 fiscal year compared to 2019. Texas A&M (-11.4%), Arizona State (-10.9 percent) and Kansas (-9.3%) reported the largest year-over-year decreases in terms of the percent of their total revenue that came from contributions.
The jokes about Texas A&M’s financial fortunes being tied to the gas and oil industry have probably entered undisputed meme territory, but there’s a chance they may not be off-base. In April 2020, crude oil prices temporarily dropped below zero dollars, which means, very theoretically, someone could’ve paid you to take gas off their hands.
Texas A&M saw the largest decrease in reported year-over-year contributions of any of the Power 5 schools examined. The Aggies reported a $37.4-million decrease in contributions, or almost a 44-percent year-over-year decrease, from the 2019 fiscal year to 2020. The athletic department’s reported contributions dropped from $85.1 million to $47.7 million.
Texas A&M reported $93.9 million in contributions in FY18, $92.9 million in FY17 and $75.2 million in FY16, so it’s not as if its donors’ giving levels in the 2019 fiscal year were some sort of fluke, either.
While I’ve previously cautioned against comparing any institutions’ financial figures, simply for reference, Texas A&M’s reported contributions in 2020 ($47.7 million) still ranked in the top five among the Power 5 schools examined, and in 2019, Texas A&M reported more than $30 million more in contributions than any other public Power 5 athletic department.
A Texas A&M spokesperson is checking for me to see whether the athletic department’s reported drop in contributions was due to the athletic department receiving fewer contributions, the department spending fewer contributions during the 2020 fiscal year, or some combination of both. Hopefully I’ll hear back soon.
The point is Texas A&M’s donors gave A LOT of money in 2019 and while they still appeared to give a lot in 2020, there’s a chance the athletic department’s contributions took a major hit and if that’s the case, it was potentially in part due to the pandemic. A decline in contributions during the start of the pandemic may not be unique. A decrease in contributions to that degree could be, however.
Contributions made up at least 25 percent of the total operating revenue at eight public Power 5 athletic departments – including Texas A&M – during the 2020 fiscal year, which was down from 12 schools the year prior.
The eight schools whose contributions represented at least a quarter of their annual revenue include four schools that finished in the top 10 of the final College Football Playoff rankings last season, plus two others that won a college football national championship in the last eight seasons: Georgia (36.0 percent), Clemson (33.4 percent), Texas A&M (28.6 percent), Florida State (28.4 percent), Florida (28.3 percent), Oklahoma State (27.3 percent), LSU (25.7 percent) and Virginia (25.1 percent).
In case you missed the last newsletter
(Click the image below to read)
The 52 public Power 5 athletic departments examined reported a combined $205-million decrease in total operating revenue from the 2019 fiscal year ($6.7 billion) to the 2020 fiscal year ($6.5 billion), or an average decline in revenue of roughly $3.9 million per institution, from roughly $129 million to roughly $125 million.
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