The real March Madness: Chasing the television money

Every March the argument starts all over again. Media pundits, columnists, analysts, college basketball fans, coaches and just those people who fill out their NCAA Tournament brackets every year all pitch in their two cents over which teams did not qualify for the NCAA Tournament through at-large bids.

While making these arguments, these people use words like RPI and phrases like “who they played and who they beat” to prove beyond a shadow of a doubt that team A deserved to be in the tournament, not team B.

Usually the argument breaks down into two camps, one camp arguing that an average team from one of the top six conferences (the Atlantic Coast Conference, Big East, Big Ten, Big 12, Pac 12 and Southeastern Conference) is more deserving of tournament selection and the other camp arguing for the other 25 conferences. Often, media members mention money, usually in passing.

Money is not a matter that should be breezed over. The amount of NCAA media money college basketball conferences receive from the tournament and how that money is doled out (See Graphic 1) are important to teams and conferences. The money is needed to meet athletic budgets. The exposure leads to exponentially more money and prestige and, in some instances, increases in overall student enrollment.

The Missouri Valley Conference traditionally found itself in good shape for a conference that doesn’t have major football and isn’t one of the six major conferences mentioned above. The Missouri Valley Conference consists of 10 teams, dotting the states of Illinois, Indiana, Missouri, Nebraska, Kansas and Iowa. The money earned from the NCAA Tournament is important for schools from the Valley because that money plays a vital role in most schools’ athletic budgets. And this is where a possible problem awaits the Missouri Valley Conference. The conference has not had the success in recent years it has had in the past.

In 2006, the Missouri Valley Conference played eight games in the NCAA Tournament. The NCAA will make its final television money payment on those eight shares this year. In three of the last four years, the conference has placed one team in the NCAA Tournament and played only one game. Take away the $1.9 million dollars the conference receives for the 2006 season and replace it with $245,000, the amount paid if the league only gets one team in the tournament and schools from the Missouri Valley Conference could receive a significantly smaller paycheck next year. That’s why the Missouri Valley Conference desperately wants more than one team to qualify for the NCAA Tournament this year. (See Missouri Valley Conference Television Revenues graphic)

“The money is huge,” said Southern Illinois University Athletics Director Mario Moccia. “We all know what is going off the books in a year. It has an impact. Salaries being what they are, you have to start to question ways to make ends meet. Do you take on another pay game in football? There are only finite ways to cut revenue.”

Athletic departments across the country deal with the impact of television revenue monies every year. Sports media spent hours discussing the impact of realignment between the six major conferences and the money involved. At the same time, the 25 other conferences carried on as usual under the media’s radar, trying to find ways to make their budgets work. Most know that if their conference is successful in the NCAA Tournament, the money can go a long way in making their individual schools financially solvent.

Supporting athletics

All universities have certain ways to earn sports revenues. Those include ticket sales, merchandising, student fees and television revenues. The largest television revenues come from football bowls, entities that are not negotiated through the NCAA, but instead from television corporations to college conferences and through the BCS agreements.

The largest player in this is Disney, which through ESPN and ABC Sports controls all six BCS bowls, including the national championship game. ESPN pays these conferences well for basketball also. In fact, taking averages that appeared on businessofcollegesports.com, conservative estimates show universities that compete in the six major conferences can expect more than $10 million in revenues from television rights deals with ESPN, Fox and other companies. Some will make more than $25 million per year in television rights revenues. That’s before television money from Bowl games or the NCAA Tournament money is paid to the conferences.

Compare this to the deal the Missouri Valley Conference has with ESPN and with Fox. The ESPN deal is about $190,000 per year. The schools in the Missouri Valley Conference received approximately $290,000 last year from the NCAA Tournament. Next year will be even less (The Missouri Valley Conference earned three NCAA Tournament shares this year and loses eight shares from 2006, meaning the conference loses over $1 million in NCAA television revenues next year). A major cut in NCAA television revenue money will have a negative impact.

Individual schools in the conference are already finding ways to either increase revenue or cut expenses. The Missouri Valley Conference’s Missouri State University played two pay-football games last year, which means the team received money to play at a school from one of the six major conferences. The two games resulted in a pair of losses and a nice paycheck. Northern Iowa dropped its baseball program. Southern Illinois University’s largest contributing factor to its basketball program is student fees. These are all ways to increase revenue or cut expenses for the athletics departments.

Television doesn’t just play a monetary role for c

onferences and individual universities either. There’s a difference in exposure as well. Teams from the six major conferences play on prime television slots on ESPN, CBS and Fox. A conference like the Missouri Valley Conference must take a different approach.

Missouri Valley Conference Commissioner Doug Elgin said one key element that he was happy with the latest ESPN television contract was that ESPN gave up its rights of exclusivity that said if the Missouri Valley Conference was going to have a game televised nationally, it would have to be from ESPN or the other broadcasting entity would have to pay ESPN a rights fee.

“ESPN relented on the current contract that we just signed for this year and they not only allow us to take games on Fox Regional, Fox National but they also simulcast those games online,” Elgin said. “They have the rights online, outside of our six state footprint, and that’s an additional 91 million homes.”

That allows Fox to carry more Missouri Valley Conference games on its regional and national channels. The Valley’s deal with Fox ties into its deal with Learfield Sports, a sports marketing company. The terms of the deal are confidential. With Fox, the Valley actually pays for the right to broadcast its games but gets to keep a large percentage of the advertising sold at games.

What’s important, says Elgin, is the exposure provided by getting Valley teams to a national audience. In years past, the Valley reached approximately 9.5 million homes with its regional package. The thought of possibly getting into 91 million homes, along with an increased amount of coverage on ESPN networks, helps the conference gain exposure.

“It’s so important for us to be able to remain relevant,” Elgin said. “It’s important to be available nationally.”

Southern Illinois University once was a recipient of that exposure. For six straight years, Southern Illinois was a powerhouse in the Missouri Valley Conference, qualifying for the NCAA Tournament in each of those years and in 2008 actually spent an entire day on national television as ESPN brought its GameDay crew to cover a game against Creighton. But Southern Illinois University dropped from the precipice of relevancy after that year and lost its opportunity to become marketable nationally. This lost exposure affected the entire Missouri Valley Conference. The Valley became an afterthought and lost what national exposure it had.

That exposure is nowhere near the exposure found in the six major conferences. But it wasn’t always that way. In 1979, the NCAA Championship game was a battle between the Missouri Valley Conference’s Indiana State University, led by Larry Bird, and the Big Ten’s Michigan State University, led by Magic Johnson. The game is still the highest rated NCAA Tournament game in television history.

That same year, the Entertainment and Sports Programming Network was born. By 1980, ESPN was covering the early rounds of the NCAA Tournament.

The national attention of the 1979 championship game and the rise of cable television led to the explosion of March Madness. The NCAA men’s basketball tournament became an event, capped by the yearly ritual of filling out tournament brackets. All the while, ESPN carried more and more games. In the 1980s, the network also introduced SportsCenter, a sports highlights show that captured the nation’s interest. The company brought in professional journalists with strong reputations and gained credibility as a journalistic organization as well as a clips show. ESPN now had a news show to promote the sports it was broadcasting.

Television rights contracts grew exponentially and even though ESPN didn’t get the rights to carry the NCAA Tournament, the network carries more than 1,200 games per year on its broadcast and internet stations. The company also profits from its coverage of games on SportsCenter. As ESPN garnered more and more television rights contracts for large sums of money to six specific conferences, it became an obvious conflict of interest for those on the journalistic side.

The revenue money also led to a more pronounced gap between the conferences that had large television resources and those that didn’t. The exposure leads to a perception that all teams from the six major conferences are superior while the money leads to resources that allow teams from those conferences to major recruiting advantages. The differences are pronounced.

This led to fewer and fewer teams from smaller conferences being selected into the NCAA Tournament as at-large bids. At the same time, media coverage (from national shows like SportsCenter) of top schools from the other 25 conferences has decreased or is presented in a negative context.

And the arguments begin. The six major conferences have more money, more exposure and are marketed as superior to the other 25 conferences.  Ask the mid-majors and they’ll say the same thing. The deck is stacked against them. It isn’t fair. They’ll also say how important that second NCAA bid actually is. And how much success in the NCAA Tournament can mean to a school and a conference. And how much the exposure helps — when they get it.

“Listen, we were the recipients of ESPN’s exposure,” Moccia said. “And we hope to get things turned around here and hopefully, we’ll be the recipients again.”

The league is gaining some exposure this year. Big wins by a number of teams early in the season and continued solid play by both Wichita State University and the University of Creighton have opened some eyes. That second bid is possible — and important.

Scott Lambert is the managing editor of the Gateway Journalism Review. He worked as a sports journalist and editor for 13 years.