Bowl Games 'Are a Money-Laundering System'

Why do teams keep coming back to bowl games despite regularly losing money on the trips?

Much of it has to do with image, but as Brent Schrotenboer of the San Diego Union-Tribune writes, it also has to do with the way the system works.

As this site noted last week, once a team accepts an invitation to a bowl game, it also agrees to purchase an allotment of tickets. This ticket revenue is critical to not only helping the bowl system survive, but thrive. In 1996-97, there were only 18 bowls. Today there are 34.

Teams usually fall short of selling their tickets and are stuck with losses that sometimes tops $1 million. Teams blindly look past the ticket-allotment issue because they pass the losses up to the conference office, which pools all the postseason monies and distributes it to league teams.

This money often covers the losses from unsold tickets. Last year, expenses for the 68 bowl participants were $80 million, which included $15.53 million in unsold tickets.

"The bowls are a money-laundering system, in which one school may fall on the economic sword and buy these tickets, knowing it will recoup this over time," Richard Southall, director of the College Sport Research Institute at the University of North Carolina, told the Union-Tribune.

Conferences and teams collected $228 million in bowl payouts last year, meaning bowl revenues exceeded expenses by $148 million. But that profit would not be possible without the huge payouts from the five Bowl Championship Series games. Those five games paid out slightly more than $148 million.

That means the 29 non-BCS games are a break-even proposition for the participating teams and conferences.

Bottom line: While the BCS has been a boom to the bowl business, it only pays to play in a BCS game.

Comments

[Will]

I would also argue that the bowls are set up to make ESPN money. 27 of the 34 games are going to be broadcast on ESPN/ABC. That total will go up by 3 next year when ESPN gets all the BCS games. Bowl games are cheap programming for ESPN. ESPN doesn't care if there's people in the stands as long as they garner at least a 2.5 share in viewership ratings.

[Purple People Eater]

Why wouldn't the SEC, which is comprised of 12 institutions of higher learning, want to generate more money for each institution every single year? Every year, the SEC breaks its own record for funds distributed to its member institutions, primarily because of the bowl system and ESPN. From Alabama to Vanderbilt, the schools are benefiting from this arrangement.

I don't understand why this so wrong.

If the "mid-major's" want to complain about the SEC and other BCS Conferences, I recommend that the SEC, PAC-10 and others pull completely away from the others and completely do their own thing. Point is, Utah is making BCS money BECAUSE of the SEC, not in spite of it.