Revenue potential crucial to Big Ten expansion debate

CHICAGO - Public discourse on Big Ten expansion largely centers on athletics and academics, but the debate's bottom line for administrators starts and ends with, well, the bottom line.

The Big Ten Conference earns and distributes more revenue than any of its collegiate peers, which is why some non-members publicly - and unusually - admit interest in joining the league.

“We won't just accept someone because they have their hand up to join the league,” Wisconsin Athletics Director Barry Alvarez said. “Everyone knows the cost of college athletics. That's no secret. It's big business. When you're sitting there with a network and you're able to do some of the things we've been able to do in negotiating with TV rights and that type of thing, I think everyone's envious.”

Most expansion prospects marvel at the Big Ten's revenue-sharing model. Based on the numbers, they should.

The Gazette obtained tax returns from every Football Bowl Subdivision conference in fiscal year 2008. The Big Ten reported $217.7 million in revenue that year, followed by the Atlantic Coast Conference ($162.7 million) and the Southeastern Conference ($161.5 million). The Big Ten distributed between $18.77 million and $18.83 million to each of its 11 schools, more than any other league.

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But in two years the numbers have changed. After treading financial water its first year, the Big Ten Network is profitable. Its viewership has soared from around 30 million in 2007 to around 75 million today. Big Ten schools now earn around $22.5 million in conference sharing.

The Big Ten isn't the only league with a growing treasure chest. In 2008, the SEC distributed $135 million among its 12 members. New media deals this year have more than tripled the SEC's television revenue from around $60 million a year in fiscal year 2008 to a reported $200 million annually. Combined with annual NCAA and bowl revenue, the SEC could distribute around $20 million annually to its schools.

Other conferences have taken notice. With Nebraska and Missouri officials publicly admitting some interest in talking to the Big Ten, Big 12 officials plan to discuss the conference's future at its June meetings in Kansas City.

“Money is an issue. The TV contracts are an issue,” Texas Athletics Director DeLoss Dodds told the Dallas Morning News. “I think the Big Ten is way ahead of us in tradition and years and TV money. I think that's the reason some people are looking at that (conference) in a favorable way.”

Texas is the Big 12's financial kingpin, earning a national-high $138.5 million in 2008 revenue, according to the U.S. Department of Education. That's $92.7 million more than Iowa State in the same fiscal year. The Big 12 reported $57 million in TV earnings in 2008 and sharing $103 million among its members. Unlike the Big Ten, which shares money almost equally among its members, the Big 12 disperses some of its money based on television appearances. Texas, for instance, took in $10.24 million in league sharing, while Iowa State earned $7.44 million in 2008.

The Big 12 revenue-sharing model has created a public schism among league schools, but Iowa State Athletics Director Jamie Pollard said the Big 12's problem isn't revenue sharing; it's overall revenue.

“To me that issue is so far ... ironically that's a very small issue given the real parameters that are out there on the table is the Big Ten television network has created a lot of revenue,” Pollard said. “The SEC's television package has created a lot of revenue. So the rest of the conferences are in this position of trying to jockey to figure out when our time comes how are we going to capitalize. So that's really the focus versus how we're splitting it up.”

With revenue at the forefront of expansion conversations, Big Ten Commissioner Jim Delany was asked if the league would require a new member to buy-in or take less initial revenue.

“I don't think that's appropriate to be commenting on,” Delany said. “It's a fair question, but the fair answer is that don't have a comment on that.”

Delany identified several criteria for potential expansion candidates, including demographics, BTN growth, athletic fit, academic profile and fiscal potential. All of them will factor in the league's final decision on expansion. All of them are bottom-line oriented.

“The institutions that make up the Big Ten have been together, some of them for 110 years,” Delany said. “They don't take change lightly, they take it very seriously. It will be about institutional fit, intercollegiate athletic fit, academic fit, fiscally sound ...”

Call it college athletics' version of capitalistic socialism, where sharing the wealth is in vogue - provided it's large and growing.