With the introduction of college football’s new playoff format, revenues will skyrocket for the schools of the so-called Power-5 conferences.
However, the amount a school will make by actually being one of the playoff teams is a lot less than you might realise.
The big boom in revenue for the Power-5 conferences (ACC, Big Ten, Big 12, Pac-12, SEC) will come from the new television contract with ESPN reportedly worth an average of $US470 million per year for the first 12 years of the playoff.
According to the College Football Playoff, that revenue is expected to nearly double the amount distributed to each of the Power 5 conferences from a minimum $US27.9 million under the last year of the old BCS system to a minimum of $US50.0 million under the new format.
But here is where it gets tricky for the schools actually competing for one of the four highly-coveted playoff spots.
Most of the money is already guaranteed for the conferences and any extra paid for participating in the playoff is paid to the conferences, not the individual schools in the playoff.
Here is how the playoff revenue is distributed to the Power 5 conferences (in addition to this revenue there is a smaller share distributed to non-Power 5 conferences and independent schools):
- Each conference will receive $US50 million automatically whether they have a school in the playoff or not. That money will be distributed to all schools evenly ranging from $US3.6 million to 5.0 million depending on the number of schools (a school will receive $US300,000 less if they fail to meet the NCAA’s minimum academic standards).
- A conference will receive $US6 million for each school in the playoff.
- A conference will receive $US2 million for each school in the playoff for travel expenses. Presumably, this will go almost entirely to the school in the playoff.
- There is no additional money given for advancing to the championship game or for winning the championship.
On top of that, the ACC, Big Ten, Big 12, and Pac-12 all distribute bowl game revenue evenly to all schools in their conference. Only the SEC gives a slightly larger share to the actual school that will participate in the playoff.
In other words, a school like Florida State could win the ACC and the National Championship and they would net the same amount as Wake Forest, one of the worst teams in the ACC, with the only difference being the travel expenses.
Only in the SEC, where the school in the playoff will receive $US1.8 million on top of the travel expenses, is there a direct financial benefit to making the playoff.
However, this doesn’t mean the other conferences aren’t fighting for something.
Not all conferences are guaranteed a spot in the playoff. If a conference fails to put a school in the playoff, that conference won’t get the $US6 million bonus, which translates to $US300,000-600,000 less per school depending on the size of the conference.
Here are the payouts based on estimations provided by the College Football Playoff and the bowl game revenue sharing system in each conference:
As a result, all schools in the Power-5 conferences are already guaranteed a big revenue boost and in four of the conferences it only matters financially that at least one of the schools gets into the playoff regardless of which school actually makes it. And yet, even then, the extra revenue is less than a $US700,000 per school.
That will help some of the lower-revenue schools. But for the bigger schools like Alabama and Oregon, with athletic department revenues north of $US100 million, that is a drop in the bucket.
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