The Growing Revenue Gap

While the revenue gap between the SEC and Big Ten in comparison to those of the Pac-x, ACC, and Big is significant and growing, the gaps between those and the Group of 5 conferences are drastic.

Most G5 athletic departments cannot support themselves financially on earned revenue.

Expenses Keep Growing Faster than Revenue

The resource gaps between “Power 2,” the “Next 3,” and the “G5” are getting worse, and the impact will continue to accelerate.

Power conferences have dramatically escalated spending while G5 schools have grown much more slowly, creating a rapidly growing disparity between the “haves” and “have nots.”

Unprofitable Programs Need Heavy subsidies

They have to massively subsidize the athletic dept from the academic side of the house (and via student fees), which may not be sustainable.

G5 schools need to subsidize most of the costs needed by their athletic programs via school and student funds.

The large revenues of the Big Ten-SEC athletic departments allow them to keep funding their growing athletic arms race with minimal school support.

High B12 may standardize as new teams integrate new revenue.

Athletic Department Share of Total Budget

This explains A LOT about how schools make decisions, and why other conferences may feel very foreign to some fans.

Athletic budgets make up a. significantly higher percentage of a school’s total academic budget in SEC and SBC or CUSA and Big 12 and ACC than they do in other conferences, and the sports percentage of total budget is rising especially quickly in the SEC and SBC conferences.

Athletic Revenue as a Percentage of Total Academic Budget

On opposite sides of the spectrum, mega research schools and G5 programs rely less on sports money (which explains how school leaders responded to COVID-19.)

Athletic revenues make up a much larger share of SEC schools’ budgets than other power conferences, not just due to prioritization, but also relative to extremely large academic budgets at the Big Ten and the former Pac-12 schools.

On the G5 level, it is a very small percentage because G5 programs earn so little revenue from athletics.

Trends Continuing

But adjusting for those issues, the trends themselves are continuing FY22 will be the first “normal” year again.

Full details aren’t out yet, but the trends are expected to continue, and many of them will rapidly get worse, especially as the B1G and SEC begin their new media deals.

Resources: Different Worlds

Intermingled B1g Ten/Pac-12/ACC/SEC explains much about realignment: Aspirational perspectives illustrate why teams do not realign downward academically.

A high concentration of the largest and wealthiest FBS schools, both in academics and sports, are within the conferences mentioned above.

In short, resource gaps between A5 “power” conferences and the G5 are dramatic, both academically and athletically.

Conference and Resource Clusters

The long, close institutional connections between B1G and Pac-12 (and ACC, too) schools are especially noticeable

Resource gaps between the “haves” and “have nots” become clear, especially in blueblood programs, with both academics and sports.

Higher Ed Influence and Power

Conference members typically align on academic prioritizations.

Power Five Profitability

Other conferences make spending choices and require subsidies to fund their departments. Some do it happily, while others make heavy cuts to non-revenue sports or run barebones Olympic sports programs to stop the flow of red ink.

Some Contrasting Examples: USC, Cal, Texas, and Florida expect to win gold medals in the Olympics and NCAA National Championships in non-revenue sports.

They understand that this takes heavy (yet VERY unprofitable!) investments in sports like Men’s Swimming, Track, Beach Volleyball, Rowing, etc.

Kansas State, on the other hand, has a profitable athletic department that earned a net book profit, but has made the choice to be smaller than those, and NOT to invest in those money-losing sports (not even having most of them).

Consequently, the Wildcats have never won a NCAA National Championship. However, they made a profit from their athletic dept, unlike many of those above.

Those are different management choices in resource allocation and investment, and they will become very interesting going forward:

Will more schools (like Cal recently did!) make the decision to pump large, new investments in their non-revenue sports, further hurting the bottom line?

Or will more schools follow KSU’s model of being more frugal on the Olympic sports to keep the bottom line in the black?

Even across the highest revenue “Power” conferences, most schools lose money on their athletic departments, requiring subsidies.

Academic Consistency

For conferences on the upper end of these charts, this stuff matters a LOT more than many fans think it does!

Rankings are very comparable, regardless of. methodological focus.

Combined Academic and Sports Success

We could make dozens of cuts and deep dives on them, but here are a few that are especially interesting, given things today.

There are so many aspects of CFB history that are still evident today in these as well, as a lot about why realignments have happened before and considerations for future moves going forward.

They’re a lot to digest, and feel free to spend some more time on them with a bigger screen!

(A note to the footnote-loving nitpickers: These use the same two-year all-sports success points from the above charts, using an average of academic ranks across the 3 most universally respected systems, so there’s no skewing for one methodology or another.)

The “Power” conference institutions are effectively in a different universe athletically and institutionally compared to most G5s.

None of the lowest-ranked academic schools enjoy significant athletic success, likely a reflection of resources and commitment.

Most conferences are made up of members who are aligned on a shared vision of academic + athletics strategies and expectations.

Despite athletic resource gaps, the five “Power” conferences are still intermingled in academic standing and athletic success.

Current Realignment Discussions

This is one of my favorite charts for perspective on the Pac-12/XII dynamic.

Understanding the synergistic goals of academics and athletics is crucial when considering realignment and expansion options.

More Realignment Coming?

If (as expected), the Pac-2 backfills back up to be the Pac-12, realignment always flows downhill… It will be fascinating to see what decisions are made by those conferences, and something that I don’t think the media is talking enough about right now!

The Broader View

This chart gets even more interesting when we look at the broader view of universities, and also add in the Ivies and other AAU schools, creating a unique triangle that shows many top schools that also DO care about their successful athletic programs, too.

There are three very separate groups in college sports, with very little overlap: A5 “Power” conferences, elite Ivy League schools and AAU, and G5.

With a few notable exceptions, the three groups are distinct: academies, recent upgrades, and a few academic elites stand out.

The Power conference members generally align in their strategies across both academics and athletics, generally clustered together.

G5 schools span the full range of academic status, from elite AAUs and academies to regional/commuter schools, but none of them can compete across the athletic department with power conference teams.

2022 College Sports Finances Data

Now that the Knight Commission and the Department of Education have published new FY22 financial data, we can get a first good look at the state of college sports dollars post-Covid.

There’s a LOT to unpack, but here are the high-level key financial updates by conference.

The Big Ten, former Pac-12, and SEC have more sports and more varsity athletes than other conferences, dedicating the resources to fund them.

There are dramatic and growing differences in the resources dedicated to athletics in the A5 “Power” conferences vs. others.

SEC teams lead spending in football, followed by the ACC and Big Ten; In hoops, Big East teams lead spending for their flagship sport.

There are significant revenue gaps among “power” conferences, but also dramatic gaps to the G5, requiring heavy subsidies from schools.