"The Market" and the BCS

Sorry if it seems like I'm hammering on the BCS too much lately, but it's a central issue to college football and it pertains to the SEC. Also, warning: long.

As the dust settles from last week's Congressional hearings, folks are moving away from critiquing the participants. The subject of the way "the Market" led to the BCS appears to be heating up some though. Matt at Dr. Saturday and Senator Blutarsky addressed the issue yesterday.

It stems from John Swofford's testimony. When asked why the six automatic qualifying conferences (a.k.a. the BCS conferences, AQ for short) get a much larger payout than the non-AQ conferences, he replied that it was because the BCS was "market based."

That much is true. College football didn't become a $2 billion a year enterprise on the back of epic battles between Temple and Western Michigan. It's the big programs that bring home the bacon (and advertising revenues).

However, markets aren't necessarily fair or rational. For instance, we've seen two bubbles blown and pop in the general economy over the past 15 years alone.

Markets in sports are especially prone to irrationality. $100 million for Kevin Brown and Albert Haynesworth? Really? $17 million a year to Zach Randolph? Whose idea was that? Perhaps the coup de grâce of them all, someone actually thought it was a good idea to put a hockey team in Phoenix. Is anyone surprised that the team has lost $200 million since 2001 and is now in bankruptcy?

Just because a market prodded you to a point, it doesn't mean it's a good or rational one. There's plenty of irrationality in college football, and I'm not even talking about Charlie Weis' contract extension.

The issue with the money structure of the BCS is not that it came about via market forces. I think anyone who knows anything about the way things work would agree.

The problem is that the BCS reinforces the cartel structure of college football. Not only that, the cartel isn't even rational.

No rational person would try to argue that, from a financial standpoint, Mississippi State is in the same league as money machines Florida and Georgia. Same goes for having Iowa State and Baylor in the same league as Texas and Oklahoma, or having Northwestern in the same league as Ohio State and Michigan.

Because college conferences are based on history and not market forces, it creates a fundamentally unfair scenario. If a program Utah, Boise State, or BYU is ready to make the leap from the underclass to the overclass, there's no way to do it. If a program like Duke or Vanderbilt can't prove they belong in the overclass, there's no way to demote them.

There's plenty of ambiguity to things as well. For instance, take Miami. Thanks to some good coaching hires and a tropical locale, Miami became a power school and is still today considered universally to be one of the top programs in the country.

However, Miami is actually a small private school with a relatively diminuative alumni base. After Butch Davis went to the NFL, the Hurricanes' head coaching job went to Mr. Underwhelming Inside Hire twice in a row. Sometimes schools will do that once (take a bow, Bill Stewart), but no one does it twice in a row. No one, except programs like Miami that can't afford to pay a buyout and a splashy new coach.

Miami also has real problems filling up its stadium, at least when Florida and Florida State aren't in town. In 2007, Miami managed about 43,600 people at every game, a mere 60.3% of the old Orange Bowl's capacity. It's not a new problem either. In 2001, when Miami fielded perhaps the most dominant team of this decade, the Hurricanes drew just 47,200 to each game, all of 65.2% of the stadium's capacity.

Senator Blutarsky also brought up the topic of attendance, pointing out that the average attendance for SEC spring games would have rated 55th in attendance last year. The only non-AQ team that bested that rank every year since 2000 is BYU, which rated no worse than 33rd in average attendance during that span.

So here's where the question comes up: with BYU winning 10 games a year under Bronco Mendenhall and drawing 15,000 more a game than Miami does, who struggles to make a bowl nowadays, where's the recourse? Where is the adjustment in the system to recognize these facts?

There is none, and that's why the BCS is not a construct of a fair or rational market. Granted, Miami isn't the best example since they are (for some strange reason) still a big TV draw. However, BYU out-wins and out-draws teams like Rutgers, Kansas State, and Stanford by the same or greater margins, but all three of those can win a national title if they go undefeated whereas BYU cannot (well, cannot anymore at least).

The BCS has gotten better over the years at being more inclusive, what with the addition of the fifth game and the creation of criteria by which non-AQ conferences can become AQ conferences. The AQ/non-AQ debate isn't the end of it though.

Strata are forming within the AQ walled garden. It's a financial arms race out there, and the current recession is only a speed bump.

Some programs are going to be able to keep up pretty much regardless. The SEC's big six - Alabama, Auburn, Florida, Georgia, LSU, and Tennessee - are probably all in that group. So are national behemoths like OU, Texas, Ohio State, Michigan, USC, and Notre Dame (we're talking financially, remember, not recent bowl records).

The scholarship limit is probably the only thing keeping the richest schools from separating themselves completely. For the schools that don't have infinite fan bases and resources, they have to hope they luck into having a coach like a Grobe, Petersen, Wittingham, or Mendenhall who is willing to do the irrational thing (in market terms) by turning down windfalls to remain where they are.

The economics of the sport have gotten to the point that schools routinely lose money on bowl trips. If you take out bonuses, incentives, and raises for coaches, huge paydays sometimes barely end up as profits for BCS participants as well.

Some kind of market correction has to come at some point. It could be a more drastic revenue-sharing plan than what already exists under the current BCS scheme. It could be another divisional split like the I-A/AA partition in the '70s. It could even be the NCAA enforcing its own standards for remaining in I-A*. A system simply cannot survive that long when the majority of members aren't making money.

It's easy to look at the BCS's existence and shout "The Market!" and be done with it. However, the attempt to blend tradition with market forces has resulted in the irrational and inequitable system we have today.

To say the BCS is a cartel isn't exactly right. It's simply the latest expression of the cartel that has existed for a while. And yes, it is Congress' business to look into things because of how much money is involved and because none of the entities in the BCS have an antitrust exemption. College football is a $2 billion industry, and the government should at least investigate when a cartel exists in a business that big.

I still doubt that much will come of last week's hearings. However, I do believe change will come to college football one way or another. It's too visible an entity and there's too much money on the line for it not to.

*One such requirement is that a program must average 15,000 in attendance once every two years and for example, Rice, Eastern Michigan, Idaho, and Utah State all failed to do so in 2006 and 2007.

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