TV Money Drives Budgets of Top-25 College Football Programs

For many Americans, Labor Day means gathering with friends and families to barbecue and celebrate the start of the college football season. Thanks largely to a U.S. Supreme Court decision in 1984, NCAA v. Board of Regents of the University of Oklahoma, college football games are widely broadcast across a variety of networks and now, platforms. This case played a significant role in increasing one of the biggest sources of revenue for college football and other sports: TV contracts.

In the NCAA v. Board of Regents case, the University of Oklahoma and University of Georgia challenged on federal antitrust grounds a television distribution model, whereby the NCAA limited and controlled how universities’ football games were broadcast nationally. The model implemented ceilings and floors for the broadcast of Division I programs’ games. The NCAA asserted that the model promoted competitive balance, as teams from smaller conferences were assured that some games would be broadcast, while powerhouse programs could not have their games shown weekly.

Ultimately, the Supreme Court struck down the NCAA’s distribution model under the Sherman Antitrust Act using the Rule of Reason test. The result was one that shifted the economic model of Division I athletics, as for the first time, individual universities were able to sell the broadcast rights for their regular season games. While most universities pooled their rights with other conference members to sell them collectively to networks, others like Notre Dame entered into individual television deals. Arguably, Notre Dame’s 1991 television deal with NBC valued at $38 million helped the team’s football program acquire a national fan base.

These days, broadcasting revenue reigns king when it comes to driving an athletic department’s budget. However, the tide of college sports broadcasting is turning, with many university athletics departments and conferences beginning to enter into new media distribution deals. For instance, this season, Utah State and Weber State played in the first college football game ever broadcast on Twitter.

While new media may provide a mechanism for athletic departments outside of the Power Five conferences to gain competitive balance in terms of exposure, at the end of the day, programs in conferences that are parties to lucrative television deals continue to win financially and on the field.

The chart below highlights the revenue and expenses for the football programs and athletic departments, respectively, ranked in the Associated Press’ pre-season top-25 poll. The data was obtained from the Department of Education and is from the 2014-15 fiscal year. It’s important to note that the Department of Education does not provide strict guidelines on how athletic departments report this financial data. For instance, some athletic departments may report service payments and payouts to the university, while others may not. Thus, this data cannot be read as being an absolute depiction of an athletic department’s finances. Rather, the data is the only publicly available set of financial information providing a glimpse at how top football programs and athletic departments spend and make money.