HH Podcast: We're tanned, rested and ready for Montana

Tequilla said:

@DerekJohnson

A little delayed in getting back to you on this as I've been largely traveling back to Seattle this past week, but definitely wanted to respond.

A few years ago when there was conversations about where UW stacked up nationally in terms of $$$ and whatnot, I did some research behind overall Athletic Department revenues as well as football. This is also something that comes in handy when looking at expansion candidates, etc.

For purposes of the discussion, I forget where I got the sport specific data at and only have through 2016 so the data I reference there will likely be more directional in nature. For overall Athletic Department revenue, the Knight Commission (http://cafidatabase.knightcommission.org/reports) is a great source in leveraging where programs reside.

Addressing the revenues in the Big 12 and how it pertains to expansion question

Big 12 revenues really tied into tiers ... Texas is by and away the largest with Oklahoma closer to the top of the PAC 12 schools than they are to Texas (2019 revenues for Texas/Oklahoma at $224M and $163M respectively). From there, Kansas is the next largest public school at $122M which is driven by hoops as football ranks at the bottom end of revenue numbers that I've seen. Once you get past that, everybody else falls between $90M (K-State) and $103M (West Virginia - hoops big factor here as well).

The wild cards in the Big 12 are the two private schools in TCU and Baylor. In both cases, there's some extrapolation that is required. A quick Google search can pull up reporting from the TCU Athletic Department annually on financial performance. However, they tend to report more on how much the AD profits ($15-$25M annually) than they do reporting overall numbers. More digging places TCU's annual revenues for their Athletic Department in the $115-$120M range for 2019. When looking at Baylor, most things I've seen/read on the subject suggests that Baylor's annual revenues tend to lag TCU's by about $10-$15M annually. This directionally makes sense to me given my understanding of the schools and the financial backing behind them.

Lastly, the football specific data that I have places TCU as the clear 3rd school in the Big 12 when it comes to football revenues which passes my smell test on the subject given that generally speaking when looking at recruiting over the years, TCU typically falls as the "best of the rest."

So the way I look at the Big 12 programs largely comes down to thinking about what they bring to the table and how that is prioritized as while there are gaps between the top/bottom, most of the programs more or less have their relative strengths and weaknesses.

Overall Revenue Profile of Big 12 (2019 totals)

Texas - $224M
Oklahoma - $163M
Kansas - $122M
TCU - $115 to 120M (estimated)
Baylor - $100M to $110M (estimated)
West Virginia - $103M
Texas Tech - $97M
Iowa St - $95M
Oklahoma St - $95M
Kansas St - $90M

For a point of reference with the 4 schools being considered for expansion in the Big 12 with their 2019 revenues:

Houston - $75M
UCF - $69M
Cincinnati - $69M
BYU - estimated $70-$75M (private)

As a FYI, Boise is at $51M in annual revenues

2019 Athletic Department Revenue for the PAC 12:

Washington - $134M
Oregon - $128M
Arizona St - $122M
UCLA - $108M
Arizona - $105M
Utah - $100M
Colorado - $95M
Cal - $88M
Oregon St - $82M
Wazzu - $72M

Both Stanford and USC are private. Everything that I've seen recently suggests that USC slots in just below the UW/Oregon level and probably losing a bit of ground overall as the years progress (the scandals going on down there is not helping). Stanford isn't about annual revenue per se given that so much of their program is funded through endowments. Stanford is as fully funded and financially stable Athletic Department that there is in the grand scheme of things.

What you take away looking at the P12 revenues is that UW is the most consistently stable revenue earning program in the conference whereas Oregon fluctuates between 1 and 2 in the order depending on where Uncle Phil's money gets used for (it's something that UW can't really compete with per se). Arizona St has been very aggressive in recent years trying to close the gap from a resource standpoint ... it's pretty interesting because big picture there's no reason ASU shouldn't be more successful than they are (short list for most underachieving program in the country). ASU should be monitored in the coming years as I suspect that they are going to be going in the "win at all costs" direction. Utah's actually a really good example of what happens when you take a solid program and put it in a better position as their revenues have almost doubled since 2014. At minimum, if/when the next round of consolidation comes in the conferences, Utah's seat at the table is something that is probably more realistic than most would think.

The weakness of the P12 is pretty easy to identify. UCLA/Arizona are relatively mid tier in the conference in terms of revenue but that's inflated because of their basketball contributions ... the reality is their football interest is largely indifferent. Colorado cares but not that much. Cal's way too poor for a school given where they are located and an alumni base that should be successful (or said differently, they don't care). Oregon St and Wazzu don't really have a good path forward when it comes to keeping up with the top programs.

This is where I'd say that the Alliance agreement has a chance to really help the top P12 programs. I suspect as time progresses the gap at the top/bottom will only widen. Winning recruiting battles and keeping kids on the West Coast (or getting them to come to the West Coast) is predicated on playing high visibility games ... of which this conference can really only offer the games that involve UW/Oregon/USC. Getting more games for this group against top end teams in the Big 12 and ACC will increase visibility. Getting the CFP to expand from 4 to 12, combined with a more difficult schedule situation, will likely result in the P12 being able to send 2 members more often than not IMO. In the end, the future of the P12 is going to come down to how are they able to keep the Big 3 in the conference happy as it pertains to being competitive nationally.

Big picture, I like that the Big 12 is expanding out to 12 (they should be able to maintain being what I'd consider to be middle tier P5 conference programs). The long-term outcome of this is that it should really bottom out the "Group of 5" and IMO really create a situation where that level spins out to either it's own level or becomes left in a no-man's land. Creating leverage against the SEC should allow for a CFP expansion that comes out with more of an established set of criteria for getting in. Make no mistake, the biggest threat to CFB at this point is too much power being consolidated between the SEC and ESPN.