Should KU be worried about getting dumped from a Power 5 Conference? The financial stakes are huge
“Power” may not be a strong enough word to describe the financial benefits of being a member of a Power 5 Conference.
The term Power 5 Conference refers to the five big, football-dominated college athletic conferences that get the lion’s share of college television revenue. With its membership in the Big 12, the University of Kansas is part of the club.
But due to its struggles on the football field, KU certainly isn’t in the top tier of schools in the Power 5 conferences. When you are in the bottom tier, there are seemingly endless questions hanging in the air: Will there be conference reorganization? Will the Power 5 consolidate into the Power 4? Would we make the cut in a new world order?
About this series
When KU announced in September plans to build $350 million in new facilities, primarily for football, it marked the beginning of one of the biggest financial bets the program has ever made. The Journal-World decided to study the financial books, talk to leaders and give readers a better understanding of the money game that is constantly a part of big-time college athletics. To see more articles go to: ljworld.com/kuath
The financial stakes are huge. While the Journal-World’s review of Kansas Athletics showed its finances unbalanced in some regards, it is nothing compared to some of the schools that have been left out of a Power 5 conference. The hallmarks of their budgets often are large amounts of student fees to support athletics, plus multimillion-dollar subsidies from the general university. Kansas’ budget does not show those signs.
The Journal-World looked at the finances of two mid-major schools in an effort to see how different the world might be if Kansas ever fell out of a Power 5 conference. Like KU, the University of Connecticut strives to be a national power in men’s basketball, having won four national championships since 1999. But despite its location in one of the richest states in America — and having arguably the most successful women’s basketball program in history — the University of Connecticut’s finances look nothing like KU’s.
In 2016, UConn received $26.9 million in direct subsides — such as dollars from the university’s general fund — to support athletics. Kansas Athletics receives about $1.5 million a year in general state funds to pay some salaries of the athletic department. In addition, UConn levied $8.2 million in student fees to support the athletic program. KU levies about $300,000 in student fees to support the athletic department.
The big difference between the two schools is which conference they are in. UConn is in the American Athletic Conference. UConn’s conference revenues, TV revenues and NCAA distributions totaled about $10.1 million. KU, as a member of the Big 12 Conference, gets about $32 million.
Ohio University competes in the Mid-America Conference, a classic home for “mid-major” schools. But don’t let that label fool you. Ohio is a statewide research university that actually has several thousand more students that KU. It also is an example of a mid-major school that arguably has passed Kansas in terms of football prowess. Ohio has beaten KU each of the last two years.
But because it is not a part of a Power 5 conference, its athletic budget isn’t even in the same universe, let alone the same league, as KU’s.
In 2016, Ohio University levied $17.7 million in student fees to support the athletic department. Even with its success on the football field, it sold less than $800,000 in football tickets, compared to $3.4 million for KU, which is thought to be one of the lowest totals of any Power 5 school.
Ohio’s conference, TV and NCAA revenues totaled about $2.5 million, nearly $30 million less than KU’s.
While Ohio’s student body has had football bragging rights over KU, think of this: Those students are paying nearly $20 million a year to have athletic teams that are still largely confined to an off-Broadway status.
KU Athletic Director Sheahon Zenger said Kansas can’t allow itself to be in position where students or the general university is picking up that type of tab for athletics. But he said the fact so many institutions willingly pay that type of money for athletics is a sign of how valuable being in the top tier has become.
“You often find enormous student fees at those schools because those students want so badly to have what we have,” Zenger said. “You will find extreme hunger and sacrifice to get what we have.”
So, what are the prospects of Kansas keeping its place in a Power 5 conference? Views vary, although no one the Journal-World talked with felt KU was in any immediate jeopardy of falling out of a Power 5 conference. The Big 12 Conference’s television contract runs into the next decade, which provides some stability.
David Ridpath, an associate professor of sports business at Ohio University and board president of the Drake Group, an organization that advocates for more financial responsibility in college athletics, said Kansas’ national reputation as a “blue-blood” program should keep it solidly in a Power 5 conference, even if conference realignment does happen in the future.
“I think that cachet may be enough for them,” Ridpath said.
Murray Sperber, a professor emeritus at the University of California-Berkeley and a longtime critic of the excesses of college sports, isn’t so sure. He said there are two trends for KU to watch closely.
One would be if the college football playoff system gets expanded. That could be bad news for KU, he argues. Sperber believes some of the Power 5 conferences are choosing to have a large number of members because only conferences of a certain size can have a conference championship game for football. Those games generate millions in revenues for a conference. But if the college football playoffs grow to 12 or 16 teams, which some have suggested, that may make the conference championship games less lucrative or feasible. If so, the need to have large conferences would be less.
The second trend is if television networks decide to change their models. Right now they deal with conferences, who then split the money fairly equally among their members. But Sperber thinks it is possible television companies may want to start dealing with schools directly. Why pay Kansas big-time football money when it struggles to beat mid-major teams and consistently produces poor TV ratings?
“Five years ago, I would have said, ‘no, KU will always be in big time college football, no matter what,'” Sperber said. “I’m not so sure anymore.”
Related stories: The finances of KU Athletics
In September 2017, when KU announced plans to build $350 million in new facilities, primarily for football, it marked the beginning of one of the biggest financial bets the program has ever made. The Journal-World decided to study the financial books, talk to leaders and give readers a better understanding of the money game that is constantly a part of big-time college athletics. These are the resulting stories from spring 2018.
• April 29 — A look at the finances of Kansas Athletics: Rising revenues, soaring costs, big bets
• April 29 — KU basketball saves athletic department budget, allows leaders to dream of ‘blue sky potential’
• May 6 — KU football ticket sales down about $6 million per year; some question whether $300 million in new facilities will help
• May 13 — Administrative salaries jumped by 42 percent in a single year at Kansas Athletics; KU salaries top K-State’s
• May 13 — How much does KU spend on athletics? More than the city spends on police, fire and roads, but returns are big too
• May 20 — Girod: Athletics important to KU, but there is a “disconnect” too
• May 20 — Should KU be worried about getting dumped from a Power 5 Conference? The financial stakes are huge
• May 22 — Rock Chalk Park started as $39 million deal for KU; now it may top $100 million after KU allowed lease to be changed