Big Ten’s decision on games will ease financial loss at Ohio State, but not all of it
Ahead of a board of trustees meeting last month, Ohio State released a projection that showed a potential loss of $130 million in athletics revenue for the current fiscal year.
It was a gloomy outlook, made as it faced the prospect of a fall without Big Ten football, threatening more than half of the athletic department’s annual operating budget.
But with last week’s announcement that conference teams will attempt a 2020 season beginning next month, Ohio State might be able to reduce its projected losses from nine figures to eight figures.
“There’s no question there is a budgetary impact,” athletic director Gene Smith said.
In response to questions during a conference call with reporters last week, Smith declined to say how much of an impact, citing varying possibilities.
But an analysis of Ohio State’s most recent available revenue and expense filings with the NCAA, obtained by The Dispatch through open-records requests, shows that the Big Ten’s reversal could lead at least $45 million to pour back into the school.
Much of that is expected to flow from television revenue. Ohio State received $45.6 million in media rights payments during the 2019 fiscal year, a figure that included distribution from the Big Ten through its contracts with ESPN and Fox to broadcast the league’s football games.
Media rights make up the second-largest source of revenue for the athletic department, accounting for 22% of its total revenues in 2019.
Patrick Crakes, a sports-media consultant and former Fox Sports executive, estimates schools such as Ohio State will see at least 80% of their football-related TV revenue distribution from the Big Ten if the coming season is held as scheduled.
“I think you get within shooting range of the full number,” Crakes said. “And if it gets close, then it becomes some kind of negotiation.”
As part of the conference’s broadcasting rights agreement with the networks, it promises game inventory.
Playing a nine-game season, which includes a conference championship game and other cross-divisional matchups over the final weekend, figures to allow the Big Ten to come close to fulfilling its committed number.
It would be about three-fourths of the length of a typical season for Big Ten teams, who normally play 12 regular-season games, plus the league title game.
The biggest variable this fall will be ensuring games are held as scheduled, avoiding the cancellations that have been prevalent in other conferences in the Football Bowl Subdivision in recent weeks.
With teams impacted by coronavirus cases and contact-tracing protocols, more than two dozen games have already been canceled or postponed, a sign of a possibly disjointed stretch looming in the months ahead.
For the Big Ten, there is no margin for error in rescheduling, no idle weeks for teams during a condensed season. While weathering a pandemic, they are set to play nine games over nine weeks, from the weekend of Oct. 23-24 through Dec. 19. The final College Football Playoff rankings, which commence the postseason, will be released Dec. 20.
Much of the conference’s hopes for a steady season lies in daily antigen testing that will be implemented by the end of this month.
Interruptions in the season, or outright cancellation, could again jeopardize the TV money, though Crakes, who was at Fox when it negotiated its current deal with the Big Ten, thought it was better positioned than in August when it scrapped all games until 2021.
In the case there will be a series of negotiations over the size of payouts, broadcast partners should appreciate the attempt to stage a season alongside a majority of the other Power Five conferences.
“Now they’re really trying,” Crakes said. “Before, you had the Big 12, the SEC and the ACC playing, and the Pac-12 and Big Ten don’t play. That negotiation feels different than everyone is playing, we tried to play, something happened that had to do with the virus that we could not handle, but we gave it a good-faith effort. That is a different environment to start negotiations.”
If teams make it to the finish line, Ohio State also will be in line to realize revenue from Big Ten bowl appearances.
In fiscal year 2019, it received $7.1 million in bowl revenue, including from its Rose Bowl trip and eight other bowl berths by conference teams. Bowl revenue is split among the Big Ten members.
Income reaped from television and bowl appearances will be significant this year because other revenue sources remain limited despite the restart of the season.
No fans will be permitted to attend games by a conference-wide policy, wiping out ticket sales, which remains the biggest revenue generator for an OSU athletic department that capitalizes on fervent fan support across the state.
It’s accustomed to selling out a 100,000-seat stadium, with capacity crowds bringing in $50 million or more, alongside other revenues from game day. Money from parking, concessions, food and more totaled $5.8 million from seven home games held in the 2019 fiscal year.
The Buckeyes are scheduled to host Michigan on Dec. 12 in a rivalry game that is usually its top draw, but looks instead to be played in front of empty bleachers at Ohio Stadium.
As a precarious season awaits, their best hope remains for the game, along with others, to be presented at least for television eyeballs.