Revenue sharing is a bad idea for college football

Dr. Saturday and College Football Talk used an insightful Blutarsky post as rationale for revenue sharing between the rich and the poor of college football.

Why should we care about revenue sharing? Because it helps competition. And that is a good thing. At least according to Dr. Saturday.

Dr. Saturday writes, “At least half of Division I games are not only not competitive, but have virtually no chance of being competitive given the huge disparity in resources. This isn’t good for business or pleasure.”

The SEC would beg to differ as it counts its money from the new CBS and ESPN contracts. The current state of college football has been very good for business. Why fix what isn’t broken? And record revenues indicate the product isn’t broken.

As for pleasure, there is a certain charm to clubbing seals, or hosting helpless teams. If competition was all that mattered, why schedule cupcakes for homecoming?

Besides, if you put everyone on a level playing field then you wouldn’t have the joy of a David beating a Goliath because everyone would be Davids. John F. Kennedy could never have asked the question in one of his moon speeches, “Why does Rice play Texas?”

Revenue sharing works in the NFL, as Dr. Saturday calls it “the most successful socialist model in world history, because that model serves the product — competition.”

However, you have to ask why it worked in the NFL—the value of each pro franchise derives from its ability to play other professional teams. George Will explained that in a August 12, 2002, column on baseball’s revenue problems.

Will writes, “To buy a team is not to buy an entitlement to all dollars generated by games in that market. Rather, it is to buy an association with MLB. All revenue streams of all teams flow from that association.

“As Clark Griffith (of the old Washington Senators family) says, suppose a store sells baseball caps with four different ornithological emblems: a Cardinal, an Oriole, a Blue Jay — and a Goldfinch. The first three will sell much better than the fourth, and the value of those three derives from their association with MLB.”

It is easy to make the case in MLB or the NFL that each team depends on its association with all other members of the league.

But is that true for college football? Is the value of Alabama Crimson Tide football based on the competition within all Division 1 teams? No. Of course not. The value of Alabama’s program depends far more on its conference than on the 100 other Division 1 teams it doesn’t play.

Would Alabama football be less valuable in 2010 if it played only SEC schools and not national rival Penn State?

It might seem that way, but no. The value of the University of Alabama derives from more local sources. You could have Alabama play itself and 92,138 would show up to view it. (While the spring game isn’t a real example, the point is that you could line Alabama up against high school teams and the fanatics would show up to view the decapitation.) But, Alabama’s greatest boost to value comes from its association with the Southeastern Conference.

If the SEC left the BCS and the NCAA to crown its own champion via its own playoff system, it wouldn’t harm local enthusiasm—or local revenue. Would CBS or ESPN eschew SEC football if every week the SEC featured all conference games instead of a few Division I-AA (or whatever the hell the NCAA calls it now) cupcakes? Isn’t winning the SEC tantamount to winning the national title anyway?

Revenue sharing makes no sense in college football because of the diffuse and yet equally regionalized nature of the sport. Millions of fans support their teams today—what good would it do to tax the 92,138 Alabama fans to support all three UAB fans? How does it help Alabama’s bottom line? In the NFL, you can show a real benefit due to the highly interconnected nature of the league. The SEC has its own form of revenue sharing every year. It helps every team’s bottom line. Until someone can show that revenue sharing for all of Division 1 college football would help every team (and that includes the power conference teams), it is useless chatter—more useless than Das Kapital.