College bowl system loots universities

U of M and others spend millions while insiders profit

"It's really an opportunity for us to bring key stakeholders together, whether conference people or folks from the schools, to come down to south Florida and to get a taste of what we have to offer," says Orange Bowl vice president Larry Wahl.

Yet he admits his game, part of the BCS series, has to "vie constantly to maintain the position in the BCS. It comes up for renewal every four years." And there's nothing like a free luxury cruise to butter that renewal.

Wetzel contends that athletic directors simply aren't bright enough to know they've been bought, seeing these freebies from friends as just another part of college football's grand tradition. So they're not inclined to get too inquisitive over contracts. And this allows their "friends" to utterly rip them off.

   

THE BIGGEST SCAM is the bulk ticket purchases.

Depending upon the bowl, schools are required to buy anywhere from 10,000 to 17,500 up front. So begins the seasonal hemorrhaging.

The deal starts with a presumption of failure. Even powerhouses like Ohio State rarely sell that many. When the Buckeyes played the Fiesta Bowl in 2009, they failed to sell more than 7,000 seats. Price for this bath: $1 million.

Auburn, last year's national champion, was still stuck with $781,000 in unsold tickets from the title game. What's worse is that the seats depreciate from the moment of purchase. Though crowds for most games are a smattering of capacity, the schools still pay bloated face-value prices. Their "friends" aren't about to grant them bulk discounts.

So when the colleges can't sell these seats to their fans, the market is flooded with more than 200,000 bowl tickets a year.

Prudent fans of UCLA, for example, know better than to buy hefty-priced seats from the school. After all, a ticket broker will soon be pushing the same seats for dimes on the dollar. Stub Hub once famously sold tickets to the Music City Bowl in Nashville for just 19 cents.

So while Connecticut may have won the Big East championship last year, it still failed to sell 14,729 seats to the Fiesta Bowl. The bowl charged the Huskies prices ranging from $111 to $268 a ticket. Stub Hub, meanwhile, was offering them at 20 bucks a pop.

The ticket scheme alone leaves schools awash in red ink. Virginia Tech lost $400,000 on last year's trip to the Orange Bowl, despite getting $1.2 million from the ACC. Though Auburn claimed last season's BCS crown, financial records show it still lost $600,000, even after a $2.2 million bailout from the Southeastern Conference.

Some bowls have also found a way to scam schools on hotels. Since the bowls usually arrange lodging, athletic directors assume their "friends" are negotiating the best group deals. But that's not always the case.

Under Junker's rule, the Fiesta Bowl required schools to purchase 3,750 room-nights at about $200 a pop. According to the contract, the schools had to pay whether they used them or not.

But what Junker wasn't telling his "friends" was that he'd arranged a side deal with the Scottsdale Convention & Visitors Bureau. In exchange for funneling teams to Scottsdale resorts, the city's tourism arm agreed to kick the Fiesta Bowl $8.2 million over the 20-year pact, according to a contract discovered by the Arizona Republic.

The Sugar Bowl also received "voluntary commissions" from New Orleans hotels. Other bowls have been accused of similar arrangements.

   

IT'S NOTHING MORE THAN a massive money-laundering scheme, says Richard Southall, director of the College Sport Research Institute at the University of North Carolina. That's the only way to describe a system where schools send millions to bowls, then bowls use a fraction of that same money to pay teams for playing.

The problem for college football is that too many people are taking notice.

Consider Taylor Morgan. He's a board member of Playoff Pac, a fan group launched to protest the way the BCS picks title contenders. It's a ubiquitous complaint. One Gallup poll showed that 85 percent of fans favor a playoff system, leaving bowls slightly more popular than polio.

But Morgan and his friends soon realized the selection process was a minor travesty. More galling was the way bowls grabbed money from everyone in their path.

"These bowls receive millions of dollars in federal and state subsidies," says Morgan. "They don't donate money to their communities. They don't do anything of substance in a charitable sense, other than line the pockets of their friends and executives."

So Playoff Pac posted financial records from bowls and schools for everyone to see. It also began bombing the IRS with complaints that bowls were violating their charitable tax status.

Add in books like Wetzel's Death to the BCS, a step-by-step account of this wholesale soaking, and bowl execs were suddenly being publicly strafed for their sins.

Just a few years ago, these same execs were claiming before Congress that they were legitimate charities. These days, they're being confronted with their own financial reports that say otherwise.

The system's also facing attack on the anti-trust front. Only the six biggest conferences, plus the Notre Dame athletic director, have voting rights within the BCS. The BCS picks the teams for the top five bowls. These six leagues also receive the largest revenue cuts, leaving the five remaining Division 1 conferences at their mercy.

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7 comments
Cannoneo
Cannoneo

Defenders of this corrupt system seem to be misreading the article. The author makes it clear that the schools break even. The point is that they only break even on the highest-revenue game of the year, one that they could easily put on themselves. Instead most of that money goes into the pockets of bowl and athletic dept officials. Why?

Jeff Swenson
Jeff Swenson

How does this article change after the author is informed that Minnesota is not responsible for bowl game tickets that are not sold. The Big Ten Conference pays for all unsold tickets for all teams that reach a bowl game.

East Coast Doug
East Coast Doug

Sports - the new opium of the masses. Truely a waste of time.

222
222

What a worthless story; it implies that that the U of M lost money by going the Insight Bowl.

The Big Ten payout and expenses for these bowl are all essentially predetermined within reason, and the University would have a hard time losing if they went or not.

The article is total BS and lazy journalism.

Bob
Bob

Your reasoning has some merit. However, I do want to point out that the University of Alabama has received 17,000 tkts for their game ( I wanted 2 ). I am unable to secure tickets for their game and those on stubhub currently have an asking price of approx $1400 per tkt. They could probably sell out the LA Superdome with just Alabama fans if given the opportunity. Your story may apply to many teams, but I believe you would be surprised how many teams have tens of thousands of loyal fans that attend every game.

Jeff Swenson
Jeff Swenson

Then how are Universities being "looted" and the U of M and others "spend millions"?

bowl_buster
bowl_buster

You're missing the point. Like Wetzel said, even if the schools are being reimbursed for the losses by their respective conferences, said conferences are STILL BEING FLEECED. Millions of dollars are STILL BEING GIVEN to these bowls for absolutely NO REASON. It's a huge, huge scam.

 
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