The following is a guest post written by S.M. Oliva – a writer and paralegal living in Charlottesville, Virginia. You can find his writings at the Mises Economic Blog and other places around the web – he brings a unique perspective on the intersection of economics and sports. In this multi-part series, Oliva will walk Saturday Down South readers through the economics of college football and how it plays out in the Southeastern Conference specifically. Enjoy.
One issue that prompted the recent impasse between the National Football League and its players was a proposal to expand the regular season from 16 to 18 games. Obviously, the owners believe adding games will increase revenue (and profits). But there’s also a secret confession hidden in this idea. Since the last schedule expansion, from 14 to 16 games, in the 1970s, the NFL relied primarily on franchise expansion to increase inventory. Now, after gorging themselves on marginal pro football markets like Jacksonville, the owners have run out of viable expansion options. But if every existing team added two games to its schedule, that would increase the NFL’s total inventory by the equivalent of four expansion teams — all without having to build a single new stadium.
The SEC operates in a different competitive environment. The SEC can’t expand its schedule because NCAA rules specify a maximum of 12 regular season games. The SEC could add new members, which we’ll get to in a moment. But the most common method of adding inventory in the SEC is stadium expansion. Since 1999 every SEC stadium, save for South Carolina’s Williams-Brice Stadium, has added capacity. The most recent was Alabama’s Bryant-Denny Stadium (to 101,821), now the second largest in the SEC and fifth largest in all of Division I. Tennessee’s Neyland Stadium, last expanded in 2009, is the largest in the conference and fourth in the nation at 102,037.
Unlike the gargantuan NFL stadiums of recent memory — think “Jerry World” and its unsafe temporary seating just outside Dallas — SEC stadium expansion appears to be a rational response to strong consumer demand. Alabama officials noted in 2009 that they’d already received pledges for 27 of 36 new skyboxes — at $500,000 apiece — and had a waiting list of over 13,000 for new or additional season tickets. As long as SEC schools produce thousands of new alumni annually with fond memories of fall football, the demand for live attendance should remain strong.
In contrast, the NFL is now primarily a television and Internet product with a diminishing live attendance component. Indeed, the present impasse is driven by franchise operators who remain wedded to a bloated, outdated stadium model. While the SEC is no stranger to television — the conference earns over $200 million annually from CBS and ESPN — live attendance will continue to drive the bus for the foreseeable future.
More importantly, there’s no obvious method for expanding the television inventory of SEC games. As noted above, the league cannot add to its existing schedule because NCAA bylaws cap all schools at 12 regular season games. It’s highly unlikely the NCAA — which includes many more smaller schools that would not benefit from additional games — will change that rule anytime soon. There’s also no postseason expansion possibilities: The NCAA limits conferences like the SEC to a single championship game and, of course, the post-season bowls.
That leaves expanding the number of schools in the conference itself. There was talk during the last round of conference-expansion musical chairs that Texas A&M might abandon the sinking ship of the Big 12 for the SEC. One could also see the SEC “raiding” the Big East and the ACC for some of its members within the SEC footprint, such as Miami, Clemson, or Georgia Tech. Or one could get radical — as the Big East did when it added Texas Christian — and make a bold move into a new territory, say by adding West Virginia.
But there’s no logical reason to assume expansion would appreciably help the SEC given the current NCAA regulatory environment. The recent conference expansions are based primarily around another NCAA bylaw that requires a conference to have at least 12 football members in order to hold a conference championship game. That’s why the Pac-10 will soon be the Pac-12 and the Big East is willing to venture all the way into Texas to move closer to that magic number of 12.
The SEC pioneered the conference championship game when it added Arkansas and South Carolina as its 11th and 12th members in 1991. As long as the NCAA’s rules remain as-is, there’s really no reason to go beyond 12 members. More members mean more partners who require a share of common revenues like television contracts. Unless you add a school that will significantly increase those common revenues — and I’m not sure even Texas A&M would fit that bill — expansion is just watering down your core product.
This is especially true given the current postseason structure of college football. In basketball, bigger can be better. The Big East, which has 16 basketball members, secured 11 berths in this year’s men’s basketball tournament — 10 of the 34 available at-large berths in addition to the automatic qualifier. That will produce a nice windfall for the conference regardless of how far any one team advances.
But with college football’s Bowl Championship Series, a bigger conference is more likely to hurt than help. There are no more than four at-large berths available in any given year for the five major bowls, including the BCS Championship Game. In 2009 the SEC only received one of those berths, Arkansas in the Sugar Bowl. The SEC faces increasingly strong competition from the non-automatic qualifying conferences for these at-large berths, and expanding the SEC would only work to their opponents’ advantage. After all, while a 14- or 16-member SEC beats up on itself even more heavily, an undefeated WAC team can quietly work its way into a BCS bowl.
Most problematic, a larger SEC lessens the chance of any one team going undefeated — or even winning the conference with just one loss — reducing the likelihood of the conference getting a spot in the big-money BCS Championship Game. Given the SEC’s current streak of five consecutive BCS championship victories, it would be foolish to do anything that might jeopardize the status quo.
Any future SEC expansion should only come about in conjunction with a radical shift in college football’s overall regulatory environment. Hypothetically speaking, if the current “Big Six” BCS conferences moved to separate themselves entirely from the NCAA and establish some sort of independent “College Football League,” with a postseason tournament and possibly longer regular-season schedules, then the SEC might want to rethink its current membership. But as long as stadium demand remains strong and the conference is locked-in to its long term television deals — and the NCAA’s established, if ineffective bureaucracy remains in charge — then 12 remains the perfect number of members for the SEC and other major football conferences.
Previous Articles from S.M. Oliva: