SMQ: What if college football had its own March Madness?
By Zach Bigalke
The economic argument for college football March Madness
The expansion of national championship opportunities from two to four ballooned the money provided to conferences. With four years of the College Football Playoff in the books, let’s compare the money generated by conference against the earnings from the last year of the Bowl Championship Series.
"Revenue increase after shift from BCS to CFP 2013-2014 BCS CFP 4-YR AVG CFP INC OVER BCS SEC $2,442,643 $6,348,214 160% ACC $2,442,643 $5,723,214 134% Big Ten $2,849,750 $6,839,286 140% Pac-12 $2,324,750 $6,541,667 181% Big 12 $3,419,700 $7,750,000 127% Mid-Majors * $280,170 $1,377,946 392% Notre Dame $2,319,000 $3,590,000 55% Independents $100,000 $309,082 209% * — Mid-Majors denotes the four non-AQ conferences in last year of BCS and Group of Five after shift to College Football Playoff. The American Athletic Conference is not included in the 2013-2014 calculation, given that it retained the AQ position inherited from the Big East. The AAC’s 10 teams shared a $23.9 million payout in 2013-2014. SOURCES: Chris Smith, “The SEC Is Already Bowl Season’s Biggest Winner Thanks To $52 Million Payout,” Forbes, Dec. 10, 2013. Kristi Dosh, “How College Football Playoff’s Payouts Compare With BCS’s: A Conference-By-Conference Breakdown,” Forbes, Jan. 1, 2018."
When compared to the revenue generated at the close of the BCS, everyone is raking out far better under the new system. While the largest real dollar values have naturally gone to Power Five schools and Notre Dame, the largest boost as share of revenue has narrowed the gap.
The biggest gains by percentage have been distributed to mid-majors.
The Group of Five has seen bigger paydays all around. Teams not named Notre Dame that are still clinging to independence have also benefited. As the next point shows, this is just one aspect of why extending the spirit of March Madness to college football would increase distributive justice and overall fairness.
Ultimately, the College Football Playoff has provided nearly a threefold increase in the annual revenue available to teams. This growth occurred merely by doubling the field from two to four championship contenders and adding two more bowls to the list of premier postseason games. On its own, the CFP generates over $500 million per year.
March Madness brings in $850 million from its current television deal. When put in that perspective, college football is still leaving a lot of money on the table.