The Big Ten’s Bigger Footprint

A year ago, the Rutgers athletic department’s deficit was nearly $28 million, bringing the hole it has dug since 2005 to $190 million. To offset the losses, student fees have been raised and state funds reallocated. Last summer, Maryland’s athletic department cut seven varsity sports in trying to patch a $21 million shortfall.

Both schools have hit upon the same solution to their athletic and fiscal troubles: Next summer, they will join the Big Ten, among the most storied conferences in college football. To understand how Rutgers and Maryland — and college athletics in general — got to this point, you need to understand Jim Delany, the Big Ten’s 65-year-old commissioner, now in his 25th year on the job. It was the Big Ten, which will crown a football champion when Ohio State meets Michigan State on Saturday, Dec. 7, that Forbes magazine recently proclaimed the “cash king” of college sports.

The conference generated $315 million in revenue in the fiscal year ended in June 2012, the most of any conference, and was expected to reward most of its member schools with a split of $25.7 million each the next year. The primary source of the money has been television — most of it coming from a lucrative contract that Mr. Delany negotiated with ESPN and from the conference’s own cable network, which Mr. Delany was mostly responsible for creating in 2007. “Jim is a superstar,” said E. Gordon Gee, a former president of Ohio State, a Big Ten stalwart. “He knows the power of TV better than anyone.”

Mr. Delany was among the first to recognize the influence of cable, then satellite. His biggest coup has been the creation of the Big Ten Network, which is expected to produce $270 million of revenue in 2013 for the conference and its schools. And yet, for all of the TV money now in college sports, according to a recent Moody’s study, 90 percent of athletic departments at public schools require subsidies from their universities to meet their budgets.

Even as the TV ratings grow, the National Collegiate Athletic Association, college sports’ governing body, faces mounting litigation and questions about the core purpose of college athletics, most prominently: Who should benefit from all of the money that college sports generate? And why do most athletic departments still run at a deficit?

As Mr. Delany pushes the Big Ten into the New York and Washington metropolitan areas, he acknowledges the issues but says, “I’d rather have the problem of too much money than too little.”

One morning in July, Mr. Delany hosted a breakfast in a ballroom at the Hilton Chicago for athletic directors and bowl executives. The Big Ten is affiliated with 16 bowls from coast to coast, and Mr. Delany, dressed in a dark suit, posed for photographs with a representative from each one, from the Rose Bowl to the Gator Bowl.

Mr. Delany navigated the crowd as the morning’s main attraction, schmoozing, shaking hands and making introductions. When his guests sat, he addressed them about the conference’s East Coast expansion. “Our footprint is Colorado to the mid-Atlantic, Canada to the mid-South,” he said. “We wanted to have a national slate of bowls because we’re the closest thing to a national conference.”

From 1953 until 1990, the Big Ten comprised 10 schools. In 1990, Mr. Delany’s second year, Penn State, previously independent, joined. Then, in 2010, Mr. Delany plucked the University of Nebraska from the Big 12, and schools have been jumping from one conference to another ever since.

After the Southeastern Conference expanded to include the University of Missouri and after the Atlantic Coast Conference added the University of Notre Dame (the school’s football program remained independent) and the University of Pittsburgh — both schools within the Big Ten’s geographic footprint — Mr. Delany concluded that the Big Ten was in danger of ceding strategic ground. “We felt threatened,” he said.

Mr. Delany countered with the invitations to Rutgers, then of the Big East, and Maryland of the A.C.C. With their addition, the conference will cover roughly 30 percent of the country by population and more than 15 percent by geography. There are 4.7 million Big Ten alumni scattered nationwide, part of what Mr. Delany calls the Big Ten diaspora.

The strategy is about television. Mr. Delany does not expect New Yorkers to start following Rutgers football the way they follow the Giants or the Yankees, but the Big Ten alums spread throughout the New York region are likely to pay attention when Michigan and Ohio State show up. In essence, Mr. Delany has found a back door into two of the largest television markets in the country and a way to tap into that alumni diaspora.

Article source: http://www.nytimes.com/2013/12/01/business/the-big-tens-bigger-footprint.html?partner=rss&emc=rss