Is Trickle-Down Revenue A Potential Market Inefficiency For Group of Five Teams?

First, let me share Alabama’s non-conference schedule against Group of Five opponents for the next six seasons:

• 2018 – Arkansas State, Louisiana-Lafayette
• 2019 – Southern Miss, New Mexico State
• 2020 – Kent State, Georgia State
• 2021 – Southern Miss
• 2022 – Utah State
• 2023 – WKU

Yawn, right?

Well, the Crimson Tide recently announced some whopper payouts for future games, and it got me curious about these games as a whole. Now take a look at the same slate, but with the per-game payouts included:

• 2018 – Arkansas State ($1.7m), ULL ($1.25m)
• 2019 – Southern Miss ($1.85m), NMSU ($1.7m)
• 2020 – Kent State ($1.75m), Georgia State ($1.2m)
• 2021 – Southern Miss (1.9m)
• 2022 – Utah State ($1.91m)
• 2023 – WKU ($1.9m)

What do you know? Alabama is leaning hard into paying good money ($1.684 million per game on average), possibly in order to avoid playing the lowest tier of Forgotten 5 programs, and some schools are really reaping the benefits.

This got me wondering; with all of the recent changes in which Power 5 conferences are allowing which types of opponents to be scheduled, can Group of Five teams start capitalizing on this financially?

First I took a look at the rest of the SEC to see what they were up to (numbers are millions of dollars):

• Kentucky:
  • 1.15 to CMU and 1.2 to MTSU for 2018
  • 1.75 to Kent State in 2020
  • 1.4 to NIU and 1.685 to ULM in 2021
  • 1.55 to Ball in 2022 and 1.4 to Miami in 2022
  • 1.3 to Akron in 2023

 

• LSU
  • 1.4 to Rice in 2018
  • 1.5 to USU in 2019
  • 1.4 to Idaho and 1.4 to UTSA in 2020
  • 1.45 to CMU and 1.4 to ULM in 202
  • 1.6 to UNM in 2022
  • 2.0 to Rice in 2024

 

• Georgia
  • 1.7 to MTSU and 1.5 to UMass in 2018
  • 1.7 to Ark State in 2019
  • 1.75 to ULM in 2020
  • 1.8 to SJSU and 1.8 to UAB in 2021
  • 1.9 to Kent State in 2022

 

• Florida
  • 2.0 to CSU in 2018
  • 1.2 to USA in 2020

 

• Auburn
  • 1.7 to Southern Miss in 2018
  • 1.937 to Tulane in 2019
  • 1.85 to Southern Miss and 1.9 to UMass in 2020
  • 1.25 to Georgia State in 2021

 

• Ole Miss
  • 1.5 to Kent State and 1.1 to Louisiana in 2018
  • 1.5 NMSU in 2019
  • 1.4 to Georgia Southern and 1.5 to Middle Tennessee in 2020
  • 1.5 to Troy and 1.45 to Tulsa in 2022

 

• USC
  • 1.2 to Coastal Carolina and 1.4 to Marshall in 2018
  • 1.4 to Coastal Carolina in 2020
  • 1.4 to Troy in 2021
  • 1.45 to Georgia State in 2022

 

• Tennessee
  • 1.4 to UTEP in 2018
  • 950K to Georgia State and 1.55 to UAB in 2019
  • 1.3 to Charlotte in 2020
  • 1.5 to Bowling Green and 1.2 to South Alabama in 2021
  • 1.5 to Ball State and 1.4 to Army in 2022

 

• TAMU
  • 1.6 to UAB and 1.4 to ULM in 2018
  • 1.3 to Texas State and 900K to UTSA in 2019
  • 1.25 to UNT in 2020
  • 1.1 to UNM and 1.9 to Kent State in 2021
  • 1.5 to App State in 2022
  • 1.6 to UNM in 2023

So there’s a few gaps in there, but let’s also ignore a few anomalies:

• Rice breaks even because that 1.4 million in 2018 is happening but then the one-off became a three-game series. That money plus the $2 million Rice is getting for their second trip to Baton Rouge in 2024 is balanced by the $3.5 million Rice is paying LSU for a “neutral site” game at TDECU Stadium in Houston for 2020.
• UTSA and Georgia State are getting a combined $1.85 million from Texas A&M and Tennessee, but those deals were inked way back in 2013.
• Florida is paying Colorado State $2 million for their game this season, but that was contractually obligated as part of Jim McElwain’s buyout when the Gators hired him away from CSU.
• Arkansas uses a loophole in the state FOIA law to share as little info about their payouts as possible, but Vanderbilt, Missouri and Mississippi State were just as hard to track down.

Even with the numbers I did find, it appears that Alabama, Auburn, and Georgia are leading the charge and way out in front. Payout games of less than a million dollars are now a thing of the past, but games checks over $1.5 million are still rare outside the SEC, and even then only the Bulldogs, Tigers and Tide are consistently signing up to give checks above that threshold.

Obviously, this is still an upward trend across the Power 5 for several reasons, primarily that the more resources you have, the more you can afford to part with.

The Alabamas of the world can only spend so much money on facilities or salaries before all this extra revenue has to go somewhere, and an extra few hundred thousand for a money game (especially a relatively easy opponent like Kent State) is something towards which these teams will barely bat an eyelash.

That being said, teams like Southern Miss and Kent State still appear to be the exception and not the rule on the other side of the coin.

Starting this season, Southern Miss will get $7.3 million dollars over the next four years by alternating road games between Alabama and Auburn, plus another $1.2 million from a trip to Starkville. They still have three non-conference slots to fill between 2020 and 2021, and will bring in anywhere from $12-14 million over four years from this scheduling they’re doing.

Kent State will receive $6 million from Ole Miss, Alabama, Kentucky, Texas A&M, and Georgia over the next five seasons. They’ll also receive another $6-9 million from Illinois, Penn State, Arkansas, Auburn, Arizona State and Wisconsin in that time. That’s not including the four slots that have yet to be filled for non-conference games in 2021 and 2022.

The Golden Flashes will have a five-year stretch where they will earn somewhere between $16 and $22 million in revenue for these money games alone. For a program with an annual athletics department budget of around $30 million, that represents about a tenth of their annual budget.

Kent State is rather anomalous in their pursuit; they aren’t the only team with three Power 5 money games on the road this season, as Middle Tennessee is doing it this year and NIU does it in 2019, but only Kent has it set up for 2020.

Of course, each program is different. Southern Miss gets these games because they’re viewed as a quality but beatable opponent within the SEC footprint. Kent State gets their games because they are (accurately) viewed as an easy win that’s willing to travel, but theirs is a balancing act.

Will they receive over $4 million in revenue each season? Sure, but that doesn’t make it any easier for a 2020 Kent State team that will spend 75% of September on the road in SEC stadiums.

I think the better Group of Five teams, by and large, are content to dominate their conference and schedule one non-conference game a year where they can focus as much on the chance of winning as the amount of the check.

The very bottom teams are the most likely to gun for this setup, as they tend to be the programs with leaner athletics budgets (where this money could go further), and somebody has to fill their schedule with those easier wins, but I doubt many teams will want to load their schedule as hard as Kent State is doing.

Heck, Florida International, Eastern Michigan, Toledo and Western Michigan are the only other teams that even have room in their schedule to do it before 2022.

The most obvious possibility, as I mentioned last year, is an independent team like New Mexico State, UMass or Liberty. The Aggies are a great example – if their games against Minnesota and BYU were instead games against Alabama and Kentucky (ala 2020 Kent State) their revenue generation would increase from $800,000 to $3,500,000 and it would have no effect on the other 6-8 very winnable games on their schedule.

These programs could easily haul in $6-8 million per year by taking 1/3 of their schedule as money games, while still having eight other opportunities to win six games – especially in the case of NMSU and their always-relatively-winnable, built-in rivalry games with UNM and UTEP.

Sure, teams with conference affiliations like Kent State could do the same thing (3-4 of these per year), but it’s a lot easier to do when you have a bit more scheduling leeway to attempt scheduling wins to balance these contests out. I doubt you’ll see someone like Toledo or Arkansas State going this hard into P5 road games any time soon.

So is this a market inefficiency that Group of Five teams could capitalize on? In theory, yes. There are few teams that are likely to see this as the best idea, though, so I don’t expect the practice to suddenly take off in the coming years.