2014 Brock School of Business College Athletics Financial Outlook

Welcome to the 2014 edition of the Brock School of Business College Athletics Financial Outlook, which lays out our perspective on recent revenue trends on the business side of college athletics.

Developing a consistent revenue stream is the lifeblood of any business, and sports are no different. Revenue growth is used to measure how fast an industry is expanding. The figures in this Outlook give us an indication of the health of the business side of college athletics. While revenue growth tends to fluctuate from year to year, sports business experts look for trends in revenue growth as a means of gauging leagues and teams growth over proscribed periods of time.

College Athletics Revenues by Conference (US $ millions)

Power Five Conferences

  2011 2012 2013 2014
SEC 1,201 1,231 1,317 1,379
BIG 10 1,162 1,211 1,281 1,341
ACC 898 1,069 1,118, 1,169
PAC 12 748 814 889 997
BIG 12 738 827 881 929
TOTAL 4,746 5,152 5,486 5,815

% change year on year

  2011 2012 2013 2014 3 Year Avg
SEC 2.51% 6.99% 4.73% 4.74%
BIG 10 4.23% 5.81% 4.68% 4.91%
ACC 19.08% 4.55% 4.56% 9.39%
PAC 12 8.77% 9.28% 12.12% 10.06%
BIG 12 12.17% 6.49% 5.43% 8.03%
Power 5 Avg 7.43%

The Power Five Conferences have grown an average of 7.4 percent per year, from $4.8 billion in 2011 to $5.8 billion in 2014. The Power Five Conferences now produce over $1 billion more in revenue than they collectively did in 2011. The top 2014 revenue generating school in each conference (Texas from Big 12 – $161 million; Alabama from SEC – $153 million; Ohio State from Big 10 – $148 million; Notre Dame from ACC – $115 million; Stanford from PAC 12 – $110 million) account for 11.8% of the total revenue generated by the Power Five Conferences in 2014.

The SEC is the top revenue generating conference with $1.4 billion in 2014 while the Big 12 continues to rank last in revenue and has generated between $400 – $500 million less per year than the SEC. During the period, the revenue gap between the SEC and the other four major conferences has closed considerably. The ACC and PAC 12 produced annual growth rates almost double that of the SEC. The PAC 12 was the only conference to achieve a double digit growth rate of 10.1 percent.

Within the overall sports industry, the Power Five Conferences have significantly outpaced the industry as a whole. According to the PwC Outlook for the Sports Market in North America, the North American sports market has grown at a rate of 5.1 percent during the same timeframe. The Power Five Conferences in college athletics have grown at a 45 percent faster pace than the sports industry as a whole.

There are four primary revenue streams that sports properties tap into: gate revenues (ticket sales for live sporting events), media rights (fees paid to show sporting events on broadcast and cable television networks, television stations, terrestrial radio, satellite radio, the Internet, and on mobile devices), sponsorship (fees paid to have a brand associated with a team, league, facility or event, including naming and category rights) and merchandising (the sale of licensed products with team and league logos, player likenesses, and other intellectual property).

Written by: Dr. Darin White

Sources:

U.S. Department of Education, Equity in Athletics. Year reflects data for 12-month period ending June 30 for that year for most institutions/Tag: College Sports

Sports Business Research Network

PwC 2014 Outlook for the Sports Market in North America