The Atlantic Coast Conference and Florida State University: The Economics of College Athletics

By Brooks, Bradley W.; Cox, Steven M. et al. | Journal of Case Studies, June 2013 | Go to article overview

The Atlantic Coast Conference and Florida State University: The Economics of College Athletics


Brooks, Bradley W., Cox, Steven M., White, Zachary M., Burson, Timothy E., Journal of Case Studies


"How do you not look into that option?" Florida State University Board of Trustees Chairman Andy Haggard's comments to Warchant.com (an online news source covering Florida State athletics) reverberated throughout collegiate athletics. "On behalf of the Board of Trustees I can say that unanimously we would be in favor of seeing what the Big 12 might have to offer. We have to do what is in Florida State's best interest" (Williams, 2012).

The words cut like a knife through the heart of the Atlantic Coast Conference's (ACC) seemingly stable facade. John Swofford, commissioner of one the premier athletic conferences in collegiate sports, was facing a public crisis unlike any he had previously addressed.

By late spring 2012, John Swofford was approaching his fifteenth anniversary as commissioner of one of the most stable collegiate athletic conferences in the country. Before that, he had served eighteen years as athletic director of his alma mater, the University of North Carolina (TheACC.com, 2012). Within the previous year, the ACC had placed two football teams into the premier Bowl Championship Series (BCS) bowl games for the first time (BCS bowls were the most prestigious and selective bowl games). During this time, he had also secured two additional high profile members into his conference. With the addition of these two new members, he had recently announced a revised contract with ESPN to televise ACC sporting events until 2027 that would annually provide each ACC member an average of over $17 million (Wetzel, 2012) a significant increase over the prior contract. Within the previous four years, his conference had also won two men's basketball national championships. As commissioner of the Atlantic Coast Conference, he appeared in control of a powerful group of twelve--soon to be fourteen--university athletic programs.

On May 12, only three days after announcing the new television contract, however, Haggard's comments had instantly changed public perceptions of the ACC from stable and powerful to shaky and divided. Swofford faced a public perception crisis just two days before the ACC's spring meetings of May 14-16.

The NCAA

The National Collegiate Athletic Association (NCAA), the governing body of collegiate athletics, can trace it roots to the time when Theodore Roosevelt was President (National Collegiate Athletic Association, 2012). It was originally founded to increase the safety of sports, especially football and basketball. Its initial charge was to establish a common set of rules and eligibility. By 2012, NCAA rules governed nineteen men's and 20 women's sports. To spur interest and rivalries, at the turn of the 20th century, groups of colleges began to band together in conferences. Over the last century more than 120 different athletic conferences have come and gone. The oldest Division 1 conference, begun in 1896, was the Big 10 (Big Ten Conference, 2012). While the NCAA governed thirty-nine sports, football represented the highest single revenue producing sport. By 1998, to facilitate a more equitable system to determine a national football champions and increase television revenues, eleven athletic conferences were designated to compete in collegiate football's Bowl subdivision (the highest classification for football). Six of these eleven conferences (ACC, Big East, Big Ten, Big Twelve, Southeastern Conference (SEC), and Pacific Ten (Pac Ten)) were each granted a special privilege guaranteeing that one or two of its members would be invited to play in a BCS bowl game each season. These BCS bowl games were the most financially lucrative of the post season games and thus the most sought after. Revenues from football television contracts were the most lucrative of any sport including basketball. Since conference teams divided most television revenues equally, membership in the right conference could have a significant effect on overall football revenues. The NCAA did not play a significant role in the formation or expansion of conferences; but it did mandate that a conference with fewer than twelve members could not have a football playoff game. …

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