Even before pandemic, CU Buffs’ financial resources hindered by lagging Pac-12 revenue

BOULDER — Rick George took long gulps of water from an aluminum bottle in between questions from reporters. But his answers didn’t wander. In fact, the University of Colorado athletic director proved defiant in his optimism during a news conference last winter.

Did football coach Mel Tucker’s departure to Michigan State feel personal?

“I don’t feel jilted at all.”

Where does the program go from here?

“We’re going to go out and hire somebody that shares the same expectations that I do. We’re going to win a championship and we can do that at Colorado with the resources we have.”

While that may be true, losing Tucker after one season represented a stark financial truth for CU a decade after it decided to join the Pac-12: Without the revenue to match many of its Power 5 peers, the Buffs must overcome a growing gap in college football’s arms race, including what it takes to hold on to a hot coach.

Midnight Mel’s disappearing act feels like a lifetime ago with the coronavirus pandemic having infiltrated the sports world the past nine months. Collegiate athletic programs across the country are feeling the financial pinch. When averaging the annual revenue generated from fans on game days over the past three seasons at CU, the Buffs are estimated to lose out on roughly $12.7 million from home football games alone this fall.

However, some schools came into the pandemic more financially immune than others.

Tucker went from being the fourth-lowest paid coach in the Pac-12 ($2.7 million) to earning the 14th-highest FBS salary in the country ($5 million) coaching in the Big Ten. CU hired Karl Dorrell, scheduled to make $3.2 million this season before taking a pay cut due to the coronavirus, and gave him a long leash to turn the program around.

“Even if we were able to match the salary (offered by Michigan State), we wouldn’t have done that,” George told The Post. “We’ve got to determine our priorities. We’re never going to pay our coaches the highest. That’s just not who we are.”

Al Goldis, Associated Press file

Mel Tucker speaks during a news conference at Michigan State University in East Lansing, Mich., on Wednesday, Feb. 12, 2020.

Cost of winning

Staying true to a program’s identity is noble. Winning championships is more fun. And in the past 10 years, CU has fallen into football irrelevance on a national scale.

Of course, paying a head football coach top dollar doesn’t guarantee titles. But in the Pac-12, head coaches make, on average, far less than their peers in Power 5 conferences. Seventeen head coaches across the SEC, Big Ten, Big 12 and ACC are better compensated than the Pac-12’s highest-paid coach in 2020: Stanford’s David Shaw ($4.8M). CU’s inability or unwillingness to match Michigan State and keep Tucker speaks to a larger issue of the Pac-12’s current resource disadvantage.

The Big Ten set a new standard for the 2018-19 fiscal year, with roughly $55.6 million in revenue distributed to each member school. The SEC came in second with about $45.3 million per school, followed by the Big 12 ($38.2M-$42M), Pac-12 ($32.2M) and ACC ($27.6M-$34M), according to USA Today. That money not only allows teams to retain coaches, it also funds the increasingly pricey efforts of football programs to recruit nationally for the best talent.

CU’s athletic department reported $775,312 in recruiting expenses for the 2019 fiscal year — a sharp rise from the previous year ($635,077). But that growth falls short of how resources are being spent across the country. SEC schools averaged $1.3 million in football recruiting costs for the 2018 fiscal year, ahead of the Big 12 ($961,981), ACC ($938,424), Big Ten ($855,437), and Pac-12 ($708,750), per the Louisville Courier Journal.

Michigan State’s ability to pluck Tucker from Boulder is just one more example of the Big Ten’s financial superiority to the Pac-12.

CU reported $94.9 million in athletics revenue in 2019. Michigan State blew CU away at $140 million. But George told The Post he does not believe the conference revenue gap has impacted CU or the Pac-12’s ability to compete.

“Would I like to have more distribution and be closer to some of our peers? Absolutely,” George said. “There are things that we could do to support our student-athletes maybe even better than we do today. But I don’t think it hurts our ability to play at the highest level. We’ve just got to be smart about how we invest our resources, then go out and play the games.”

It’s a challenge George must bear, but certainly not one of his making.

Cliff Grassmick, Daily Camera file

In this 2018 file photo, the CU “Bananas” joined the PAC-12 broadcasting crew during pregame for the University of Colorado football team as they took on Oregon State.

Conference blunders

In 2012, the Pac-12 entered a landmark 12-year, $3 billion media rights deal with ESPN and Fox Sports to broadcast football and men’s basketball games. The conference also launched the Pac-12 Network for original content — totally independent of major networks.

The conference shopped the network to potential partners prior to its launch, but none were interested, the Oregonian recently reported. Now the network isn’t carrying live football games during this fall’s coronavirus-shortened season as the Pac-12 scrambles to meet its commitments to ESPN and FOX.

“They made a risk when they decided that they were going to do their own network, whereas the Big Ten went with FOX and the SEC and the ACC went with ESPN,” said Chuck Neinas, the interim Big 12 commissioner during conference expansion (2011-12) and a former longtime Big Eight commissioner. “People don’t understand the cost involved. … You’ve got to have the leverage to get clearances. To get exposure and sales, you have to find sponsorships. All those things, the Pac-12 decided they were going to take on themselves.”

The gamble has yet pay off, with the Pac-12 Network’s inability to successfully negotiate a deal with major carrier DirecTV its biggest indictment, and AT&T’s U-verse dropping it in 2018.

Conference leaders also failed to anticipate a meteoric rise in television dollars for college football programming.

Back in 2011, the projected annual revenue distribution per school from the league’s ESPN/Fox Sports television agreement seemed massive at $21 million. Today, that’s small potatoes with the Big Ten topping $50 million in distributions.

The current contract between CBS and the SEC for rights to its “Game of the Week” and conference title game is $55 million annually. When it expires after the 2023 season, ESPN is prepared to pay the SEC $300 million per season for the same rights, according to Sports Business Daily. That would be on top of a multi-billion dollar agreement ESPN previously made with the conference to carry other programming and host the SEC Network through 2034.

The Pac-12’s television contracts expire after 2024 with uncertainty over what comes next.

“The biggest question mark for the Pac-12 is the 2024 TV contract,” CU men’s basketball coach Tad Boyle said. “That’s the unknown and where media is going. There are a lot more questions than there are answers. But it is going to change and I think it’s going to be interesting to be a part of it.”

The CU football program desperately seeks stability with Dorrell at the helm. But if you ask Martin Greenberg — founder of the National Sports Law Institute at Marquette University — this won’t be the last time Pac-12 schools are poached for head coaches.

Greenberg formerly represented Mark Richt in contract negotiations with Georgia, in addition to a number of high-profile head coaches across college football and basketball. He said programs without the maximum financial resources can still find ways to incentivize coaches to turn down big money elsewhere; with contract amendments such as a longer-term commitment, post-career employment, retention bonuses, additional spousal/family travel, and loosening restrictions on outside income opportunities.

But money talks.

And college football coaches are listening.

“The conferences with greater revenues are going to have much better resources to steal coaches away,” Greenberg said. “It’s just a fact of life.”


THE COST OF COVID-19

What will be the financial toll from an absence of fans at Folsom Field for football games in 2020? The Denver Post created an estimate by averaging the combined revenue generated for sales of tickets, programs, novelties, parking and concessions. Here is the breakdown, courtesy of annual financial records provided by CU athletics.

2019

Ticket sales: $11,523,640

Program, novelty, parking and concession sales: $1,143,245

2018

Ticket sales: $12,070,227

Program, novelty, parking and concession sales: $1,011,845

2017

Ticket sales: $11,459,055

Program, novelty, parking and concession sales: $1,073,596

3-YEAR AVERAGE

Ticket sales: $11,684,307

Program, novelty, parking and concession sales: 1,076,228

Total: $12,760,535

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