Priceonomics

 

College football kicks off this week. But rather than heading to the stadium to watch anticipated rematches, most fans of the country’s best teams will cheer as their squads crush outmatched opponents. Second ranked Ohio State will play Buffalo, #23 Wisconsin will face the University of Massachusetts, and #7 Texas A&M will take on Rice. 

Each opponent comes from outside the BCS conferences that contain college football's best teams. They could pull an upset like Appalachian State’s 34-32 stunner over Michigan in 2007, but most likely they’ll have an experience more similar to Savannah State’s 84-0 defeat to Oklahoma State. In college football, these “cupcake” or “guarantee” games can be found on the September schedule of most every large football program. If you’re wondering why these uneven matchups take place each year, the simple answer is money, often in the form of a $1 million check to the visiting team. 

College football teams play 12 regular season games a year, of which 8 or 9 are played against other members of their conference. Each university’s athletics director works the phones to schedule the remaining 3 or 4 games.

In deciding which opponents to play, coaches and administrators may consider the merits of playing an opponent they can easily beat or a formidable opponent that will boost their strength of schedule (an important consideration in rankings). They may also consider whether they want to recruit in the locations of their away games, how to spread out their most challenging games, and whether a visiting team will help them sell out their stadium that week. 

The main consideration in scheduling cupcake games is that the NCAA has no rules about playing an equal number of home and away games - or how you share revenue with visiting teams. So, universities like Ohio State that sell out their 100,000 person stadium for every game gladly pay teams like Buffalo to give up one of their own home games to play at Ohio State. 

The weaker opponent may be less of a draw for ESPN and television networks, but universities are largely shielded from the financial consequences of scheduling patsy opponents as they split television revenues with their conference. Colleges pay cupcake opponents $400,000 to over $1 million because an extra home game brings in as much as $4 million to $5 million in additional revenue for the biggest programs. And during a mediocre season, that extra victory could be the difference in earning six wins and a profitable trip to a postseason bowl game.

In return, small programs receive increased exposure, a pipe dream of victory, and a check for as much as two thirds of their football budget and 20% of their athletic budget in a single game. (Head coaches are sometimes literally handed a six or seven figure check after the game.) 

Despite the opulence of elite college football programs, the financial logic of the exchange is just as necessary for the elite teams as their cupcake opponents. As Priceonomics wrote in a prior article about the NCAA:

University presidents overwhelmingly view the high cost of athletics as a problem and athletic directors are busy cutting their budgets - a process only accelerated by the recession. Just over half of elite football and basketball programs turn a profit. Only 14 out of 120 athletic departments in the upper tier of Division I cover their costs. The remainder run a median deficit of $10 million.

Of the schools in the top conferences, only a quarter play a balanced schedule of 6 home games and 6 away games. The remainder schedule a guarantee game in order to play 7 home games or a game at a neutral site where they can split ticket revenue with their opponent. 

The small school players may often be victims on the field, but their administrators are in the position of power. Every major program wants to schedule their guarantee games in September as the pollsters that rank teams and influence bowl placements give less credence to early games. That means the supply of small schools with amenable schedules is limited. Ohio State’s athletic director told USA News "Sometimes they've got you over a barrel.” 

Some writers have speculated that the replacement of the current BCS championship bowl games with a 4 team playoff will cut down on the number of cupcake contests. The importance of strength of schedule is expected to rise, meaning guarantee games risk schools' chance at lucrative championship games.

The few elite, highly profitable teams may be able to afford giving up an extra home game’s worth of revenue to improve their playoff odds, but the economic logic is very strong for most teams on both sides of the guarantee game equation. Expect them to remain - like Thursday night games and the ticket sale projections that decide which teams play in the best bowl games - a money-driven tradition of college football.

This post was written by Alex Mayyasi. Follow him on Twitter here or Google Plus. To get occasional notifications when we write blog posts, sign up for our email list.


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