As Notre Dame's TV Money Dwindles, So Too Should Its Independence

In 1990, Notre Dame signed a glitzy football television contract with NBC. The deal revolutionized college athletics and brought millions into Notre Dame's bank account. It was a huge financial windfall that guaranteed the Fighting Irish would remain independent from other conferences.

Chances are, you still think that Notre Dame is banking major revenue from this agreement in comparison to other teams. Chances are, you're wrong. What do Vanderbilt and Northwestern have in common when it comes to football? Answer: They likely both get more money for their televised football games than Notre Dame does. As does every other team in the Big Ten and the SEC.

Notre Dame doesn't release their finances publicly, but there is zero doubt that a colossal rewriting of collegiate athletics has occurred in the 19 years since the Irish and NBC first became television partners. How has this happened? Television has a voracious appetite and hours of programming to fill. Bundling and selling a major conference to ESPN's network of properties, as the SEC has done, or creating their own network while selling some games to ESPN, as the Big Ten has done, is more valuable now than selling one great property, like Notre Dame football. In college sports, the whole is truly greater than its parts.

Now for some numbers.

In 2008, NBC ponied up an extension to the Fighting Irish television contract. USA Today reported that the current contract paid Notre Dame in the neighborhood of $9 million per year. The new deal won't begin until 2010, but it's doubtful the rights fees increased very much, since Notre Dame's television ratings have been dwindling for several years. (Last season, the average Notre Dame game on NBC drew less than half the ratings that CBS and ABC averaged for their college football games.) The new NBC deal only covers eight Irish games a year (seven home tilts plus one neutral site game), Television rights for the remaining four away games are part of the rights packages sold by those other teams. The Irish also bring in a share of revenue from the Big East for basketball. But that number is set contractually and isn't particularly large.

For example, Syracuse, a member of the Big East for football and basketball, took in just $4.7 million from the Big East in 2007. Even assuming that Notre Dame gets half of this number (which it likely doesn't, because football floats the boat in college athletics), Notre Dame's television and shared Big East conference revenue in 2009 will be, at best, $11.35 million.

Why's that number important? Because in 2008, every school in the Big Ten will clear north of $15 million from the conference, a number that will only increase in years to come. Every school in the SEC will bank, conservatively, $17 million. (Looking at the numbers it's likely the SEC will hit $20 million within a couple of years.) The reason for these increases is simple, spiraling television money. The Big Ten Network distributed $7.5 million to each conference school last year, and in conjunction with the 10-year, $1-billion deal that the Big Ten signed with ABC/ESPN, there's a whole lot of new television money floating around. Let me repeat that, the Big Ten Network alone has almost equaled the payout for Notre Dame's sacrosanct contract with NBC.

Every team in the SEC has also eclipsed Notre Dame since signing a new $3-billion contract with CBS and ESPN that tripled existing rights fees ($2.25 billion reportedly comes from ESPN, while the CBS deal is $825 million). Throw in that Notre Dame now nets just $4.5 million for an appearance in a BCS game (against $1.3 million each year if it doesn't go to a BCS bowl) and you're looking at a financial mountain that is becoming increasingly uphill for Notre Dame. Television revenue at most conferences is rapidly accelerating while at Notre Dame it's staying the same. Where once the Fighting Irish were king of the television universe, conference affiliation deals are now lapping the Irish.

So add it together and even in a BCS bowl season, the best possible result for a football season, the Irish are bringing in something in the neighborhood of $15.85 million for televised football and Big East basketball. Miss the BCS -- thanks Charlie Weis -- and it's $12.65 million, in all likelihood a generous estimate of Notre Dame's total revenues for television and Big East funds. Now Notre Dame still makes a large amount of total revenue from football -- $59.8 million in 2008 --but that revenue is not growing very rapidly, their television money is stagnant.



Now, if you're a Notre Dame fan you can pop the four-leaf clover on your chest and argue that college athletics is not all about money. That there are psychic values associated with remaining independent. And that's all well and dandy. It's important that college sports retain some of their soul even if if we all know that college sports is a big business now. But Notre Dame fans who are making that present-day argument are directly opposing the stance taken by their leaders in 1990 when they announced the new television contract with NBC.

Back then, Notre Dame stated they were signing their deal with NBC, per the New York Times, in order "to maximize television revenue and receive the widest possible exposure." Notre Dame also said another issue was of "paramount importance," that they receive the most money possible to share with the academic side of the university ledger. If that reasoning still holds true, Notre Dame is failing to keep pace with other schools and shortchanging their own students in the process. Refusing to join the Big Ten and create a seismic payout via a two-division format that leads to a Big Ten Championship game, for instance, is leaving an awful lot of cash on the table. Cash that fellow academic stalwarts Vanderbilt and Northwestern are grabbing hand over fist. That's money that Notre Dame can't redistribute to their students, money that doesn't go towards ensuring the Fighting Irish remain a golden university on the hill of academia.

In all the talk about whether Notre Dame should stay independent, few of the points of discussion ever focus on the financial ramifications of their decision. I think that's because most fans incorrectly assume that Notre Dame has already maximized their financial standing. That line of thinking is a vestige of the 1990 NBC contract that was truly monumental in scope. But since that time, cable television has proliferated to such a degree that 24 or so hours of programming over the course of a Notre Dame football season just isn't that big of a deal. Not when you compare it with hundreds of hours of conference programming for networks, such as ESPN, with many platforms of distribution and hours and hours of content to fill. This isn't just an opinion, the ratings reflect that college football fans are voting for conference affiliation with their eyeballs, they watch the average Big Ten and SEC game on ABC/ESPN and CBS, as noted above, much more often.

What does all of this mean? Notre Dame's television revenue is going to continue to fall relative to the Big Ten and the SEC. If Vanderbilt and Northwestern aren't already ahead of the Irish, which I think the numbers prove they definitely are, another couple of years of increasing television money will erase all doubts. This will continue all the way up through 2015 when Notre Dame's newest extension with NBC runs out. By that time, the financial ramifications of Notre Dame's independence will have become more apparent to everyone. The Big Ten Network will be thriving, throwing off cash to the 11 member institutions. ESPN, the Big Ten, and the SEC will be smoking big cigars as the ratings gold pours in from their deals.

And, mark my words, Touchdown Jesus will stick out his palm. Yep, at long last the Fighting Irish will be begging for a piece of the Big Ten pie.