Dollars and Nonsense: Losing Money for 'Priceless Exposure'
CMU spent more than $560,000 sending its football team, cheerleaders and band to Mobile. It got some travel money from the conference and some more cash from ticket sales, but still wound up losing almost $189,000 on the trip, according to a March report in CMU's student newspaper, Central Michigan Life.
Was it worth it? Central Michigan athletic director Dave Heeke thinks so. Playing in the GMAC Bowl put Central Michigan in front of more than 3.5 million viewers. "You just can't measure that exposure," said Heeke. "Bowl games are not profit. It's the extended value that helps grow a university."
Dan Wetzel doesn't agree.
Wetzel, a columnist for Yahoo! Sports, is one of the co-authors of the book "Death to the BCS: The Definitive Case Against the Bowl Championship Series." The book will be released tomorrow.
Wetzel and his co-authors sorted through mounds of financial documents related to bowl games and came to a conclusion: "Nobody in their right mind should ever be engaged in a bowl bid. It's a bad business deal for the universities," he told FanHouse.
According to Wetzel, CMU's trip was actually a bargain. "It's not unusual to spend $2 million traveling to a bowl game. You have to take your team, your staff, your cheerleaders, your band, and you're obligated for eight days," he said.
Wetzel cited Virginia Tech's experience at the 2009 Orange Bowl. The Hokies spent $3.8 million traveling to Miami. Nearly half of that was spent on empty seats.
"Virginia Tech and the ACC were obligated to buy 17,500 tickets for the Orange Bowl, but they only sold 3,342. At $125 a ticket, that's $1,769,750 for empty seats," said Wetzel.
Of course, the Orange Bowl's payout in 2009 was $17 million, so the Hokies should have cleared a tidy $13.2 million dollar profit.
Except they didn't. The payouts go to the conferences, not the universities.
Conferences wisely pool their bowl money so that everybody gets a cut. "It's financial sleight of hand," Wetzel said. "They're basically funding the lower bowls off of the BCS games."
Virginia Tech's actual payout from the ACC was about $1.6 million, which is not even half what it spent.
This is why athletic directors like CMU's Heeke insist bowl trips are not about profit and loss. There frequently isn't any profit. Wetzel said Florida turned a net profit of just $47,000 for winning the 2009 BCS National Championship Game, for instance.
Is it really true that the exposure provided by these money-losing bowl trips is priceless? The GMAC bowl was watched by an estimated 3.5 million on ESPN. You can't get four hours of commercial time on ESPN for $189,000. If the goal was to promote the Central Michigan University brand to ESPN viewers, then it was money well spent.
Is that kind of exposure really valuable in building a university? What exactly do universities hope to accomplish by getting their names associated with postseason football? There's little question that playing in a bowl game makes people more aware of a university's existence, and there is some value in that.
Just ask me; I frequently have to convince people that my Division II alma mater is a real school.
Mere brand awareness isn't enough, however. Central Michigan's GMAC Bowl win might have helped Dan LeFevour land a quarterbacking job with the Cincinnati Bengals. How much help was that victory for, say, CMU business graduates trying to get hired by banks?
Universities want exposure so they can either increase their enrollment or have a larger pool of high-quality applicants from which to select. If Central Michigan's GMAC Bowl trip swayed 20 in-state students or a mere eight out-of-staters to attend CMU, the university came out ahead.
But try to imagine one high school senior sending another this text:
u see gmac bowl? ima go 2 cmu
Since 97 percent of Central Michigan's students come from in-state, a kid in Grand Rapids torn between Central Michigan and Ferris State might send that text. A kid in southern California isn't likely to abandon UC-Six Hours Away or Cal State Three Towns Over for Central Michigan on the basis of one minor bowl game. Yet Central Michigan spent its $189,000 to broadcast its message to both kids, as well as a much larger audience of people who aren't in the market for a college education at all.
Random advertising is like random gunfire. Neither is likely to fulfill its potential. CMU needed a mere 20 in-state students to pay off its investment in the GMAC Bowl. It's certainly possible CMU reached that goal, but if it had spent $189,000 on a targeted advertising campaign, how many more applications might that have yielded?
Peter Koeppel is the president of Koeppel Direct, a Dallas-area media buying firm specializing in direct response advertising. He told FanHouse that Central Michigan could reach potential CMU students with a "significant" campaign for the same money.
"For example, you could go on MTV or G4 in specific areas to hit the demographic," Koeppel said. "You could have a strong presence in the market at key times when students are choosing colleges."
Koeppel said a targeted media buy could also be tracked, allowing a university to see what particular programs generated the most inquiries or attracted the highest quality students.
You can make a case that Central Michigan got what it wanted out of the GMAC Bowl trip. The school doesn't feel it got ripped off, though it could have gotten more for its money. The $189,000 turns out to be a small amount of money to lose on a bowl trip.
What did Virginia Tech get for for the $1.2 million it lost going to the 2009 Orange Bowl? "Priceless exposure," indeed. But TV exposure can always be had for a price.
The better question is how much more VT or CMU could have gotten for their money.