Why College Football Means Big Business In Certain States
ROBERT SIEGEL, HOST:
College football is a big deal in a lot of states.
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SIEGEL: In Alabama and in Georgia it is a very, very big deal. It's also very, very big business. So there's more at stake Monday night, when the universities of Alabama and Georgia face off for the College Football Playoff National Championship, than just a title. A win can also be a huge financial boon for the school and for its home state, too.
To get a sense of the numbers we turn to Eben Novy-Williams, who's a sports business reporter for Bloomberg. Welcome to the program.
EBEN NOVY-WILLIAMS: Hi, thank you for having me.
SIEGEL: How much money did the Alabama and Georgia football teams make last year?
NOVY-WILLIAMS: A lot is the simple answer. Alabama football in terms of revenue makes about $100 million a year, Georgia pretty close behind in the high 70s, low 80s in terms of million dollars a year. College football is an extremely lucrative endeavor.
SIEGEL: But to give us some sense of what they're spending in order to make that money, how expensive are the football programs at Alabama and Georgia?
NOVY-WILLIAMS: Sure. I mean, let's use Alabama as an example. OK, Alabama puts $41 million into its football team every year. You know, about 17 million of that pays for the football coaches. You know, Nick Saban is getting about 11 million. And he has million-dollar assistants, which is now kind of becoming the norm in college football. There's a couple million dollars paid for athlete scholarships. There's travel. And in the - on the back end in revenue, Alabama - $95 million to $100 million coming back in terms of revenue. So you can do the math there. That's about a $50 million profit just on college football alone.
SIEGEL: But just to clarify something, when a school like Alabama spends over 17 or almost $18 million on football coaches, we know the biggest one by far is the head coach, Nick Saban. How many people are part of a big-time college football coaching staff?
NOVY-WILLIAMS: There's a lot. I mean, it's not just your offensive coordinator, defensive coordinator and position players. You know, there are strength trainers. There's academic help. There's medical staff. You know, it goes down the line. There's a lot of people involved here. The president of Alabama - Stuart Bell is his name...
SIEGEL: Of the university.
NOVY-WILLIAMS: He makes 700 - of the university. He makes $755,000 a year. He has to work 14 years to make what Nick Saban is making this year. He would be the fifth-highest paid coach on Nick Saban's staff. The numbers are staggering.
SIEGEL: Now, but as you say, at least in Alabama and Georgia the schools bring in a lot more money than they spend. What do they do with the profits?
NOVY-WILLIAMS: Most of that money is spent on all the other sports that don't make money. Almost every other sport outside of men's basketball and in a few places maybe baseball, maybe ice hockey - almost every other sport runs in the red. Some of that money is also going to paying off debt for the stadium. Alabama has a couple hundred million dollars of debt that they need to pay off for stadium renovations, et cetera. And if there's some left over, as we see with some schools, some of that works its way back into the academic coffers of the university. You know, LSU and Texas, for example, are two schools that do a very good job year after year of putting a couple million dollars back into the academic side of things.
SIEGEL: What an outrageous idea that is.
NOVY-WILLIAMS: Yeah, exactly. The truth is that the way these - they're set up athletically there's really not that much money when everything is divvied out.
SIEGEL: As a financial proposition, how much can a national championship be worth to a state like, say, Alabama?
NOVY-WILLIAMS: Oh, it's great. I mean, the thing for Alabama is that they've been here so many times in the past decade - I mean, Nick Saban, it seems like he's in the title game every year - that a championship doesn't do maybe as much as it might do for a school who hasn't been here before. But the truth is that just like a title in - you know, a Super Bowl title or a World Series title, you're going to sell more tickets the next year because you have a national championship.
And TV networks and sponsors who want to put their - your brand on their packaging are going to pay you more because you're a national champion. All those little, incremental things go up. So, yes, a national championship is worth millions. But win or lose on Monday, neither of these schools are going to be struggling about, oh, man, how are we going to balance the budget next year?
SIEGEL: Eben Novy-Williams, a sports business reporter for Bloomberg. Thanks for talking with us.
NOVY-WILLIAMS: Thanks, Robert.
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