The Big Ten Revenue Sharing System Isn’t Working

The SEC is extending its dominance of the Big Ten in football.

Note: This post is by David Mick, who is taking a break from all things Cubs at the Obstructed View blog to talk college football. You can follow him on Twitter at @dmick89 Enjoy.

This past summer I came across this article that talked about the revenue sharing in the SEC. It changed the way I thought.

I grew up an Iowa Hawkeyes fan and have been a Big Ten fan all my life. As fans of teams or conferences, we tend to believe they are better than they really are. We highlight the positives while ignoring the negatives.

But the Big Ten has a big negative: its revenue sharing system.

It’s not that the revenue sharing system isn’t sharing enough money. Rather, the system doesn’t do enough to boost profits throughout the league to create more equal profits and more equal competition.

There’s no doubt that over the last five to 10 years the SEC has been the far superior conference in football. It’s actually not even that close. I don’t think anyone would deny that since it’s as true a statement as saying smoking is bad for your health.

It's all about the money.

We could talk about all the possible reasons:

• The SEC generates more money in football than the Big Ten does.
• The SEC is shown on national television much more frequently while the Big Ten is airing on the Big Ten Network in select locations, primarily in states with a university in the Big Ten.
• Oversigning has some small, but negligible impact.

But like anything else in life, it really comes down to the money and the SEC has more of it. Because they’re better, they generate more money in football, are nationally televised more often and draw the younger fans that are sought by all teams.

The amount of money in college football has grown substantially in recent years. It’s taken the relatively equal Big Ten and SEC and created a gap between the two conferences.

The prior financial gap was meaningless. There’s not much one can do with small amounts of money in that type of business, but now we’re talking about huge sums of money. With that money, some of it is being shared with other teams. What stood out to me reading the article last June was just how insignificant a difference the SEC’s revenue sharing was compared to the Big Ten.

For example, each SEC school was awarded $18.3 million in revenue sharing. That same year the Big Ten awarded each Big Ten school just over $22 million. The difference is marginal and not worth the superiority complex that some of us Big Ten fans have developed (myself included).

What is revenue sharing supposed to accomplish?

The fact each conference hands out so much money equally doesn’t mean anything by itself. The goal of revenue sharing is to create more equal profits, which then helps create more equal competition. We can look at the profits of each university’s football team and get an idea which conference is more equally distributing the money. We don’t even need to concern ourselves so much with the revenue sharing because the profits tell us what we want to know.

For example, the New York Yankees outspend every team in baseball because their profit is significantly higher. If MLB had better revenue sharing, they’d spend less while others could spend slightly more. In the end, the profit of the Yankees goes down while the least profitable teams increase. If we shared revenue in a way to make all teams profit the same amount of money, all teams would be equal. That’s not true over one year, but if we had equal profits and teams spending an equal amount and so on and so forth, over 100 or 1,000 years the teams would all be equal. That’s what revenue sharing is trying to accomplish. It’s the road to mediocrity. Bunch as many teams as you can around .500 and let ‘em go after the championship. That is precisely what revenue sharing is creating.

Before we even look at team records, which is the ultimate goal in all of this, let’s look at the profits of each university’s football program:

Vanderbilt isn’t included as they don’t report a profit. If multiple SEC teams were reporting no profit then we’d have to include them, but Vanderbilt just isn’t a football school. It’s not important to their brand. You have seven SEC schools profiting more than $30 million while only 3 Big Ten schools do.

There’s another way we can look at this. What percentage does each team make of the top profit in the conference?

This means Georgia and Penn State are each 100 percent, of course. Florida’s $44.3 million is 84 percent of Georgia’s $52.5 million.

The SEC has 8 teams that earn between 50 percent and 100 percent of Georgia’s profit (including Georgia). The Big Ten has only 5.

The top percentages in the SEC are: 100, 84, 82, 78, 75, 73, 68, 50.

The top percentages in the B10 are: 100, 89, 63, 54, 54.

Even among the top teams, the Big Ten still doesn’t compare to how equally the profits are spread among the SEC teams. At the bottom, you have Mississippi State in the SEC with only 9 percent, while Purdue is at 12 percent in the Big Ten. Hold your horses. Next is Mississippi at 31 percent and Kentucky at 34 percent. In the Big Ten it’s 14 percent and 18 percent.

The top and bottom of the conferences are considerably different when it comes to the percentages of the top earners. The SEC more equally shares their money in a way that leads to more equal profits than does the Big Ten. And it’s not even close. The Big Ten would have to add considerably more money to be shared to be equal to the SEC.

So is that what the Big Ten should do? Dump more money into the revenue sharing pool to reallocate resources from the haves to the have-nots?

No. This would only further weaken the top of the conference. The last thing the Big Ten needs is for the top of the conference to take yet another step back.

There are different ways to achieve the same thing. Football is about scoring and preventing points. It boils down to that. A team can score 50 points a game and allow 30 points and have the same record as one that scores 20 points and allows 10. In baseball we like to look at a player’s on-base percentage (OBP) and slugging percentage (SLG). Some players derive their value with high OBP while others with a high SLG. How you get there is interesting, but value is value.

When it comes to revenue sharing, the goal isn’t to share the most money.

The goal is to create a system that shares money in a way to make the league more competitive. This means, and it only means, establishing more equal profits. That’s all that matters. And the SEC is superior by a wide margin. Since both conferences champion equal competition both of them could do considerably better at spreading the revenue around than they currently do. In reality, both systems are failing to achieve the intended goal, but one is still better than the other.

If you couldn’t already tell, I’m not a fan of revenue sharing (and my favorite sport is baseball). The goal is not to strengthen the quality of teams, but disperse the talent. This weakens the talent of the best teams. It does improve the talent of the worst teams, but the central element of professional sports is being the best. It’s not being the best among equal teams. It’s to highlight the difference in talent that makes them superior to the rest. As kids we are drawn to the best teams.

We talk about the best teams in each sport’s history. The 1927 Yankees? Or was it the 1939 or 1998 Yankees? I’d argue the 1998 Yankees since it occurred when talent of all races was allowed to play professional baseball. Were they the best? It’s not worth getting into an argument over that, but if all teams are equal, how much do we lose in the process? Are teams like those three forgotten? Baseball fans know about the ’27 Yankees because they may have been the best ever. Without that, I fear we lose an important connection to the history of the game.

Many become fans of a team because they are good. If all teams are equal, what’s really the point? You can’t brag that you’re the best team. You can only brag that you’re the team among the equals that won the championship. Sorry, but I find that to be excruciatingly boring. I want good teams and I want bad teams.

I dislike revenue sharing at the professional level and I dislike it at the collegiate level. I know others disagree and I won’t argue this, but it’s just my preference. You can have yours.

My opinions aside, another way to evaluate whether revenue sharing is having any meaningful impact is to look at performance.

Are teams relegated to the bottom of the conference? If so, revenue sharing isn’t accomplishing its goal.

In other words, if we look at a team’s performance in one year (y) and compare it to y+1, what changes are we seeing? Do teams move up and down the rankings? If the same teams are winning the conference each year and the same ones are losing it, why even bother with revenue sharing in the first place?

I don’t have the answers to that right now, but will expand on this article when I do have them. All I have right now is wild speculation. Ohio State wins the Big Ten every single year and Minnesota is at the bottom. Wild speculation about the rest of the conference doesn’t answer the questions in any intelligent manner.

Related articles

• Big Ten Keeping Leaders, Legends (dailybigten.com)