The stage is set for the college football bowl season, which means conferences and teams can start adding bowl payouts to their respective budgets. That's because bowl payouts are based on participation, not upon who wins or loses.
Another little-known fact is that BCS bowl payouts are based upon your conference affiliation, not the BCS bowl game you're selected to play. The nine conferences competing at the Football Bowl Subdivision level are divided into two groups: automatic-qualifiers and non-automatic qualifiers. The AQ conferences include the ACC, American Athletic Conference, Big XII, Big Ten, Pac-12, and SEC. The non-AQ conferences include Conference USA, MAC, Mountain West and Sun Belt.
Each AQ conference is guaranteed a spot for its conference champion, and along with that $23.9 million. That means Auburn, Baylor, Central Florida, Florida State, Michigan State, and Stanford each earned their respective conferences $23.9 million. Florida State and Auburn don't receive any additional compensation from the BCS for playing in the national championship game.
When a second team from an AQ conference is selected for a BCS bowl game, that team is considered an at-large selection. Those teams earn their respective conferences $6.3 million, meaning that this year the ACC, Big XII, Big Ten, and SEC will each earn a grand total of $30.2 million.
Non-AQ conferences are not guaranteed an invitation to a BCS bowl game unless one of their teams finishes in the top-12 or in the top-16 and ahead of a conference champion from an AQ conference. No non-AQ team qualified this year; however, non-AQ conferences are guaranteed a payout from the BCS even in years when no non-AQ team qualifies, albeit a smaller payout than if a team does qualify. This year, the non-AQ conferences will split $14.25 million. The four non-AQ conferences have an agreement among themselves to share that money, and it is divided according to a formula in the agreement.
A $14 million loss
Had Northern Illinois beaten Bowling Green in the MAC Championship Game, Northern Illinois would likely have been ranked high enough to qualify for a BCS bowl game. In that case, the non-AQ conferences would have shared $28.5 million.
Calculating what each individual school in any given conference will receive from bowl revenue is more complicated because every conference distributes bowl revenue differently. For example, the SEC gives a greater share to a team participating in any bowl game where the payout exceeds $6 million.
In that case, the participating team receives $1.875 million before the remainder of the bowl payout is divided into 15 equal shares, with one share to each of the 14 SEC conferences and one share to the conference itself. For the national championship, the participating team receives $1.975 million prior to the split into 15 equal shares. Participating teams also receive a travel allowance determined by the SEC.
Meanwhile, the ACC does not provide any additional compensation to the teams participating in the bowl game. Instead, the conference divides bowl revenue equally between all members after a travel allowance to the participating teams. However, the conference shares the burden of unsold tickets past 6,000 tickets. For example, BCS bowl games require each participating school to purchase 17,500 tickets. The ACC provides reimbursement of 50% to 100% for tickets unsold beyond the initial 6,000 it expects the university to sell or cover.
There are other teams not participating in BCS bowl games that will also receive a share of BCS revenue. Notre Dame would have received $6.3 million if it had qualified for a BCS game, but instead will earn $1.97 million this year for its non-participation. Other independents BYU, Army, and Navy receive $100,000 each, despite not playing in BCS bowl games. Notre Dame (Pinstripe Bowl), BYU (Fight Hunger Bowl), and Navy (Armed Forces Bowl) will also earn additional money for their appearances in non-BCS bowls this season.
Each Football Championship Subdivision conference, none of which are even eligible to compete in BCS bowl games, will also receive $250,000 from the BCS. Many conferences also have automatic tie-ins with non-BCS bowls that increase bowl revenue with payouts that range from $325,000 to $4.55 million.
Don't expect much to change next year when the BCS ends and the College Football Playoff begins. Although there will be more money to go around, thanks to a 12-year contract with ESPN that averages $470 million annually (compared to the $155 million per year the BCS currently receives), the so-called "power conferences" will still receive the lion's share of the revenue.
Media reports have differed as to the exact formula the College Football Playoff will use to distribute revenue, but they all agree the ACC, Big XII, Big Ten, Pac-12, and SEC will benefit the most. ESPN reported $345 million per year would be split 75% to those conferences, with 25% being divided by the American Athletic Conference (which is moving "down" out of the power conferences next season thanks to conference realignment), Conference USA, the MAC, Mountain West, and Sun Belt.
The College Football Playoff says the formula hasn't been completed yet, but everyone seems to agree that while there will be more money for everyone, the divide between the haves and have-nots will continue to grow financially.
The Fool has crowned its 2014 champ
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!