Title hopes? Why switching athletic conferences is a big gamble for universities

Research shows that moves intended to boost notability instead cause major disruption to brands and bottom lines at most institutions.
By: | January 11, 2022
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For the seventh consecutive year, a team from the Southeastern Conference wound up in college football’s national championship game. Actually, it was two this time—the University of Alabama and the University of Georgia.

Reaching that pinnacle is the goal of every Div. I program …. and increasingly the hopes of those who hold power over institutions of higher education. After all, it’s hard to beat the brand recognition and riches enjoyed by the Alabamas, Clemsons and Ohio States.

Those that fall short of that goal are not sitting still. They are scrapping affiliations with longtime athletic conferences to position themselves for that glory, moving in and out of leagues like uneasy renters. The most prominent example is the Big 12, which by 2025 will no longer include Texas or Oklahoma but will have newcomers Central Florida, BYU, Houston and Cincinnati. Texas and Oklahoma believe their chances will be better in the SEC, but Commissioner Bob Bowlsby called the risky moves “delusional” in an interview with the Austin-American Statesman.

The slew of multibillion-dollar gambles—ESPN has a conference realignment tracker dedicated to all the changes—prompted Stephanie Herbst-Lucke of Georgia State University’s Robinson College of Business, a marketing leader and former All-American track athlete, to survey the college landscape to see whether shifting conferences actually does lead to a pot of gold of acclaim and revenue. In almost every instance during a period from 2009-2017, the answer was no.

“We found that universities that changed conferences neither increased earned revenue nor decreased debt, compared to universities that stayed put,” she said. “The economic mission, athletic performance and brand outcomes described in academic literature and anecdotally are not. In no other category would iconic brands voluntarily disrupt successful, long-standing relationships.”

Herbst-Lucke spent four years on qualitative and quantitative research on the topic as part of her doctorate dissertation. Add to that 30 years as a business leader plus her time as a world-class athlete at the University of Wisconsin, and she has a lot of background in both the Big Ten and college athletics. She also has built a lot of connections. For the study, she teamed with Paul Salipante and Kalle Lyttinen of Case Western Reserve University and Dr. Robert Mayberry of Georgia State to glean information from 82 sources, including conference commissioners, athletic directors and experts including those representing the Power Five conferences—the SEC, Big Ten, Big 12, ACC and American—to assess how the trends have panned out.

What they found was a stunning dysfunction between the fractured groups – those on the institution side and those in powerful positions affecting higher ed – and unachievable defiance toward making conference switches a reality, even when there was a known lack of positive outcomes, along with a lack of leadership by the NCAA.

“The data was absolutely clear that this was not driven by money. It was all driven by stakeholder aspirations and pressure on the system,” she said. “We found that not only was revenue not going up, but it was slightly going down [when colleges switched conferences].”

They also found that graduation rates, application rates and performance did not improve.

Athletics over academics?

From the interviews, 82% said there was a dilution of their mission, purpose, value and ethics. Another 76% believed the university brand had been depleted. And 90% said that because there had been such a disconnect from the brand and mission, the system was not sustainable.

“They’re putting athletics ahead of academics,” Herbst-Lucke says. “They’re depleting academic revenue and reserves to continue to support a system in which 90% of those in it are not solvent. That’s crazy. They’re diverting funds from education to cover these losses. All the literature suggests that there are these huge conference distribution numbers that the schools are going after to get a huge influx of revenues. But it’s actually not the case.”

Once a system based on stable relationships, college athletics has been undermined by leaders who may not see the value in staying put. They instead see the allure of the SEC and think Alabama levels are attainable and will try to get there at any cost. According to many of those who responded in the study, politics played a big part in decision-making, with an array of stakeholders who have little knowledge of the inner workings of college football driving moves and leaving commissioners and athletic directors with their hands tied. “They care a great deal about their system, but they don’t think that they have any control,” she says. “They feel like they lack agency.”

In the end, they all may agree to something they know will not work. And after they’ve moved and balance sheets are done, there may be an equal distribution of revenues and expenditures, but the bottom line is most are losing when subsidies are removed. Of institutions that were not in the Power Five, estimates are that all of the others lost an average of $23 million in 2019 alone. “The athletic directors, commissioners and presidents of the schools are supporting the narrative that conference change will improve the revenue, and they know it won’t,” she says. “But they are continuing to promote that.”

Only two institutions during the 2009-2017 period managed to show positive gains. One was the University of Missouri, which joined the SEC and won three division titles during that stretch and saw a 321% rise in postseason revenue. After 2013, when its win-loss ratio declined, it showed no improvement. The other was Rutgers University, which joined the Big Ten and saw huge jumps in sponsorship and licensing. The rest did not. Those that make the switch are also not exactly welcomed with open arms by fans, who are confused and frustrated by conference realignments.

“The Big Ten changed a 122-year-old brand and then they retained the name,” says Herbst-Lucke. “They changed the rivalries. Now you’ve got schools like Wisconsin not playing Michigan or Ohio State every year, which changes attendance. Ticket sales alone make up 28% of the overall revenue for an average athletic department. You get your tickets and how many games are you interested in? Maybe one or two? It’s a risky venture when you start doing those kinds of things.”

And dangerous for colleges and universities who can’t get into conferences such as the SEC but make huge decisions to move that may affect their brand, their missions and their academics.

“These 100-year-old systems are breaking apart even though, by nature, they are collaborative,” Herbst-Lucke says. “These decision-makers have taken this very narrow lens of athletics. Of the top 25 ranked schools by U.S. World & News Report, not one of those schools tried to change conferences because their stakeholders are focused on academics. There’s a story here that perhaps the espoused mission of a university is not academics. It’s certainly questionable the way that they’re spending the money.”