To fill empty seats, the Holiday Bowl in San Diego tried a new strategy, offering $80 seats for $40 through an online discounter.
It's a good deal for fans, but not for the two college football teams in Monday's game: Texas Tech and Arizona State. Both schools and their respective conferences are required by contract to buy 10,400 full-price tickets at $70 to $90 each. If they can't find enough buyers, they're stuck with the full-price cost anyway.
Make no mistake: The bowls are profitable overall for the major football conferences when the revenue and expenses for all games are combined. Last year, the conferences collected a record $210 million profit from the bowls. But that profit was largely driven by the five games that constitute the Bowl Championship Series: $202 million from the Rose, Sugar, Orange and Fiesta Bowls plus the national championship game. In the spirit of promoting the common good, that BCS money was shared with leagues that did not have a team in a BCS game.
Not all bowl games can produce such revenue, especially as the number of games has grown from 22 in 1998 to 35 this year. Over the last five seasons, USA TODAY Sports found that schools and conferences absorbed more than $92 million in losses on full-price bowl tickets that went unsold, causing many participating teams to lose money on bowl trips.
"There are a lot of challenges for schools selling tickets, and certainly one of them is the idea that fans can buy tickets from outside of the schools' allotment for less money," said Nick Carparelli, former chairman of the NCAA's postseason bowl subcommittee.
Many of the online discounters say they procure tickets from the bowl games themselves, creating a dual economy when it comes to lower-tier bowl games. The bowls indirectly provide the public with great deals; LivingSocial offered Hawaii Bowl tickets for $5. Yet the schools in the games must appeal to fans' loyalty to persuade them to buy tickets from the school's allotment instead of buying much cheaper tickets online.
For the top-level games, ticket demand often is strong. Michigan State, which is playing in the Rose Bowl for the first time in 26 years, sold its ticket allotment quickly, prompting some fans to purchase tickets out of the allotment of the Spartans' opponent, Stanford. The Jan. 6 national title game between Florida State and Auburn recently had a median ticket price of $1,100 in the secondary markets, according to VividSeats.com, a ticket reseller.
The bowls remain a booming industry largely because they provide networks valuable sports programming that viewers tend to watch live. ESPN, which in 2001 got into the business of owning and operating bowl games, now owns and operates nine games and will add two more next year, helping expand the postseason to 38 games next year, plus the national championship game. This year, ESPN and ABC - both owned by the Disney Company - will televise 33 of the 35 bowl games through Jan. 6.
Most of the bowls are run by local non-profit organizations that select teams according to prearranged contracts. In exchange for a guaranteed payout amount from a bowl, the leagues agree to send a team to the game and often commit to buying a certain amount of tickets. Those ticket sales help drive revenue for the bowl games, along with sponsorships and television money.
Last season, the bowls retained a record $144.7 million out of $445 million in gross receipts, up from $104 million in 2008-09. That represents a 32.5% cut of the pie, the biggest since at least 2002-03, when the cut amounted to 19.9% of revenue.
As revenue has gone up, so have the paychecks for the game's executive directors, with at least 13 bowl bosses making at least $300,000 in fiscal year 2011, led by the Cotton Bowl's Rick Baker at more than $1 million. A bowl boss' average compensation for fiscal year 2011 was $489,000, more than double from 2002 and up more than 40% since 2006, according to tax forms from 15 of the oldest non-profit bowl organizations.
"What would be ideal for conferences would be to have no ticket commitment, and what would be ideal for the bowl would be to have the whole stadium committed to the schools and conferences," said Carparelli, who is also senior associate commissioner of the American Athletic Conference. "Somewhere in between, the economics have to work for both parties."
It didn't work for Florida State last season. The school reported to the NCAA in a document obtained by USA TODAY Sports that it was "very dissatisfied" about having to buy 17,500 full-price tickets to play in the Orange Bowl, where the Seminoles defeated Northern Illinois. FSU sold a small portion of that allotment and needed help from the Atlantic Coast Conference to pay $2.1 million for unsold tickets. The loss caused FSU to exceed its expense allowance by $1.4 million, and the school cited the easy availability of cheaper tickets as a reason.
"The price of the tickets were too high and the secondary market had tickets at a much lower cost, which made it impossible for us to sell our allotment," Florida State reported on an official survey form afterward.
Next year, the debut of a four-team college playoff that will produce three games of intense interest could cast an even larger shadow over lesser bowl games, meaning ticket discounting is inevitable as bowls battle to attract fans. Last season, average bowl attendance was 49,224, the worst since 1979, and it has gone down slightly each year since 2007-08.
"It is a boondoggle in many ways, but it's just money after all," said Richard Southall, director of the College Sport Research Institute at South Carolina. "Everyone's having a good time. It's the holidays."
At least 12 bowl games have peddled deep-discount seats on Groupon, LivingSocial or Goldstar in recent years. ScoreBig, a ticket liquidator that sells tickets only below face value, told USA TODAY Sports that last year it sold thousands of tickets to 21 bowl games. This year it expects to sell tickets to about 30.
Cheap seats to many lower-tier bowl games also can be found on the secondary market, at sites like StubHub, where individuals try to unload tickets they no longer want or can't use.
Payouts fall short
Bowl payout money generally goes to the conference offices, which share it with all of their league members, even those that do not land bowl bids. The schools playing in bowls receive an additional allotment for expenses, but after that revenue pie has been distributed across the league, sometimes there's not enough left to cover the costs of travel, hotels and unsold tickets.
UCLA had $1.2 million in expenses from the 2011 Fight Hunger Bowl, which offered a $925,000 payout. UCLA's expenses included $439,000 in unsold tickets, most of which cost $50 to $85 each. Meanwhile, the Fight Hunger Bowl sold $60 seats on Groupon before the game for $36.
To help UCLA break even, the Pac-12 Conference picked up half the tab of unsold tickets. Following the 2010 season, Connecticut reported it lost $1.6 million in the Fiesta Bowl after having more than $2.6 million in unsold tickets.
If anybody should take the blame for the unsold tickets, it might be the teams' league representatives, who made a big gamble on prearranged ticket allotments when they agreed to multiyear contracts with the bowls. In retrospect, the leagues overestimated the number of tickets their teams could sell. They also might have been willing to take the financial risk in exchange for a guaranteed block of premium seats and a bigger guaranteed payout.
In the Holiday Bowl, each team is guaranteed about $2.3 million.
"Nobody's got a pistol at anybody's head and saying, 'You've got to take this amount of tickets,'" said Wright Waters, executive director of the Football Bowl Association, a bowl industry trade group. "From a (league's) perspective, the complicating question is, 'How many tickets do I need?'"
It's a difficult question to answer. Even some of the bowls acknowledge the lack of demand for full-price tickets.
Boise State was required to buy at least 660 tickets to the Hawaii Bowl at $45 each - a near $30,000 commitment for its game against Oregon State. Meanwhile, the Hawaii Bowl was selling half-price tickets on Groupon and LivingSocial this year and last year, some for as low as $5. Last year, Fresno State played in the Hawaii Bowl; it sold 55 of its 600 tickets priced at $50 and absorbed $27,250 for the unsold tickets, according to bowl documents.
The discounting "does help us, because those seats traditionally are not sold," said David Matlin, the Hawaii Bowl's executive director. "This is a way for us to move some of those tickets."
The Heart of Dallas Bowl last Jan. 1 offered half-price tickets on Groupon for $36. Oklahoma State and Purdue played each other in that game, each committed to big allotments at $75 a ticket. OSU sold about 6,000 of its 10,000-ticket block, forcing the Big12 Conference to eat the rest for about $300,000. Purdue sold about 2,000 of its block of 6,000, forcing the school and its conference to also take a hit of about $300,000.
The Poinsettia Bowl played last Thursday in San Diego sold $52 seats for $20 on LivingSocial. Utah State played Northern Illinois and was required to buy 3,000 tickets: 2,000 at $50 each, 500 at $65 and 500 at $30.
"The ticket commitment for the Poinsettia Bowl is so low, we don't think we're competing against the schools," said Bruce Binkowski, executive director of the Holiday and Poinsettia bowls.
For the Holiday Bowl, Binkowski said the half-price tickets on Goldstar, an online discounter, were for a limited number of end-zone, upper-deck seats, not the better seats given to the schools.
The number of bowl games keeps going up, even if ticket demand isn't keeping pace, but the conferences have learned.
"I think those conferences and institutions realized that was a bad model," Carparelli said.
In their next multiyear bowl contracts, starting next year, the leagues asked for much lower ticket commitment requirements, cutting them by a quarter or half. The Holiday Bowl, for example, will drop its required ticket commitment from 11,000 to about 7,000 a team, reducing the financial risk for the participants.
Bowl games have proliferated largely because so many powerful interests see them as moneymakers. While most of the games are not financial windfalls for the participating schools, they do bring other benefits, such as television exposure for recruiting, extra football practices and fundraising opportunities.
"The majority of these schools know they have to eat it, but they use it as a recruiting tool, to thank the seniors and use it as a way to prepare the players on next year's team," said Ron Dick, an assistant professor of sports marketing at Duquesne University. "These are all the ways they justify it."
The new playoff next year will add more money to the pot, especially for the power conferences, but it also could further depress ticket demand for the lower-tier games. Waters said those games might have to add more entertainment, such as concerts.
"What keeps me up at night? That's it," Waters said. "What's going to be the impact of the college playoff on other bowls? What's the impact of the additional bowls next year? My gut tells me we're going to be fine as long as we stay focused on making it an event and not another game."