The Conundrum Of Basketball’s Guarantee Games

January 19th, 2017 | by College AD
The Conundrum Of Basketball’s Guarantee Games
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Guarantee Games

At the initial blush, the idea of playing a large number of guarantee games in the range of $75,000 to $100,000, seems like a good idea. You generate significant short-term revenue which helps support the entire athletic department. If a program plays four guarantee games they would on the average (after expenses) generate somewhere in the neighborhood of $250,000.  

So why would a non-FBS program not want to take advantage of the guarantee gravy train?  Here are a few reasons:

1) For the most part, basketball is the one sport where non-FBS programs can generate revenue through ticket sales, solicit gift dollars and make a name for itself on a national level.  Why then would you force your one program that can create exposure for your university to lose games so you can afford to support sports programs that generate no revenue, are expensive to run and receive no media exposure or fan interest?  Does having your basketball team lose a game to fund field hockey make any sense?

2) By playing these guarantee games, the road teams almost always lose (and quite often by lopsided scores) which create the following issues:

a) The fan base for losing teams lose interest because losing has a way of turning off fans.

b) The players (particularly young ones) lose confidence because they have lost all the guarantee games by large margins. (Most folks will tell you winning breeds winning.)

c) You doom your conference representative in the NCAA tournament to a low seed (which is based on RPI and non-conference games determine your conference RPI) which will almost assuredly result in a very small chance of winning playing a top 2 or 3 seed.

d) Additionally, most of these schools playing many guarantee road games will have limited home non-conference games, so they lose home game ticket revenue plus quite often those home games are non-D-1 so those victories don’t count in the RPI and the fans could not care less about a non-D1 opponent. This home game situation just exacerbates the problem.

ETSU

 

Just to give you a real life example, in 2012-13 ETSU – with a young team – started the season off with a 1-11 record. Their average margin of defeat was 19 points. Six of those losses were to North Carolina, Virginia Tech, Georgia, Ole Miss, Arizona, and VCU. While the guarantee money was significant, the loss of season ticketholders and the cost to recapture them over the next four years has been significant. The year after that horrible start in 2012-13, season ticket sales were the lowest they had been in the last 25 years.

So what is the answer?  Here is my solution. All schools that play guarantee games enter into a consortium where each consortium member agrees to the following conditions:

1) Each school will only play a maximum of 3 guarantee games.

2) The fee for each guarantee game is $151,000.

3) The consortium members play a home and home series with at least 2 of the other consortium schools. (This provision would create home games and relieve some problematic scheduling issues for mid-majors).

4) Each of the guarantee consortium schools agree to pay $1,000 for each guarantee game into a fund to support an individual who is the guru of the consortium. The guru will help with issues that arise and work with the consortium schools as a power base.

What will this do for the guarantee consortium?

1) Simple supply and demand. The Power 5 schools will be forced to pay the going rate.  If the consortium members (just like OPEC) will stay the course, then the model will work.  The consortium members have the one thing that the traditional powers want – opponents who will play them on their home court. If there is an agreed upon standard financial guarantee, then the value has been established and those schools that want to buy games know the cost and build it into their budget.

2) It will force some schools that never play non-conference road games to travel to some of the guarantee consortium schools and play on the road because there is a finite limit as to the actual number of guarantee opportunities available.

3) It will provide almost the same revenue for guarantee consortium schools while also giving them home games and games against like schools.

4) It will greatly improve the consortium members chances for more wins by playing more home D1 games (according to RPI ratings.com, the home team wins about 68% of the time).  Non-conference victories translate into a higher RPI for their conference which converts into a higher seed in the NCAA Tournament for the conference champion and a better chance to win games and earn NCAA basketball pool distribution units. (A win in the NCAA tournament generate an additional unit which translates into approximately $1.5 million.)

By implementing this plan, the benefits would be:

1) Teams playing guarantee games would generate approximately the same amount of revenue.

2) The pairings for the NCAA Tournament would be much more true and not be as skewed as significantly because the playing field would be somewhat leveled because of a more even distribution of home games.

3) Some programs that never go on the road in the pre-conference season would be forced to go on the road thus providing some opportunity to play “big schools” at home.

4) The bifurcated system of have and have-nots would be minimized while allowing more teams to develop fan bases resulting from new home game opportunities.

Clearly, the Power 5 conferences have done a phenomenal job of working together to create a power base in college athletics that works for them. All I can say is, “Kudos to the Power 5 leadership.” However, now it is time for the “other folks” to work together to create some initiatives that are in their best interest and develop a model that gives them a chance for success. A basketball guarantee consortium is clearly a radical first step to identifying initiatives that serve the non-power 5 programs.

 

If you are looking for a way to advance your career, check out ETSU’s Doctorate in Global Sport Leadership.  You can complete this degree and keep your current job and location.  Contact Dr. Brian Johnston at johnstob@etsu.edu for information.

 

Richard Sander About Dr. Richard Sander

Dr. Richard Sander, led Virginia Commonwealth’s athletic program for 20 years, and was introduced as ETSU’s  Director of Intercollegiate Athletics in 2013. Prior to his time at VCU, Sander served as Assistant Athletic Director and was responsible for athletic fundraising at Memphis State University (now The University of Memphis). Sander earned a B.S. in Business Administration from the University of Tennessee-Chattanooga in 1968. He received a M.S. in Physical Education from Xavier University in 1974, and a Ph.D. in Education from the University of Cincinnati in 1980.

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