Archive for category football
Can Profit-Maximizing Enterprises Systematically Leave Money on the Table? The Curious Case of the BCS
For years the public has been clamoring for a playoff system to crown a champion in college football. Yet the geniuses at the BCS stubbornly defended—at least until now—their computer-knows-best system for inviting the two most worthy teams. By injecting doubt over the legitimacy of its invitees, the current system diminishes the meaning of the BCS title game, as evidenced by the abysmal Nielsen ratings for Monday night’s Alabama-LSU game (only 13.8 percent of U.S. television households tuned in to watch the television equivalent of paint drying) and last year’s Auburn-Oregon title game (15.3 percent). By comparison, the title game between Alabama and Texas just two years ago drew 17.2 percent of U.S. households; if this were a publicly traded firm, its shares would be falling fast.
Even worse, the current system diminishes the importance of the other BCS games. Besides alumni, who wants to watch an exhibition game between Oregon and Wisconsin (this year’s Rose Bowl) if the winner cannot advance to the next round? This year’s Rose Bowl drew a meager 9.9 percent of U.S. television households, down 15 percent from last year’s Rose Bowl between TCU and Wisconsin. And last year’s Rose Bowl drew 11.3 percent, down 15 percent from the prior year. Can anyone spot a pattern?
In contrast, the first round of the NFL playoffs this year drew massive audiences. For example, NBC’s coverage of the Saints-Lions earned a 19.3 overnight rating, the third-best overnight for a Wild Card Saturday game since the 1999 playoff season. Along with 42.4 million of my closest friends, I found myself compelled to watch the Broncos-Steelers Wild Card game (25.9 rating), not because I care about either team, but because the investment of my time would pay off in even greater happiness next week.
It is a tragedy that the BCS would run these valuable assets into the ground. Imagine the excitement of a Cinderella team like Baylor, Boise State, or TCU sneaking into the championship. Organized as a playoff, the Rose Bowl (or any BCS non-title game) would experience a significant lift in ratings, along the lines of the lift enjoyed by NFL post-season games relative to NFL regular-season games. To be fair, the profit function of the BCS conferences is presumably much more complicated than “maximize the value of the television revenues for the BCS games.” But these television revenues must be a critical component of their joint profits. Which begs the question: Why would the BCS systematically err when so much money is at stake?
Every year around this time—around week 10 of college football season—we are reminded of the inequity of the Bowl Championship Series (BCS) system. Instead of permitting an open playoff system to determine the college football champion, as is done by most other NCAA sports including Division II football since 1973, and more famously, NCAA basketball, the BCS uses a computer algorithm and polls to decide the contestants according to, among other things, regular season performance, the teams’ conferences (BCS-approved or not), and strength of schedule. In particular, six of the ten BCS playoff slots are set aside for teams from BCS conferences.
While choosing the best team in the country is relatively easy, choosing the second-best team is highly controversial, as the second-best team will have some warts. Going into the ninth week of the season, here is a look at the BCS standings: LSU (.9931), Oklahoma State (.9447), Alabama (.8836), Stanford (.8749), and Boise State (.8473). Despite losing at home to LSU this weekend, Alabama is BCS-ranked above undefeated Stanford and Boise State.
In today’s Washington Post, columnist John Feinstein makes a compelling antitrust argument against the BCS:
But here’s the real nightmare scenario for the boys of the Bogus Championship Series: Oregon beats Stanford; Oklahoma beats Oklahoma State. That’s when the BCS apologists will start screaming for an LSU-Alabama rematch.
Is Boise State better than Alabama? Who knows? If college football were a real sport with a real playoff system or tournament, we might get a chance to find out. But you can bet all the TV money in the world that if you were to acquire [Alabama’s head coach] Nick Saban’s cellphone records you wouldn’t ever find a call to the 208 area code to set up a home-and-home with Boise State.
That’s why the money-huggers who argue that Boise’s schedule doesn’t make it worthy of playing for the championship have no argument at all. All of the so-called big-time schools who have played Boise in recent years — Georgia, Virginia Tech and Oklahoma come to mind — have lost. In fact, Boise’s only two losses in the last four years were to TCU and Nevada, who also aren’t worthy of playing for anything meaningful, according to the money men.
What Mr. Feinstein has articulated sounds very much like a coordinated refusal to deal by BCS conferences and their schools against Boise State (and perhaps against TCU in prior years) to maintain their share of the profits generated from post-season Division I football. In economic parlance, a non-BCS team’s strength of schedule—the key factor cited by BCS teams to support exclusion from sharing in the prize—depends on the willingness of BCS teams collectively to schedule games against the attacker. Proving coordinated refusals to deal are quite difficult—the inquiry concerns whether each participant would find it in its unilateral interest not to schedule games with tough non-BCS teams in the absence of the alleged conspiracy—but I am confident that several economists (including your fearless writer) would line up to correct this inequity.
One might argue that no BCS team has an incentive to schedule a tough non-conference opponent, for fear of adding a loss to its record. To this I say poppycock: Bubble teams—teams from weak BCS conferences (like the ACC or Big East) or teams at the bottom of a strong BCS conference (like the SEC)—seek a tough non-conference opponent to bolster their conference victories. In contrast, a team at the top of the SEC simply needs to win its conference. That Virginia Tech (of the weak ACC) and Georgia (at the bottom on the SEC) invited Boise State to play in 2010 and 2011, respectively, does not disprove Feinstein’s conspiracy theory—those teams needed to prove something. Better evidence would be an invite from LSU or Alabama. But alas, those teams seem to schedule tough non-conference games with BCS conference teams. LSU invited Oregon (Pac 10, BCS) and West Virginia (ACC, BCS) this year. It would be good for football—and the competitive process generally—if these non-conference invitations were made irrespective of the opponent’s conference (BCS conference or not).