Bowled Over

At an industry conference recently, a discussion began about the college football playoff and its impact on the various bowl games around the country.  The playoff seems to have created a culture of the haves and have nots, one that is even more pronounced than the prior system (the Bowl Championship Series or BCS).  If you are in the playoff rotation to host one of the semi-finals or the championship game every few years, you are financially secure.  If you are on the outside looking in, every year can be a struggle.

Here are some negative trends in the current bowl game system as it stands today:

·       Funding Challenges – Multiple bowl games obtained certification from the NCAA the past few years, yet didn’t actually hold their game for financial reasons.  The most notable of this group was Austin.  A soft sponsorship market for these second-tier events is likely responsible here, which has also impacted some long-standing events including the Independence Bowl in Shreveport among others.

·       No Thanks – Several high-profile players have declined to play in their team’s bowl games in order to avoid injury ahead of the NFL draft.  This list in 2016 included two first round picks in Christian McCaffrey of Stanford and LSU’s Leonard Fournette.  If the marquee players don’t play, marketing tickets to the bowl games affected can be a challenge.

·       Big Brother – There are some games that are sustainable only due to their relationship with another, larger, and more lucrative bowl.  The Fiesta Bowl and its smaller Cactus Bowl is an example of this scenario.  It’s likely that these smaller secondary games wouldn’t be possible without the backing of their more successful big brother bowl games.  In addition, ESPN owns and operates no less than 14 bowl games, many of which needs the deep pockets of Disney (who owns ESPN) to keep their doors open.  Lastly, there are several events that are wholly subsidized by a state or federal tourism office in what is in all reality a television time buy to market their destinations (see Hawaii and the Bahamas).  We don’t believe any of these scenarios will last the test of time.

·       TV – The same entity that once made bowl games popular (television) now threatens to kill them.  The in-home television experience is so good, that it rivals the live game entertainment value in the minds of many.  Put on top of that the price of tickets, parking, food and beverage, and the hassle of getting in and out of the stadium on game day, and staying home to watch the big game sounds much more appealing.

The old bowl game model is obviously broken.  The days where a local nonprofit group formed a bowl game, negotiated with two conferences on financial guarantees, worked to find a media rights partner, and sold tickets to help raise money for area charities – are likely over.  After all, any business that doesn’t evolve as the market changes around them, will parish.  However, there is some hope.

There are some rather progressive bowl game models being tested that could change the post-season landscape for college football.  These games have flipped the financial script by putting the onus on their partners more so than in the past.  Specifically, these bowls are asking the conferences to buy their spots in these games (rather than the bowl game guaranteeing the conferences dollar amounts for their participation).  In addition, there are games that have moved to streaming their contests, rather than making what is essentially a time buy on a traditional television network.  These two examples provide a titanic shift to the traditional bowl game model, and could be a market disruptor in the near term – think of what Uber did to the taxi cab business.  There are likely more model changes coming (how about tying marketing partner’s advertising fees directly to tickets they can track as being sold directly by their work, rather than just cutting them a check for “marketing”).

So you may say, “Well, we don’t run a bowl game, this doesn’t apply to us.”  To that I would reply, “Oh, but it does.”

In grass root sports, the day of bid fees and room rebates as primary revenue streams for event owners are limited – and sometime soon, will end.  More CVBs and sports commissions are creating their own events and are relying less and less on the bid game.  What does that mean for event rights holders and NGBs?  It’s likely your model needs to evolve, or you may be putting your events and organization at risk.

As our industry continues to advance itself professionally, there are more and more people that are educated and experienced to a point they can challenge the status quo.  These industry leaders don’t mind taking on an entrepreneurial endeavor in order to forgo the traditional bid-in event.  We see the industry growth in the created events area, and in the “incubating” of new events by CVBs using their local promoters.  Movement is afoot.

Bottom line.  The sports market is changing.  Our industry is evolving.  Where will you be five years from now?  Ten years?  Take a step back and look at your business today.  Can you revamp what you are doing today to be even more relevant to your stakeholders tomorrow?  Then why not start now, and avoid getting bowled over?