Playoffs pay off for the Ducks

oregon-ducks-logo-helmet-thumbBY JACOB PALMER | OB DIGITAL NEWS EDITOR

The University of Oregon football team looked unstoppable on the field Jan. 1 — and the university is reaping the benefits of the new postseason format.

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As the University of Oregon football team approaches what could be its first-ever national championship on the field, it’s hard to ignore the high stakes business implications of the new college football postseason format.

UO is no stranger to success on the field, especially in the last decade. But this year, the costs are a little higher for some — broadcasting companies, would-be ticket holders —  while the payouts for coaches and sponsors soar.

Excitement about college football has been growing since the NCAA eschewed the much-maligned computer-ranking system that previously determined which teams would play for the national championship. Debuting this year is the four-team playoff system for which fans had been clamoring.

The College Football Playoff Championship game between the Ducks and the Ohio State Buckeyes is Monday, Jan. 12 at 5:30 p.m., in Arlington, Texas.  Here’s a look at the money trail:

All eyes on the games

According to a report from CNN Money, ESPN had 28.2 million viewers for UO’s 59-20 beatdown of Florida State. The Buckeyes unseating No. 1 Alabama yielded 28.3 million viewers in the other playoff game, both broke the previous record for cable viewership.

Scoring a highly sought-after contract like the College Football Playoffs for the cable network has come with significant costs. According to a report from Bloomberg Businessweek, the Disney holding had to shell out a hefty price relative to years past.

If the audience for next week’s game matches the 25.6 million who tuned in for last year’s BCS title game, ESPN’s seven-game total audience for the college postseason would hit 112.4 million—a per-viewer cost of $5.41. The Oregon-Ohio State showdown will probably do better than last year’s championship, but even so, ESPN will almost certainly end up paying more than twice the price for each viewer that it did last year.

Yet the network will not blink at that higher price, especially with rates locked in for the next 12 years. ESPN has a history of paying a premium to move marquee sporting events onto the cable dial. It currently pays more than $8 per NFL viewer during the regular season, quadruple the rate of its network competitors. And it paid $100 million to carry the first NFL playoff game on cable last weekend, drawing 21.7 million viewers for the Carolina Panthers victory over the Arizona Cardinals (at a rate of $4.60 per viewer).

Tickets: highs and lows

According to an story, the average ticket price to the UO-Ohio shakedown has been relatively low compared to previous years.

Though the lowest prices are rising to see the game, the average ticket cost for AT&T Stadium in Arlington, Texas, remains unchanged since mid-December, at $1,621, which is $700 more expensive than the average cost to see the 2014 title game between Florida State and Auburn. The current average price is less, however, than what it took to see any of the title games from 2011 — when it cost more than $5,086 to watch Auburn beat Oregon — to 2013, with each of those more than $2,000 per ticket.

As of Monday afternoon, the cheapest tickets to the game from TiqIQ were selling for $510 to sit in the one of the most far-flung seats in the enormous AT&T Stadium (Jerry Jones’s monstrosity of a football arena outside of Dallas).

The most expensive seats could be purchased for a mere $5,222 from the online secondary ticket provider. And on the very high end:

Windfall for coaches

The new playoff format has proved beneficial for the coaches, who earned hefty bonuses by winning the Rose Bowl. spoke with Oregon athletic director Rob Mullens before the New Year about how he plans to sustain the university’s current success. Mullens offered a glimpse into the balancing act he must perform to keep fans, coaches and players happy. They all want financial relief: Fans demand a championship-caliber team but are tired of price increases and coaches want to be paid on par with the rest of the nation’s football powerhouses.

Mullens said five years ago Oregon ranked 39th in assistant coaches salaries with the school paying a combined $1.59 million; the Ducks now rank 15th at $3.13 million. In the Pac-12, only UCLA has higher assistant salaries.

“Raising the ticket prices has enabled us to move that salary pool from 39th to 15th,” Mullens said. “We’ve nearly doubled it in the last five years because continuity matters to us, and we want to reward success. And it’s paying off.”

Just do it

Another beneficiary of the Ducks’ postseason success has been Nike, the sponsor of all four CFP teams.

From the Portland Business Journal:

The cost [of sponsoring Alabama, Ohio State, Florida State and Oregon]: a bargain $15 million.

That’s the combined amount of cash and apparel that Nike will provide the four universities this year in exchange for the right to outfit each university’s entire athletic department.

Taking advantage of the discount exposure, Nike has launched a college football collection of shoes marketed to fans of the four teams.

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