Explaining the economics of the Bowl system

Over at www.grantland.com, here is my piece with Kevin Grier, on the question of bowls vs. playoffs. Here is an excerpt:

In 2007, Mark Schlabach chronicled the Chick-fil-a Bowl’s selection process. He explained that Boston College was not invited to the game in Atlanta because organizers worried that BC’s fan base wouldn’t buy enough tickets and spend enough money.

“The BC thing ate me up for a week,” Stokan (the Bowl President) said. “The factors on the field were very favorable to Boston College. But when you look at this thing, you have to take into account the players, the administrators, the relationships with the leagues and the financial commitments. The city really depends on us because we’re one of the top 10 conventions. We have an obligation to hotels, restaurants and retailers.”

Are you surprised that this bowl is run by the local Chamber of Commerce?

…Did you know that there is a “Sugar Bowl CEO”? Circa 2009, he was paid more than $600,000 a year. Is it surprising that the Sugar Bowl and Fiesta Bowl each have more than $30 million in net assets? Did you know that many of these bowls also receive government subsidies?

The piece ends thus:

In sum, we have a system where the games are not designed to produce the best on-field matchups, the competitors often lose money but fight fiercely to participate, outsiders and observers complain vehemently, and the organizers amass and waste a great deal of money with little oversight.

Welcome to capitalism, American style. Get back to us when you’ve found a better system.

Here is Art Carden on the same topic.