Bears hoop dreams ring cash registers

by Paul Flemming

SBJ Staff

The Southwest Missouri State University athletic department will get at least a $227,152 payment in the year 2000 for the exploits of its men's basketball team in this year's NCAA tournament.

The team advanced to the regional round of the tournament with victories against the University of Wisconsin and the University of Tennessee. As the Business Journal went to press, the Bears were set to meet Duke University March 19 in East Rutherford, N.J.

More than the SMSU basketball team shared in the benefits of its athletic achievements. The university as a whole, other Missouri Valley Conference member schools and area businesses all reaped the rewards of March Madness, Ozarks style.

"We wish the Bears would play Duke in the Sweet 16 more often," said David Thomason, local sales manager for KOLR Channel 10. The station was the local broadcaster for the men's games.

It's a sentiment surely shared by Head Coach Steve Alford. His four-year contract, signed in 1997, calls for him to receive incentive bonuses of $25,000 for the team's success thus far $6,000 for each NCAA tournament game and $7,000 for making an appearance in the Sweet 16. Alford's base salary is $100,000 a year.

The projected payout of NCAA television contract rights to the university is about $107,000 more than it would otherwise have been had SMSU and two other MVC teams not performed as well as they did. The University of Evansville lost its first-round game, and Creighton University won a game before bowing out in the second round.

Those six tournament appearances increase the MVC take of the television-revenue pie. In 1994, CBS agreed to pay more than $1.5 billion for the broadcast rights to the tournament through 2002.

At that time the NCAA instituted a new procedure for doling out the proceeds. Conferences are paid each year based on the number of games played by member teams during the preceding six years. The conferences then split up the money among their members.

The 10-member Missouri Valley Conference bylaws call for individual teams to be credited for each game they appear in for the payout of the year those appearances are made. Those payments are then deducted from the total payment made to the conference. The remainder is split evenly among the 10 conference schools.

In April 1998 the NCAA divvied up $55 million for the 1997 men's tournament. The MVC received $961,025 for 13 tournament games from 1992-97. SMSU, which did not appear in the 1997 tournament, received $93,638 a tenth of the conference's take after Illinois State University was paid for its single game in the tournament.

If SMSU does not beat Duke and advance to another game, the school will next year receive $87,366 for its three games and a $139,785 one-tenth split of the $1.4 million the MVC will distribute after giving Creighton and Evansville their off-the-top cuts.

With the NCAA's formula, benefits will accrue in future years, as well. No matter what happens in the remaining two years of the CBS contract, SMSU will receive in 2001 and 2002 $61,000 more than it would have had the Bears not played in the tournament and had its conference compatriots not performed well, also.

The last two years the MVC has placed only one team in the tournament the automatic bid its conference tournament winner receives and that entrant has lost its first game in each of those years.

The $227,152 television revenue payment to SMSU represents about 2.8 percent of its athletic budget. Greg Onstot, vice president of university advancement, said athletic expenditures in fiscal year 1998 were $7.8 million. The figure this year will be between $7.8 million and $8 million, Onstot said.

Onstot also oversees SMSU's trademarked merchandise. The university this year budgeted between $20,000 and $25,000 in revenue from licensing agreements with apparel and merchandise manufacturers. That amount will be exceeded with unexpected money as a result of the basketball team's tournament success, but Onstot did not have final figures.

"At this point it's not huge money, but we try to establish our own marks," he said.

The university licenses its trademarked logos with hundreds of manufacturers, Onstot said. The contracts call for the university to receive 7.5 percent of the manufactured price of items.

The university also has an agreement with the NCAA to handle licensing through its Collegiate Licensing Co. In that deal, SMSU receives 10 percent of merchandise that bears the official NCAA logo and SMSU trademarks. Sweet 16 is a trademark owned by the NCAA.

One local company with an SMSU licensing agreement printed more than 1,000 T-shirts proclaiming "Bring on Duke." T.J. Loudis, president of T.J. Sales, said Monday morning, following SMSU's Sunday afternoon victory, shirts were being produced. The company sold the shirts out of its own shop and through retail outlets.

Loudis said bulk purchases were also being made: employees of four local Dillon's stores, the Springfield Convention & Visitors Bureau and others in town would all be wearing the shirts late in the week.

Loudis said his company fielded calls from around the country seeking shirts. The same was true at the SMSU campus bookstore. Director Max Wood said sales of Bears merchandise have been brisk.

Wood said business has boomed so much he had not even tried to count up the week's total revenues. March 17 the store sold more than 450 official NCAA T-shirts in a little more than three hours, Wood said.

"People are buying them in bunches. There's no telling what it would have been like with students here." SMSU was on its spring break the week of March 15.

The store shipped items out express to fans around the country and world.

"We sold some this morning that were being sent to France," he said. "People really didn't care so much what it was, as long as it said SMS real big."

Those far-flung fans would watch the games on television and perhaps listen to the contest via the Internet. "By looking at our Internet hits, they are from all over the place. It's about double (the visitors compared to) the regular games," said Tom Ladd at KTXR, which broadcasts SMSU games in the regular and post season. "People may watch it on TV, but they listen to the broadcast."

Ken Meyer, an owner of KTXR's owner, Meyer Communications, said more than 85 percent of advertisers for its regular season broadcast package signed up before the season for tournament advertising if the team played in the post season. Almost all of the remaining advertisers signed up after the Bears made the tournament field.

KTXR's broadcasts are also part of a 13-station network around the state.

Basketball "does produce ad sales. I'm not inclined to do things that are not moneymakers."

KOLR, the local CBS affiliate, is selling ads, too. Thomason, the local sales manager for Channel 10, said local affiliates have between five minutes and seven minutes of advertising to sell during the national broadcasts of tournament games. That time was not available for long on Bears games, he said.

He said it took less than an hour each to sell the Bears' first three games.

"This advertising opportunity hasn't presented itself before," he said. "The Super Bowl happens every year. But this is kind of a rare occasion."

He would not reveal the rates the station is charging. The rates are priced at a cost-per-thousand viewers, and Thomason said the Bears game March 19 is expected to draw a local audience five or six times larger than a typical tournament game.

Long-range benefits will also be seen by the university, said Brent Dunn, in the SMSU development office.

"Will it generate some more income for the university? Yes," Dunn said. Not just for basketball, but for academics and the university as a whole. I've already received calls from people who want to give to the Bears Fund."

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