Leaving the NCAA. Is it possible?

Another of my cleaning out my drafts column.  Never completely finished but the point was that there are probably 40-50 teams that would make sense to join but conference affiliation makes it impossible.  Unless the college players form a union and force schools to separate football as a separate entity I don't see it happening.
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Any time a big time school is under investigation by the NCAA penalties decry the inequity of it all and suddenly you see statements by fans that say their team should leave the NCAA.  Some of this is just frustration that their team is about to be hit with penalties but it's also because the whole system is set up on the backs of 20 year old men so bad decisions on their part are to be expected.  The NFL doesn't have to worry about illegal payments, only that their players stay out of jail.

Most major college make tens of millions of dollars on the backs of their student athletes.  Texas, Alabama, Florida, and Ohio State all make between $50-80mm from their football programs will spending about $20-30mm to support them. The profit for each of these universities is used to support the other programs at the school.  The problem is that more and more people are coming after this money and while the total revenue for all schools continue to escalate that isn't going to continue forever.  With costs continuing to rise it is only a matter of time before the big schools do something to protect this income.

Could the big schools leave the NCAA?  

The first question is how they leave.  Many suggest that it should be made up of the conferences with automatic qualifition in the BCS while others feel a more selective process should be used.  I'm a big proponent of the second method but lets look at both:

BCS Conferences (B1G, Pac12, Big12, SEC, BE, ACC)

There are currently 66 schools in the BCS system with the SEC/B1G the strongest and the B12/BE the weakest.  68 schools is too many especially since so many schools have differing level of support.  Here's the attendance numbers for each conference for the 42 schools with more than 50,000 in attendance (with teams over 65,000 in red):

Big Ten (8/7)

1. Michigan 111,825

2. Ohio St. 105,278

3. Penn St. 104,234

11. Nebraska 85,664

16. Wisconsin 79,862

19. Michigan St. 73,556

21. Iowa 70,585

38. Illinois 54,188

SEC (11/9)

4. Alabama 101,821

6. Tennessee 99,781

7. Georgia 92,746

8. LSU 92,718

9. Florida 90,511

10. Auburn 86,087

18. South Carolina 76,668

22. Arkansas 68,932

25. Kentucky 66,070

35. Mississippi 55,898

37. Mississippi St. 54,999

Big 12 (6/3)

5. Texas 100,654

12. Oklahoma 84,738

13. Texas A&M 82,477

26. Missouri 61,540

32. Texas Tech 57,108

41. Oklahoma St. 50,812

Pac 12 (6/2)

15. Southern California 79,907

23. Washington 66,264

28. UCLA 60,376

29. Oregon 59,398

31. California 57,873

36. Arizona 55,408

ACC (6/3)

17. Clemson 77,469

20. Florida St. 71,270

24. Virginia Tech 66,233

30. North Carolina 58,250

33. North Carolina St. 56,877

39. Miami (FL) 52,575

Big East (3)

34. West Virginia 56,325

40. Pittsburgh 52,165

42. Louisville 50,648

Independant (2/1)

14. Notre Dame 80,795

27. BYU 61,381

As you can see  most conferences have a few dominant players with many others schools that don't have close to the same resources.  This system is a bit symbiotic as the top schools get wins and the bottom schools get money.  This has worked well in the past but the question is will it work if they break ties with the NCAA and the answer is mixed.  It can for the big conferences but not for the smaller conferences.  

That's why I think the answer is a combination of the B1G/SEC/B12/Pac12 along .  You could make an argument that the B12/Pac12 shouldn't be included but both serve a geographic area with huge college football traditions.  To these 4 conferences I'd add Notre Dame/BYU/Florida State/Miami/Virginia Tech.  

There are many obstacles in the way but the biggest is political and I think it is impossible to exclude the ACC if you include schools like Indiana and Vanderbilt.

The Big Ten, The SEC, and Bowl Posturing

College football playoff conversations are reaching a fever pitch and like usual people are missing the point.  It's not about making the fairest matchup or protecting the student athlete.  College football hasn't ever been about that.  It's about the money.

Someone made this comment on the Ozone forums:

I thought Delaney conceded on the first round playoff games being played at home (which the SEC was fighting), so we could have a playoff with all conference champions. What happened? It appears the SEC is rolling the B1G again.

And got the following response:

Don't do what the Media Fruit Flies are doing. They are taking public statements as something more than...posturing. It isn't. As Delaney said, none of the people commenting and publishing opinions are "in the room."  The Fruit Flies seem to think that the SEC positioning itself for its perceived best interests is somehow superior to the B1G and PAC 12 doing the same thing. 

I agree with that line but went a little further:

I think most of the posturing is the Big 4 masking figuring a way to exclude the rest of the conferences from the system.  Just an example...

Imagine if the B1G/P12 keep pushing to protect the Rose Bowl and a plus 1 system. Wouldn't that "force" the B12/SEC to put their champions in the new bowl they just announced? It's just too bad they 4 couldn't come to some sort of agreement (snicker). Wouldn't the fact that the winners of these games would most likely face each other a week later in the plus 1 game push the tv money for these 2 games into the stratosphere?  Wouldn't it make most of the other bowls pale in comparison? That would expecially be true if Delany "forced" the SEC to agree that only conference champs could play in the plus 1 game. I'm sure there would be years that a team like Florida State, Miami or Notre Dame (j/k) could sneak in but this is about money not making the fans happy. That will only happen (imo) if they ever to an 8 game playoff but Delany isn't interested in that.

In the meantime, the Big 4 will lament that it is too bad they couldn't come to an agreement as they take their piles of money to the bank and the lesser conferences slip into mediocrity.

One thing I didn't say was just how important do you think the conference championship games would be if they were the "quarterfinals" to these games.  Can you imagine if these 4 leagues agreed not to schedule anything opposite each other and the 4 games ended up in prime time the week after Thanksgiving?  Every day the media would focus on each conference game and the nation would tune in. With Super Bowl ads getting $4 million a minute is it unthinkable that the networks could get $1 million for the 60+ minutes of commercials during these game plus more money for the pre and post game coverage?  The money we are talking about could rise into the stratospheric for the 4 leagues.  Everyone else would be left behind.

It's like an argument I got into on the ESPN forums (pointless but silly fun).  Someone said -

B1G you screwed up by not coming out with one voice as a conference. With this confusion in the B1G, lack of solidarity, compared to the Big 12 And SEC, I am now seeing the big 4 as PAC, Big 12, ACC, SEC.

My response was:

This is all posturing. What they are really doing is giving Delany options so he can try to negotiate for the conference. Delany is the one voice for the B1G and the presidents trust him to get the best deal.

Perlman's comments were the best indicator of this when he made the veiled threat if things didn't go the way they wanted they'd walk away entirely and go back to the old BCS system. Don't believe what you read in these articles. Most of what is released is just conference spin and we have no idea what is going on behind closed doors.

Conversations like this make me laugh as most fans don't think like a commissioner or a college president.  The goal here is to maximize money and there are two goals in the playoff talk -

•  improve their product on New Years Day to improve ratings and 
•  keep as much money in the hands of the conferences that drive television ratings (B1G, SEC, B12, and P12).  

Everything else is secondary and while I'm sure the SEC/B1G aren't 100% in line in their thinking they both have these two goals in mind.  The problem is public opinion and more important is doing this in such a way that the government doesn't have a reason to get involved.

Public bickering is a good smoke screen.

Stay tuned.  It should get interesting to see how this all shakes out but anyone that thinks that Delany and the B1G won't end up with the best deal possible is kidding themselves.

Florida State has set off crazy expansion talk

Reports are that Florida State is a lock to join the Big 12 which has set many people on the internet to assume that the ACC is in play.  The reason is that it appears that the Big 4 (B12, P12, B1G, SEC) are making moves to set up a playoff where they are the only conferences involved.  That has made the teams in the ACC nervous and if that happens all the teams in that conference will be losing millions of dollars of revenue in an already strapped athletic department.  That has lead to a lot of speculation that additional teams will be leaving soon and other conferences will be picking over the scraps.

So what changes are likely?

Big 12 - currently at 10.  Most likely will be adding Louisville and Florida State.

That impacts the Big East because they gave an out to all their new teams if another existing member left which means Boise and San Diego State will most likely go back to the Mountain West.  Houston and SMU are up in the air but seem likely to stay in the Big East if it still exists.

ACC - If FSU leaves they will most likely go for Connecticut as a replacement unless 2 teams leave in which case they might just stay at 12.  12 teams is much easier to work with as a conference.

That is what is likely.  Many people feel there will be a seismic shift and expect the following as well.

- Notre Dame to join a conference.  Most likely the Big 12 but possibly the Big Ten.  I personally think the Irish would be silly to go anywhere but the Big Ten as it is a better fit but their fan base hates the idea and most feel they will raise enough havoc to keep them out of the B1G.

- The SEC will take a few ACC teams.  Everyone seems to think that 16 is the magic number which I dispute but if that happens the most obvious targets are Miami FL and Virginia Tech.  There's a lot of hurdles in the way of that happening.  The biggest are Florida and Virginia along with the state legislatures.  The thing is Miami is a private institution and I'd bet the Virginia legislature would it as a good move to goto the SEC.  Other possibles - Georgia Tech, West Virginia, and the Carolina schools.

- The Big Ten will expand.  I seriously doubt this will happen as very few schools could move the needle in sports but Notre Dame is an exception.  If that happens the new question is who can you pair with them.  

• Missouri was my favorite choice but that ship has sailed (I'd think).  
• You could look to schools like Kansas but the issue there is the schools have signed over their broadcasting rights to the conference for 15 years which makes any move really difficult.  
• There's always the Big East leftovers like Rutgers or Connecticut but I've always thought those were poor choices.

That leaves the ACC for the Big Ten.

• Maryland - too far but a great fit academically.
• Virginia Tech - If they don't goto the SEC it is a really good fit but academics a bit lacking
• Pitt - Not gonna happen
• Syracuse - Not gonna happen
• Boston College - Not gonna happen
• Virginia - Bad football but a great fit academically.

This got me to thinking about my old posts about possibilities when it looked like Delany's plan was to expand to 16.  What we didn't realize at the time is how tough it is going to be to attract a team that wouldn't cost us money.  It also reminded me that Notre Dame is essentially an undergraduate school and the academics in the league won't be happy with another school that doesn't push the needle in terms of research.  Who would do this?  Virginia and Maryland.

This is totally fantasyland and the fan base in the Big Ten would have to accept that we'd essentially become two separate leagues for reasons I've explained in the past (7 division game plus 2 non non-division is not good for cohesion).  Think about the league you'd get:

East
West
Ohio State
Notre Dame
Michigan
Nebraska
Michigan State
Wisconsin
Penn State
Iowa
Indiana
Purdue
Maryland
Illinois
Virginia Tech
Minnesota
Virginia Tech
Northwestern

Virginia Tech would be a great addition for football and Maryland/Virginia are top notch academic institutions (and with decent all around sports).  This would likely be a net loss to the conference (only add Virginia/Maryland/DC on basic) but a home run for the academic consortium.  I doubt it happens but it is fun to think about.

If that happens then the conference championships would essentially be the quarterfinals, the bowls a semi-final, and the BCS will be the 1 game championship.  While teams outside of the Big 4 could qualify for the semi's, it would be doubtful as the strength of schedule and voter bias would make it almost impossible.

That was the unstated goal of the commissioners meeting last month and it seems like they are on track to make it happen.  The only remaining question is what will happen to the teams in the ACC.

The current state of college football TV deals

The ACC just finalized their television deal with ESPN due to the additions of Syracuse and Pitt.  The Big 12 is in the final stages of their negotiations with ESPN/Fox as they lost aTm/Missouri and added of West Virginia/TCU.  The SEC is in initial talks regarding the addition of aTm/Missouri.  I thought it might be a good time to recap the television deals for college football.




The main motivation that got me to write this was was an article I read that stated that Florida State should leave the ACC and join the Big 12 due to their favorable deal.  The key in that article is that Florida State's athletic department is currently running a $2.4 million deficit and in the Big 12 Florida State would have the ability to create a Seminole Network.  The expectation is that this would bring in at least $5 million which would balance the budget.  I really can't believe Florida State would move for something as risky as that proposition but it has gotten traction over the weekend.  My guess is this is merely posturing to get concessions from the other ACC members at the meetings this week as the numbers don't add up.  There are rumors that ESPN and the Big 12 have agreed to a new deal that would give each team an estimated $20 million per season but I don't think it would be worth it for Florida State to leave for the $2.9 in additional television money when you consider the cost of additional travel.  I guess time will tell.

The other interesting thing about the spreadsheet is that most leagues seem to be happy they are getting Big Ten/SEC money and there is no doubt that ESPN stepped up to the plate and gave huge contracts to the Pac 10/ACC/Big 12.  Honestly when you think about television ratings I really don't think these deals can pay for themselves.  Are we really to believe that games in the ACC are worth $2.3 million?  I really think the key is ESPN is protecting its $5 per basic subscriber by making sure that they have long term college football contracts tied down all over the country so they have to be included on the basic tier.

That brings me to the SEC.  If the ACC is worth $2.3 million a game and the Big 12 is worth almost $2.7 million then what is the SEC worth?  That is where the question of subscriber fees vs ratings is interesting as the SEC's ratings are among the best though they are probably down the list when it comes to cable boxes in their area.  The SEC started their current deal in 2009 before prices really jumped and while their deal goes through 2016, I expect ESPN to cave and give them at least as much as the Big 12 for the addition of Texas A&M and Missouri.  If they don't the SEC could sell those home games to Fox/NBC/CBS for a huge sum and with 2016 not that far away they want to keep the SEC happy.  As you might recall, the Big Ten Network started because an ESPN executive dared Delany to find a better deal.  In the end I'd expect the SEC deal to be extended for at least another 10 years at least $3.0 million per game.

That brings us to the Big Ten.  Their deal is up in 2017 and they are biding their time as these deals have gotten increasingly ridiculous.  Looking at the Pac 12/Big 12, I expect the final deal to be a partnership between the ESPN and Fox for the 45 games   ESPN would prefer to have them all but they only really care that 1-2 games a week are on their station so it will be impossible for Midwest  cable companies to remove them from the basic tier.  That's because their main national competitor (DirectTV) will always have ESPN as basic and that combined with a section of the country that loves college football will make it hard to change.  This protects ESPN's $5/month which is the key.

So how much could the Big Ten get when they renew this contract?  Considering the games they are selling are the 3-4 best matchups every week they will get more than the average as their tier 2 games are shown on BTN.  My best guess would be at least $4 million in today's dollars.  That may seem high but if the Pac 10 can get $2.8 for all it's games then $4.0 million/game for the best Big Ten games seems pretty reasonable.  That's a nice bump from the $2.2 million per game they currently get and add an additional $7 million to each school in the league.

If the SEC and Big Ten get numbers like I expect the revenue per team for the next 15 - 20 years in college football would be as follows: Big Ten 27.7, SEC 23.0, Big 12 20.0, Pac 12 20.1, and ACC 17.1.  The Pac 12 numbers could jump a little if they are able to get their web based Pac 12 Network going for their Tier 3 content (games that Fox/ESPN don't want to run).  The same is true for Texas and the Longhorn Network.

A wildcard in the mix is Notre Dame as they will soon be making less than every other school in the top 5 college football conferences.  Their contract is up in 2015 and there are rumors that NBC may walk away as they are losing money on the current deal.  That's another clue that the real money in these college football deals is in subscriber fees as NBC doesn't get those as they are a broadcast company.  If they walk away then Notre Dame will need to negotiate with ESPN/FOX or possibly CBS/NBC's cable counterparts.  The issue for the Irish is one school isn't enough to motivate people to subscribe to a cable network so they will be negotiating from a position of weakness.  That leaves them with two choices - get the best deal they can from the cable companies to be included with the rest or work with one of them to form the Irish network.  There are undoubtedly thousands of Irish fans that would be happy to pay a premium for this channel.  That actually may be their best choice and one of the reasons for the recent talks with Texas and their Longhorn Network.

Unless they want to join a conference....

Notre Dame's increasingly limited bowl options

A poster on the forums linked an interesting article about Notre Dame moving closer to BCS irrelevance.

My response is - As the all the bowls are going to conference tie-ins, it is getting harder for ND to find a place to play in January.

Right now they have a tie in with the Big East so they can take a spot from one of their schools if Notre Dame isn't in the BCS (which is pretty much every year). That makes the Big East a more attractive sell but its not enough to move the needle much. Now that the Big East has lost all the schools that travel well, their options are going to get worse as contracts expire.


It makes sense for the bowls as who would you rather have -- the 7th place B1G vs 7th place SEC - Iowa vs Auburn or the #2s from the Big East and C-USA - Louisville vs Tulsa. It's about filling the stadium and turning on TVs and the Big East/CUSA doesn't do it. With bowls stuck with their guarantees it is only a matter of time before the only choices Notre Dame will have is to make the top 4 in the BCS or find that even with a 10-2 season they can't go anywhere but the Potato Bowl.

I look forward to the day when the Irish come crawling to the Big Ten for entry because it is going to happen. It's their only logical choice. Sure they could join the Big East but I think they are smart enough to realize that doing this will put them on the same path as Army/Navy football (i.e. - dominant powers back in the day). The interesting question is if/when the Irish come calling, how will the B1G respond.  FWIW, my personal preference would be to "encourage" Penn State to join the ACC but that won't happen for financial reasons. I'm sure they will take Notre Dame as they do add value.


Of course this is all specualation but one thing is certain - Notre Dame fans have a lot of crow to eat over the next few years until they join a conference.

ESPN's coming apocalypse

One thing many people don't realize is just how much of their cable bill is spent on sports.  The biggest expense to cable companies is ESPN and its sister companies.  The following table is a bit dated but it gives a good idea of how your cable bill is split between the various companies.

This is just an estimate from a company that values entertainment companies but it is close enough to clearly show that sports programming is getting many times what other forms of entertainment receive from basic cable.  When you consider that there's over 100 million subscribers in the US alone those rates are astronomical (100mm x $4 x 12 mo = $4.8 billion annual).  Recent reports state that the ESPNs monthly charge is now over $5.00 with the expectation that it will get near $10.00 by the end of the decade.

Compare their rate to channels that produce quality non-sports television like A&E, FX, USA, TNT, and AMC.  ESPN's charge is about 10 times what these channels are able to demand.  How are they able to do this?  The answer is because there is a perceived value by subscribers of having ESPN on the basic tier of channels.   ESPN was one of the prime drivers that helped put cable into every virtually every home in America.  As cable grew so did ESPN and while at first they only offered sports highlights eventually they bought properties like Monday Night Football and most of college football.  The executives at ESPN have leveraged the fact that cable subscribers would revolt if their channel was moved to a higher tier.  Other channels can't duplicate this because while some people love shows like "Mad Men" and "Justified", it isn't enough to push rates higher (Side note - One of the main reasons for the recent rise of original programming on basic cable is due to the hope that increased ratings will allow for higher subscriber fees).

Subscribers are almost universally ignorant of these facts.  We pay our monthly bills and rely on the cable companies to negotiate the rates with companies like ESPN.  We don't care what they pay but we do care when our cable bills start to increase.  That has started to happen and combined with a recession, the cable companies are being pressured to pay more for content and charge less to consumers.  They have been able to offset this by offering other services like high speed cable but that is causes another problem.

One of the issues with all forms of media is they are easy to duplicate once it has been filmed/recorded/etc.  With the rise of the internet many properties are availble for download within hours of broadcast. This has hurt all media companies but one area that is safe is sports because viewers want to see an event live.  That has only increased sports popularity with advertisers in recent years but the rise of companies like Netflix are increasingly cutting into the profits of the cable companies.  Every year new technology is developed that ultimately will lead to the end of cable's monopoly on content.  This will lessen their ability to pay companies like ESPN and force a reduction in rates.  Ultimately ESPN is destined to end up in a pay tier of some sort and a sign that they know this is last years release of ESPN3 which allows for online streaming of their programming.  It is currently streaming for free to most internet subscribers and is a nice long term hedge depending on what happens with the cable companies.  The issue they will face is ESPN currently has 100 million captive subscribers payiing $4-5 / month.  The question is how many of those 100 million will they be able to keep if it goes to subscription as that will determine the cost they will need to charge to break even.  The rise of league owned networks like BTN and the NFL network combined with increased competition of NBC Sports and Fox means that keeping current content is going to be difficult regardless of what happens to the cable companies.  ESPNs rise was due to leveraging their properties to force higher prices.  If they lose them their fall will be just as drastic.

Bottom line for ESPN is they are in for a very difficult decade but that isn't to say they are doomed.  You can see they have plans in place to deal with today's realities but they rose to prominence on major sports like football and now desperately need to hold on to those properties.  If they don't they will fall just as quick.  The good news for viewers is ultimately the cost for sports shouldn't go up as competition rarely leads to increased prices.  These battles off the field may be as interesting as the ones that occur on it and no doubt will go a long way to determine how we see sports in the future.