Realignment Megathread (All The Moves)

[FinalFourCy]

No way someone buys college football, sports and/or its TV rights for $100 billion. If you purchased every NFL franchise you would spend $190 billion. No way is college football valued at half that. IMHO.

Odd to bring up buying NFL franchises. As of now, schools can only sell rights or license agreements.

The NBA just signed an 11 year $77 billion deal. NFL at 11 years for $111 billion

Not saying this is what happens, but for context, if an investment company agreed to pay 64 P5 schools an average of $75 million for 11 years, it is only a $53 billion investment. That’s a lot of content they’d make Fox, ESPN etc pay up for

A fixed for floating deal in which they financed Big 12 and ACC schools for 10 years at $75 million, it would only be $25 billion investment

More likely they first need to unravel things by overpaying for some schools imo

 

[SolterraCyclone]

Only thing I've read with regards to PE is buying into programs, not conferences or college football as a whole. And if that's the case the only ones who will likely benefit are the bluebloods that have the brands capable of providing a return on what would be a pretty massive investment. I have no idea why fans of middling/bottom-half P2 programs or Big 12/ACC programs would be jazzed about PE coming in thinking they're going to invest in everyone. And yes I know that includes Iowa.

There definitely was chatter about PE investing in the Big 12 last Summer. And certainly meetings were being had.

But I haven’t hear anything recently, so those talks may have stalled

Big 12 considering private equity investment of up to $1 billion for as much as 20% of conference

www.cbssports.com

 

[FinalFourCy]

Who is forcing you to pay more? Yes tickets are going up and you have to pay sales tax now, that’s what happens when teams have this level of success. You have two of the greatest coaches in the history of ISU sports right now, yeah you have to pay them and their staff to retain them. But again, you as a fan? No one is forcing you to do anything.

If you were coming off a 4 win season and having missed the tourney for a couple years those salaries are millions of dollars less. Also as people have pointed out part of this is AD’s anticipating having money before the ink was signed on contracts.

The bulk of this change is due to being forced to pay the athletes their fair share by the courts. This was going to happen regardless of realignment

No one is forcing, and that’s not pertinent to the contention

What is relevant is that unless fans contribute more, $120 million in revenue, a huge increase in just 15 years, isn’t enough to prevent cutting of sports or loss of competitiveness

That’s not a product of success, it’s the result of a broken industry

Broken because it is governed by greed and short term benefit of something like the worst of PE, without the benefits.

College athletics should have been getting paid long ago. In this ****** industry it occurs as inducement and uncontrolled because of no central leadership and a lot of greed

I’m talking about more than realignment- that is another symptom of the broken industry

 

[FriendlySpartan]

There definitely was chatter about PE investing in the Big 12 last Summer. And certainly meetings were being had.

But I haven’t hear anything recently, so those talks may have stalled

Big 12 considering private equity investment of up to $1 billion for as much as 20% of conference

www.cbssports.com

You’re always one of the more rational people on here so I wanted to ask, do you actually think getting PE involved and moving to a for profit model like so many are clamoring for is a good long term decision?

 

[FriendlySpartan]

No one is forcing, and that’s not pertinent to the contention

What is relevant is that unless fans contribute more, $120 million in revenue, a huge increase in just 15 years, isn’t enough to prevent cutting of sports or loss of competitiveness

That’s not a product of success, it’s the result of a broken industry

Broken because it is governed by greed and short term benefit of something like the worst of PE, without the benefits.

College athletics should have been getting paid long ago. In this ****** industry it cans about uncontrolled because of no central leadership and a lot of greed

I’m talking about more than realignment- that is another symptom of the broken industry

The moment judges ruled that athletes get a cut was the moment the non revenue sports are at risk, if they become employees it’s game over.

Your own collective manager is constantly talking about ISU doing this with a fraction of the funds other programs have and yet, here you are. NIL has been the Wild West for years now, the transfer portal has been active for years now too. When is this sudden ability to not be competitive with the rest of the Big12 or NCAA tournament field supposed to emerge exactly?

 

[Kinch]

Odd to bring up buying NFL franchises. As of now, schools can only sell rights or license agreements.

The NBA just signed an 11 year $77 billion deal. NFL at 11 years for $111 billion

Not saying this is what happens, but for context, if an investment company agreed to pay 64 P5 schools an average of $75 million for 11 years, it is only a $53 billion investment. That’s a lot of content they’d make Fox, ESPN etc pay up for

A fixed for floating deal in which they financed Big 12 and ACC schools for 10 years at $75 million, it would only be $25 billion investment

More likely they first need to unravel things by overpaying for some schools imo

Yep. I do not know where Mcguyver fellow, or whoever he is, is getting that $100 billion figure.

 

[FinalFourCy]

Yep. I do not know where Mcguyver fellow, or whoever he is, is getting that $100 billion figure.

The $100 billion figure is not surprising.

It’s not that much when talking about a rights deal.

 

[cykadelic2]

You keep saying this. Where are you coming up with this number? Last I checked no media deal had been announced. And you are comparing it to what? The Big 12 number? Because last I checked the Pac 12 was struggling to get $25M for a deal, not $35. So what exactly are you basing their supposed reduction in TV payouts on?

Saying they would get more if it was before this team or that team left, is just hypothetical, just like the SECs hypothetical playoff game wins.

Their PAC12 2023 payout was $33M down $3M from the prior year.

The current projected number for the new PAC is expected to be in the range of the existing MWC deal (less than $10M/yr.)

So $33M minus $8M = ~$25M/yr decrease due to relegation as I previously posted.

Got it?

 

[FinalFourCy]

Their PAC 2023 payout was $33M down $3M from the prior year.

The current projected number for the new PAC is expected to be in the range of the existing MWC deal (less than $10M/yr.)

So $33M minus $8M = ~$25M/yr decrease as I previously posted.

Got it?

But $8 million more than what they were owed by TV in 2024+ when budgeting in prior years

 

[FinalFourCy]

The moment judges ruled that athletes get a cut was the moment the non revenue sports are at risk, if they become employees it’s game over.

Yes, Only because it’s a broken system.

Do you know how much revenue has increased in the last 14 years?

 

[FriendlySpartan]

Yes, Only because it’s a broken system.

Do you know how much revenue has increased in the last 14 years?

A lot, as have all sports rights in that time.

 

[cykadelic2]

But $8 million more than what they were owed by TV in 2024+ when budgeting in prior years

Not sure what your point is here but the per school payout valuation for the PAC12 if they stuck together was nearly the same as the B12's through 2032 (mid-30s). But Fox/USC/B10 decided to pull the plug on the PAC instead.

 

[12191987]

I think the general understanding is that media contracts would be something the NCAA/ some other governing body would be able to negotiate like any other sports league with the protection of an antitrust exemption. There are many downstream effects going back over the past 35 years from the NCAA arguing their athletics program are academic pursuits in order to protect nonprofit status at the universities. Losing TV rights to conferences and schools was one of them.

So is the thought that the federal government will endow a single entity with this antitrust exemption?

Is it assumed this entity must operate in an egalitarian fashion wrt disbursement of these funds?

Finally, this agreement will strike the perfect balance between fairness/parity and buy-in from the more valuable schools (from a media rights perspective ) so as to prevent them from creating their own league (accepting the consequences of antitrust liability)?

 

[SolterraCyclone]

You’re always one of the more rational people on here so I wanted to ask, do you actually think getting PE involved and moving to a for profit model like so many are clamoring for is a good long term decision?

Generally, I don’t view PE as a boogeyman. It’s actually extremely helpful for startups and provides both resources to scale the business and expertise for strategic decisions. Think like Shark Tank at a larger level.

However, I’m really, really hesitant about PE investing the world of college athletics. Setting aside the fact that universities, and by extension their athletic departments, aren’t businesses and their missions aren’t really to increase profits for shareholders.

Even if you do view college athletics as a business, it very much is not a startup. It is a mature business that’s been around for 100+ years. So schools/conferences would only pursue PE for survival. It wouldn’t be used for R&D or product expansion or other things to help grow. Yielding control for survival usually doesn’t end well.

It also isn’t a competitive advantage. If PE proved to be a boom for the Big 12, there’s nothing stopping the SEC or B10 from seeking outside funding too. They would definitely be valued higher than the B12 which would only increase the revenue disparity.

So I am very wary about outside funding here.

 

[12191987]

Not sure what your point is here but the per school payout valuation for the PAC12 if they stuck together was nearly the same as the B12's through 2032 (mid-30s). But Fox/USC/B10 decided to pull the plug on the PAC instead.

WsU’s 2025 operating budget is $1.3B.

Their athletic department budget for 2025 is $74M.

 

[Die4Cy]

So is the thought that the federal government will endow a single entity with this antitrust exemption?

Is it assumed this entity must operate in an egalitarian fashion wrt disbursement of these funds?

Finally, this agreement will strike the perfect balance between fairness/parity and buy-in from the more valuable schools (from a media rights perspective ) so as to prevent them from creating their own league (accepting the consequences of antitrust liability)?

The NCAA still is struggling with the ramifications of athletes as university employees and what to do with the non-revenue sports that look nothing like major sports properties. Some have argued for football being "spun off" from other sports as a way around this. Nobody knows how that would work yet, there's a lot of ancillary issues there.

 

[isucy86]

I’ve seen people say this but I honestly don’t think they’ve thought it through at all.

Any coach or player at any program we have worth their salt would be transferring and it would crush interest in the programs.

No doubt Iowa State and other Tier 2 schools would lose some of their better players and coaches. But no different than today when coaches move on for bigger paychecks and players enter the portal and are eligible immediately to the highest bidder.

But there is a limit to the openings because those Big10/SEC schools have a limited # of coaching spots and 105 scholarships for players. It's not like college sports are a profit center, in almost every case Athletic Department Expenses match Revenues (or are within a few %). So if Iowa State & other Tier 2 universities lose media revenue, then coaching salaries and other Athletic Department costs would be RIGHT SIZED based on the new revenue level. So instead of Tier 2 head football coaches making $3-$10M annually, maybe the most tier 2 schools like Iowa State could afford is $750k. And maybe tier 2 schools wouldn't have the large football support staffs that have become common in the last decade.

I mean it sincerely if we got dropped to a lower level where our TV contract is like a quarter of what we get now we should immediately drop scholarship football and try to get in the Big East.

Why drop football or change conferences. There will be plenty of Big12, ACC, AAC and MWC schools that will be in the same boat as Iowa State if we can't compete based on the upcoming changes to athlete status and revenue sources. Heck you might even see some Big10 or SEC teams decide why stay in those conferences if they don't have the resources to compete. Against it's not like Mississippi or Vanderbilt are kicking tens of millions in direct support back to their University General Fund.

I might be unique, but my interest in Iowa State athletics isn't tied to the budget. My interest in going to games and watching them on TV was the same a decade ago when our budget was $40M vs. $115M today. I am an Iowa State grad and it's not like I will suddenly choose a school in the Big10/SEC to support instead.

I was curious ISU revenue/expenses by sport and found the linked article from the Daily which compare the 2022/23 FY to 2021/22 FY. But what was also interesting was a breakdown of Overall Athletic Department expenses by type of expense.

Iowa State AD: expense amount, change from FY22.

• Student-athlete student aid: $10.24 million, 4.08%
• Coaching salaries, benefits and bonuses: $19.69 million, 2.51%
• Support staff and administrative salaries and benefits: $18.74 million, 14.57%
• Recruiting: $1.59 million, -2.04%
• Team travel: $7.55 million, 32.73%
• Direct overhead and administrative expenses: $21.82 million, -5.52%
• Non-travel student-athlete meals: $4.2 million, 28.62%

The above accounts for about $84M in annual expenses. Not sure what the remaining $30M is- maybe facility operating costs and debt service. But other than contract salaries and facility costs, most expenses could be adjusted to meet the new College Athletics Model that ISU would find itself in.

 

[FriendlySpartan]

The NCAA still is struggling with the ramifications of athletes as university employees and what to do with the non-revenue sports that look nothing like major sports properties. Some have argued for football being "spun off" from other sports as a way around this. Nobody knows how that would work yet, there's a lot of ancillary issues there.

Did this get sorted? I thought the employee thing hadn’t happened yet

 

[Prone2Clone]

I was digging a bit into the CST and Smash proposals and found this quote from Greg Sankey:

"I've studied it a little bit and I come back to, I don't want to dumb down the Southeastern Conference to be a part of some super league notion with 70 teams that some people speculate would happen," Sankey said. "They want to be us and that's on them to figure it out, not on me to bring myself back to earth."

 

[12191987]

I was digging a bit into the CST and Smash proposals and found this quote from Greg Sankey:

It’ll all work out. Sankey is such an ******* that his close proximity will result in him alienating Ted Cruz. Cruz will then broker an antitrust exemption solely for the NCAA that neuters the SEC and Big 10. With equal access and media money ISU will ascend to the top of CFB.

Cruz will put in a poison pill provision for ESPN and Fox for good measure, making it known that is the penalty for dealing with Sankey.