Realignment Megathread (All The Moves)

[SolterraCyclone]

College athletics is absolutely a for-profit entity. Pretending otherwise is burying your head in the sand.

Firstly, the Media is definitely for-profit, and they are paying for everything.

And all that media money going to the ADs - that's not all going to educate kids, not even close. Maybe 25%? Lots of people (coaches are the biggest single benefactor) are making millions and millions. ADs and lots of associated meatpacking glitterati within the ADs are also getting paid a lot to do a little. Building over-the-top facilities. Private jet recruiting trips. All those expenses are not suggestive of non-profit behavior or mission. Just because they don't have "owners" and just because they are a 501c3 doesnt change that behavior.

The guy running United Way is not making $8M a year with a 5 year guaranteed contract buyout.

There is a difference between maximizing revenue and maximizing profits (which is what a for-profit entity would do).

I’m not sure if your last sentence was sarcasm or not. But you should take a look at some non-profit CEO salaries

Nonprofit Compensation Packages of $1 Million or More

Which charities compensate their executives most highly. CharityWatch's salary information is calculated using the IRS Form 990.

www.charitywatch.org

 

[FinalFourCy]

I agree with pretty much all of this. But PE isn’t the best avenue to get centralized (or even competent necessarily) leadership.

Sankey is the devil we know. PE could be the devil we don’t.

Is Facebook your source on this?

Listen, any investment in college athletics in order to offset the inherent inefficiencies is getting labeled PE. Could be from a prominent PE arm of a financial firm, could be an Apple or Amazon type. It could be investors helping espn and/or Fox build a P1

But it wouldn’t be the stories about PE you fear. It will be closer to fixed for floating deal in which the investor gets the rights to future revenue in exchange for a certain annual payment.

The PAC didn’t want to collapse, the networks just used schools thirst for more revenue in this no-profit, uncapped spending environment to get desired movement.

And yet some think all P2 schools will pass when real money gets involved? USC and OUT jumped for less than $50 million/year more. That’s nothing for any of the tech companies or Wall Street. They could easily justify offering some of the P2 schools $150 million/year given it would lead to huge changes


Until these departments are no longer in that race, the industry is ripe for a takeover

 

[isucy86]

If the Big 12 is getting teams into the playoff every year, then ISU is fine. We've shown we can compete at a financial disadvantage.

The biggest risk to ISU is the idea of the SEC and Big 10 as they're currently constructed saying "we're no longer playing schools from other conferences" and having their own playoff. Which is extremely unlikely, BUT feasible. I say it's unlikely because it would ultimately lead to the Big 10 and SEC making less money than they do today due to diminished interest in their product and lesser ratings. But those fanbases are big enough to guarantee a profitable product on their own.

A far more likely outcome is a playoff expansion that ends up with the Big 12 and ACC having guaranteed access, but less guaranteed access than the Big 10 and SEC. Something like 4/4/2/2. That's not really any change over where we've been for awhile, and that's something ISU fans can have as much fun as we've ever had with.

I don't believe the Big10 & SEC will ever exclude the Big12/ACC from the CFP. It's in their best interest to give the Big12/ACC a couple token spots in a 12 team CFP with the Big10/SEC & ND filling the other 10 spots every year.

What I am against is any type of quota on # of teams a conference gets for the CFP. Many people will disagree, but the 12 team playoff should include:

• P4 Conference Champs
• Top ranked G5 Conference Champ
• The next highest 7 ranked teams based on computerized polls vs. selection committee

If that means 7 SEC teams and 1 Big12 team most years, so be it. But if once every 5 years there are 3 Big12 teams that are elite (top 12), then all 3 teams should get into the playoff.

My biggest fear is money will matter. And the Big10/SEC is doing everything they can to widen the money gap. No issue with Big10/SEC getting $30M+ more/school out of the TV folks for their Conference TV packages. What puts a bad taste and negative take about the future for me was the Big10/SEC taking a bigger share of the CFP money. An even split among the P4 would have resulted in the 66ish schools receiving around $16M annually. But the Big10/SEC kicked the Big12 in the cojones by making the 12 team CFP split: Big10/SEC= $21M & Big12= $11M. Not the actions of someone who wants to be a partner.

 

[Al_4_State]

Fair optimism.

On the other hand:

The biggest risk is the P2 expand and then later separate. Incrementally culling just a handful of schools per round after first marginalizing, which makes it much more feasible politically. My guess is going to 48 biggest brands across the nation would make a big enough tent

Imo, if separation is even on the table at all, the sooner the better. The smaller the P2 the better. Don’t give an inch and force the current P2 to be willing to bring on Armageddon.

I wonder if that’s why the P2 have so far successfully gotten unequal treatment. If the Big 12 and ACC don’t agree, the P2 will just add enough schools until separation is feasible.

Basketball will be impacted more by that, as generally we’ve spent close to most P5s, and there’s no ability to improve postseason access as an equalizer. It is intentional that the CFP deal expires at the same time as NCAA. The monetization of basketball is going to change. We’ll be lucky if we can prevent a similar inequitable situation.

The SEC and Big 10 are better off financially by keeping something like the status quo as opposed to adding a bunch of dilutive schools in order to achieve a critical mass to break away.

I think the reason they haven't added more schools is because it doesn't make financial sense. A few ACC schools might make them money, but I'm starting to wonder.

The current set up (or something similar) seems like their most profitable model.

 

[isucy86]

The SEC and Big 10 are better off financially by keeping something like the status quo as opposed to adding a bunch of dilutive schools in order to achieve a critical mass to break away.

I think the reason they haven't added more schools is because it doesn't make financial sense. A few ACC schools might make them money, but I'm starting to wonder.

The current set up (or something similar) seems like their most profitable model.

The only reason the Big10 & SEC haven't added more schools is two-fold:

1. The Big10 & SEC just signed new TV deals. So adding more schools isn't accretive to existing schools until the next round of new TV deals for both conferences in the early/mid 2030's. The only exception is if ESPN & FOX/NBC/CBS are willing to re-open their TV deals early.
2. The ACC & Big12 teams are governed by GOR that run through 2036 and 2031 respectively.

 

[Cyched]

If the Big 12 is getting teams into the playoff every year, then ISU is fine. We've shown we can compete at a financial disadvantage.

The biggest risk to ISU is the idea of the SEC and Big 10 as they're currently constructed saying "we're no longer playing schools from other conferences" and having their own playoff. Which is extremely unlikely, BUT feasible. I say it's unlikely because it would ultimately lead to the Big 10 and SEC making less money than they do today due to diminished interest in their product and lesser ratings. But those fanbases are big enough to guarantee a profitable product on their own.

A far more likely outcome is a playoff expansion that ends up with the Big 12 and ACC having guaranteed access, but less guaranteed access than the Big 10 and SEC. Something like 4/4/2/2. That's not really any change over where we've been for awhile, and that's something ISU fans can have as much fun as we've ever had with.

At the same time, how often has the "can't see that happening" scenario played out in the realignment chaos?

I agree in the long run a P2 breakaway would diminish interest, but if the networks or PE show a positive initial return? Nothing will stop for the short term quest for MOAR in CFB.

 

[SolterraCyclone]

Is Facebook your source on this?

Listen, any investment in college athletics in order to offset the inherent inefficiencies is getting labeled PE. Could be from a prominent PE arm of a financial firm, could be an Apple or Amazon type. It could be investors helping espn and/or Fox build a P1

But it wouldn’t be the stories about PE you fear. It will be closer to fixed for floating deal in which the investor gets the rights to future revenue in exchange for a certain annual payment.

The PAC didn’t want to collapse, the networks just used schools thirst for more revenue in this no-profit, uncapped spending environment to get desired movement.

And yet some think all P2 schools will pass when real money gets involved? USC and OUT jumped for less than $50 million/year more. That’s nothing for any of the tech companies or Wall Street. They could easily justify offering some of the P2 schools $150 million/year given it would lead to huge changes


Until these departments are no longer in that race, the industry is ripe for a takeover

Is Facebook my source for what? I’m speaking from experience having to work with board members who work for PE. Some are good, some are bad. All want growth for the company to (either immediately or eventually) maximize profits.

I still don’t see why the schools would accept the floating deal structure you’ve outlined. Or the PE entity for that matter. They’re going to want a percentage of the dollars coming in, in line with their equity. What you’ve described is basically an annuity. Why wouldn’t schools just pursue that instead if they are going for-profit route.

And if you’ve followed my posting history, I do believe a Super League will happen eventually because growth will stall. Eventually the only way these schools’ TV payouts will increase will be to separate from the chaffe.

And if that happens PE will not save us, it’s going to kill us faster. If the PAC partnered with PE and all those schools still leave, OSU and Wazzu is really f’d. Worse than they are today

 

[Kinch]

Do we have a little dissension brewing at UT?
Hartzell has had to put out a lot of fires at the school since he became president at UT. A long time longhorn leaving for SMU is kinda interesting.

UT President Jay Hartzell to step down, lead Southern Methodist University

After spending more than two decades at The University of Texas at Austin, UT President Dr. Jay Hartzell will soon serve as the next president of Southern Methodist University in Dallas, SMU announ…

www.kxan.com

 

[Al_4_State]

The only reason the Big10 & SEC haven't added more schools is two-fold:

1. The Big10 & SEC just signed new TV deals. So adding more schools isn't accretive to existing schools until the next round of new TV deals for both conferences in the early/mid 2030's. The only exception is if ESPN & FOX/NBC/CBS are willing to re-open their TV deals early.
2. The ACC & Big12 teams are governed by GOR that run through 2036 and 2031 respectively.

They had an opportunity to take every current Big 12 school in the past 2 years.

They passed.

 

[bphill4isu]

Iowa State accumulated over 25 million viewers this past football season good for 21 in the country. Seems pretty relevant to me considering our TV partners don't promote the Big 12 like they do the B1G and $EC.

2024 College Football TV Ratings

 

[FinalFourCy]

The SEC and Big 10 are better off financially by keeping something like the status quo as opposed to adding a bunch of dilutive schools in order to achieve a critical mass to break away.

I think the reason they haven't added more schools is because it doesn't make financial sense. A few ACC schools might make them money, but I'm starting to wonder.

The current set up (or something similar) seems like their most profitable model.

Sounds similar to the wishful thinking behind when people claimed Oregon and UW wouldn’t get invites

Didn’t you just post separation by current P2 is “unlikely because it would ultimately lead to the Big 10 and SEC making less money than they do today due to diminished interest in their product and lesser rating”?

As you allude to, it’s about macros now too, not just short term TV valuation

So, if you’re consistent, separation at 48 mitigates the “diminished interest in their product and lesser rating”. And with unequal revenue sharing schemes, can be feasible as we’ve seen. A pretty easy decision for any school in ACC or Big 12 to take less in order to be on the tenable side of separation.

Plus, if a P2 adds KU, UNC, Duke, they’re in a great position to get the biggest share of the base revenue from the future CBB tournament.

It could be a financial bloodbath come the end of this deal for Big 12, particularly if the ACC as we know it exists. Likely why Otz and CMC deals expire then

If there are any investors (PE) willing to take on that risk for a bloc of Big 12/ACC schools, it would be wise to sell now. Make it their problem, and I’d bet favorable change would occur

 

[Al_4_State]

Sounds similar to the wishful thinking behind when people claimed Oregon and UW wouldn’t get invites

Didn’t you just post separation by current P2 is “unlikely because it would ultimately lead to the Big 10 and SEC making less money than they do today due to diminished interest in their product and lesser rating”?

As you allude to, it’s about macros now too, not just short term TV valuation

So, if you’re consistent, separation at 48 mitigates the “diminished interest in their product and lesser rating”. And with unequal revenue sharing schemes, can be feasible as we’ve seen. A pretty easy decision for any school in ACC or Big 12 to take less in order to be on the tenable side of separation

Plus, if ESPN/SEC add KU, UNC, Duke, they’re in a great position to get the biggest share of the base revenue from the future CBB tournament.

It could be a financial bloodbath come 2032 for Big 12, particularly if the ACC as we know it exists.

If there’s any investors out there willing to take on that risk, it would be wise to sell now. Make it their problem, and I’d bet favorable change would occur

By adding those schools, the Big 10 and SEC are taking on schools that devalue their current payouts. The admins in the league aren't going to sign up for that.

They've had a million opportunities to take KU (for example) and they've never done it. Why? It's because KU is not valuable enough to increase their media payouts.

If they separate, that doesn't really change. They aren't going to get paid more per school with a 24 school league that's 30% schools that don't make financial sense to add. The Big 10 in particular already has a bunch of schools that aren't really contributing value, but are basically grandfathered in.

 

[CascadeClone]

Sounds like if there is that much excess that doesn’t go to anything it should be easy to find 20mil to pay the players and none of this is an issue then, just cut that excess right?

It's not that it doesn't get spent - as you well know. The problem is that with no "shareholders" providing real oversight, and no salary cap or cost limit, there's a strong incentive to spend every dime to win and keep your job as AD. Which is what they have been doing for 3-4 decades now.

Which SEC AD is going to come out and say "we are only going to pay our next coach $1.5M annual, because we are going to start paying players instead"? He'd be thrown out on his ass in <24 hours.

 

[CascadeClone]

There is a difference between maximizing revenue and maximizing profits (which is what a for-profit entity would do).

I’m not sure if your last sentence was sarcasm or not. But you should take a look at some non-profit CEO salaries

Nonprofit Compensation Packages of $1 Million or More

Which charities compensate their executives most highly. CharityWatch's salary information is calculated using the IRS Form 990.

www.charitywatch.org

Totally agree about revenue vs profit. But if a PE entity was in charge of all CFB (not individual conferences or schools - which I don't think is a good idea), then maximizing revenue (from media and other sources) would be basically the same thing. They'd set spending min/max by the ADs and let them sort out their own profit/loss on a school by school basis.

The PE entity would maybe get paid based on a % of the media deals?


And I knew picking United Way would be a bad example! Not a big fan of big charities, but I couldn't think of anyone else top of my head...

 

[Die4Cy]

FYI the Miss America pageant is being sued much in the same way the NCAA has in court as a 501c(3) non profit in the scholarship business for their rules of participation as well:

https://www.cnn.com/2024/09/17/style/miss-america-pageant-ban-mothers/index.html

 

[Cloneon]

Iowa State accumulated over 25 million viewers this past football season good for 21 in the country. Seems pretty relevant to me considering our TV partners don't promote the Big 12 like they do the B1G and $EC.

2024 College Football TV Ratings

I'm not sure people realize this, but this is HUGE. With promotion, I think this number would show a much greater ROI than comparably sized brands.

 

[1UNI2ISU]

To the roots of this thread....

Northern Illinois to the Mountain West is official for football only.

Super vague on other sports. Almost seems like they're daring the MAC to expel them so they don't have to pay the exit fee.

 

[isucy86]

They had an opportunity to take every current Big 12 school in the past 2 years.

They passed.

Hope your right. But it could also be like recruiting. The Big10/SEC have their top priorities- the 5 stars (UNC, UVA, ND, FSU, etc). But when it comes time for final realignment adds both conferences could be targeting 4 star schools. That's why every school in the Big12 and ACC is working hard to show their value between now and 2030.

 

[RustShack]

While I agree obviously the B1G SEC could have already had any Big12 and PAC(now Big12 schools), that doesn’t mean things can’t change in the future. It’s not some locked in value that can never change. Hell the value of some of these “P2” schools could end up going down. Iowa might never make another B1G championship again. Obviously Nebraska isn’t what they used to be. How good will Oklahoma be in the SEC? Maybe I’m wrong but I don’t think Nebraska is as valuable today as they were when they were added to the B1G.

 

[isucy86]

While I agree obviously the B1G SEC could have already had any Big12 and PAC(now Big12 schools), that doesn’t mean things can’t change in the future. It’s not some locked in value that can never change. Hell the value of some of these “P2” schools could end up going down. Iowa might never make another B1G championship again. Obviously Nebraska isn’t what they used to be. How good will Oklahoma be in the SEC? Maybe I’m wrong but I don’t think Nebraska is as valuable today as they were when they were added to the B1G.

I agree with your general premise that values are changeable. But value to the TV folks isn't predominately based on W/L's, but viewership and access to highly populated markets.

So while the Huskers might be an average football team, they still draw eyeballs. Could be the NASCAR effect, fans love to see them crash. But in a small population state, is that sustainable?

Then there is a school like Arizona State. They have been horrible in football, but maybe their coach stays and builds that program to be a perennial Big12 power. Phoenix is the 10th largest MSA in the US at 5M people- and growing. Could ASU be attractive to the Big10 in 2030 as an AAU school, large population base and west coast compliment to their current 4 PT zone schools?