Conference Realignment

[stech81]

I'll just be so happy when the season starts, and we can put this stuff to rest till next year.

 

[RamblinRed]

Oregon and Washington are coming in at a "discount" temporarily. It's similar to what Maryland and Rutgers agreed to when they joined the B1G. Oregon and Washington will go "full share" on the next TV contract. Current contract started in July 2023, and will end in 2030. This is a 50+ year decision, so to say it's "bargain shopping" is misleading. Oregon and Washington won't always be "partial share" members. USC and UCLA only got full share because the new B1G contract was negotiated knowing they were both joining the B1G. The B1G has been adamant that all their members would be full share members. The only reason Oregon and Washington are getting partial share is because the B1G already closed their media contract with FOX, and B1G was able to get UW and UO to agree to come in at a partial rate earlier than anticipated with FOX underwriting it.

As for the rest...we'll see in 2036 (or sooner). Everyone has made a lot of guesses about realignment. Half have been right, half have been wrong. One thing is certain, realignment and conference consolidation is far from over. Even at the G5 level, I expect to see massive movement over the next decade, and quite a few of those G5 conferences will struggle to stay alive once big media decides they no longer need them for content and to allocate those savings to what most likely will become "The Big 3" conferences. There's already talk that the remaining PAC12 teams + a select group of AAC schools will command between $10-20 million per school from a blended media deal with several different media companies. That is a BIG drop in revenue for the remaining PAC12 schools...and a glimpse into the future of the "have nots". Stanford, because they have so many endowments, and because they can count on BILLIONAIRE donors, really will not be affected in terms of funding. They just want a place for their SAs to compete. Cal and the remaining PAC12 schools are probably in trouble once the current PAC12 contract terminates.

I agree with you on alot of this.
I don't expect the ACC to look like it does today in 2036.
I expect some teams will leave - that said I currently feel it will be fewer than many think because I simply don't believe the money is going to be there for 6-8 teams to leave.
I think over/under 4 is sort of where I am at.
I think the ACC will survive for the simple reason it is too important for ESPN to let it fall apart. ACC provides more college programming for ESPN than any other conference. To have the ACC go down the drain would be a big negative for them.

It does feel like CFB is headed toward a more formal tier system (from the less formal tier system we have now). GT is likely to be either toward the bottom of tier 1 or top of tier 2, could go either way. If they set up a system where each tier has its own championship system I won't really care where GT ends up. I'll simply support it with whoever they play against. My preference would be for GT to be in tier 1, but if it ends up in tier 2 i'm not going to lose any sleep over it.

 

[Techster]

Precisely as I thought previously. NC State's vote is tied to UNC's.

Why was NC State not in favor of expansion? The dynamics in the state of North Carolina provide a fascinating window into the North Carolina-NC State relationship. North Carolina is one of the most attractive schools in the country to both the SEC and Big Ten, should those conferences decide to expand further.

NC State holds power within the University of North Carolina System and the state legislature. Siding with North Carolina essentially signals the Wolfpack believe their future is tied with UNC.

 

[ThatGuy]

Keep in mind, neither Clemson nor FSU were among the ACC schools reportedly vetted by the B1G recently.
Those were GT, UVA, UNC, Miami and Duke. (FWIW, the other 5 schools vetted were WA, OR, Stanford, Cal and Utah).
WA and OR were grabbed by the B1G because the situation had changed - not because they all of a sudden were more valuable. If B1G had to give them a full share they would have passed on them. They only brought them in because they were basically able to get them at a 50% discount. It was bargain shopping at its finest.

IMO UNC and UVA have the most overall value because both the SEC and B1G would be interested in adding them. Both fit into the long term strategies of the Big 2. For SEC it gives them the 'state' school in 2 states contiguous to its current footprint that it has no presence in. For B1G they are the 'state' school that is also highly regarded academically (and part of the AAU) in two states with large and growing populations.

Duke was likely vetted as a partner with UNC.
Miami and GT would give B1G a presence in the largest city in the 2 most populous states it currently does not have a team in.

All that being said, the environment has changed as well. If GT had been offered and accepted a spot in the B1G a decade ago it would be in a much different place financially (though not necessarily competitively) than it currently is. But the market is different now. It is pretty clear what the value of a non-Blue Blood school is. I think UNC and UVA could potentially get a full share due to the likely bidding war that would ensue over them, but very few other schools would. None of the other ACC schools vetted by the B1G fit into the SEC's strategy so they are likely worth less as they would not create a bidding process.

GT, Duke, Miami would be more likely to get an offer similar to WA or OR and that type of offer would make no sense to move right now. That is where the market is.
The next time to watch is going to be at the end of the decade as both the B1G and B12 contracts expire. If the environment is similar to what it is now then just getting a contract that kept the money flat would be considered a win. But we don't know what the environment will be, so maybe contracts will escalate again, but there is no guarantee there.

The idea that B1G didn't have much interest in FSU or Clemson goes deeper than just the GoR. It goes to what their strategy is for their conference. The fact they haven't even vetted Clemson or FSU when it has vetted at least 1/3 of ACC schools suggest they are pretty far down a list. What alot of programs are starting to find out now is that they are not nearly as attractive as they thought they were. Clemson and FSU are negatively impacted by the fact that neither really fits in with the long term strategies of the Big 2. Does that mean they would be left out - no, but it does mean they may not be the automatics that they think they are. Sankey has already implied that FSU is not worth a full share and SEC is not going to bring on anyone that isn't worth a full share.

There are demographic patterns at play that run against the idea of any big escalations in future college football contracts. While it is a major sport in the US, it doesn't really possess the demographics that are going to make it attractive to advertisers over the next 10-15 years, which could mean less money available. College football is largely an older sports fan sport (particularly an older, white sports fan sport). 82% white, 44% over 55 according to a Neilson study of viewership. Only 4% Hispanic viewership in a country that is now almost 20% Hispanic. I expect Soccer to be the biggest sport gainer over the next decade in the US and to potentially take some windows away from college football.

Long post follows, sorry for the brain dump.

The above is a great post. I've said for some time that in the expansion discussion, perception is one thing and reality is another.

1st misalignment of perceptions and reality: the assumption that The Big 10 and SEC's revenue is going to break even further away from the rest in 2030, or whenever their contracts expire. I believe this could happen, but is unlikely - due to a couple of factors:

1) ESPN and FOX bought in a bull market. Similar to buying a house in the past couple of years, you almost definitely overpaid. Buyer's remorse has for sure set in. The question is, will the house be worth the same thing to buyers in 2030? Will FOX and/or ESPN or the other networks be willing to pay more than they are now? Difficult to say. It might be, but they might very well not be willing to.

2) The buyers might not be able to afford to pay more. Even if they want to - which isn't guaranteed - the networks might not be able to offer the same thing or even a little less than they did this go-around. This could be due to financial mismanagement, dwindling viewership due to accelerated cord cutting, or any other number of factors. But assuming the Big 10 and SEC are going to continue to rake it in when the networks are losing their guaranteed recurring revenue in the form of cable fees is a bad move, IMO.

2nd misalignment of perception and reality: FSU and Clemson and their self-perceived brand value.

This one is a big "if" - but as you said, the Big10 not vetting them says a lot. Both seem to think that they have suitors waiting in the wings - and maybe they do. But it seems that conferences are now about following the money (as they probably should be in this environment, if they want to remain competitive - but that's another discussion). The SEC already has Florida and South Carolina media markets locked down. The Big 10 has neither, but also has the possibility of Washington DC, Atlanta, and Charlotte in the mix - all of which are more attractive in terms of population growth and current subscriber dynamics.

Will that change with the advent of more cord-cutting? Almost indefinitely. But for now, the size of the market is much more important than the size of the fan base, as it's a guaranteed revenue stream. And neither FSU or Clemson are well-positioned in that regard.

NOW. As my former calc prof liked to say, "What does that have to do with the price of tea in China?" Simple: If the Florida and South Carolina media markets have value, but aren't valuable to the Big10 or SEC, then FSU and Clemson and their ilk have 2 options:

a) Campaign to join the Big 12. I'm sure the Big 12 would love to take them, but they might not be able to after recent expansions. Not to mention that their payout is smaller than the ACC's.

or b) Make the ACC home, and work to help it get the most out of its valuable media properties (that we undervalued and undersold in the last go-around).

Seems like B is the answer, for now. And it's really been the logical choice all along. But will be interesting to see what happens as 2035 approaches.

 

[LongforDodd]

Long post follows, sorry for the brain dump.

...

1) ESPN and FOX bought in a bull market. Similar to buying a house in the past couple of years, you almost definitely overpaid. Buyer's remorse has for sure set in. The question is, will the house be worth the same thing to buyers in 2030? Will FOX and/or ESPN or the other networks be willing to pay more than they are now? Difficult to say. It might be, but they might very well not be willing to.

2) The buyers might not be able to afford to pay more. Even if they want to - which isn't guaranteed - the networks might not be able to offer the same thing or even a little less than they did this go-around. This could be due to financial mismanagement, dwindling viewership due to accelerated cord cutting, or any other number of factors. But assuming the Big 10 and SEC are going to continue to rake it in when the networks are losing their guaranteed recurring revenue in the form of cable fees is a bad move, IMO.

2nd misalignment of perception and reality: FSU and Clemson and their self-perceived brand value.

...

or b) Make the ACC home, and work to help it get the most out of its valuable media properties (that we undervalued and undersold in the last go-around).

Seems like B is the answer, for now. And it's really been the logical choice all along. But will be interesting to see what happens as 2035 approaches.

Maybe the ACC is in a good decent neighborhood with good bones and all it takes is a commitment to rehab it to raise its value.

 

[ThatGuy]

Maybe the ACC is in a good decent neighborhood with good bones and all it takes is a commitment to rehab it to raise its value.

 

[GTNavyNuke]

Precisely as I thought previously. NC State's vote is tied to UNC's.

Why was NC State not in favor of expansion? The dynamics in the state of North Carolina provide a fascinating window into the North Carolina-NC State relationship. North Carolina is one of the most attractive schools in the country to both the SEC and Big Ten, should those conferences decide to expand further.

NC State holds power within the University of North Carolina System and the state legislature. Siding with North Carolina essentially signals the Wolfpack believe their future is tied with UNC.

Thanks for the quote.

Interesting answer with mostly an inference. Obviously NCState has their reasons at the President level. But assuming actions today will influence actions for UNC to drag them along in the distant future is a stretch to me.

I know at the student level, UNC and NC State don't get along.

But it could be like VT and UVa being a package deal due to the legislature.

 

[LT 1967]

Ross Dellinger reports that George W. Bush and Condoleezza Rice are calling ACC administrators pressing for SMU and Stanford's admission to ACC.

 

[Papa Foxtrot]

Obviously NCState has their reasons at the President level. But assuming actions today will influence actions for UNC to drag them along in the distant future is a stretch to me.

I'm beginning to believe that we're all overthinking this. I'm sure that there's some big brother/little brother going on and possibly a little left coast distrust thrown in. Stir in some intrigue and possible ulterior motives and the forums go wild. But maybe Occam's Razor is that this just wasn't the right deal. According to the Yahoo Sports article, the incremental additional revenue would have basically covered the additional travel cost for "lesser" sports. Based on that, it's surprising that the proposal had so much support. Possibly F$U's prez said the quiet part out loud and the "No's" are looking to ND's renewal negotiations with NBC.

Just a thought...

 

[Papa Foxtrot]

Ross Dellinger reports that George W. Bush and Condoleezza Rice are calling ACC administrators pressing for SMU and Stanford's admission to ACC.

They should be calling ND....

 

[cpf2001]

Ross Dellinger reports that George W. Bush and Condoleezza Rice are calling ACC administrators pressing for SMU and Stanford's admission to ACC.

Where were they months/years ago on the phone with the SEC or Big 10?

 

[Papa Foxtrot]

 

[Richard7125]

Long post follows, sorry for the brain dump.

The above is a great post. I've said for some time that in the expansion discussion, perception is one thing and reality is another.

1st misalignment of perceptions and reality: the assumption that The Big 10 and SEC's revenue is going to break even further away from the rest in 2030, or whenever their contracts expire. I believe this could happen, but is unlikely - due to a couple of factors:

1) ESPN and FOX bought in a bull market. Similar to buying a house in the past couple of years, you almost definitely overpaid. Buyer's remorse has for sure set in. The question is, will the house be worth the same thing to buyers in 2030? Will FOX and/or ESPN or the other networks be willing to pay more than they are now? Difficult to say. It might be, but they might very well not be willing to.

2) The buyers might not be able to afford to pay more. Even if they want to - which isn't guaranteed - the networks might not be able to offer the same thing or even a little less than they did this go-around. This could be due to financial mismanagement, dwindling viewership due to accelerated cord cutting, or any other number of factors. But assuming the Big 10 and SEC are going to continue to rake it in when the networks are losing their guaranteed recurring revenue in the form of cable fees is a bad move, IMO.

2nd misalignment of perception and reality: FSU and Clemson and their self-perceived brand value.

This one is a big "if" - but as you said, the Big10 not vetting them says a lot. Both seem to think that they have suitors waiting in the wings - and maybe they do. But it seems that conferences are now about following the money (as they probably should be in this environment, if they want to remain competitive - but that's another discussion). The SEC already has Florida and South Carolina media markets locked down. The Big 10 has neither, but also has the possibility of Washington DC, Atlanta, and Charlotte in the mix - all of which are more attractive in terms of population growth and current subscriber dynamics.

Will that change with the advent of more cord-cutting? Almost indefinitely. But for now, the size of the market is much more important than the size of the fan base, as it's a guaranteed revenue stream. And neither FSU or Clemson are well-positioned in that regard.

NOW. As my former calc prof liked to say, "What does that have to do with the price of tea in China?" Simple: If the Florida and South Carolina media markets have value, but aren't valuable to the Big10 or SEC, then FSU and Clemson and their ilk have 2 options:

a) Campaign to join the Big 12. I'm sure the Big 12 would love to take them, but they might not be able to after recent expansions. Not to mention that their payout is smaller than the ACC's.

or b) Make the ACC home, and work to help it get the most out of its valuable media properties (that we undervalued and undersold in the last go-around).

Seems like B is the answer, for now. And it's really been the logical choice all along. But will be interesting to see what happens as 2035 approaches.

Neither FSU or Clemson are going to the Big12. Why would you leave a conference making $40m/year for a conference making $30m/year. Secondly, i think there are other options. For example, I think FSU could leave the ACC to go to the Big10 for a partial share on the hopes that they will be "in" and then get a total share somewhere down the line. What that partial share is i don't know.

 

[UgaBlows]

Have Fsu and Clemson even been vetted by the BIG?

https://www.si.com/college/ohiostate/news/ohio-state-buckeyes-big-ten-expansion-acc-pac-12-programs-dissovlement

 

[GoJacketsInRaleigh]

Ross Dellinger reports that George W. Bush and Condoleezza Rice are calling ACC administrators pressing for SMU and Stanford's admission to ACC.

Tell them to call Congress and get a revenue sharing law amongst publicly funded schools and we'll be happy to add them

 

[CEB]

I'm beginning to believe that we're all overthinking this. I'm sure that there's some big brother/little brother going on and possibly a little left coast distrust thrown in. Stir in some intrigue and possible ulterior motives and the forums go wild. But maybe Occam's Razor is that this just wasn't the right deal. According to the Yahoo Sports article, the incremental additional revenue would have basically covered the additional travel cost for "lesser" sports. Based on that, it's surprising that the proposal had so much support. Possibly F$U's prez said the quiet part out loud and the "No's" are looking to ND's renewal negotiations with NBC.

Just a thought...

This caught me funny this morning.

Needless to say, you’re quite right.

Everyone is trying to make something of “why” the yes / no votes came down as they did but there are probably just as many reasons as there are votes.

 

[Techastrophe]

It really seems as if the realignment is focusing on football money. I'd argue it is in the interest of the megaconferences, schools, and other sports to depart from tying all sports to the football conference. A separate system of men's basketball conferences ought to allow a better regular season product by bringing together schools with football and schools without football. A separate system of women's basketball conferences would make women's basketball more marketable. Lower revenue sports would work better in regional alignments that aren't restricted by football relationships. Non-football sports would end up with a better product and lower costs. Football has decided being a college sport in the traditional sense isn't lucrative enough. So be it, I would love to have more coverage of track and field, golf, softball, etc.

 

[LT 1967]

Moving to the BIG if we were able to leverage the additional money might make us more competitive with UGA. Not a level playing field but more competitive.

I believe our recruiting would be better and more consistent if we were in the B1G or SEC. Back in 1978-1980 time period, I recall an AJC reporter saying that GT being in the ACC would " wear like an old leather coat". I believe the reporter was David Kindred. That seemed true for several years, particularly during the Bobby Cremins and Homer Rice era. However, the Georgia and Atlanta
fans have never really embraced many of the ACC football teams as we had hoped. The SEC in particular uses the ACC's general perception against us, "Cup Cake Conference or JC League".

We are identified with those we run with. After the last expansion and the retirement of Bowden and Beamer the conference has lost a lot of it's luster in Georgia. Unfortunately, GT has helped
add to that problem with the last coaching experience.

Also, we have not been able to create the kind of Rival games like we had in the SEC, exception being Clemson when we have competitive teams.

 

[RamblinRed]

This is a really good read on all the various decisions that led to the downfall of the PAC over the last year or so.
One point on this. It mentions that they overplayed their value in negotiations. (My take on that - we have seen plenty of evidence from the market that most P5 programs are worth in the $30-40M range. Alot of schools and fans are butthurt over how much they are getting, but there are very few schools that can argue they could truly get more than they are currently receiving in an open market. There is alot of self-delusion going on.)
https://www.latimes.com/sports/story/2023-08-16/pac-12-collapse-decisions-realignment-ucla-oregon

Kliavkoff brought the schools an ESPN offer of $30 million per school annually for all of their rights. The Pac-12’s analysis said the schools would be worth somewhere in the mid-$30-million range apiece, so they could go back to ESPN with a reasonable counter in the high $30-million-range and maybe the two sides would end up around $35 million.

When the Pac-12 CEO group met to discuss the offer, one of the league presidents had other ideas. The president worked with a professor on his campus to come up with their own estimate of what the 10 schools should get based on their market value: $50 million.

“George and our media consultant were pretty clear there was some risk, but they said, ‘Nope, our numbers show we’re worth this, go ask for it,’” a source with direct knowledge of the negotiations not authorized to speak publicly about them told The Times. “... ESPN did not react very well to it.”


One other point. The new B12 commissioner got his schools to understand and buy-in to where they stood in the marketplace.

Instead, the Big 12 survived and added four schools of its own from the “Group of Five” — BYU, Cincinnati, Houston and the University of Central Florida. The Big 12 was composed of 12 schools that were not of interest to the Big Ten and SEC, so they presented a united front.

To the east, the rejuvenated Big 12 was much more willing to band together at a rate dictated by the networks. On Oct. 30, the Big 12 announced it had re-upped early with Fox and ESPN with a deal that would pay its schools $31.7 million annually.

New Big 12 commissioner Brett Yormark was able to convince his schools that stability was more important than fighting for every last dime.

 

[Vespidae]

I believe our recruiting would be better and more consistent if we were in the B1G or SEC. Back in 1978-1980 time period, I recall an AJC reporter saying that GT being in the ACC would " wear like an old leather coat". I believe the reporter was David Kindred. That seemed true for several years, particularly during the Bobby Cremins and Homer Rice era. However, the Georgia and Atlanta
fans have never really embraced many of the ACC football teams as we had hoped. The SEC in particular uses the ACC's general perception against us, "Cup Cake Conference or JC League".

We are identified with those we run with. After the last expansion and the retirement of Bowden and Beamer the conference has lost a lot of it's luster in Georgia. Unfortunately, GT has helped
add to that problem with the last coaching experience.

Also, we have not been able to create the kind of Rival games like we had in the SEC, exception being Clemson when we have competitive teams.

TBH, I don't think it matters much anymore. Yes, our recruiting would be better in say, the SEC or B1G, but ask Vandy how it is going.

Tech concluded that it had a better chance of DEVELOPING players than outrecruiting, especially wrt NIL $. That was one of the main reasons to raise money for the new Edge. But when players can freely leave after one year ... the whole theory of development kinda goes bust unless you have athletes who really can't find a better deal or playing time.

As to what the best players want, it's the same answer over an over ... "A path to the League (NFL)". Tech ranks lower than most in this category and that's a key selling point against us wrt to the best players.

What we want today are good students who are also good athletes and WANT to be at Tech and not likely to jump ship every year. Very challenging.