Conference Realignment

[bobongo]

It’s math. If Tech can’t keep the revenue coming in, it MUST reduce costs. Or declare bankruptcy.

But they can't keep revenue coming in if they drop football. Dropping football would mean certain bankruptcy.

 

[Vespidae]

Does anyone know how the debt is secured? I'm guessing that GTAA doesn't really have any assets as the Institute likely owns the real estate.

The Institute does not. The GTAA does.

 

[Vespidae]

But they can't keep revenue coming in if they drop football. Dropping football would mean certain bankruptcy.

Again, it’s simple math. If the costs drop faster than the loss of revenue, you drop it. For example, if I lose 40 million in revenue, but also lose $50 million in costs, annualized, then I’m ahead.

 

[Northeast Stinger]

If in fact we are heading to a National CFB Conference and it does actually happen which I'm inclined to believe it will, are we missing something in the stature and place CFB will then have in our society? For instance looking at our own GT, does it become Atlanta's college team representing Atlanta against Seattle, Ohio, MI etc? Not sure I'm saying this well but I see it could become something greater than just one college against another. More along what we see with NFL teams. It is just a thought that has occurred to me. It makes me look at conference realignment in a little different light, little different flavor to it. I thought CBK's comments the other day in his speech to ?? Touchdown club or something, "Atlanta is going to be proud of GT" were interesting. I honestly think CFB will take on a new stature and place in American society after this all shakes out.

That’s actually, in a way, is what it used to be back slightly before my time. As a child I remember the Atlanta Crackers in baseball and other than them, Atlanta’s team was Tech.

 

[rfjeff9]

Again, it’s simple math. If the costs drop faster than the loss of revenue, you drop it. For example, if I lose 40 million in revenue, but also lose $50 million in costs, annualized, then I’m ahead.

Here now! Let's don't be talking of dropping football!

 

[cpf2001]

Yeah I’ll bet 20 bucks that if you dropped football you’d lose X revenue where X is > all football revenue. Possibly even a solid chunk of non-athletics donations. It’s “shut the whole damn sports thing down time” at that point, which some places have done, but would be a major change from what a lot of the fan/alum base wants.

 

[orientalnc]

The president of Washington said they were seeking stability, not money.

 

[Northeast Stinger]

The president of Washington said they were seeking stability, not money.

Insomnia?

 

[Papa Foxtrot]

The Institute does not. The GTAA does.

Then I would think that the Institute would do anything necessary to avoid a bankruptcy. Losing that chunk of real estate in the middle of campus would be an embarrassment...

 

[TooTall]

Looking at others on the list, aside from Cal, I'm not to worried. Programs bigger than us are on there as well as ones smaller. Clempson has been flush with cash the last 5-8 years, and they are on the list. Is it an issue, yes. Should we drop down to D2 to get it paid off? Hell've engineer NO!
We raised 175 million dollars in just over a year for the new Edge. IF that debt was that crippling, we could raise that amount again, especially once HCBK has the ship turned around, and be just fine.
Just call me Alfred E. Newman at this point.

 

[bobongo]

Again, it’s simple math. If the costs drop faster than the loss of revenue, you drop it. For example, if I lose 40 million in revenue, but also lose $50 million in costs, annualized, then I’m ahead.

Tech has wasted a lot of money on stuff that doesn't make us better, like useless stadium expansions and the like, all while ignoring stuff that really would make us better, like recruiting budgets for example.
That's why the GTAA is $200 million in the hole. They could have managed the money a lot better IMO.

 

[Techwood Relict]

Just call me Alfred E. Newman at this point.

I bet you were never redheaded and short.....

 

[Vespidae]

Looking at others on the list, aside from Cal, I'm not to worried. Programs bigger than us are on there as well as ones smaller. Clempson has been flush with cash the last 5-8 years, and they are on the list. Is it an issue, yes. Should we drop down to D2 to get it paid off? Hell've engineer NO!
We raised 175 million dollars in just over a year for the new Edge. IF that debt was that crippling, we could raise that amount again, especially once HCBK has the ship turned around, and be just fine.
Just call me Alfred E. Newman at this point.

You should be worried. The payments on the debt has been a big reason why Tech can’t afford spending in other areas, like better coaches, infrastructure maintenance, etc.

GTAA has never done a good job managing money or putting in a process to raise it at scale. And with a smaller fan base, it’s particularly painful.

 

[orientalnc]

Insomnia?

No. I'm in northern Norway.

 

[RamblinRed]

One other thought I had last night. What happened this week makes it more difficult for expansion to occur for the SEC (and ACC). With B12 bringing on 4 new P5 members and ESPN holding 2/3 of the B12 media contract, that means starting with the 2024 season ESPN is effectively on the hook for $80M more per year in payouts than it was expecting a week ago. Given its current financial condition, ESPN certainly is not going to be saying to the SEC and ACC - go out and expand. I expect the message would be the opposite - if you expand, don't expect your payout to increase.

 

[Vespidae]

One other thought I had last night. What happened this week makes it more difficult for expansion to occur for the SEC (and ACC). With B12 bringing on 4 new P5 members and ESPN holding 2/3 of the B12 media contract, that means starting with the 2024 season ESPN is effectively on the hook for $80M more per year in payouts than it was expecting a week ago. Given its current financial condition, ESPN certainly is not going to be saying to the SEC and ACC - go out and expand. I expect the message would be the opposite - if you expand, don't expect your payout to increase.

Doesn’t ESPN also get more games to broadcast? And more to stream?

 

[Richard7125]

I think with the next set of media deals (with all conferences) you will probably see some type of uneven revenue distribution. The only way you are going to increase growing revenue to the big schools (who generate the most interest) is by taking from the Vandy’s and Rutgers of the world. I don’t know if SEC or Big10 schools will chirp like FSU is chirping, but you can bet there will be discussions behind closed doors.

 

[GoJacketsInRaleigh]

One other thought I had last night. What happened this week makes it more difficult for expansion to occur for the SEC (and ACC). With B12 bringing on 4 new P5 members and ESPN holding 2/3 of the B12 media contract, that means starting with the 2024 season ESPN is effectively on the hook for $80M more per year in payouts than it was expecting a week ago. Given its current financial condition, ESPN certainly is not going to be saying to the SEC and ACC - go out and expand. I expect the message would be the opposite - if you expand, don't expect your payout to increase.

There's nothing for the ACC to expand with other than Notre Dame or Penn State. ESPN would gladly accept either and redo the deal. The ACC isn't adding Sun Belt, CUSA, or AAC schools just for the sake of adding more schools.

The SEC isn't expanding either unless they get top notch brands and/or get into new markets. They could take UNC and UVA or VT to expand markets. Possibly Clemson and FSU for the brands if they want to keep those two away from the B1G. None of this is happening until the GOR expires or is close to expiring.

If ESPN wanted schools to switch amongst the SEC, ACC, and Big 12 I'm sure they would find a way to make it happen. In fact, assuming they haven't gone out of business I expect them to consolidate these conferences with the schools they want and leave the others out. We will eventually have an ESPN conference (SEC) and a Fox Conference (B1G). Everyone else will be in a second tier. The SEC and B1G will be NFL-lite in 10 years and ratings will actually go down because fans of schools that aren't included won't watch or care. I would be perfectly fine in a second tier with similar schools playing in a conference where teams are located from VA to FL and are easily accessible and where we aren't bringing a knife to a gun fight expecting to beat UGA, Clemson, etc... other than the occasional miracle with the restrictions we put on ourselves compared to them.

 

[Vespidae]

The SEC and B1G will be NFL-lite in 10 years and ratings will actually go down because fans of schools that aren't included won't watch or care.

That hasn’t been the case. Intra-conference games are the most watched games in the country. Once a fan‘s team has been eliminated (by the third week in September), fans move to their second favorite team which may still be in the running.

1. Michigan–Ohio State (FOX) 17.1 million
2. Tennessee–Georgia (CBS) 13.1 million
3. Alabama-Tennessee (CBS) 11.6 million
4. LSU-Georgia (SEC Championship) (CBS) 10.9 million
5. Purdue-Michigan (Big Ten Championship) (FOX) 10.7 million
6. Alabama-Texas (FOX) 10.6 million
7. Notre Dame-Ohio State (ABC) 10.5 million
8. Kansas State–TCU (Big 12 Championship) 9.4 million
9. Alabama-Ole Miss (CBS) 8.7 million
10. Ohio State-Penn State (FOX) 8.3 million

 

[forensicbuzz]

Does anyone know how the debt is secured? I'm guessing that GTAA doesn't really have any assets as the Institute likely owns the real estate.

Then I would think that the Institute would do anything necessary to avoid a bankruptcy. Losing that chunk of real estate in the middle of campus would be an embarrassment...

Georgia Tech does not own the property or any of the buildings on campus. They’re owned and managed by a separate State-owned organization.