So the main argument against Oklahoma and/or Florida State as a potential candidates for B1G expansion is that they are not AAU. As a biased observer (I'm not even going to feign remote impartiality), how does the AAU requirement jive with extending Notre Dame an offer in the late 90s?

If conference networks were not in play, let's face it, Notre Dame would be the ultimate addition to the B1G athletically with or without AAU. Though OU and FSU have substantial name recognition, they don't resonate in the Mid-West and East Coast like Notre Dame. What that means is that Notre Dame would likely have higher local and national ratings and attendance figures especially at the middle and lower tier of the league. PSU v FSU or PSU v ND will draw well but what about NW v FSU or NW v ND? I could throw just about the entire B1G save the top TV draws and ND would probably do better. This is also the reason IMO that Notre Dame summarily beotch-slapped our proposal by wedding themselves to the Big East and later the ACC. What would Notre Dame get out of the B1G other than regionalizing themselves? Far better IMO that ND play USC/Stanford than Illinois/Indiana annually. ND made the right call.

Furthermore, though football is the primary sport of consequence in the realignment conversation, the Non-revs would probably be even more substantially impacted by Notre Dame. Proximity and the name brand would generate more buzz in the present B1G footprint if for no other reason than Notre Dame fields a competitive athletic department across the board and has sports like lacrosse and ice hockey not available at OU or FSU but increasingly more important in the BTN content offerings.

Now onto the cord cutters and their collective impact... Assuming cable subscriptions keep dwindling until they reach some yet to be determined stable place, and assuming that place isn't zero... Both OU & FSU have a leg up over ND by increasing "in-market" fees to the conference. We also observe from the oft-ridiculed additions of Maryland and Rutgers that the recruiting in that region improved remarkably which could help overall talent level of the conference.

Given my limited understanding of the conference's network revenue model, the two drivers of BTN revenue are subscription fees and advertisement. Subscription fees are under pressure because of cord cutters so advertisement will become more important which translates to more people need to be interested in the game. So as I see it the question to ponder is this: Is the slightly higher draw for ND in the Midwest/East Coast enough to cover the loss of subscription fees and potential new recruiting areas?

My answer is no. Inasmuch as the non-revs produce more interest at Notre Dame in the footprint, they are not really a major consideration in the carriage rate asked by the B1G. Football provides the lion's share of the valuable content for the conference networks and probably upward of 70% of the value of the Network. While OU & FSU may not draw as well as ND in the footprint... they will still draw extremely well. Additionally, I don't see the league going to FSU without constructing a land bridge of UVA, UNC, and GT. and OU would almost certainly be a great way of making Texas feel closer.

Under this idea the league would be at 20 and it would make since to go to 4 divisions of 5. That would make the annual games more regional.
North (Sparty, Indy, ILL, Purdue, NW) Sparty would OWN this division!!!
East (Rut, Md, PSU, OSU, Mich)
West (UW, MN, Iowa, Neb, OU)
South (UVA, UNC, GT, FSU, UT)
I don't want to get caught up in divisions, my point is that with divisions like this 4 of your 9 conference games are regional and at most you'd have 1 away game per division per year.

Now to the point of individual schools qualifications specifically the issue of AAU. OU and FSU are not AAU and who knows how long it will take to get there. But neither is Notre Dame. Why was Notre Dame given an AAU pass but every other school in the country without exception is held to the AAU standard to be considered? It is a double standard and proves to me that at the end of the day the B1G can do what it wants and if the Brand is strong enough, they will make an exception. Throw in the Markets and recruiting added in Florda, Oklahoma and Texas (OU is heavily represented in Texas) and I think OU and FSU are the right programs with strong enough Brands to get the AAU exception.