A thesis (2012 still relevant to whats happening) paper on CFB realignment by Cal Berkley undergrad and Professor advising. It a long read, if you don't like long reads and figure makes your head spin, just go to the conclusion.

Synopsis: concludes the sweet spot for conference size and profitability is 11-12 teams. The CFB PO may decrease the meaning of the regular season. Talks about the possible coming changes of paying FB players and other things relevant to CFB and conference realignment.

"Our tests show that the future trends of sixteen teams are not within the confidence interval and would earn less profit as a result of increased size. This could be due to the rising costs caused by furthering the distance between schools, the expansion of the recruiting region, or the bidding war and competition between coaching salaries with more “rivals.” Revenues could be declining as rivalries lose their intensity and could be related to the loss of prestige a conference might experience either by losing a top school and replacing it with less significant school, or just acquiring less worthy schools in the interest of size. "With a playoff system, there could be ramifications that diminish the meaning and importance of each single week in college football, as the regular season is now not as vital in order to get to the championship. Without this notion of everything being on the line week in and week out, viewership could be affected."

LINK

(04-19-2014 09:27 PM)BIgCatonProwl Wrote:  A thesis (2012 still relevant to whats happening) paper on CFB realignment by Cal Berkley undergrad and Professor advising. It a long read, if you don't like long reads and figure makes your head spin, just go to the conclusion.

Synopsis: concludes the sweet spot for conference size and profitability is 11-12 teams. The CFB PO may decrease the meaning of the regular season. Talks about the possible coming changes of paying FB players and other things relevant to CFB and conference realignment.

"Our tests show that the future trends of sixteen teams are not within the confidence interval and would earn less profit as a result of increased size. This could be due to the rising costs caused by furthering the distance between schools, the expansion of the recruiting region, or the bidding war and competition between coaching salaries with more “rivals.” Revenues could be declining as rivalries lose their intensity and could be related to the loss of prestige a conference might experience either by losing a top school and replacing it with less significant school, or just acquiring less worthy schools in the interest of size. "With a playoff system, there could be ramifications that diminish the meaning and importance of each single week in college football, as the regular season is now not as vital in order to get to the championship. Without this notion of everything being on the line week in and week out, viewership could be affected."

LINK

It's been a while since I read an undergraduate thesis. Now I remember why. It's a deeply flawed paper beginning with the comparison of all FBS schools and conferences. That's like comparing watermelons to raspberries.
 
Economics is a shaky social science, their origin in disgruntled political theorists who desired to use numbers to explain human behavior.

The only relevant section is the one stating some of the "study's" limitations.

Pay it no mind. It's a relevant as 8-track tapes.

To have done this properly, he would have first needed to limit his study to the B-5 and Big East/Mountain West. Then he needs define "profit" and determine if the schools in the study define "profit" the same way - they don't. They also have a plethora of accounting tricks to avoid appearing to make a profit at some campuses and exaggerate a "profit" at others. Even then he is assuming that revenues follow some innate logical process (the fundamental flaw of economics - that people make rational economic decisions). Sports are rife with people making irrational economic decisions on the ticket purchase and donation end.

All this being said, the kid's paper is no worse than some of the stuff I've seen come out of Emory by folks that should know better. Perhaps that's the most important lesson.

Sounds like he was sponsored by the PAC 12...

(04-19-2014 10:08 PM)lumberpack4 Wrote:  

(04-19-2014 09:27 PM)BIgCatonProwl Wrote:  A thesis (2012 still relevant to whats happening) paper on CFB realignment by Cal Berkley undergrad and Professor advising. It a long read, if you don't like long reads and figure makes your head spin, just go to the conclusion.

Synopsis: concludes the sweet spot for conference size and profitability is 11-12 teams. The CFB PO may decrease the meaning of the regular season. Talks about the possible coming changes of paying FB players and other things relevant to CFB and conference realignment.

"Our tests show that the future trends of sixteen teams are not within the confidence interval and would earn less profit as a result of increased size. This could be due to the rising costs caused by furthering the distance between schools, the expansion of the recruiting region, or the bidding war and competition between coaching salaries with more “rivals.” Revenues could be declining as rivalries lose their intensity and could be related to the loss of prestige a conference might experience either by losing a top school and replacing it with less significant school, or just acquiring less worthy schools in the interest of size. "With a playoff system, there could be ramifications that diminish the meaning and importance of each single week in college football, as the regular season is now not as vital in order to get to the championship. Without this notion of everything being on the line week in and week out, viewership could be affected."

LINK

It's been a while since I read an undergraduate thesis. Now I remember why. It's a deeply flawed paper beginning with the comparison of all FBS schools and conferences. That's like comparing watermelons to raspberries.
 
Economics is a shaky social science, their origin in disgruntled political theorists who desired to use numbers to explain human behavior.

The only relevant section is the one stating some of the "study's" limitations.

Pay it no mind. It's a relevant as 8-track tapes.

To have done this properly, he would have first needed to limit his study to the B-5 and Big East/Mountain West. Then he needs define "profit" and determine if the schools in the study define "profit" the same way - they don't. They also have a plethora of accounting tricks to avoid appearing to make a profit at some campuses and exaggerate a "profit" at others. Even then he is assuming that revenues follow some innate logical process (the fundamental flaw of economics - that people make rational economic decisions). Sports are rife with people making irrational economic decisions on the ticket purchase and donation end.

All this being said, the kid's paper is no worse than some of the stuff I've seen come out of Emory by folks that should know better. Perhaps that's the most important lesson.

And if his thesis was limited in that way (bolded text) it would introduce yet another flaw. Comparing the P5 to the MWC and AAC/BE would be comparing apples to cranberries.

A few flawed assumptions.

One looking solely at football "profit" in a vacuum. You cannot operate an FBS program without sponsoring 15 other sports, with at least half being female sports. Women's volleyball or track and field cannot be considered independently of football any more than a factory can exclude its costs of adding pollution controls from its operating costs, or an employer can exclude the cost of workers comp insurance and payroll matching taxes from its labor costs.

Two while conference revenue is an important income source based on most recent data, members of FBS receive less than half of operating revenue from their conference. With the exception of a small number of P5 schools, most FBS schools derive 65% or more of revenue from a source other than the conference.

Three. Conferences have utility beyond conference revenue. The addition of Mizzou gives Arkansas the potential to develop a strong rivalry, something that has been lacking throughout their athletic history, the games they have deemed rivalries were against opponents that rarely shared the emphasis on the game except in select seasons. This should increase demand for tickets in men's basketball and football. The sweet spot in college athletics is for demand to just slightly exceed supply because it permits premium pricing without disenfranchising too many fans.

Four. G5 conference revenue is heavily influenced by CFP revenue. A 12 team conference finishing with the lowest rating among the G5 will receive about $13.4 million from the CFP. If the top finishing conference has 12 teams and sends a team to the access bowl that league will receive nearly $25 million (though some significant portion of the $6 million access bowl payment will go toward the participating team's costs and won't be pooled, at worst the conference will share around $19 million). The next significant revenue in G5 is NCAA distribution and adding a team to acquire greater NCAA revenue is a speculative enterprise. Adding a stronger team, may mean more units earned or it may simply change who is earning the same number of units on the league's behalf. It is difficult to justify expanding a G5 league on the basis of league revenue. However expansion can be desirable to a G5 league at 12 teams if new schools can be brought in to reduce travel costs and increase gate receipts and fan interest but neither will appear on the ledger of the conference. A conference may choose to add two teams because it reduces games between schools that create little fan interest while increasing games against schools of more interest. The difficulty is that any such analysis has to be done by the individual members because the conference office will likely only analyze league revenue in providing information ahead of a vote.

Five. Within the P5 the analysis of a potential new member will focus more on television revenue and in the case of leagues with a conference network, will extend to carriage fee revenue. It will also look at potential CFP appearances and revenue in addition to the contract bowls. The P5 unlike the G5 are able to sign some bowl contracts outside of the CFP and contract bowls that provide significant revenue. Within the P5 it is far more likely that growing beyond 12 can produce a positive result on the ledger.

It seems to me the biggest flaw in the thesis is that you can't evaluate how profitable being in a conference of 16 members is if there are no conferences that big from which to glean empirical data. There were no such conferences in 2012, when this thesis was prepared, and to my knowledge there haven't been any in any time frame that would be relevant in today's media climate.

And, of course, to draw any "conclusion" about how important a regular season is when you have a playoff, you first have to have a playoff. I don't fault the kid for trying - he is, after all, just a kid. The faculty advisor, on the other hand, should know better.

at 12 with CCG its screws the #
there so many factors leading to profitability.
conf networks are growing by leaps & bounds,
bigger conf with big markets will work

Even the upcoming 4-team postseason I don't consider a playoff, and it sure as heck wouldn't make any regular season game less important. It's just speculation in any case since we've never had a playoff.

The main takeaway anyone should have is that Economics is just not the science it's supporters purport it to be - the first assumption of almost any Economics argument is "perfect knowledge" which is pretty damn difficult to come by and a universe of shared values such that we know what the shared values are and what they are really worth to the parties. Economists split from political theorists because they thought they could quantify the world and reduce it to a formula. In any credible social science work, the social scientists are upfront that they are presenting a certain limited model of the real world and you will find many economists go right past this important caveat.

Football is played for a bundle of reasons whose value fluctuate to the individual universities. That bundle is not the same from entity to entity and not even the same over time at an single entity.

Sports have such a deep anthropological angle that permeates the institutions that I find it akin to complexity related to how males and females (and same sex, etc. etc.,) trade sex. Meaning that the on-surface transaction is a cover for the underlying desires. The University mostly uses football like male bird uses stuff he picks up to attract a mate - a show of wealth and virility in order to attract a mate, although in this case the mate is the future donor to the University.

The student who wrote the paper is trying, but as others have immediately noted above, there is not even a definition of "profit" let alone other key terms. Sort of reminds me what my Chair said to me years ago after reading my first dissertation draft - "damn son, that stinks, have you even read this yourself?" I was mortified, yet he thought it hilariously funny - I still have that draft to remind me of what a stinker reads like. :)