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Will The Power 5 Soon Become The Power 2? Unpacking new TV revenue projections for a 12-team CFP World
Forget about the Power 5. College athletics is headed toward a financial reality that looks more like a Power 2.
According to updated annual revenue projections from Navigate, a data-driven consulting firm, the SEC and the Big Ten stand to make nearly twice as much as the Big 12, Pac-12 and ACC by 2026. The estimate provided to The Athletic includes the following assumptions: that a 12-team Playoff will be implemented beginning with the 2026 regular season, that the SEC will dominate in such a format and that Texas and Oklahoma will leave the Big 12 to join the SEC by July 2025 at the latest, as their contractual agreements state.
“There’s an unlevel playing field everywhere you look in collegiate athletics at every level and even looking within conferences, unlike professional sports,” Navigate CEO A.J. Maestas said. “This is normal, but it is concerning for a few reasons. One is coaching talent. There’s very little that other conferences will be able to do to compete with the budgets of the SEC and the Big Ten, and that cascades down throughout all resources. If somebody has double the resources of somebody else, how are they supposed to compete?”
In December 2020, the SEC announced a new 10-year contract with ESPN, beginning in 2024, that will make the network the exclusive rights holder of SEC football, taking over the massively undervalued CBS deal for the league’s best game of the week and paying a reported $300 million per year to the conference for the privilege. In the next four years, the Big Ten, the Pac-12, the Big 12 and the College Football Playoff all have TV rights deals coming up for negotiation, which means the coming years will go a long way toward shaping the future of college athletics.
“It’s one of many arms races,” said Tom McMillen, the president of Lead1, an organization that represents the FBS athletic directors. “Data rights. NIL. You’ve got all these arms races, and clearly all of them are leading to greater stratification.”
As television viewership continues to decrease, the value of live sports rights continues to go up because sports are one of the few live broadcasts with a massive following and minimal incentive to DVR or binge the content later. Last year, the NFL announced new media rights agreements with five partners valued at more than $110 billion over 11 years. Although the NFL draws by far the biggest TV audiences each year, several college football games also typically appear in the year-end top-100 viewership charts.
The Big Ten is next in line to cash in, and industry experts expect a bidding war between several traditional media companies, from Disney and Fox to CBS, NBC and Turner. “It’s the reason I am so bullish on top-tier college football rights,” said John Ourand, a media reporter for the Sports Business Journal. He noted that CBS is looking to fill the Saturday afternoon time slot vacated by the SEC and NBC would like to find inventory to pair with its Notre Dame package, for example. SBJ has estimated that the Big Ten could become the first college conference to eclipse $1 billion per year in revenue in its next negotiations.
“It’s a big advantage for the Big Ten to be going first in this climate and to not be competing with the CFP deal,” Maestas said. “If you want high-quality college football at the highest level, there’s only one option right now that you know is going to deliver in a really, really big way. And that’s the Big Ten.”
And there may be a competitive market beyond the more traditional media partners. Industry experts continue to watch the streaming services that have begun to dip their toes into live sporting events. Amazon recently hired Al Michaels and Kirk Herbstreit for its Thursday Night Football broadcast, and Major League Baseball recently tapped Apple TV+ to exclusively broadcast a weekly Friday night doubleheader. Peacock Premium, part of NBC’s streaming arm, aired the Notre Dame-Toledo football game last fall.
By 2026, the SEC’s per-school payouts are expected to be more than double that of the Big 12 and nearly double that of the ACC. The Big Ten is expected to come in behind the SEC, but the gap is nowhere near the subsequent drop-off from the Big Ten to the Pac-12. By 2029, Navigate projects, the SEC and the Big Ten will be distributing more than $100 million to member schools on an annual basis. The next-highest distributions, in the Pac-12, will be approximately $38 million less. Conferences’ annual payouts to their members primarily come from media rights deals, but they also include football and basketball postseason revenue.
Here’s a summary of the key assumptions and caveats Navigate took into account in building the projection in the above chart:
These estimates include all Tier I, II, and III media rights for each conference and are based on historical growth rates in college and pro media rights deals.
These estimates include a new CFP agreement in 2026 with expansion to a 12-team field: five spots for Power 5 champions, one spot for the highest-ranked Group of 5 champion and six at-large spots.
These estimates do not reflect any strategies conferences may adopt in the structuring of their media rights, the negotiation process, or other potential moves to maximize value.
These estimates include conference realignment in the SEC and the Big 12 and their impact on media rights values. Navigate also factors in an assumption that the 16-team SEC will move to a nine-game conference schedule.
These estimates include additional revenue from NCAA units, bowl payouts, conference championships and other revenue streams beyond media rights; all of these revenues are assumed to have steady growth rates.
To allocate payouts earned by advancing deeper than the first round of playoff games, Navigate looked back at the last 11 years (2011 to 2021) of college football performance and estimated the value of participating in each round, assuming that each successive round sees increased TV viewership by 25%. It assigned values to each game, totaled those estimates by conference and averaged them over the same 11-year timeframe.
When Navigate last provided Power 5 revenue projections to The Athletic in June 2020, Oklahoma and Texas were Big 12 members, expected to remain so, and industry experts assumed at the time that the CFP would expand to an eight-team field. Navigate’s new model incorporates a 12-team Playoff that includes six at-large selections, plus the impact of Oklahoma and Texas joining the SEC.
The biggest change from the 2020 projection to now? That the SEC distributions will surpass those in the Big Ten by 2026. One major reason for that adjustment is the SEC’s shift from a deeply undervalued deal with CBS (which paid $55 million a year on average for some of the most-watched games of the season) to a contract with ESPN that will reportedly pay around $300 million annually beginning in 2024.
“That puts them back up to where they should have been all along,” said Matt Balvanz, Navigate’s senior vice president for analytics. “Then, you see another jump with whatever happens with the CFP. That split, especially in the 12-team model for us, really rewards performance, and historically, their performance has been stronger than the Big Ten. So, if that success continues to play out for the SEC, that’s where they leapfrog. …
“We tried to think about what a more equitable payout would be to reward teams actually participating versus huge base payments that stay massive regardless of participation or not. It is rewarding the SEC more, because historically, they would have more teams in the system.”
The difference in revenue for all parties between an eight-team Playoff and a 12-team model is significant, Balvanz said, because more games mean more money. Navigate projected last summer that a 12-team CFP could bring in $2 billion per year, and comparing the new projections to those the company made this month for an eight-team model underscores the difference. (In an eight-team CFP, for example, the Pac-12 is projected to distribute to its schools $56.5 million per year by 2029. That number climbs to $62.8 million per year in a 12-team model.)
Despite the loss of Texas and Oklahoma, the Big 12’s annual distributions are projected to rise from $44.3 million to $52.6 million in 2026 to align with its new media rights deal. There is still significant value in sports media rights in general, and the Big 12 will be adding members, offering additional markets with dedicated fan bases and additional inventory in the form of more conference football games. Maestas said the Big 12’s projected revenue increase would have been far more significant with Texas and Oklahoma in the fold. Balvanz said the four schools “filling in the gap” should help stabilize the league and avoid a more significant decline in revenue.
The ACC is locked into a long-term contract with ESPN through 2036, which accounts for the steady but small increases in its revenue distributions. The Athletic’s Andy Staples recently wrote about the risk involved in such a decision compared to the Big Ten, which bet on itself with shorter six-year deals that allowed it to set and reset the market. The latest projections have been adjusted to reflect that the ACC Network will have a full year of Comcast distribution beginning in fiscal year 2023, but the bump in revenue for the league displayed in the chart is largely due to CFP distributions in an expanded Playoff.
Even within just the Power 5 conferences, it’s easy to see how quickly slight disparities can turn into real stratification. Extrapolating to the Group of 5, FCS and beyond paints an even more dramatic picture. In a world where SEC and Big Ten head coaches make double that of other Power 5 leagues, wouldn’t they hire all the best assistants? Does that trickle down to getting all the best players, consolidating talent further in a sport that already funnels its elite talent to the same handful of schools? Does that put a strain on donors in other leagues to step up even more to make up for it? College football has never been an equal playing field, but the resource gap may soon become as wide as ever.
“I haven’t heard anybody say to me that they didn’t think they could compete, even with tremendous resource differences,” McMillen said. “But it’s not going to be easy.”
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From The Athletic " Will The Power 5 Soon Become The Power 2"
