04-16-2020, 02:05 AM
Life is upside down, huh?
We're working from home, we're shopping at a distance, and the IRS is paying us on April 15th! What a world!
So what better time to delve into the finer points of madness? I've been reviewing some old threads and trying to look at how some of the economics might affect future decisions.
This past week, we had the G5 leagues requesting relief from the NCAA in the form of temporarily suspending qualifications for membership in D1. In other words, they don't want the financial upheaval to impact their status.
A handful of schools are already cutting some of their minor sports and that may have happened anyway, but the timing does seem odd. It's hard to fathom that financial decisions aren't being made, at the very least, in the aftermath of losing so much revenue from a cancelled NCAA Tournament.
Consider this aspect:
Pete Thamel talks about the financial motivation to expand the CFP
There's some interesting points and quotes in that article so I recommend reading the whole thing, but the gist is that there may be a long term financial ding that these schools suffer in the wake of the pandemic. Such a set of circumstances might lead schools to find easier ways to make that cash up and an easy way could be expanding the CFP.
There also appears to be a growing realization that the schools have farmed out some of their best products to middle-men...the bowl games. Why do that? Especially in a time when circling the wagons may be necessary?
Also found this article a little while ago, it looks like a local paper in VA talking about James Madison and Old Dominion. The point of the article is to underscore a potential movement towards more regional conferences. Apparently, there have been some conversations on that.
Considering the pressure that may exist at some of the G5 and FCS schools, reorganizing into more regional entities may prove fruitful. They want to reduce expenses and it doesn't make as much sense for schools on the same level to be stretched across multiple states when comparable programs lay a couple hundred miles away. Some of the talk centers around only doing that for the minor sports so excluding football and basketball, but the point is also made that football rivalries and travel for fans may play a role in the final outlook.
Now, this sort of dynamic is more relevant to programs on the fringe. The finances of the G5 and FCS are less flexible as we pointed out earlier with their petition to the NCAA.
Nonetheless, for programs looking to save a few bucks here and there, could this sort of thinking creep into the minds of Power 5 leaders?
Finally, I was listening to some local radio today and some of the hosts seem to think that the SEC, for example, might play their conference schedule this season and nothing more. That obviously hurts the G5s the most, but it would impact all non-conference games. It didn't sound like they had any inside info or anything, they were just pitching a notion that would make playing a football season more feasible if people are worried about getting together.
Reduce the number of games? Play more regionally as a whole? Some might like that better.
Now personally, I think the football season will more or less look normal. There are already signs from Federal, State(across the country), and local leaders that they want to open the economy within the next few weeks. That would come well before players have to report for Fall camp or students were on campus.
I think college leaders are hesitant to make any commitments today because they don't really have the freedom to buck State and Federal authorities anyway. They'll wait for the politicians to call the shots and go from there. Just my view.
Anyway, as to how all this might affect the long term outlook, I do think there could be some interesting changes to how football...the primary revenue driver...is played.
For one, an expanded CFP and a de-emphasis on the exhibition oriented bowl season would obviously produce more opportunities for teams to compete in relevant games. That means conferences could have greater freedom to be more regional, but it also means greater numbers in membership is not an impediment to qualifying. More teams equals more wildcards one way or the other.
At this point, I foresee TV revenue becoming even more important than it already is, if you can imagine. For one, some fans will always be a little skittish and reduce the number of times they attend a game in person. Tickets sales reduction could be a long term trend in other words. Many fans will rely evermore on TV networks to bring them the teams they follow which incidentally drives up the value of TV broadcasts.
Additionally, if it's deemed that CFP money is more valuable for the sake of stability then perhaps steps are actually taken to reduce the number of regular season games. Less ticket demand might make these moves much more reasonable and it would also create some scarcity. If there are 10 regular season games instead of 12 then your opportunities are reduced for you whether you asked for it or not, but it also provides an opportunity to increase ticket prices and take advantage of premium seating. If social distancing in some form or fashion becomes a way of life then fewer people will want to be crammed into a stadium anyway. They'll watch at home, pay for seats that allow them to distance themselves a bit more, or they just won't attend as often.
Obviously, that social dynamic won't take effect with everyone and certainly not permanently, but either way, TV becomes more valuable as a means to show the product. If you're relying on TV then you need to fill TV's needs. Obviously, there aren't going to be a ton of people tuning in for Alabama/Western Carolina or Auburn/Samford. This type of environment would quicken the pace with which we run headlong into a schedule where Power schools only play Power schools...with occasional exceptions perhaps, but you get the point.
Now with respect the regional interpretation of conferences, does that become more or less likely?
I'm not sure. I mean, you can still reduce costs by placing the schools from multiple regions under one administrative roof. Just because everyone is in the same conference doesn't mean they have to play all the time. You can still have mostly regional schedules, and you can still host a conference championship game that pits schools against each other who otherwise might not play very often.
You can still increase leverage with media companies too if there's more cooperation. If the leagues regressed back to more regional entities then the TV networks actually regain some leverage. Since TV revenue could be a little more stable than ticket sales in this future then perhaps larger leagues are still best especially considering no reduction in the opportunity to qualify for the CFP.
Now here comes the world domination part, if we enter this future then here's my proposal for what the SEC should do...
1. Large is good.
2. Less room on the schedule for non-conference games.
3. Maintain regionalism to a reasonable degree.
4. Lean towards quality content because TV becomes more important.
With that in mind, I don't mind absorbing regions rather than focusing on the best products.
I would take Texas, Texas Tech, TCU, and Baylor.
Beyond that, I would leave room to acquire the schools in the East that complete the footprint. Florida State, Georgia Tech, Clemson, and not sure who the others might be.
In other words, I wouldn't worry so much about tapping new regions even though I've been a proponent of that in the past. I would think in terms of completely controlling the ones we're already in.
We're working from home, we're shopping at a distance, and the IRS is paying us on April 15th! What a world!
So what better time to delve into the finer points of madness? I've been reviewing some old threads and trying to look at how some of the economics might affect future decisions.
This past week, we had the G5 leagues requesting relief from the NCAA in the form of temporarily suspending qualifications for membership in D1. In other words, they don't want the financial upheaval to impact their status.
A handful of schools are already cutting some of their minor sports and that may have happened anyway, but the timing does seem odd. It's hard to fathom that financial decisions aren't being made, at the very least, in the aftermath of losing so much revenue from a cancelled NCAA Tournament.
Consider this aspect:
Pete Thamel talks about the financial motivation to expand the CFP
There's some interesting points and quotes in that article so I recommend reading the whole thing, but the gist is that there may be a long term financial ding that these schools suffer in the wake of the pandemic. Such a set of circumstances might lead schools to find easier ways to make that cash up and an easy way could be expanding the CFP.
There also appears to be a growing realization that the schools have farmed out some of their best products to middle-men...the bowl games. Why do that? Especially in a time when circling the wagons may be necessary?
Also found this article a little while ago, it looks like a local paper in VA talking about James Madison and Old Dominion. The point of the article is to underscore a potential movement towards more regional conferences. Apparently, there have been some conversations on that.
Considering the pressure that may exist at some of the G5 and FCS schools, reorganizing into more regional entities may prove fruitful. They want to reduce expenses and it doesn't make as much sense for schools on the same level to be stretched across multiple states when comparable programs lay a couple hundred miles away. Some of the talk centers around only doing that for the minor sports so excluding football and basketball, but the point is also made that football rivalries and travel for fans may play a role in the final outlook.
Now, this sort of dynamic is more relevant to programs on the fringe. The finances of the G5 and FCS are less flexible as we pointed out earlier with their petition to the NCAA.
Nonetheless, for programs looking to save a few bucks here and there, could this sort of thinking creep into the minds of Power 5 leaders?
Finally, I was listening to some local radio today and some of the hosts seem to think that the SEC, for example, might play their conference schedule this season and nothing more. That obviously hurts the G5s the most, but it would impact all non-conference games. It didn't sound like they had any inside info or anything, they were just pitching a notion that would make playing a football season more feasible if people are worried about getting together.
Reduce the number of games? Play more regionally as a whole? Some might like that better.
Now personally, I think the football season will more or less look normal. There are already signs from Federal, State(across the country), and local leaders that they want to open the economy within the next few weeks. That would come well before players have to report for Fall camp or students were on campus.
I think college leaders are hesitant to make any commitments today because they don't really have the freedom to buck State and Federal authorities anyway. They'll wait for the politicians to call the shots and go from there. Just my view.
Anyway, as to how all this might affect the long term outlook, I do think there could be some interesting changes to how football...the primary revenue driver...is played.
For one, an expanded CFP and a de-emphasis on the exhibition oriented bowl season would obviously produce more opportunities for teams to compete in relevant games. That means conferences could have greater freedom to be more regional, but it also means greater numbers in membership is not an impediment to qualifying. More teams equals more wildcards one way or the other.
At this point, I foresee TV revenue becoming even more important than it already is, if you can imagine. For one, some fans will always be a little skittish and reduce the number of times they attend a game in person. Tickets sales reduction could be a long term trend in other words. Many fans will rely evermore on TV networks to bring them the teams they follow which incidentally drives up the value of TV broadcasts.
Additionally, if it's deemed that CFP money is more valuable for the sake of stability then perhaps steps are actually taken to reduce the number of regular season games. Less ticket demand might make these moves much more reasonable and it would also create some scarcity. If there are 10 regular season games instead of 12 then your opportunities are reduced for you whether you asked for it or not, but it also provides an opportunity to increase ticket prices and take advantage of premium seating. If social distancing in some form or fashion becomes a way of life then fewer people will want to be crammed into a stadium anyway. They'll watch at home, pay for seats that allow them to distance themselves a bit more, or they just won't attend as often.
Obviously, that social dynamic won't take effect with everyone and certainly not permanently, but either way, TV becomes more valuable as a means to show the product. If you're relying on TV then you need to fill TV's needs. Obviously, there aren't going to be a ton of people tuning in for Alabama/Western Carolina or Auburn/Samford. This type of environment would quicken the pace with which we run headlong into a schedule where Power schools only play Power schools...with occasional exceptions perhaps, but you get the point.
Now with respect the regional interpretation of conferences, does that become more or less likely?
I'm not sure. I mean, you can still reduce costs by placing the schools from multiple regions under one administrative roof. Just because everyone is in the same conference doesn't mean they have to play all the time. You can still have mostly regional schedules, and you can still host a conference championship game that pits schools against each other who otherwise might not play very often.
You can still increase leverage with media companies too if there's more cooperation. If the leagues regressed back to more regional entities then the TV networks actually regain some leverage. Since TV revenue could be a little more stable than ticket sales in this future then perhaps larger leagues are still best especially considering no reduction in the opportunity to qualify for the CFP.
Now here comes the world domination part, if we enter this future then here's my proposal for what the SEC should do...
1. Large is good.
2. Less room on the schedule for non-conference games.
3. Maintain regionalism to a reasonable degree.
4. Lean towards quality content because TV becomes more important.
With that in mind, I don't mind absorbing regions rather than focusing on the best products.
I would take Texas, Texas Tech, TCU, and Baylor.
Beyond that, I would leave room to acquire the schools in the East that complete the footprint. Florida State, Georgia Tech, Clemson, and not sure who the others might be.
In other words, I wouldn't worry so much about tapping new regions even though I've been a proponent of that in the past. I would think in terms of completely controlling the ones we're already in.