(06-04-2020 07:14 PM)jedclampett Wrote: Let's consider these two examples:
The Southwest Conference (in 1996):
1. Texas
2. Texas A&M
3. Texas Tech
4. TCU
5. Rice
6. Baylor
7. SMU
8. Houston
The Big East Football Conference (in 2011):
1. Syracuse
2. Pitt
3. West Virginia
4. Rutgers
5. UConn
6. Louisville
7. Cincy
8. USF
Both of these conferences "imploded" or went out of existence (although, strictly speaking, the Big East morphed into the AAC).
Q. What did they have in common?
A. Both conferences had only 8 full members.
.
Hypothesis:
The single factor that may be most predictive of the imminent collapse of a conference may be having only 8 full members.
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Corollary hypothesis:
The fewer schools there are in a conference, the greater the likelihood that the conference will eventually collapse.
Good questions but wrong assumptions.
Both the SWC and Big East eventually succumbed to having too small of a market reach and in the era of the footprint model for figuring the media compensation for schools in a conference the real issue with the SWC was not the number of schools, but the number of states those schools occupied, two, Arkansas and Texas. The Big East at least had more states, but both also had another factor working against them. S.M.U. received the death penalty in the SWC hampering further the number of games they had to sell which is related to to the number of schools in the conference.
The Big East was basically a basketball conference that worked with some schools which also offered football. When football value became the driver of realignment both the ACC and Big East suffered the same weaknesses as predominantly basketball conferences. The ACC won out because they added F.S.U. and had more exposure in the football crazy Southeast which had ample recruiting prospects to assist their development. The Big East had Miami. The ACC saw the risk and struck first. That killed the Big East.
The problem you face now is that weakness in 2020 is no longer defined by the number of schools, or even the size of your market footprint. We've entered a new era thanks to smart TV's and streaming. Now the cable companies know exactly how many people watched an event. They no longer pay a fee for each cable subscription within a footprint state. Now they get extra add revenue because they know how many truly watched. TV audience is tied to brand strength which is tied to a history of winning at "football" and that value is multiplied when brands play brands.
The Big 10 has at least 6 brands that can draw nationally: Ohio State, Michigan, Penn State, Michigan State, Wisconsin, and Nebraska. Sometimes Iowa makes a run. These are also attendance leaders.
The SEC has 7 brands: Alabama, L.S.U., Georgia, Auburn, Texas A&M, Florida, and Tennessee. Those are also the attendance leaders. The big difference for the SEC over the Big 10 is that it has a couple of other schools capable of making a good run a couple of times a decade. The Big 10's bottom is broader.
These are the top two earners now and have way outpaced the other 3 P conferences because of the number of brands they have each and because those brands play each other creating must see national TV for college football fans.
The PAC has old brands that haven't won in big ways very often in the last 20 years: USC, UCLA, Washington, Stanford, and new comer Oregon. They have lousy viewer numbers so they are paid what is very soon to be the least amount of money.
Nipping at their heels is the ACC which essentially has two consistent football brands that win at national competition levels: F.S.U. and Clemson and lately F.S.U. has been struggling. They have the second poorest viewer numbers when the total actual viewers are compared to the total possible viewers in their footprint. So with the fewest national football brands and the second worst viewer to potential viewer ratio they are paid the second worst.
The Big 12 also only has 2 major national brands, but they are massive brands and annually ranked 1st and 7th in total revenue generated. They hang together because the third tier rights for all schools are independently held. This allows Texas and Oklahoma to make 37 million for the T1 and T2 rights and Texas approaching 17 million for the LHN while OU picks up around 7 million more for their T3. Because of their brand power they earn significantly more than either the PAC 12 at 29.7 million or the ACC which this year may earn 29.7 from their T1 and T2 and could make 3 to 5 million more for the ACCN which will reflect roughly 7 months worth of revenue.
The problem moving forward is that the Big 10 making nearly 54 million this past year will get a new contract bump in 2024. That contract with a mere 10% bump jumps past 60 million. Likely it will be closer to 15% more so think 63 to 65 range. The least the SEC will make by 2024 where their new contract kicks in will be 67 million and without all the details in it could be more and if ABC is successful in buying out the remaining CBS contract after this year that raise could come much sooner.
So which conferences are weakest now? The PAC which will be doubled up by both the Big 10 and SEC and the ACC which will almost be doubled up by both.
We are talking a difference for the ACC of 30 million a year for the next 13 years after 2024 and until 2037. That's a loss over 13 years of 390 million dollars if they stay put. Football first schools like Clemson, Florida State, Georgia Tech and Louisville which is a two sport school will all have in state SEC rivals making twice as much as they make. That will be an intolerable disadvantage for those schools. It also puts Syracuse and Pittsburgh at a similar disadvantage with Big 10 schools in their recruiting areas.
Meanwhile the two most sought after prizes in realignment would rather stay where they are and since they are making more than either the PAC 12 or ACC they'll probably be able to do so.
Since the PAC is virtually isolated and travel expenses will be a bigger consideration in the future because of recent events I think they are less likely to be raided than many think but if they suffer defections there is only one destination for them, the Big 12 which makes Texas and Oklahoma's position even stronger. I just really really don't see any of them parting company. They like each other. What they are growing not to like is Larry Scott. So Larry Scott probably doesn't survive the rancor that is growing within the PAC, but the PAC does survive.
I know the ACC has a big long GOR, but really if a school could make 390 million more over the next 13 years following 2024 that's gong to put a lot of stress on that conference which is 2nd to the Big 10 in the Northeast in ratings and 2nd to the SEC in ratings in the Southeast and has the fewest brands with which to make money in football. If three or four schools can jump for that much more it's going to create big issues. Even movement to the Big 12 with the possibility of jumping closer to the 50 million range with the right mix of traveling companions will spur interest. So unless there is a huge windfall from the ACCN which doesn't seem likely at all since both the BTN and SECN are suffering declines of what were once record high earnings.
So Jed what makes a conference weak has changed but the causation of that weakness is still having unfavorable conditions to media payouts. From 1990 to 2010 it was cable subscription fees within the footprint. Small footprint = limited subscriptions (especially since duplicate schools from 1 state don't count or help) and in 2020 it's national brand schools playing other national brand schools which drive actual viewership for which advertisers pay a premium. This difference is so huge for the SEC and Big 10 that media payouts in say 1998 were all within 2 million of each other based on cable subscription fees, but now there's as much as 30 million dollars difference and the ability of those behind to make up the difference is practically nil.
Monetary difference will be the driving force of further realignment and the ACC is in the next to the weakest position in % of actual viewers to possible viewers, nest to last in attendance, next to last in media revenue, and locked into this contract until 2037. The PAC is last in all but only locked in until 2024.
Who is in the weakest position is really not even up for debate, it's the ACC bordered by both of the dominant conferences and without the brand power of a Texas and Oklahoma. Ironically what could be their saving grace is the fact that neither the Big 10 nor SEC have much to gain from them.
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What is the most common factor that predicts demise of a college sports conference?
