(05-31-2021 12:04 AM)Wedge Wrote:  

(05-30-2021 07:54 PM)ken d Wrote:  

(05-29-2021 08:38 PM)Wedge Wrote:  

(05-29-2021 04:47 PM)OhioBoilermaker Wrote:  it's somewhat unclear what the value of a shell conference even is

The NCAA probably wouldn't let a group of schools just buy a shell conference for the autobid. But, just for fun, if it was allowed, how much is that NCAA autobid worth?

The minimum value of the autobid is the revenue the conference would get every year from March Madness even if no team in the conference ever won a game in the NCAA tournament and no team ever received an at-large bid. Right now that minimum payment would be about $1.3 million per year. Since we're just looking at a minimum, assume that the TV money paid for March Madness stays the same and doesn't increase, so the annual payout remains level. Also project it out only for 20 years of guaranteed payouts, who knows, maybe the tournament will cease to exist in 20 years.

Let's assume an average investment return on money for the next 20 years of 3 percent. Then the present value of 20 years of the minimum March Madness payout is a minimum of roughly $25.3 million.

That's the bare minimum that an NCAA autobid is worth, the present value of a guaranteed profit stream of $1.3 million per year. Add in whatever value we might put on having an autobid in your team's conference for all sports, and it should be quite a bit higher.

So IMO, even if you could sell an autobid for cash, it would be foolish to sell it for anything less than $35 million, and it's probably worth significantly more than that.

I believe there's a major flaw in your argument. You are assuming that the schools in the new conference had zero value themselves before they formed the new entity. In fact, if you are just shuffling the deck chairs within D-I, all the bottom feeder conferences have about the same value, so you should only be using the difference in expected annual revenues before applying your present value calculation. In most cases, that would mean the value of the shell conference is close to worthless.

Nope. If I'm selling a business with a guaranteed annual income of $1.3 million/year, then it gets valued according to that guaranteed revenue stream. If a would-be buyer says, hey, I already belong to such a business, or conference, then fine. They can keep being unhappy in their existing 14 or 16 or 18 team conference. But if they want a new one, they can pay for mine.

Every buyer is in such a conference. In fact, the universe of likely buyers are already in a conference that has the exact same value as the shell they would be buying. That's not to say they shouldn't try to form a conference more to their liking for reasons other than money. But they shouldn't do it hoping for some financial windfall that isn't going to happen.

(05-31-2021 10:22 AM)ken d Wrote:  

(05-31-2021 12:04 AM)Wedge Wrote:  

(05-30-2021 07:54 PM)ken d Wrote:  

(05-29-2021 08:38 PM)Wedge Wrote:  

(05-29-2021 04:47 PM)OhioBoilermaker Wrote:  it's somewhat unclear what the value of a shell conference even is

The NCAA probably wouldn't let a group of schools just buy a shell conference for the autobid. But, just for fun, if it was allowed, how much is that NCAA autobid worth?

The minimum value of the autobid is the revenue the conference would get every year from March Madness even if no team in the conference ever won a game in the NCAA tournament and no team ever received an at-large bid. Right now that minimum payment would be about $1.3 million per year. Since we're just looking at a minimum, assume that the TV money paid for March Madness stays the same and doesn't increase, so the annual payout remains level. Also project it out only for 20 years of guaranteed payouts, who knows, maybe the tournament will cease to exist in 20 years.

Let's assume an average investment return on money for the next 20 years of 3 percent. Then the present value of 20 years of the minimum March Madness payout is a minimum of roughly $25.3 million.

That's the bare minimum that an NCAA autobid is worth, the present value of a guaranteed profit stream of $1.3 million per year. Add in whatever value we might put on having an autobid in your team's conference for all sports, and it should be quite a bit higher.

So IMO, even if you could sell an autobid for cash, it would be foolish to sell it for anything less than $35 million, and it's probably worth significantly more than that.

I believe there's a major flaw in your argument. You are assuming that the schools in the new conference had zero value themselves before they formed the new entity. In fact, if you are just shuffling the deck chairs within D-I, all the bottom feeder conferences have about the same value, so you should only be using the difference in expected annual revenues before applying your present value calculation. In most cases, that would mean the value of the shell conference is close to worthless.

Nope. If I'm selling a business with a guaranteed annual income of $1.3 million/year, then it gets valued according to that guaranteed revenue stream. If a would-be buyer says, hey, I already belong to such a business, or conference, then fine. They can keep being unhappy in their existing 14 or 16 or 18 team conference. But if they want a new one, they can pay for mine.

Every buyer is in such a conference. In fact, the universe of likely buyers are already in a conference that has the exact same value as the shell they would be buying. That's not to say they shouldn't try to form a conference more to their liking for reasons other than money. But they shouldn't do it hoping for some financial windfall that isn't going to happen.

By your argument, if I'm selling a house and the potential buyer already owns a house but wants to move, that makes the value of my house zero. Ha ha, no.

It's even more specific than that. There are 32 autobids to March Madness. The NCAA has rewritten its rules so that any new conference in D-I would have to wait several years to get one of those money-generating autobids, and even after several years the D-I board gets to decide whether to increase the number of autobids. So selling an autobid is like selling a house in a town that lots of people want to live in but where there are only 32 houses, and every homeowner gets paid $1.3 million a year, and a newcomer would have to wait 8 years before they could start the process of building a house.

(05-31-2021 01:11 PM)Wedge Wrote:  

(05-31-2021 10:22 AM)ken d Wrote:  

(05-31-2021 12:04 AM)Wedge Wrote:  

(05-30-2021 07:54 PM)ken d Wrote:  

(05-29-2021 08:38 PM)Wedge Wrote:  The NCAA probably wouldn't let a group of schools just buy a shell conference for the autobid. But, just for fun, if it was allowed, how much is that NCAA autobid worth?

The minimum value of the autobid is the revenue the conference would get every year from March Madness even if no team in the conference ever won a game in the NCAA tournament and no team ever received an at-large bid. Right now that minimum payment would be about $1.3 million per year. Since we're just looking at a minimum, assume that the TV money paid for March Madness stays the same and doesn't increase, so the annual payout remains level. Also project it out only for 20 years of guaranteed payouts, who knows, maybe the tournament will cease to exist in 20 years.

Let's assume an average investment return on money for the next 20 years of 3 percent. Then the present value of 20 years of the minimum March Madness payout is a minimum of roughly $25.3 million.

That's the bare minimum that an NCAA autobid is worth, the present value of a guaranteed profit stream of $1.3 million per year. Add in whatever value we might put on having an autobid in your team's conference for all sports, and it should be quite a bit higher.

So IMO, even if you could sell an autobid for cash, it would be foolish to sell it for anything less than $35 million, and it's probably worth significantly more than that.

I believe there's a major flaw in your argument. You are assuming that the schools in the new conference had zero value themselves before they formed the new entity. In fact, if you are just shuffling the deck chairs within D-I, all the bottom feeder conferences have about the same value, so you should only be using the difference in expected annual revenues before applying your present value calculation. In most cases, that would mean the value of the shell conference is close to worthless.

Nope. If I'm selling a business with a guaranteed annual income of $1.3 million/year, then it gets valued according to that guaranteed revenue stream. If a would-be buyer says, hey, I already belong to such a business, or conference, then fine. They can keep being unhappy in their existing 14 or 16 or 18 team conference. But if they want a new one, they can pay for mine.

Every buyer is in such a conference. In fact, the universe of likely buyers are already in a conference that has the exact same value as the shell they would be buying. That's not to say they shouldn't try to form a conference more to their liking for reasons other than money. But they shouldn't do it hoping for some financial windfall that isn't going to happen.

By your argument, if I'm selling a house and the potential buyer already owns a house but wants to move, that makes the value of my house zero. Ha ha, no.

It's even more specific than that. There are 32 autobids to March Madness. The NCAA has rewritten its rules so that any new conference in D-I would have to wait several years to get one of those money-generating autobids, and even after several years the D-I board gets to decide whether to increase the number of autobids. So selling an autobid is like selling a house in a town that lots of people want to live in but where there are only 32 houses, and every homeowner gets paid $1.3 million a year, and a newcomer would have to wait 8 years before they could start the process of building a house.

That's not my argument at all. In your analogy, if my house is worth $300K and the potential buyer's house is worth $300K, his wanting to move doesn't change the value of my house. I'm saying that if I am in a conference worth $30 million, and the value of a shell conference I could move to is also $30 million, I won't get a windfall by moving. At the end of the day my revenue stream is the same whether I stay or go.

Your argument only makes some sense (and not all of it makes sense even then) is if you are a group of D-II schools wanting to move up together to D-I by buying the shell of a defunct conference. Then, the present value of the revenues may be $30 million, but the present value of the net income, after deducting the additional expenses required for D-I membership, is considerably less than that, and may even be negative.

(05-31-2021 10:22 AM)ken d Wrote:  

(05-31-2021 12:04 AM)Wedge Wrote:  

(05-30-2021 07:54 PM)ken d Wrote:  

(05-29-2021 08:38 PM)Wedge Wrote:  

(05-29-2021 04:47 PM)OhioBoilermaker Wrote:  it's somewhat unclear what the value of a shell conference even is

The NCAA probably wouldn't let a group of schools just buy a shell conference for the autobid. But, just for fun, if it was allowed, how much is that NCAA autobid worth?

The minimum value of the autobid is the revenue the conference would get every year from March Madness even if no team in the conference ever won a game in the NCAA tournament and no team ever received an at-large bid. Right now that minimum payment would be about $1.3 million per year. Since we're just looking at a minimum, assume that the TV money paid for March Madness stays the same and doesn't increase, so the annual payout remains level. Also project it out only for 20 years of guaranteed payouts, who knows, maybe the tournament will cease to exist in 20 years.

Let's assume an average investment return on money for the next 20 years of 3 percent. Then the present value of 20 years of the minimum March Madness payout is a minimum of roughly $25.3 million.

That's the bare minimum that an NCAA autobid is worth, the present value of a guaranteed profit stream of $1.3 million per year. Add in whatever value we might put on having an autobid in your team's conference for all sports, and it should be quite a bit higher.

So IMO, even if you could sell an autobid for cash, it would be foolish to sell it for anything less than $35 million, and it's probably worth significantly more than that.

I believe there's a major flaw in your argument. You are assuming that the schools in the new conference had zero value themselves before they formed the new entity. In fact, if you are just shuffling the deck chairs within D-I, all the bottom feeder conferences have about the same value, so you should only be using the difference in expected annual revenues before applying your present value calculation. In most cases, that would mean the value of the shell conference is close to worthless.

Nope. If I'm selling a business with a guaranteed annual income of $1.3 million/year, then it gets valued according to that guaranteed revenue stream. If a would-be buyer says, hey, I already belong to such a business, or conference, then fine. They can keep being unhappy in their existing 14 or 16 or 18 team conference. But if they want a new one, they can pay for mine.

Every buyer is in such a conference. In fact, the universe of likely buyers are already in a conference that has the exact same value as the shell they would be buying. That's not to say they shouldn't try to form a conference more to their liking for reasons other than money. But they shouldn't do it hoping for some financial windfall that isn't going to happen.

The financial benefits could relate to the expenses side of a conference’s and conference members’ income statement. Even if revenues net out, the cost of competition could be reduced if a new league was more geographically compact and had a lower coaching salary structure.

Yeah, anyone looking to buy a D1 conference "shell" for the autobid is not looking to gain revenue from that in and of itself. They have some other objective (like creating a more competitive or geographically compact conference than their current one), and the shell is means to that end. The WAC and A-Sun, for instance, are partial "shells" that the defecting OVC, Big Sky, and Southland schools are using for similar purposes.

(05-31-2021 02:23 PM)ken d Wrote:  

(05-31-2021 01:11 PM)Wedge Wrote:  

(05-31-2021 10:22 AM)ken d Wrote:  

(05-31-2021 12:04 AM)Wedge Wrote:  

(05-30-2021 07:54 PM)ken d Wrote:  I believe there's a major flaw in your argument. You are assuming that the schools in the new conference had zero value themselves before they formed the new entity. In fact, if you are just shuffling the deck chairs within D-I, all the bottom feeder conferences have about the same value, so you should only be using the difference in expected annual revenues before applying your present value calculation. In most cases, that would mean the value of the shell conference is close to worthless.

Nope. If I'm selling a business with a guaranteed annual income of $1.3 million/year, then it gets valued according to that guaranteed revenue stream. If a would-be buyer says, hey, I already belong to such a business, or conference, then fine. They can keep being unhappy in their existing 14 or 16 or 18 team conference. But if they want a new one, they can pay for mine.

Every buyer is in such a conference. In fact, the universe of likely buyers are already in a conference that has the exact same value as the shell they would be buying. That's not to say they shouldn't try to form a conference more to their liking for reasons other than money. But they shouldn't do it hoping for some financial windfall that isn't going to happen.

By your argument, if I'm selling a house and the potential buyer already owns a house but wants to move, that makes the value of my house zero. Ha ha, no.

It's even more specific than that. There are 32 autobids to March Madness. The NCAA has rewritten its rules so that any new conference in D-I would have to wait several years to get one of those money-generating autobids, and even after several years the D-I board gets to decide whether to increase the number of autobids. So selling an autobid is like selling a house in a town that lots of people want to live in but where there are only 32 houses, and every homeowner gets paid $1.3 million a year, and a newcomer would have to wait 8 years before they could start the process of building a house.

That's not my argument at all. In your analogy, if my house is worth $300K and the potential buyer's house is worth $300K, his wanting to move doesn't change the value of my house. I'm saying that if I am in a conference worth $30 million, and the value of a shell conference I could move to is also $30 million, I won't get a windfall by moving. At the end of the day my revenue stream is the same whether I stay or go.

Your argument only makes some sense (and not all of it makes sense even then) is if you are a group of D-II schools wanting to move up together to D-I by buying the shell of a defunct conference. Then, the present value of the revenues may be $30 million, but the present value of the net income, after deducting the additional expenses required for D-I membership, is considerably less than that, and may even be negative.

The motivation of the schools buying an autobid doesn't drive the value.

If there are D-I schools who hate their current conference situation so much that they want a brand new conference for themselves, and they don't want to wait 8 years to have NCAA autobids, then getting a new conference that already has an autobid would be worth big money to them.

If that group of schools lacks the funds to pay for an autobid or are too cheap to pay, then they're in the same situation as would-be homebuyers who really want to move into a new house in a nice neighborhood but end up staying where they are because they either can't or don't want to pay what that new house is worth.

(05-29-2021 08:02 PM)IWokeUpLikeThis Wrote:  

(05-29-2021 07:41 PM)Fighting Muskie Wrote:  Maybe a better solution for the MEAC is a joint effort mercy killing by the SWAC and CIAA: the 4 strongest join the SWAC, creating an HBCU Superconference, while the other 4 (Morgan St, Coppin St, UMES, SC St join the CIAA?

It’s a tough sell for SWAC schools to bail them out. They’re adding flights and less desirable games while losing more desirable games and 1/3 of their pie.

Barring a survival-necessitated merger of two leagues below the autobid line, it’ll likely be the continuation of death by a thousand cuts for the MEAC:

- Howard and Delaware St join northeastern conferences
- Morgan St might or might not get a ticket
- Norfolk St, NC Central, & SC State might or might not get invites to southern conferences needing football members
- Coppin St & UMES are SOL

Right now it’s a blinking contest as no one wants to put in the dagger unless they’re left with no option.

If the MEAC can add VSU before anyone bolts, the league can be saved. If someone bolts before then, no one’s paying $1.7 million to board a sinking ship.

IMO, the likelihood of MEAC schools finding a D1 lifeboat:
100% - Howard
75% - Delaware St
50% - Morgan St, Norfolk St, NCCU, SCSU
2% - Coppin St, UMES

Adding SC State to the Big South would put that league back at 8 FCS teams after Kennesaw State and North Alabama move to the ASun since they’re adding NC A&T, as long as they keep FB-only associate members Robert Morris and Monmouth. Would be easy for other sports as two other public SC schools (Upstate, Winthrop) and two private schools (Presbyterian, Charleston Southern) are already there. No shade, but CSU>SC State>PC>Upstate is an all I-26 drive that is convenient for a bus league. Rock Hill is also very easily reached from Clinton, Spartanburg, Orangeburg and Exhibit 205B on 26.