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RE: Why The Next Round Of Realignment Will Not Be Like Any Of The Others:
(04-04-2022 01:48 AM)JRsec Wrote: Kansas and North Carolina end basketball season tomorrow. We will begin what always appears to be the quiet season. It isn't. More things, including realignment discussions, get done in the still of Summer than people realize. I suspect this Summer to be rife with behind-the-scenes machinations. The reasons will be discussed but suffice it as a preface to say the national and international political and financial scenes offer any number of precarious possibilities and everyone realizes money, due to inflation, is going to be tight. They also understand demographics, namely the Boomers will not be pushing trends societally beyond 2035. This means ticket sales for college athletics will continue to drop placing more dependence upon media deals for revenue. Loose translation, Networks will have an ever-increasing power in structuring college sports and no doubt will do so to meet their own goals.
Conferences will still lay out parameters, but in a quasi-professional pay for play world where basketball monetization will be important, and separation from the NCAA
essential to accomplishing it, how conferences are structured will likely be handled in a manner which ensures full seasonal fare, and at quality, for the Networks.
Make no mistake football will be King, but hoops will be Queen, and diamond sports a Jack. Branding will be the Ace. Into this milieu these things will be impactful, and massive change more likely. And for reasons I will enumerate. If you are one who is banking on status quo for the next 14 years you may wish to avert your eyes.
1. NIL and Pay for Play Will be a factor at the Network, Conference, and School Level
The advent of these legal rulings will render moot the organizing principle of the NCAA, amateurism, end some, at this point, really stupid violation charges against some schools, and make monetizing hoops an essential, which means beyond NCAA control. Think football after OU/UGa vs the NCAA 1983 different.
Corporate NIL money will play into advertising revenues, likely creating some synergy which Schools and Conferences might also share if players are shown in school jerseys, using settings with conference logos, etc. So, all revenue and some non-revenue sports could see a financial tide which lifts and benefits all 3. Making sure the NCAA doesn't try to horn in eliminates a complication and another mouth to feed.
2. While Money will be a motivation for movement, it won't be the only major reason. Surviving in the Highest Division of play will also be a major motivator.
$40-50 million gaps between the SEC / B1G and the B12/ ACC / PAC will cause movement. This represents a gap of 400 million to a half billion over the coming decade. Major schools have moved for 20 million tops and much less so far. There will be movement.
The unspoken part of this will be driven by a downsizing and streamlining of higher education which is well under way. Texas in part move to again distinguish themselves from all other Texas schools but A&M. Oklahoma moved in part to remain the dominant school in Oklahoma. Many might shake their heads over this assertion but being in conferences comprised of state flagship schools of academic standing and with sports brand recognition will be key is setting themselves apart. Schools like North Carolina, Virginia, and Kansas will want to do the same. But moves can't be made against fan culture, old rivals and annual games. For this reason, the SEC will be attractive to each of these. Brand name privates will also seek being set apart with distinction. Duke, Notre Dame, USC, and Stanford may avail themselves of the funding and elite company as things move forward.
This is an era ending and era beginning shift and administrations know this.
To make this mass transition easier politically, I look for a third conference comprised or 2nd state schools from smaller states or 3rd schools from larger states, and well known and prominent privates which aren't nationally dominant.
A 20-24 member SEC and Big 10 would not be out of the question. A third conference of like size would be practical. N.C. State, Kansas State, Oklahoma State, Texas Tech, Virginia Tech, Georgia Tech, Oregon State, Arizona State, Washington State, and privates like Miami, Boston College, Syracuse, Baylor, and TCU fit here as well along with a hybrid like Pitt and a small state Flagship like WVU, and some top up and comers.
Why? The Flagships can't leave them behind or take them with them. Their inclusion preserves important in state rivalries and makes the transition possible. So, they will be included, perhaps with a nice bump in pay, just not at SEC & B1G levels, and they will offer networks a solid product which can be marketed well.
3. Basketball will play a bigger part in selections, as will national branding, and state flagship status.
Basketball first state flagships have the branding and with a earning potential 2.25 times what they earn now under the NCAA. They are valuable and provide balance for top heavy football scheduling.
4. Size of conference will only be determined by what is profitable. No NCAA, no restrictions on how a conference is structured.
With no structure requirements larger conferences add profit with conference semis, more inventory, and expenses share with many more, and by the elimination of duplicated conference overhead. A P3 has much less administrative overhead without 5 conferences and adds to their bargaining strength with numbers.
5. Network Rights desires will Trump Conference wants. And Networks will determine profitability.
Look for networks to encourage consolidation in order to market the most popular brands over larger market footprints which impacts ad revenues. Old valuations on who is profitable will be moot. Networks will pay for market reach and market penetration, and for a greater versatility in scheduling.
Networks will encourage playoff expansion. A new model will profit all and since conference semis will be the profit of the conference taking the 12 divisional champs the 3 champs will automatically be included with the next best seeded, and 4 more at large bids issued. This will mean some conference runners up will get new life.
6. GORs may not play a part, but even if the do movement within a network family can be managed at the Network / Conference level.
GOR's may be rendered moot by Pay for Play. If not if everyone earns more movement is possible. If few if any of current P5 schools are left out there will be no monetary loss, and no loss of inclusion. No damage, no damages. If ESPN & FOX and any other network likes their lineup we move without fear.
7. Expect 2 truly super conferences and 1 which is paid less but has access and earns more than any of its members do now.
So, time frame? As early as 2023 on some moves, likely 2025 if movement is wholesale and at once. It takes time to work out new schedules.
Money, Law, Recession and Inflation, Demographics, and Resources say we move in this direction. And, the sooner the better.
With respect to your #5 point, I still don’t understand what benefit the ESPN would have by moving ACC teams including UNC, Duke and UVa to the SEC.
To be fair, the ESPN did help restructuring the old Big East Football Conference. The ESPN moved five football schools out of the original 8 (six if you include Louisville) to the ACC, repackaged the remaining football schools and dropped the basketball school coverage. But would the ESPN do the same for the ACC?
The latest forecast says the SEC would make about $100 million per team and the ACC about $50 million in 2027. Simply put, the total expenditure for the ESPN would be $2300 million ($1600 for the SEC and $700 for the ACC ignoring the ND non football portion). So if the ESPN moves eight schools from the ACC to the SEC, then the ESPN’s total payment to the SEC alone would become $2400M (24x100). This doesn’t make much financial sense.
Now let’s say we move four teams from the ACC to the SEC. Keeping the SEC payment per school same, the ESPN’s payment to the SEC would become $2000M (20x$100M).
I really doubt there are four ACC schools that would generate revenue as much as the average SEC teams does to justify the move but let’s say that UNC, Duke, and UVa and another school are that valuable. What would the ESPN do for the remaining 10 ACC schools?
If the ESPN doesn’t want to increase the total payment from the previous $2300M, the payout to the reamaining ACC schools should be decreased to $30 million per school from $50 million per school. Most likely, the remaining schools will try to switch a network or try to move to another conference. Alternatively, the ESPN keeps six schools it likes and pays them $50 million as before and drop the other four schools. Is this really the ideal outcome for the ESPN? I don’t see much financial incentive for the ESPN to do any of this. Also this would increase the possibility of ND joining the BIG for full, which may not be in the ESPN’s best interest.
I said this before, but I don’t see a movement between the four conferences that have the dedicated TV networks (or so called P4) except for potentially ND. The money gap is actually GOOD and necessary. The SEC/BIG schools get paid more because they generate more revenue. The ACC/PAC schools get paid less because they generate less revenue. Once we hit the point where there is no school in the ACC/PAC that generates more than an average revenue of the SEC/BIG, then there would be NO MORE movement. That’s the equilibrium point and I think we are already there except for maybe a couple of schools (ND and potentially USC).
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Why The Next Round Of Realignment Will Not Be Like Any Of The Others:
