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RE: Is the college football financial bubble bursting???
(08-14-2023 01:00 PM)Frank the Tank Wrote: (08-14-2023 11:57 AM)HawaiiMongoose Wrote: (08-14-2023 08:20 AM)Frank the Tank Wrote: (08-14-2023 12:40 AM)HawaiiMongoose Wrote: (08-13-2023 11:05 PM)Frank the Tank Wrote: It’s not a bubble. The knee-jerk reaction to top properties getting top dollar and calling it a bubble is just plain wrong.
In nearly every single industry and facet of society, the financial rewards are being allocated to the very top echelon. That doesn’t mean that there’s a bubble. Instead, it’s a recognition that superstars are disproportionately valuable and they’re taking a greater share of the rewards accordingly.
College football is no different. The SEC and Big Ten (or if the top teams create a Super League) aren’t in a bubble at all. They’re gaining outsized rewards over others, such as the Pac-12, because that’s totally logical based on their intrinsic value. To that point, a real bubble is where properties that aren’t worth as much (such as the Pac-12) are getting paid like a premium property. A bubble isn’t when things that are intrinsically valuable go up in value, but rather when things that aren’t intrinsically valuable (like the crap real estate in the 2000s housing bubble) are rising in value. That’s actually not happening in college sports (as evidenced by no one overpaying for the Pac-12).
Once again, there was a great point made earlier this week by Stewart Mandel that the people that are valuable for TV purposes are the Giants fans living in the Bronx that don’t normally watch college football but will turn on Michigan-Ohio State for an hour. There a many more millions of those casual sports fans than there are people that care about the Apple Cup or Civil War. I’m not saying that this is a good thing for hardcore college football fans like us, but we’re not the audience that any of these networks are concerned about.
I know people want to hate on what’s going on in realignment and believe that somehow these power players are eventually going to kill the golden goose, but financially, it’s GOING to work for the Big Ten and SEC because it’s ALL about the many millions of casual sports fans that just want the big brand names and never even realized the regional rivalries that we’re eulogizing ever existed. Either adapt or die.
The issue I have with this take is the presumption that the premium brand names will remain premium brand names -- and their matchups will continue to draw national interest from casual sports fans -- when they're all grouped together and playing each other every week and half of them are losing every week.
The blue-bloods of college football attained that status by winning. Leveraging a variety of factors that bestowed competitive advantage in their respective historical conferences, they were able to dominate consistently on the field against their traditional geographically-proximate non-blue-blood rivals, which in turn fueled the growth of their passionate fan bases as well as their national reputations.
In the new world those competitive advantages will evaporate. No more schedules consisting mostly of home games. No more multi-week streaks of coasting to victory against overmatched opponents. Many more long road trips to play distant conference-mates, sometimes all the way across the country. Since when has jet lag been a factor that multiple superstar programs actually had to plan for and attempt to overcome on a regular basis? Never, until now.
I think four or five years of former perennial winners beating up on each other and half of them losing half or more of their games in that time period will be enough to trigger a precipitous decline in fan interest in the top level of college football. The ability of the preeminent programs to finish in the top ten year after year will become a thing of the past. A form of parity will eventually emerge -- and ironically, it may be parity that kills the golden goose, by not only dampening the interest of casual sports fans in clashes of titans-no-more, but also by eroding the passionate fan bases that have been the sustaining foundations of the premium brand programs.
If we still had the current top 4 or the old BCS system, I’d agree with you.
However, the new 12-team playoff changes that dynamic drastically. A 9-3 season is no longer a “disaster” for a blue blood, but instead will often be a playoff qualifying record in the new playoff format.
And there is NOTHING that drives casual fan interest in the regular season more than a playoff race.
The NFL is *all* about parity: lots of teams and lots of games every week where there are playoff implications late into the season. That is what drives the casual fan to watch a Jaguars vs. Texans game on a Thursday night in greater numbers than all but a handful of programs on all of television during the entire year.
An even more apt comparison is the English Premier League (which I’ve brought up before and Greg Sankey pointed out that he read “The Club” about that league’s formation). Forget about promotion/relegation aspect (as that’s not relevant to the business aspect here): the point is that the EPL is a meat-grinder like the new Big Ten and SEC will be. The top half of the league is beating up on each other and the bottom half still has a lot of talent due to their financial positions. The top clubs in the EPL actually have a much harder road to success than their elite club counterparts in Germany, Spain, Italy and France.
Yet, instead, what has happened even with that much greater competition is that the top EPL clubs have widened their financial gap and grown their fan bases at a much higher clip than the other leagues. It’s simply way more casual fan-friendly. It doesn’t have ALL of the top brands and not every game is a monster, but it does have the *most* top brands and the bottom half is still very competitive, which means if an international sports fan only has time and space to follow one league, it’s often the EPL.
What the casual sports fan gravitates toward is simplicity. Following just the Big Ten and SEC is a whole lot more understandable and accessible than following all 130+ teams in FBS or even the P5. A Super League of the top 20-30 teams would be even easier to follow.
The point is that team that ends up 8-4 is often still in the playoff race in November. We all have to internalize that what we thought of as a “good record” in the past is going to drastically change going forward and that gives a lot more leeway for the top Big Ten and SEC to beat up each other more without as much negative playoff repercussions.
Fair point. Of course the counterpoint is that we already have an NFL. And that means fully replicating the NFL’s (or EPL’s) core dynamic of “parity in pursuit of the playoffs” runs the risk of turning college football into minor league pro football.
Moreover this risk is amplified by the combined impact of the liberalized transfer portal, unfettered use of NIL compensation as a recruiting inducement, and litigation that may result in the conversion of student-athletes into unionized employees.
IMHO college football’s distinctiveness from NFL football has been one of the key drivers in growing and maintaining its popularity. Having a large number of consistently elite teams piling up wins on their way to conference championships that deeply matter to fans, and then coming together at the end of the season in a clash of the titans — traditionally in major bowl games and more recently in the CFP as well — has been a formula for massive success. But now that we’re on the cusp of finally, fully capitalizing on the distinctiveness of the sport with an expanded CFP that puts the ultimate prize within reach of a larger and more inclusive collection of titans, we’re rushing instead to convert it to NFL-lite.
I certainly could be wrong about this. But I suspect the consolidation and possible breakaway of the blue-blood programs — separating them from the lesser peers who historically have enabled them to sustain their winning traditions and premium brands and big fan bases, in favor of throwing them together in a brand-leveling meat-grinder — will eventually transform the top level of college football into a minor league pro sport with a minor league fan following.
I get what you’re saying.
I have been taking it toward an extreme conclusion of a blue blood-only Super League up to this point.
Now, having said all of that, the NFL still has 32 franchises and many of them aren’t marquee brands. So, is it a revenue maximizing proposition for the networks to actually have a top level of college football that’s *smaller* than the NFL itself? Probably not in the long run because you’d be cutting off wide geographic swaths of the country from that top level. However, you probably do get that coverage at around 48 schools (such as 24 teams in both the Big Ten and SEC).
I go back to English soccer as the roadmap since it has the most similarities to US college sports. The vast majority of soccer clubs are *not* in the Premier League. Yet, those clubs could still (a) hypothetically play themselves in to the Premier League via promotion and/or (b) c compete with them directly annually in the FA Cup.
Pro/rel in option (a) won’t ever happen in America, but option (b) still effectively exists in college sports via the 12-team CFP and NCAA Tournament. It might be practically extremely insanely monumentally hard for anyone outside of the top level to win the FA Cup, but they aren’t *structurally* excluded from participating in it. The fact that the FA Cup still exists is what continues to connect all of those local lower tier clubs with the top level Premier League clubs that are worth billions of dollars.
The CFP and NCAA Tournament can continue to serve a similar role in college sports. That would be my advice to the Big Ten and SEC and/or whoever else is left standing at the end: you can make it practically impossible for anyone else to win a championship, but don’t completely cut off access where it’s *structurally* impossible for them. That’s how you keep all of those local colleges connected to the big national brands in the same way the English soccer system works.
I’m a pretty big believer in the old adage, “Pigs get fat, hogs get slaughtered.” I think the P2 can still eat a fair amount more before they become hogs, but the bright line would be if they try to hog ALL of the access.
There already was a practical impossibility for all but about 20 schools. Its just that 5 of those schools have moved into the Big 10 and SEC. Notre Dame, FSU, Clemson, Miami and maybe Colorado are the only ones left outside the p2.
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