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Y11 Notes: Quick Math on Getting Filthy Rich
Big Ten and SEC might reach Scrooge McDoug levels of filthy rich if they can get the playoff's revenue distribution model to change with 12-team field.
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Y11 Notes: Friday, Sept. 30, 2022
THE ATHLETIC: The rich became richer, and now they would like to get more richerer
The Athletic’s Stewart Mandel and Nicole Auerbach butted heads together for a longer piece earlier this week that touched on a lot of different ways in which college football could grow or change over the next generation or so. The mark of a new era will ultimately be decided on the sign-off on, not just when the playoff changes (2024 or 2026?), but when the sport compromises how money is collected and distributed in the new 12-team format.
ESPN currently pays the College Football Playoff roughly $608 million per year for the New Year’s Six bowls (which rotate hosting the two semifinals) and the national championship game. CFP officials have indicated those games will be folded into the new 12-team format, joined by four new on-campus first-round games. The 12-team Playoff will be in place in time for the 2026 regular season — and perhaps as early as 2024 if several logistical hurdles can be worked out.
The expanded Playoff could more than triple in value to at least $1.9 billion annually once the CFP can take its rights to the open market beginning with the 2026 season, according to estimates from sports marketing consultancy firm Navigate. If the revenue distribution model stayed the same, the Power 5 leagues would net at least $230 million annually, up from $74 million now. But it’s not a given that the model would stay the same; the expanding Big Ten and SEC are expected to push for a formula similar to the NCAA men’s basketball tournament, in which leagues receive payouts proportional to the number of teams they put in the field.
Those two conferences have thrown around their weight for years, but after the SEC’s addition of Texas and Oklahoma and the Big Ten’s addition of USC and UCLA, all corners of college sports are bracing for an era of two super conferences, the rich getting richer at a rate that far exceeds the rest. (-The Athletic)
There’s an expected $230M per year on the table waiting for Power 5 leagues to play the future playoff model under the current economic structure. How much more money do the Big Ten and SEC expect to make by getting paid out per team in the playoff?
Let’s do some quick and easy math. These numbers aren’t perfect, but they’ll get us to the neighborhood we’re looking for.
Let’s also work with the frame of reference that ‘the future of college football’ starts in 2026 when the playoff and all of the major conference realignment changes that we’re aware of will have already happened. By then, the Big Ten and SEC will both have 16 schools, the Big XII will have 12, the ACC will have 14, and the Pac-12 will be at 10 schools. The Sun Belt and American both will have 14 schools each, the MAC and Mountain West will both have 12 schools still, and Conference-USA will have 9.
Let’s also take The Athletic’s report for what it’s worth: $1.9B. Without getting too weeded in how much each seed is worth (top 4 conference champions with byes would realistically be worth more than the #12 seed), I’ve decided to just divide that number by 12 and worth with that. The answer: $158.3M to the league for each school in the playoff.
I took Sports Illustrated’s most-recent 12-team mock playoff and did the math from there. In the mock, both the Big Ten (Ohio State, Penn State, Michigan) and SEC (Georgia, Alabama, Tennessee) each have 3 schools in, the ACC (Clemson, Florida State) and Pac-12 (USC, Washington) have 2 each, and the Big XII (Kansas) and Sun Belt (James Madison) both have 1 in.
If you’re a conference that’s good enough to expect two teams in the 12-team playoff every year, you want the economic structure that’ll bring in more than the expected $230M/year figure. According to my imperfect math, leagues with two teams in the playoff make roughly $86.7M more per year, and leagues with three teams in the playoff would more than double its current expected rate: up roughly $245M per conference.
If you’re a conference with just one team in the playoff, though, then you just make the $158.3M to split with your schools. If you’re the Big XII in this scenario, then you’re out an expected $72M.
The Super 2. It’s already apparent that the Big Ten and the SEC are the sport’s Super 2, and the Pac-12 and ACC might be with the Big XII if somebody doesn’t step up to be the perennial third wheel here. Once the Big Ten or SEC starts to get 4 or 5 teams in the playoff, then we’re looking at conferences bringing in well over a half-billion dollars just from a single playoff. (Hell, maybe three playoff teams will end up being enough for conferences to make $500M+.)
Somebody’s going to get phased out. Whether it’s the Big XII or anybody else, it’ll require multiple years of dominance from the top (Super 2) and not enough seasons of 2 or more playoff teams. Having six conference champions automatically in the playoff means there’s room for the Sun Belt, or whoever from the current Group of 5 leagues, to cover some ground with consistency in the playoff.
Perfect timing for Sun Belt? Perhaps, maybe. It’s the next best growing G5 league, and James Madison’s having an incredible start to its freshman year in the FBS. If the new-looking Sun Belt can sustain the success that the American of last decade couldn’t, then maybe it’ll end up having a season or two where it has two playoff teams. For G5 leagues, the old race used to be making the playoff just once. But now, the game is to consistently stay in the playoff, and figure out how to squeeze in an automatic qualifier as well every once in a while.