Tuesday, September 16, 2014

College Realignment - The Next Evolution?

I saw a discussion about who would be a better candidate as an expansion target, assuming that there is another round - Baylor or Texas Tech. It is an interesting question, although one that appears to be academic because of a few variables, not the least of which is the inability of the Pac-12 to put a good network product together. 

As a quick aside on that, I get wanting to keep all revenue, and I get trying the current "all or nothing" model, but in the wake of the success of the SEC Network, trying to charge the same for people in Florida as California seems rather nose/face, no?

But it did spark a thought that I figured I would drop on this blog real quick. But let me establish a premise or two first. To start with, this is an idea I am kicking around.  PLEASE comment below if you have insights, corrections, thoughts, clarifications, etc. on any of this. I am sure there are so many moving parts that there is information I do not have, or don't have accurately enough, that you dear reader can help us with. Additionally, please review the "assumptions" section below as some of them may help you understand where this is going.

The Overview

So there will most likely be another round of conference realignment, in large part due to the new haves/have-somes/have-nots dynamics since the SEC Network's successful launch. Now you have the SEC as the king of the hill, the B1G a step behind, then a gap, then the ACC and Big XII, and then a larger gap, and then the rest. 

What makes things interesting is that now you have enough revenue in the SEC to have an ACC or Big XII school jump ship to the SEC and make the same or better money in the SEC *while paying the Grant of Rights penalty* for exiting their current conference. (It appears that the ACC and Big XII teams are currently making +/-$20M currently, and in the SEC or B1G, they would make close to or more than $40M.)

If true, that would mean that if the SEC or B1G wanted to expand their footprint a little more, they can do it without significant obstruction.

So that leads us to a few basic assumptions before we dive into the details.

Assumptions and Background

First, it is all about the benjamins. And in this context, that means millions of dollars at a pop, and how to get them. This is NOT about maintaining historical rivalries, although I do think that some sort of reality check on travel might play into the discussions a bit. I mean, West Virginia in the Big XII has to be costing all of those programs way too much money, time and quality. But this is about eyeballs in stadiums for revenue sports that generate revenue for in-stadium and television events.

Second, ESPN and Fox are going to try to keep their properties as much as possible. ESPN with the ACC and the LHN, and Fox with the Big XII. This may be a huge sticking point we may have to revisit, especially considering that the LHN is ESPN and Fox is the main partner for the Big XII overall. That is very much a huge conflict.

Third, the gulf between the SEC/B1G and the Big XII/ACC is not something that UT, OU, Notre Dame, Florida State or others are willing to stomach long term. This is a point I could very well be wrong about, and you could only see the defection of a few schools from the ACC to fill out the ACC and we are done.

Fourth, the past efforts of the B1G and SEC to play footsie with UNC, Duke, Georgia Tech, Virginia, Virginia Tech, North Carolina State, etc.

And yes, this ignores the Pac-12 as I think they have painted themselves into a corner that they can't get out of. Also, in part, because the LHN was successful at one thing - keeping UTx out of the hands of Fox and in the ESPN family.

The Theory

Find a way to create a conference or arrangement that raises as many boats as possible. Can it be done? I am not sure, but this is my best guess for now. It does involve moving a few teams around, involving five different conferences.

I - The Heavies Who Stay

Let's start with the key players. These are the teams that are going to push for this because they won't make enough money to keep up with the SEC otherwise: OU, Notre Dame, Florida State, Clemson. They will be for this because simply, they have no choice. There is no other way to raise their revenue to keep up with the facilities, coaching investments, etc. that Arkansas, Ole Miss, etc., are able to pour money into with the SEC Network revenues. Getting out financed by Alabama or LSU is one thing. But Kentucky? Mississippi State? No way those collegiate blue bloods will put up with that.

Note that I did not put UT in that mix as they have all the revenue they need. Their key here is to go along with anything that doesn't impact their considerable income. I almost put ND in this group too but their once ground-breaking deal with NBC isn't the behemoth it once was.

Ultimately, I think Notre Dame will have to go this route as a natural progression of their path to date. Surely they want to keep their independence, but the brand simply isn't as strong as it once was, although it clearly is still strong. In fact, ND and UT are the two crown jewels that will make this super-conference worth the effort.

II - The  Heavies Who Leave

This group is more hypothetical as not all of these schools are guaranteed to move, but they are the ones most likely to.

First, the two most likely to go to the SEC: Virginia Tech and North Carolina State. As much as the SEC might love to get UNC instead, it seems unlikely that the SEC would absorb UNC and Duke and either add 2 more teams or not add Virginia Tech. Why? Because the states of Virginia and North Carolina are the targets for more television revenue. Adding more than the minimum necessary makes no sense. In fact, you can make an argument that the revenue difference in adding those two schools just to add those two states is somewhat marginal, but that would make this whole exercise moot and that is no fun, now is it? I have looked at a few different options on this, and I just can't see UNC joining the SEC - not with Duke and two other schools, and certainly not without Duke.

Second, the ones most likely to go to the B1G. This is in large part due to who the SEC doesn't want or can't make work: Georgia Tech, Duke, North Carolina, Virginia.  All four have been heavily rumored to be targeted by the B1G up until the whole ACC GOR deal was finalized.

Is it possible that Georgia Tech is something the Super-Conference fights over? Possibly, but based on past rumors, I don't get the sense that they will fight that hard. Georgia is a huge state in terms of eyeballs, but I don't see how the program itself is worth fighting over.

III - Others Who Might Leave

In this group, I have Kansas and Kansas State possibly going to the B1G. Personally, I think it unlikely, but if the new super conference doesn't want to go to 20 teams, this would be the solution. My sense is that it wouldn't bring enough value to the B1G for them to be interested, but I throw it out there as a possibility.

IV - The Remainderment

These are the schools that for one reason or another are along for the ride. They can't push their way forward, but if it means a larger network for ESPN, and more money for them, then they will sign off on it:

OSU, Baylor, Texas Tech, TCU, West Virginia, Iowa State, Louisville, Pittsburgh, Syracuse, Miami, Wake Forest, Boston College.

V - The Last Peice

This would put the new super-conference at either 17 or 19 teams, with no one in the NY/RI/CT area. Here is where I think you will see UConn added to round things out and put a relatively Power 5 sized program back in the Power 5.

What It Looks Like

SEC: Alabama, Auburn, Arkansas, Florida, Georgia, Kentucky, Louisiana State, Mississippi, Mississippi State, Missouri, North Carolina State, South Carolina, Tennessee, Texas A&M, Vanderbilt, Virginia Tech

B1G: Duke, Georgia Tech, Illinois, Indiana, Iowa, Ohio State, Maryland, Michigan, Michigan State, Minnesota, Nebraska, Northwestern, Penn State, Purdue, Rutgers, UNC, Virginia, Wisconsin (and possibly Kansas and Kansas State)

Big XII/ACC Super-Conference: Baylor, Boston College, Clemson, Florida State, Iowa State, Louisville, Miami, Notre Dame, OU, OSU, Pittsburgh, Syracuse, TCU, Texas Tech, UConn, UT, Wake Forest, West Virginia (and probably Kansas and Kansas State)

Bottom Line

If you were ESPN, would you pay B1G/SEC money for that new conference? Could it generate the eyeballs and advertizing dollars to at least get close? That is a larger footprint than either the B1G or SEC and would probably have more eyeballs and ratings...

I say ESPN because while Fox is a competitor and would love to fund a competitor to the SEC in the South, the LHN problem raises its ugly head again, as does the current contract with ESPN for the ACC.

Again, I am sure there are flaws in this. Where are they? What am I missing? What needs to be corrected?

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