Archive for the ‘Big Ten’ Category

I’ve been getting a lot of requests for comment on some proposed legislation by an Illinois state representative from Naperville to have a feasibility study performed on whether another Illinois public university can be added to the Big Ten. Here is the full text of the proposed bill. Note that I actually live in Naperville, but the applicable representative (Michael Connelly) doesn’t represent the portion of town that I live in.

Most people that have a passing understanding of conference realignment know that the odds of the feasibility of the Big Ten expanding with any school from the state of Illinois is less than zero (but we’ll spell it out here for any first time readers that haven’t been paying attention to this issue for the past several years). First of all, what the Illinois State Legislature wants is completely irrelevant to Big Ten expansion. They might have some control over the University of Illinois specifically, but Michigan, Ohio State, Wisconsin and every other Big Ten school (even Northwestern) would laugh off any attempt for some type of legislative intervention. Second, a viable Big Ten candidate needs a combination of FBS football credentials, academic prowess (preferably membership in the Association of American Universities, which is an extremely select group of top tier research institutions) and, most importantly of all, additional media value in the form of new TV markets and/or a national brand name (i.e. Notre Dame). Considering that the entire state of Illinois is already receiving the Big Ten Network at the maximum cable carriage rate, any additional school from the state would add exactly $0 in TV revenue for the conference. That would actually mean that all other Big Ten universities would lose money with an Illinois-based expansion by splitting the pie further without making the overall pie larger… and the Big Ten isn’t making moves in order to lose money. Plus, the only other public university that even plays FBS football is Northern Illinois, who isn’t anywhere near AAU status on the academic front (and realistically never will be with its mission). If the State of Illinois wants to spend a single dime on whether it’s feasible for another public university here to join the Big Ten, then the legislature is flushing money down the toilet that it doesn’t have.

That being said, let’s not throw the proverbial baby out with the bathwater on what ought to be the real intent of this legislation: creating a stronger #2 public university in the State of Illinois behind the University of Illinois at Urbana-Champaign (abbreviated as UIUC for ease of discussion here, although I’ve always thought that was a clumsy abbreviation as an Illinois grad) regardless of any Big Ten prospects (which are non-existent in reality). What I hope is that my fellow Naperville native can’t possibly be this naive and is just using the Big Ten name as a headline grabber in order to shine the light on the very real problem that the academic quality gap between UIUC and the rest of the state’s public universities is so large that Illinois high school grads are heading to out-of-state colleges at a rate that dwarfs almost every other state in the country.

In the typical competitive Chicago suburban high school, the top 5% of the class or so is generally gunning for the Ivy League and Ivy-caliber schools (i.e. Stanford, Duke, Northwestern, etc.). The next 5% is the group that UIUC generally targets (with a little bit of variation depending upon the program – engineering and business require top 5% credentials these days, whereas an applicant might be able to get by with being in the top 15% for liberal arts). Regardless, an Illinois high school grad is pretty well-covered if he or she is in the top 10% of his/her high school class and the 90th percentile in SAT or ACT scores.

The problem is the massive academic reputation gap between UIUC  and the rest of the in-state schools. For the very large group of kids that rank between the top 10% and top 30% of their class (people that still have good-but-not-elite grades and test scores and make up a huge share of the college student population), UIUC is getting too tough to get into while the rest of the in-state schools are way too easy to get into in relation to their credentials. There’s no compelling option in-between that’s a solid fit for that group of students. In the latest US News rankings for undergraduate programs at national universities, UIUC is ranked #41 in the nation, but then there isn’t another Illinois public school until the University of Illinois at Chicago (UIC) at #128. Farther down the list are Illinois State (#152), Northern Illinois (#177) and Southern Illinois (#177). It just so happens that neighboring schools like Indiana, Purdue, Iowa and Missouri are in the top 100 of the US News rankings and have admissions standards that perfectly align to those top 10%-30% students that can’t get into UIUC, so Illinois kids go to those schools in massive numbers* and are willing to pay out-of-state tuition for them (which is still relatively less expensive compared to a lot of lower-ranked private university options). According to the Chicago Tribune, there was an outflow of 30,000 freshmen students from Illinois to out-of-state schools and an inflow of 17,000 last year, which is a negative outflow of 13,000.** The academic quality gap is exactly why this is occurring.

(* Last year, the Chicago Tribune put together this fascinating database of where Illinois high school students currently go to out-state colleges. Not surprisingly, schools in neighboring states drew the largest numbers, with Iowa and Missouri having more than 1000 Illinois students each in their respective freshmen classes last year, while Indiana, Marquette, Wisconsin, Purdue, St. Louis University and Iowa State all had over 500 Illinois freshmen. Interestingly, Arizona State, Colorado, Kentucky and Kansas all drew more Illinois students than Ohio State, with all of them getting just under 200 Illinois freshmen each. Other popular power conference destinations for Illinois students outside of the Midwest are Arizona, Vanderbilt and Miami, with over 100 Illinois freshmen each. After this hellacious winter, I can’t blame any Chicagoan heading to some place where you can wear shorts in the middle of January. Meanwhile, Alabama and Ole Miss surprisingly draw more Illinois students than Nebraska, while Rutgers only has 10 Illinois freshmen. Maryland and Penn State don’t show up in this data set, which doesn’t mean anything one way or another, as some schools like Harvard that definitely have Illinois students aren’t listed here.)

(** New Jersey is a state with an even larger outflow of college students and has almost the exact same issue as Illinois: a very large drop in the rankings of its public universities after its flagship of Big Ten newcomer Rutgers.)

UIC is probably the only public school in Illinois that has a realistic chance of filling that gap since its faculty quality is already on the higher end compared to its admissions standards, the school is solid in STEM areas since it houses the University of Illinois system’s medical and pharmacy schools, and has what is now considered to be a very desirable location in the West Loop neighborhood of Chicago. (UIC was actually a visiting member of the Committee on Institutional Cooperation (CIC) that’s considered to be the academic arm of the Big Ten for nearly 30 years, but that status was revoked following the conference’s admission of Nebraska.) The main issue is that UIC’s reputation in professional circles (outside of medicine and pharmacy) actually lags behind its perception in academia, and changes there seem to be glacial. Every Big Ten school has a stronger professional network in Chicago in the finance and tech areas that fuel the influx of new college grads every year in Lincoln Park and Lakeview, and UIC still has to catch up to regional private Catholic schools like Loyola, DePaul and Marquette on that front, too. This is a self-fulfilling prophecy – UIC won’t move up in professional prestige without attracting better students, but such better students won’t go there until UIC moves up in professional prestige.

(* Up until 20 years ago, that location was considered to be a major liability when it was far from gentrified. I know this area well since my parents both graduated from there and my father worked there for 30 years, so I have a lot of affinity for the school. My father used to get his hubcaps stolen quite frequently back in the day and we used to joke that we could buy them back at the old Maxwell Street market adjacent to UIC, which was featured in the John Lee Hooker scene in The Blues Brothers. Needless to say, the old Maxwell Street was moved for UIC’s expansion several years ago and what used to be a seedy neighborhood has turned into a land of high-priced condos and restaurants.)

The other practical problem is that it would take a ton of investment from the state to get UIC up to the level of schools that are strong non-flagships (i.e. Michigan State, Purdue, Miami University of Ohio, etc.), yet the state keeps reducing the money to public universities every single year (and as noted, the state doesn’t have the money to give it to them even if they wanted to). Regardless, I hope that some type of better realistic in-state option exists by the time my 4-year old twins are ready to go to college in 13 years. If Representative Connelly can ensure that the focus is on that particular academic goal (as opposed to Big Ten membership specifically, which is a waste of time and resources because it will never happen), then I’m game.

(Image from PIPBlog)

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As many of my regular readers know, I’m a huge fan of both the NBA and college basketball. While this blog has generally focused on college football over the past few years since that has been the driving force behind conference realignment, I’m still a hoops guy at heart. As a result, I’m constantly thinking about how to balance all of the interests of the NBA, colleges and individual players while maintaining a high quality on-the-court product at all levels of the game.

Dallas Mavericks owner Mark Cuban recently touched off another debate about “one-and-done” players in college basketball and whether they would be better off going straight to the NBA Developmental League:

“I think what will end up happening — and this is my opinion, not that of the league — is if the colleges don’t change from the one-and-done, we’ll go after the one,” Cuban said. “The NCAA rules are so hypocritical, there’s absolutely no reason for a kid to go [to college], because he’s not going to class [and] he’s actually not even able to take advantage of all the fun because the first semester he starts playing basketball. So if the goal is just to graduate to the NBA or be an NBA player, go to the D-League.”

Notwithstanding the fact that Cuban erroneously assigns blame to the NCAA for not allowing players to enter into the NBA Draft immediately out of high school (that’s completely an NBA collective bargaining rule), what’s interesting over the past couple of days is that I’ve seen a lot of both NBA and college basketball fans agree with this sentiment. To the extent that they are in separate camps, NBA fans generally just want to see the best players in the pros ASAP, while college fans hypothetically don’t want to spend time worrying about players that are only going to spend a year on campus.*

(* Granted, I believe most college basketball fans are being disingenuous about this issue. If a bunch of freshmen can lead your favorite team to the national title like Kentucky in 2012, you generally get comfortable with the one-and-done concept pretty quickly. Most college basketball fans complaining about the practice are grousing about teams or rivals other than their own.)

However, while I generally sympathize with Mark Cuban and the basketball fan masses on a lot of issues, this is one area where I believe a lot of people are having collective amnesia of what both the NBA and college basketball looked like in the early-2000s before the NBA age limit was put into place. Simply put, basketball at both the pro and college levels sucked back then. The NBA was drafting high schoolers such as Kwame Brown in the lottery based on raw athleticism that were thrown into the league prior to being ready, which created a sloppier and less polished on-the-court product. Meanwhile, the college ranks were depleted of a critical mass of top-level players in a way that ended up pushing down the quality of the play across-the-board. Even if the one-and-done year gets transferred to the D-League as Cuban proposes, this can have a disastrous effect on both the pros and college levels.

This issue is a tough one for me because I’m someone that normally believes that if you’re good enough to perform a job or task, you should be allowed to do so regardless of your age. Yet, basketball seems to be the one area the laissez faire approach has proven to not work because of the nature of the sport. The main problem is that virtually everyone involved in the NBA Draft process needs to be protected from themselves (as the system provides incentives for everyone to take actions that are detrimental to the quality of the game overall). If I had faith that the only high schoolers that NBA general managers would draft were like LeBron James that were ready immediately at age 18 and, at the same time, only high schoolers that were of a LeBron-quality entered the draft into the first place, then it would be easy to say that anyone should be able to go to the pros immediately. However, we have empirical proof from the early-2000s that this simply doesn’t happen. Basketball, unlike football and baseball, is a game where obtaining an individual star matters more than anything. In contrast, stars in football and baseball might be important, but depth generally trumps stardom.

As a result, NBA GMs were (and still are) significantly more mortified about missing out on the next Kobe Bryant or Kevin Garnett compared to their football and baseball counterparts (and it makes sense considering the type of superstar that you need in order to viably compete for the NBA championship) and they overvalued raw athleticism in high schoolers back in the early-2000s. Meanwhile, top high school players saw all of their AAU buddies getting massive paydays at age 18, so anyone with a prayer of getting into the draft jumped in (whether it was by their own volition or pressure from family members and/or street agents looking for a financial meal ticket). This created a vicious cycle where NBA GMs were taking unproven high school players based on raw athleticism with lottery picks that were previously used on seasoned college players (many of which were already household names by the time they entered the draft), such lottery picks were getting stuck on the bench with high bust rates as opposed to contributing right away, and college programs were left with the scraps. Blowing a top 5 pick in the NFL or Major League Baseball is not a good thing for a GM, but it’s at least recoverable or mitigated if the team has the right depth. In the NBA, though, blowing a top 5 pick can mean that your franchise is set back for a decade… and we saw a whole lot of NBA franchises blow their top 5 picks in the early-2000s.

The current one-and-done system, while imperfect, at least provides a checkpoint for all parties involved: NBA GMs can watch players compete against people other than 5′ 11″ power forwards in high school (like I was back in the day) in pressure situations, while the players themselves get a reality check of where their skills really stand. Unfortunately, shifting the one-and-done year to the D-League in the manner that Cuban suggests would likely bring up the same problems as the old open NBA Draft without an age limit. NBA franchises would go back to drafting raw prospects (now for the D-League) as opposed to obtaining the best players that are ready for the NBA immediately, while top high school players will get delusions of grandeur and/or chase after the easy paycheck.

Note that Mark Cuban isn’t really proposing anything new: 18-year olds already have the option of giving up their NCAA eligibility and spending a year in the D-League (such as P.J. Hairston, who left UNC in the middle of the season this year and is now playing with the Texas Legends) or Europe (a la Brandon Jennings). So, why aren’t top players choosing that option en masse? Part of it is that the special branding in college sports matters quite a bit, as outlined by Dave Warner of “What You Pay for Sports” (who happens to be an outspoken critic of the cable subscriber fees that people pay for sports networks). As Warner stated about why minor leagues in basketball and football haven’t been successful financially:

Minor league basketball has had a bit more traction — the Continental Basketball Association survived for decades as an NBA minor league before finally folding in 2009 — but it doesn’t come close to outdrawing big-time college basketball. Go to any NBA D-League game, and you’ll be lucky to find a few thousand fans in the stands. More importantly, you won’t find the top high school prospects at those games. Jabari Parker gets more attention playing for Duke than he would playing for, say, the Fort Wayne Mad Ants.

This is where we begin to understand the status quo. What we have here is an issue of branding. Minor league football and basketball have no traction in America, because fans have declared their loyalty to the brands of college football and basketball teams. College football, in particular, has a century’s worth of rich history in America. College students attach themselves to their schools’ teams, remain attached through adulthood, and spread those attachments to children and other family members. You can’t sell the Omaha Nighthawks to an army of die-hard Cornhuskers fans. They’ve spent decades engrossed in the University of Nebraska’s football team and all of its traditions. Supporting a group of guys trying to play their way into the NFL is not enough. These people demand Nebraska football.

The point about Jabari Parker getting more attention playing for Duke than the Fort Wayne Mad Ants is particularly exacerbated in the NBA context even compared to the NFL because it relates back to the star system that’s inherent in pro basketball specifically. While Jabari Parker might get more specific basketball-focused training, avoids having to go to class, and even would earn a paycheck in the D-League, the exposure that he gets with nationally-televised games of Duke and constant SportsCenter highlights aids his own personal brand off-the-court and the long-term financial effects of that could vastly outweigh a year’s worth of earnings in the D-League. In turn, the NBA itself benefits from this as it gets to leverage the pre-made stardom of players like Jabari by the time they enter the draft, which creates further interest in the league. That aspect was completely lacking in the early-2000s (with the exception of LeBron, who legitimately was a household name by the time he graduated from high school) and we’d go back to that malaise if top players enter the D-League and Europe instead of going to college. The NBA has a golden goose here that it ought to be extremely wary of messing with again.

To that end, the best approach going forward is the simple one that new NBA Commissioner Adam Silver has already suggested: raise the NBA age limit to 20. That effectively means that top high school players would need to play 2 years of college basketball prior to entering the draft. While that might delay the LeBron-types from entering into the league even further than now, the early-2000s should have shown everyone that the LeBron-types are so rare that the NBA needs to care more about its year-to-year product as a whole. That requires another year of vetting in college in order to separate the proverbial wheat from the chaff along with building the anticipation of stars like Jabari Parker even further. At the same time, college basketball programs get the benefit of having top players for at least 2 years, which is a good balance between having such players on campus for a long enough time that programs feel confident in investing time and money into them while being short enough to prevent holding back the true superstars from going to the next level for too long.*

(* I’ve seen a number of people suggest that the NBA approach the draft in the same manner as MLB, which is that high school players can either choose the enter the draft immediately or go to college for at least 3 years. While it’s not a bad suggestion, I disagree with it as applied to basketball because of the nature of the sport that I’ve noted above. All that would happen is the same thing that occurred in the early-2000s, where every high school player convinced that he’ll get drafted will enter the draft and NBA GMs will be de facto forced to pick them out of fear. That would lead the exact same on-the-court quality problems that we saw in that era. Plus, the MLB draft goes for 50 rounds and GMs are generally rewarded for building depth as opposed to getting a single superstar. In contrast, the NBA draft is the reverse where there are only 2 rounds, GMs are rewarded for finding a single superstar instead of building depth, and the practical reality is that only 15 or so players in any given NBA Draft ever becomes a regular rotation player (much less a superstar or even a starter). The simple numbers show that the opportunity cost of foregoing college eligibility is several magnitudes greater for basketball player compared to a baseball player. As much as I hate paternalistic rules, this is exactly why people in the basketball world need to be protected from their own worst instincts.)

So, that’s why I support raising the NBA age limit to 20-years old. It’s long enough for the NBA to get a solid evaluation of players and colleges to obtain the benefit of having top players on campus, yet short enough for the legitimately elite players to get into in the NBA relatively early. The next step is to get both the NBA and NCAA on the same page on this matter, which is probably the most difficult piece of all in this entire discussion.

(Image from Sports Illustrated)

When it comes to conference realignment-related lawsuits, every school that has left a conference has attempted to claim that it owes nothing in exit fees. In turn, every conference has attempted to claim that the defecting school owes every single penny. Ultimately, though, it’s all a dance to get to a settlement (as is the case in 99% of all lawsuits as a general matter) and the parties invariably meet somewhere near the middle.

As a result, Maryland’s new counterclaim filed on Monday against the ACC (see the full complaint here) needs to be viewed through that prism. Maryland is now claiming that the ACC is liable for $157 million, which reflects treble damages for allegations of anti-competitive behavior (which we’ll get to in a moment). The ACC’s original claim states that Maryland owes the entire amount of the $52.2 million exit fee that the conference passed a couple of months prior to the Terps defecting (although Maryland and Florida State voted against it). The reality is that Maryland doesn’t truly believe that the ACC is going to pay $157 million and the ACC doesn’t truly believe that Maryland will pay the full $52.2 million exit fee. It’s just that they can’t say anything less along those lines in court or public or else they’ll lose a massive amount of leverage.

The headlines for the counterclaim focus on two tantalizing allegations that the ACC (1) attempted to recruit 2 Big Ten schools after Maryland announced that it was leaving and (2) received “counsel and direction from ESPN” on expansion targets. Now, my semi-educated guess is that these allegations are blowing some fairly mundane conversations out of proportion. Conferences are constantly recruiting schools, as the Big Ten has done quite a bit over the past several years. The word on the street is that Penn State was definitely one of the Big Ten schools that was contacted, while Northwestern appears to be the most likely other target. Note that Maryland stated that the ACC did not recruit any schools west of the Mississippi River (which was a distinction to bolster their argument that the “relevant market” that needs to shown in antitrust cases was as limited as possible and that the ACC had market power in such market), so it looks like the ACC didn’t want to go after Minnesota, Iowa or Nebraska.  Regardless, the fact that representatives from Wake Forest and Pittsburgh* attempted to recruit Big Ten schools in and of itself doesn’t mean very much other than showing that there’s no limit to John Swofford’s hubris. Pitt’s president calling up Penn State’s president with a “Want to join the ACC, bro?” inquiry and quickly getting rebuffed is a recruitment on paper, but it never went anywhere. The real test is whether there was any evidence of reciprocal interest (i.e. the Big Ten entering into confidentiality agreements with multiple ACC schools besides Maryland in 2012) and Maryland didn’t present anything to that effect.

(* It’s not surprising that Wake Forest and Pitt were chosen as the schools to put out feelers because they are probably the last two schools from the ACC that would garner any interest from the Big Ten. Now, that doesn’t mean that there’s anything wrong with them, but rather they are the two schools that do the least to fill what the Big Ten specifically would be looking for in expansion. Wake is a small enrollment undergrad-focused private school that shares its state with 3 other schools with larger fan bases, while Pitt is the only ACC school that is located in a current Big Ten state and wouldn’t bring any new markets to the table. Everyone else in the ACC would bring in a new TV market and recruiting territory to the Big Ten at a minimum putting aside any academic and cultural fit issues.)

At the same time, ESPN’s “counsel and direction” isn’t unique to the ACC. While I have seen a number of people try to argue today that the ACC is an “ESPN property” while the Big Ten is a “Fox property”, this belies the fact that ESPN’s top college football package still consists of the Big Ten’s first tier rights, the Big Ten continues to receive more money from ESPN than the BTN even under an older pre-sports rights boom contract, and Disney will very likely be paying a monster amount (as in the largest contract in college sports history) to retain those rights sooner rather than later (which is a topic for another day). The reality is that ESPN is having these types of conversations with everyone. If the ACC lobs in a call to Bristol and asks whether they’d be willing to pay more if they added Penn State, they’re probably giving an honest affirmative answer. Likewise, if anyone thinks that Jim Delany and the Big Ten didn’t have the exact same conversations with ESPN about what they’d be getting if Maryland and Rutgers joined (the latter being the old Big East that had all of its rights owned by ESPN), then that’s a serious case of naivete. That doesn’t mean that ESPN is actually directing conference realignment decisions, although it highlights the substantial conflict of interest that ESPN has by having so many contracts with a multitude of competing parties.

Separately, it appears that the quote of former Boston College AD Gene DeFilippo in Boston Globe after the ACC added Syracuse and Pittsburgh, where he says, “We always keep our television partners close to us. You don’t get extra money for basketball. It’s 85 percent football money. TV – ESPN – is the one who told us what to do. This was football; it had nothing to do with basketball,’’ will probably live on in infamy for the foreseeable future in conference realignment lawsuits. Granted, my belief is that the quote is taken a bit out of context where the emphasis that DeFilippo was likely trying to get across was that ESPN was telling conferences that football was worth more than basketball as a general matter as opposed to providing actual membership directions, but it shows that the public will pounce on any hint of meddling from Bristol because they want to believe that ESPN constitutes the Conference Realignment Illuminati behind every move.

For all of the lawsuits, mudslinging and public posturing, we’re probably going to see the ACC and Maryland end up splitting the baby in a settlement in relatively short order. Absolutely no one involved – Maryland, the ACC, the Big Ten, ESPN – wants anything to do with this matter going to trial. A year ago, I thought that this would settle for between $25 million and $30 million, and that still seems to be the likely outcome from my standpoint.

(Image from Fansided)

Time is a bit cramped this week with Thanksgiving upon us, so I’ll be tackling one mailbag question below this week. Also, I need to wallow a bit in my misery about Derrick Rose being out for the rest of season with a torn meniscus in his right knee after having just been out for 18 months for a torn ACL in his left knee. If you were following my Twitter feed on Friday night when the injury occurred, you probably were hoping that I didn’t have access to any sharp metal objects – it was a dark, dark evening. As a 35-year old Chicago sports and Illini fan, I’ve seen more than my fair share of debilitating sports moments, but nothing has been as bad as these back-to-back Derrick Rose injuries. I had dreamed of the Bulls somehow landing D-Rose in the draft back when he was still not even halfway done with his high school career at Simeon and the night that the franchise won the 2008 NBA lottery with a 1.7% chance was the greatest off-the-field sports moment that I had ever witnessed (if that makes sense). By the end of his rookie season, he had quickly vaulted to one of my 5 favorite athletes of all-time (the others being Michael Jordan, Walter Payton, Frank Thomas and Illini era Deron Williams). So, this has been an excruciating process to witness and there’s a palpable feeling here that Rose may end up on the list of “What might have been?” athletic enigmas such as Gale Sayers, Bill Walton and Bo Jackson. From an overall Bulls team perspective, the franchise is now in the “basketball hell” danger zone where they’re not good enough to win a championship yet not bad enough (even with Rose being out and presumably trading Luol Deng and his expiring contract) to realistically tank to get a legit shot at a top 5 lottery pick in next summer’s loaded draft. (Granted, I’ll keep praying for the sports gods to throw us the bone of Rose’s fellow Simeon alum Jabari Parker ending up in a Bulls uniform.) In summary, thank goodness for the Blackhawks!

Now for our mini-mailbag question for the week (with a full-blown mailbag coming after Thanksgiving):

Yes, I believe that it’s inevitable for the playoff system to go to 8 just as it was only a matter of time that we went from 2 teams playing for the championship to a 4-team playoff. I would never have said that 2 years ago, but the tea leaves are there for further playoff expansion. Now, as I had intimated in playoff system proposals posts previously (such as this one about a hypothetical 4-team playoff system 3 years ago that actually turned out to be fairly close to what the CFP will look like), the critical question is, “Does this make sense for the Big Ten and SEC?” Anyone can slap together a playoff system that he or she personally would like to see, but the challenge is always about whether the power conferences would ever agree to it.

In this case, there’s a fairly heavy incentive for the power conferences to eventually expand the playoff to 8 teams if they can do the following: all 5 power conference champs would receive an auto-bid. That provides a host of benefits for the power conferences compared to the 4-team system, such as (a) a guaranteed playoff slot annually and all of the money that comes with that, (b) guaranteeing that their respective conference championship games become de facto annual playoff games under their complete control and all of the money that comes with that and (c) making each divisional race within each of those power conferences have national title implications in a way that would increase the competitive and media value of the regular season and all of the money that comes with that.*

(* Yes, I know that the Big 12 can’t take advantage of (b) and (c) as of now. We’ll see how long that lasts, as noted in my last post.)

Going one step further, there’s also an easy and logical framework to get that in place by using the bowls and their traditional bowl tie-ins:

Rose Bowl: Big Ten champ vs. Pac-12 champ
Sugar Bowl: SEC champ vs. at-large
Orange/Peach Bowl: ACC champ vs. at-large
Fiesta/Cotton Bowl: Big 12 champ vs. at-large

If that looks familiar, it’s because I proposed that system in one of the earliest posts on this blog over 7 years ago. The irony is that this playoff system could expand the number of participants to 8 yet the bowls would actually revert back to their traditional roots more compared to the current 4-team system (i.e. there is truly a traditional Rose Bowl every year no matter what). In essence, it’s both progressive and traditionalist. Just imagine what a TV network would pay for those 4 games split up on New Years Eve and New Years Day, 2 semifinal games a week or two later, and then the national championship game on the open Sunday between the NFL’s conference championship games and the Super Bowl.* The Big Ten, Pac-12, SEC and Big 12 are all already receiving $40 million per year for their top non-playoff bowl contracts above and beyond what they’re receiving for the 4-team playoff, so there really isn’t any cap for how high those rights fees can go if those games are converted to single elimination playoff games. That’s going to be really difficult to resist.

(* Yes, these games are getting played in January as opposed to the common fan request of playoff games during December. Note that December TV ratings are materially lower than January TV ratings, the bowls are a contractual mechanism that allow the power conferences to maintain control over the postseason, and the platitudes that university presidents, conference commissioners and athletic directors have given about the length of the football season are mind-bogglingly disingenuous considering how much they have all whored themselves for the almighty dollar in almost every other conceivable way. Drawing a line in the sand about 2 or 4 teams at the most playing beyond New Years Day is completely arbitrary, especially considering that the other revenue sport of men’s basketball has a season that runs from Midnight Madness in October to the national championship game in April.)

Access for the non-power conferences would likely be a hot topic, although I’d have a hard time seeing the power conferences automatically giving them a national championship playoff slot every year.* There might be some type of provision similar what is with the current BCS system, where a top 12 non-AQ champ or top 16 non-AQ champ that ranks higher than an AQ champ would get a bid.

(* Yes, I know that’s not necessarily fair when the power conferences automatically get their own slots while the non-power conferences don’t receive automatic access. Like I’ve said, what matters in reality is what the Big Ten and SEC would agree to.)

I also have a difficult time seeing a playoff ever going beyond 8 teams (and an NCAA Tournament-style system that provides an auto-bid for every conference would be a non-starter for the powers that be), so any traditionalist arguments about further “bracket creep” are tougher to take seriously at that level. The power conferences can get favored access status for their conference champs and preserve or even enhance the financial values of their respective regular seasons, conference championship games and bowl tie-ins under an 8-team system that wouldn’t be possible in a 16-team scenario. The facts that (a) the 8-team playoff that I described above is such low hanging fruit financially with relatively little disruption to the current setup and (b) there will inevitably be controversies arising from who gets in and who gets shut out of the 4-team playoff are going to be driving forces behind an eventual expansion of the playoff system. The powers that be can state all that they want that the current CFP deal will go the full 12 years, but there will surely be an assessment in a few years about what an 8-team playoff would be worth in the marketplace that will open their eyes to change once again.

We’ll get to some other mailbag questions about the state of college sports and conference realignment soon. Until then, Happy Thanksgiving!

(Image from Wikipedia)

For the past year, I’ve been pointing out that conference realignment really hinges on three primary schools: Texas, Notre Dame and North Carolina. The first two are fairly obvious to football-focused fans, but UNC is really the true lynchpin to the ACC. So, it was interesting to see the emails that were circulated within the UNC leadership ranks in the wake of Maryland’s defection to the Big Ten last year that The News & Observer procured. Here are some key excerpts and my thoughts:

Emails to and from Cunningham, the UNC athletic director, reflect the uncertainty that fans, boosters, administrators and Cunningham himself shared in the days after Maryland announced its decision to leave the ACC. Financial concerns drove the speculation surrounding conference realignment. According to Maryland, those concerns also drove it out of the ACC.

Hours after Maryland announced its move, Sports Illustrated posted a story on its website that detailed how much more money Maryland would make in the Big Ten. The first paragraph read: “The University of Maryland stands to make nearly $100 million more in conference revenue by 2020 with its switch from the ACC to the Big Ten. …”

Martina Ballen, the Chief Financial Officer of the UNC athletic department, emailed the link to Cunningham and UNC’s associate athletic directors. She included a short note: “Wow! Big $$$ if this is accurate.”

***

Other emails Cunningham received expressed shock that Maryland would leave, and they questioned whether the money in the Big Ten was that much greater than in the ACC. One came from Cappy Gagnon, a longtime Notre Dame athletic department employee who retired in 2011.

“I don’t get this one,” Gagnon wrote to Cunningham, who started his college athletic administration career at Notre Dame. “Maryland is going to be nobody in the Big Ten, with zero natural rivals and long travel. Is the money from the Big Ten Network that much greater than the ACC TV money?”

Cunningham’s response: “Yes. Likely $20 (million)/yr by 2017.”

This was one of the more surprising points in the sense that there seemed to be a genuine lack of knowledge among top level people of how much more of an advantage in TV money that the Big Ten had (and continues to have) over the ACC. That wasn’t something isolated to UNC – recall that University of Maryland President Wallace D. Loh stated that he was “stunned” at the Big Ten’s financial projections and didn’t realize the extent of the financial disparities between conferences until going through realignment discussions. It would have been one thing if these were average sports fans just focused on on-the-field results, but it’s quite amazing that university leaders and athletic department officials didn’t seem to be as informed on college sports financial matters as, say, most of the people reading this blog or those that followed the reporting of mainstream media members like Brett McMurphy of ESPN.com, Andy Staples of SI.com and Dennis Dodd of CBSSports.com. It’s an indication of the insularity of many universities and athletic departments and partially explains why the inertia in favor of the status quo is often stronger than many conference expansionistas would like to believe. What we’re seeing is that it takes a real external crisis for the vast majority of power conference schools to take notice of the information that’s out there and consider switching leagues. (Note that this thinking doesn’t apply to the “Group of Five” non-power conference schools, who are going to be continuously and unabashedly actively looking for greener pastures.)

Cunningham had no shortage of input. A steady stream of emails from alumni, fans and boosters began on Nov. 20.

The notes came from everywhere: from people who graduated from UNC in the 1960s, and those who graduated in the past few years. Former athletes wrote in. There were Rams Club members. And emails from fans who had no tie to the school other than their allegiance.

One came from an Army major who wrote of how he’d followed UNC athletics throughout deployments in Afghanistan and Iraq. He expressed concern about a conference move and wrote, “I will always love Carolina, but my fervor towards our athletic programs would die a rapid death should we choose to enter the BIG TEN.”

The emails – many coming after UNC fans on the message boards at InsideCarolina.com organized a push to fill Cunningham’s inbox – shared roughly the same sentiment: Lead the Tar Heels out of the crumbling ACC, to a better place. The overwhelming majority of fans preferred moving to the SEC. Among the more than 150 pages of emails that Cunningham received in the 10 days after Maryland’s announcement, only one email favored joining the Big Ten.

This isn’t a shock that UNC fans preferred a move to the SEC over the Big Ten, as many purely sports-focused fans are generally ignorant or dismissive of the desire of university presidents to tie academic prestige to athletic conferences along with the TV dollars involved. As I’ve stated in previous posts, this plays to the ACC’s advantage in terms of retaining UNC: Tar Heel fans want a Southern-based athletic league, but university leaders care much more about being with their academic peers and maximizing revenue. So, the ACC provides the right balance of being Southern-focused (unlike the Big Ten) and having academic prestige (more so than the SEC).

And so it went, day after day. The most dire speculation was that Florida State and Clemson might also leave for the Big 12. The possibility came up in communication between Cunningham and Dean Jordan, an ACC consultant who specializes in TV rights contracts.

Jordan, who works for the Wasserman Media Group, worked closely with Swofford and helped convince Florida State and Virginia, among others, that the grant of rights agreement would help secure the ACC’s future. Jordan also discussed with ACC schools the possible benefits of developing a TV network devoted to ACC coverage.

Back then, in the days after Maryland’s announcement, Jordan was like everyone else, trying to figure out whether Florida State might actually leave. In an email to Cunningham on Nov. 21, Jordan wrote:

“FSU’s life won’t greatly change in the Big 12. The Big 12 TV deal is pro-rata for any new member and their TV distribution is only about $1 (million) more than the ACC. The Big 12 is going to take in $13 (million) more in BCS money – around $1 (million) per school.

“So for $2 to $3 (million) bucks, FSU is going to go through the trauma of switching leagues?”

The Wasserman consultant crystallized what I had always thought about the prospect of Florida State and Clemson going to the Big 12: it just didn’t make sense when you just took a step back and saw what was involved. The Big 12 might have had the advantage in pure on-the-field football performance over the past several years, but that league is a paper tiger in off-the-field conference realignment discussions compared to the ACC and other power conferences. Florida State might have used discussions (or the rumors of discussions) with the Big 12 as leverage to get an audience with the SEC and Big Ten, but the Seminoles were never seriously considering actually joining the Big 12.

Cunningham didn’t just receive emails from interested colleagues and panicking fans. On Nov. 25 – six days after Maryland announced its move – former University of Cincinnati NCAA faculty athletics representative Frederick Russ wrote Cunningham in hopes of bolstering support for Cincinnati.

Russ and Cunningham spent time together days before at the Maui Invitational in Hawaii.

“As I mentioned in Maui, I’ve been hearing all kinds of rumors about which schools the ACC might seek to add, and I wanted to let you know why I think adding the University of Cincinnati to the ACC would benefit the conference and both UNC and UC,” Russ wrote, before listing his reasons.

The ACC, though, already was finalizing its plan. Less than two weeks after Maryland announced that it would be leaving for the Big Ten, the ACC on Nov. 29, 2012 announced that it was replacing Maryland with Louisville. About five months after that, the conference had secured a grant of rights agreement, which effectively put an end – at least for the foreseeable future – to speculation and rumors that were never more prevalent than in the days that followed news of Maryland’s impending departure for the Big Ten.

Give Cincinnati credit for this: that school has been tireless in getting its message out for conference realignment purposes and taking nothing for granted. To be honest, I didn’t even really consider Cincinnati to be a viable ACC candidate in the immediate aftermath of the Maryland defection, but they managed to at least shoehorn themselves into the conversation when all was said and done (despite the fact that Louisville was ultimately chosen). Being aggressive in and of itself isn’t going to change a school’s position in conference realignment, but with the insularity among university and athletic department officials that I described above, taking every opportunity to highlight successes and future facilities plans (particularly in football) to the right people is critical. Louisville (Cincinnati’s competition) did just that over the past couple of years and went from being a marginal ACC candidate and possibly being left out of the power conference picture completely to grabbing the last spot in the ACC against formidable athletic (at least in basketball) and academic competition (UConn). Keep an eye out on Cincinnati when (not if) the Big 12 inevitably comes to the conclusion that it needs to expand.

All-in-all, the UNC emails highlighted the consternation that school officials and fans feel in times of conference realignment instability. As much as people like me are interested in the topic, I can certainly understand that no one in a leadership position likes dealing with periods of high stakes uncertainty. That being said, UNC is one of the few schools that is legitimately in control of its own destiny – both the Big Ten and SEC would take them in a heartbeat. The worst case scenario for the Tar Heels is that they are forced to join a league against their will that is wealthier and more powerful than the ACC itself. A fellow ACC school like Wake Forest, on the other hand, would feel quite a bit differently in the face of a conference collapse (just as Baylor, Iowa State, Kansas and Kansas State feared back in 2010 and 2011 with the Big 12 defections and UConn, Cincinnati and USF feel today in not being able to escape the then-Big East (now AAC). Schools will continue to place quite a bit of value on stability even if there is the possibility of larger dollars elsewhere.

(Image from Now I Know – It’s Gotta Be the Shorts)

Let me upfront: I’m an unabashed free market capitalist. I’ve never been bothered by TV contracts, conference realignment, ticket prices, rising salaries for coaches and players, sponsorships and the multitude of other financial issues in pro and college sports that fans generally complain about at face value (but then turn around and feed that money monster by continuing to watch games). At the same time, I have long given up the delusional notion that college athletes (at least in football and basketball) are somehow still pure amateurs. We crossed the proverbial bridge of top college conferences being semipro leagues a loooooong time ago. Finally, I’ve generally supported how Big Ten commissioner Jim Delany has led the conference in exploiting new revenue opportunities and expansion (as long as we can forget that whole “Legends” and “Leaders” debacle).

So, I have no issue at all with money flowing through college sports and institutions profiting from high profile teams. Let’s stop pretending that it’s (a) not already happening at a rate on par with the pro leagues and (b) inherently a bad thing. What I have a massive problem with, though, is that this money isn’t flowing at all to the people that are generating all of this revenue. I’m a firm believer that people should be compensated in accordance with their free market value*, and in today’s world, college football and basketball players at the top level aren’t getting paid that way.

(* Note that I don’t look at over-compensation or under-compensation in absolute dollars in the way that much of the populist public likes to do. LeBron James, for instance, is a clear example of someone that is underpaid. If there weren’t the artificial restraints of the NBA salary cap and collective bargaining agreement, he would be making much more than his current $19.07 million salary. That doesn’t even take into account the fact that he’s the rare athlete that can single-handedly increase the value of a franchise by hundreds of millions of dollars and sellout all arenas that he plays in. Even though LeBron’s salary for a single game (much less an entire season) is more than what 99% of American households earn, he is still underpaid in comparison to what his true value is in the marketplace. In contrast, there are minimum wage earners that are making more than what the free market would dictate if that artificial floor weren’t in place, so they would arguably be overpaid.)

With the “pay for play” issue not going away in college athletics, Jim Delany stated that he would like to see football and basketball players be able to sign with leagues directly out of high school in the same way that baseball players do. From ESPN.com:

“Maybe in football and basketball, it would work better if more kids had a chance to go directly into the professional ranks,” Delany said. “If they’re not comfortable and want to monetize, let the minor leagues flourish. Train at IMG, get agents to invest in your body, get agents to invest in your likeness and establish it on your own. But don’t come here and say, ‘We want to be paid $25,000 or $50,000.’ Go to the D-League and get it, go to the NBA and get it, go to the NFL and get it. Don’t ask us what we’ve been doing.”

What Delany states isn’t necessarily wrong conceptually, but there are tons of issues from a practical standpoint and he’s ultimately being disingenuous and further exposing much of the hypocrisy of college sports:

(1) The Interests of the NFL and NBA Ultimately Rule – The power brokers in college sports can complain all that they want, but the NFL and NBA need to be convinced that it’s better for them to pay for and build minor league systems on the scale of Major League Baseball. I’ve seen plenty of arguments that the NFL and NBA could expand create such systems, yet it’s hard to see why it’s better than the current college model from their perspective. Unlike baseball, the NFL and especially NBA have long had a greater need for their athletes to come into the league as ready-made stars and that’s only exacerbated in this social media-driven world. Such star power simply isn’t incubated well in minor league settings at all (as seen in baseball and hockey). College football and basketball provide vehicles where sports fans are introduced to top players on a first name basis and can step in immediately at the next level.

Plus, lest we forget, the NBA tried the “direct from high school” route not too long ago and the results were pretty abysmal. Too many high school players were jumping into the draft that weren’t ready, which meant that (a) lottery slots that used to go to well-known college stars were being taken up by unknown (at least to the general public) speculative draft picks based on raw athleticism with little regard to skills and (b) on the flip side, other high school players that would have been aided by some college experience got drafted lower than expected or not at all and ruined their NCAA eligibility. The NBA wants nothing to do with going back to that model and, in fact, the owners would have pushed for a 2 years out of high school age minimum requirement (instead of the current 1-year standard) in the last collective bargaining agreement negotiations if there weren’t so many other fundamental salary and revenue-sharing issues to deal with. This gets to the next point…

(2) Players Need to be Protected From Themselves – On the one hand, it would be easy for a free marketer like me to try to apply real world concepts to the realm of sports to state that players and team general managers take risks with respect to the draft and then they need to live with the consequences. However, on the other other hand, that real world free market application fails because a draft is specifically not the free market. In fact, it is probably the most directly anticompetitive behavior that professional sports league participate in that they’re only able to get away with due to antitrust exemptions. American high school graduates aren’t free to negotiate directly with any team that they want to play for. Instead, a draft provides a finite number of spots in a predetermined order, which is the antithesis of a free market.

This means a “college or pro” choice isn’t exactly that simple. What Delany is suggesting is that a top high school prospect should be put into an “all or nothing” decision when he’s 17 or 18-years old: either he strikes it big in the pros or he completely loses out on a college scholarship, with very little in between. There are very few professions where this is the case. A software programming prodigy can try going to a startup firm out of high school, but if that startup fails, he or she can still go get a computer science degree or work at another company. That’s not how it works in football and basketball where you have one shot if you’re lucky. How many of you here would have had the emotional and fiscal maturity to make that type of decision at that age? Furthermore, how many of you would be able to make a mature decision if you were born into an impoverished environment with no access to a college education otherwise (like a disproportionate number of top football and basketball players)? What if you had family members that were leaning on you for financial support? What if you hired an agent that invariably overinflates your draft value (which played into your decision to enter to the draft)? When I see comments from fans to the effect, “These are decisions that these guys need to live with and they can do something other than sports if they don’t get drafted,” I believe they’re failing to see the context in which such decisions are made along with, in most cases, making that judgment from comparatively more comfortable catbird seats (whether it’s being older or living in a middle or upper class environment where the fallout from making a mistake in life is relatively mild by comparison).

The upshot (and once again, we saw this with the period of high school players going directly to the NBA) is that there are a whole lot more people that submit themselves to the draft prematurely (with devastating consequences) than there are guys that are truly ready. It would be one thing if only the Lebron-type talents would enter into the draft (in which case, allowing high school players into the draft would work), but we’ve seen firsthand that this simply doesn’t happen in the real world*. There are too many high school prospects that get bad information about their draft stock or are pressured into making money immediately to their detriment. That leads to the next issue…

(* Similarly, if NBA and NFL general managers would only draft LeBron-type talents, then having high school players going directly to the pros would work efficiently. As noted earlier, though, the problem is that those GMs then have to rely their draft analysis almost solely on raw athleticism, which leads to a much higher bust rate and a poorer quality product to watch on the field or court for fans.)

(3) The NCAA Needs to Provide a Safety Net for Players – If the NCAA sincerely believes that high school players need to be able to go directly to the draft, then the organization can’t turn around and punish such players (AKA taking away their college eligibility) for utilizing all of the tools and resources at their disposal to make a fully informed decision that will impact them for the rest of their lives. Jim Delany mentions players hiring agents and training firms like IMG, which is all well and good, but then the NCAA will take away their eligibility once they receive any agent benefits. A solid and reputable agent (not a guy off the street or, even worse, an emotionally invested family member) can probably give a player the most realistic analysis of anyone about draft position and long-term earning potential, yet the NCAA (via its rules regarding agents) is forcing athletes to make an all-or-nothing decision on eligibility before he can even receive that analysis. That’s not exactly equitable, particularly when the athletes are the ones in a much more vulnerable position compared to the NCAA and its members.

As a result, colleges ought to reevaluate its eligibility rules completely if it’s being sincere. Players ought to be able to hire agents freely, submit to drafts and play again in college if they fail to get drafted (or even choose to go to college if they get drafted in a lower position than what they wanted). Colleges turning their backs on these players would be wrong even if there weren’t billions of dollars at stake, which ties to the next point…

(4) Delany’s Money Flow is Backwards – Let’s look at the budgets of two sports teams:

BUDGET A: $124,419,412

BUDGET B: $500,000

If you were to plop down those figures in front of anyone that has the basic skill of knowing which number is higher, one would logically assume that the team with Budget A has a lot more money to pay players than the Budget B team. Well, Budget A represents the expenses of the Ohio State athletic department in 2012. Meanwhile, Budget B represents what used to be the annual operating cost of each individual team in the defunct NFL Europe, which was the minor league system that the NFL had run until 2007. A major difference on top of this disparity is that Ohio State brought in $142,043,057 in revenue (a profit of over $17.6 million). Meanwhile, NFL Europe was shut down since it was still losing money at the bare bones cost of $500,000 per team (which translated into a grand total of $3 million in costs for the entire 6-team league in 2007). To put this into context, the NFL minimum salary under the current collective bargaining agreement is $405,000. The last 8 bench players on the Bears’ depth chart make more than what was spent on the entire NFL Europe operation… and the NFL still lost money on it!

Call me crazy, but when Jim Delany states that the players should be going to minor leagues to get paid, he seems to have the money flow backwards. When the NFL itself isn’t willing to spend to fund an entire minor league system that costs less than the salaries of 8 bench players making the league minimum, you can see pretty clearly that the money isn’t there. The NBA D-League is run on a similarly shoestring budget. In contrast, the colleges are the ones seeing a massive revenue flow off of these young players, so it’s disingenuous of university leaders and conference commissioners to attempt to make the claim that the minors are where they ought to receive salaries. Texas A&M itself stated that it garnered $37 million worth of media exposure in connection with Johnny Manziel’s Heisman campaign last year, so one can imagine the financial impact of a national championship (or even better, the Heisman Trophy/National Championship combo that Cam Newton delivered to Auburn in 2010 – see Charles Barkley’s comments about how $200,000 that may or may not have been paid to Cam by boosters was a bargain) for a school.

So, sure, if colleges are willing to take reduced or no revenue for football and basketball in the same way that they are for baseball (where even the most elite programs make a fraction of their football and basketball counterparts), then I could see this argument from Delany sticking. However, let’s not be naive to think that there is a vastly different playing field for football and basketball in reality.

Now, I realize that there are Title IX, employment and other issues that come into play in the event that colleges start paying athletes. It’s not as easy to institute as most supporters of the concept would like it to be. However, that doesn’t mean that we should allow colleges (even if we love them as our alma maters) to get away with such blatant hypocrisy toward money. It’s time to ditch the faux amateurism and either go all in on college sports being a massive money-making enterprise or take a Division III approach.  If that means paying every athlete (from members of the football team down to the women’s water polo team) in order to comply with Title IX, then that’s a heck of a lot better than not paying anyone. Once again, I have no issue with the money flowing through college sports at all. The only thing that I want to see is that it flows down to the people that we’re actually cheering for as fans.

(Image from USA Today)

As promised, we continue to empty out the mailbag (click here for Part I):

Frank,
One of your theories is that if the Big 12 dies, Texas would try for a partial member deal like Notre Dame in the ACC instead of becoming an equal member of another conference. I had agreed with that theory up until Texas A&M exploded onto the national scene at the end of last year and has remained there ever since. Texas is going to make its money anywhere but playing 2nd fiddle to its state rival has to be a blow to the powers that be at UT. I don’t think playing a half ACC schedule mixed with a couple of 2nd tier Texas schools is going to offer enough pub to compete with A&M and the SEC especially with the coming difficultly of scheduling with conferences going to 9 games. Does Texas A&M success, and more importantly attention, change your thoughts on the future of UT? – PSUhockey

Very interesting question. I think that A&M’s success can definitely impact the long-term prospects of Texas, but that it’s a separate issue from the particular conference that UT is in (or if it’s an independent, not in). A lot of sports fans may be looking at the Big 12 through the prism of its relatively good on-the-field football success over the past few years, while the ACC has had arguably its weakest stretch over the exact same period. However, I’d argue that Florida State, Miami, Virginia Tech and Clemson at the very least are more valuable football opponents than any Big 12 school outside of Oklahoma. Personally, I’d put UNC, NC State and Georgia Tech ahead of anyone non-OU Big 12 school purely for football, as well. So, if Texas keeps the Red River Rivalry as an independent, plays 1 or 2 of its fellow in-state Texas schools not named Texas A&M, has a similar 5-game partial ACC schedule like ND and then fills out the rest of its schedule in a manner that’s similar to now, I think that’s very attractive compared to the normal Big 12 schedule for the long-term. We’re not even getting to basketball and baseball, where the ACC is extremely powerful.

So, A&M could certainly put a serious dent in UT’s power (and if it’s not A&M specifically, it could be simply the increased presence of the SEC in the state of Texas), but that doesn’t necessarily correlate in Texas preferring the Big 12 over partial membership in the ACC. If anything, Texas might end up with acting in a way similar to how BYU responded to Utah’s invite to the Pac-12, where independence became mechanism to show how it was “special” compared to its in-state rival.

To me, Big East expansion to 12 schools is inevitable and ought to have happened already. The fact that Xavier AD Greg Christopher mentioned St. Louis, Dayton, Richmond and VCU as the prime candidates isn’t any surprise. SLU seems to be a lock – it’s a perfect institutional fit in a large market (by college sports standards) with a competent on-the-court basketball team. As I’ve stated previously, it’s really a matter of who comes along with SLU. I don’t see the Big East being interested in creating a nationwide conference with schools like Gonzaga and BYU – that’s an interesting fantasy for those purely focused on the basketball product, but it’s a non-starter for all of the other sports. So, Dayton, Richmond and VCU are really the well-worn “other” candidates, with the Big East’s consternation on each of them being that they have major flaws from the conference’s perspective (Dayton is in a smaller Midwestern market, Richmond has a small alumni base, and VCU would be the lone public school in a league of private institutions). It’s also difficult to see many other schools outside of that group that could have both a Butler-like ascent and the institutional and market profiles that the Big East is looking for. The only ones that come to mind are Davidson (which has a small size like Richmond but has had more recent on-the-court success and is located in a college hoops hotbed) and Duquesne (great institutional and market fit, yet they have zero on-the-court credentials).

If I were running the Big East, I certainly wouldn’t see Davidson or Duquesne as panaceas that are worth holding off expansion for. University presidents have proven to be a strange bunch in conference realignment decisions, though. To me, SLU is a lock to get into the Big East when it expands (and I say when because I just don’t see Fox being satisfied with the level of inventory and market coverage that the 10-team setup offers in the long-term), with Dayton as a slight front-runner for the 12th spot. Now, VCU might end up being too much to ignore if they have another Final Four run and, maybe more importantly, keep having fans showing up in droves in Brooklyn for the Atlantic 10 Tournament (as the Big East needs to maintain ticket buyers for its own tournament at Madison Square Garden). The public school profile is definitely a major problem for VCU’s candidacy, though. That factor can’t be underestimated with the Big East presidents.

For the long-term (the next 10 to 20 years), it probably won’t look too much different than now when it comes to U.S. spectator sports: (1) football, (2) basketball, (3) baseball and then a big dropoff to get to hockey and soccer. (This is different than levels of actual participation in sports, where soccer and basketball will likely dominate.) When looking at the metrics, basketball is clearly ascendant compared to baseball: the NBA Finals have been consistently drawing better ratings than the World Series, NBA players are more recognizable to the general public, neutral sports fans are more likely to watch an NBA game that doesn’t involve their favorite team than an MLB game without their favorite team, and, most importantly, the NBA viewing audience is younger and more diverse across economic and racial lines.

I wrote a piece on soccer’s issues with viewership back when David Beckham joined the LA Galaxy a few years ago and the main thrust of that post still holds true: viewership of soccer in the U.S. will be capped as long as Major League Soccer fails to import the best players in their primes like they do in Major League Baseball, the NBA and NHL. Americans want to watch the best of the best, which is why they’re willing to watch the U.S. Men’s and Women’s National Teams play in the World Cup and other international competitions, but aren’t interested in what they perceive to be minor league pro soccer compared to the English Premier League and other top European leagues.

Think of it this way: most sports fans can recognize the difference in the quality of play between an MLB game with a 1-0 score and a minor league baseball game with the same 1-0 score. Likewise, even relative soccer watching novices in America can see that the level of play in a World Cup or EPL match is vastly different than MLS. That’s why I’ve long said that the drag on soccer’s popularity in the U.S. has nothing to do with the supposed lack of scoring*. Instead, it’s that soccer is the main sport where we’re exporting the best players as opposed to importing them, which means we’re getting a worse product than other countries (unlike in basketball, baseball and soccer) and we know it. So, soccer can grow, but it will be limited as long as we don’t get to watch the best players here.

(* Scoring is an artificial construct, anyway. A 21-14 football score sounds a lot different than a 3-2 score (as in 3 touchdowns to 2 touchdowns) even if it reflects the same amount of on-the-field action. The “lack of scoring” argument for why Americans don’t watch soccer en masse is one of my sports pet peeves because it’s so simplistic and misses the larger picture.)

What will it mean for NCAA 14 that the conferences aren’t represented? – @Devon2012 

Ah, yes. Yet another toothless action by the NCAA and conferences in attempting to deflect criticism that they’re taking in billions of dollars on par with the largest pro sports entities in the world. I guess the NCAA has a bit more skin in the game since its brand is in the title of the game itself, but it’s pointless for the conferences to remove their names from video games, but then allow their members to continue to be included under their own separate agreements with EA Sports (and all but one of them have such agreements). We’re not talking about going to some Blades of Steel era logoless and nicknameless labeling of teams here: the Illinois Fighting Illini, Michigan Wolverines, Ohio State Buckeyes and all of their other conference-mates will be playing in a video game league that’s not named the Big Ten but everyone will recognize is the Big Ten. (I’m sure that EA Sports will simply use the mathematically correct “Big 14″.) Why the Big Ten, SEC and other power conferences give up their branding control when their member schools are still participating in the game is beyond me.

I don’t think ESPN and Fox are battling over conference realignment per se in the sense that the only conference where it really matters at this point for them is the Big Ten. In fact, the Big Ten’s next TV contract (which would start in 2016) is in an environment where it’s the only power conference that’s going out to the open market for the next decade, so ESPN and Fox (along with NBC and maybe even Turner) could fight for the conference with realignment being a tangential factor. At the end of the day, I believe that the Big Ten will end up with a Pac-12-style deal where the Tier 1/Top Tier 2 rights are split between ESPN and Fox and then the Lower Tier 2/Tier 3 rights go to the Fox-affiliated BTN, so neither ESPN nor Fox will push the Big Ten or the other conferences to do one thing or the other simply for the sake of TV rights. If anything, the last thing that ESPN and Fox would want is further realignment, as it has resulted in significantly higher rights fees that they’re footing the bill for. The Pac-12, Big 12, SEC and ACC rights are all locked up for a long time, so the networks are just going to end up paying more if any other schools end up defecting to the Big Ten.

Which is more likely for the NHL – expansion or contraction? Which NFL franchise(s) are most likely to land in LA? If none do in next 5-10 years, would NFL expand again? – John O

A couple of key overarching points about about pro sports realignment:

(1) Having an “acceptable” stadium is non-negotiable -  It doesn’t matter how attractive a market might be – if it doesn’t have the right stadium (which means having the requisite amount of luxury suites and sweetheart revenue streams), then it won’t be considered. (See the lack of an NFL team in LA for the past 2 decades.)

(2) The top 4 U.S. pro sports leagues will NEVER contract – Believe me – if I could wave a magic wand, there would be 8 to 10 NHL franchises eradicated tomorrow. However, when franchise values for even the worst pro teams in the worst markets are worth hundreds of millions of dollars, owners would rather (a) collect entry fees from new buyers of those dog franchises, (b) move those dog franchises to new markets with “acceptable” stadiums and (c) simultaneously scare current markets into building new “acceptable” stadiums in the process.

So, the first question is fairly straightforward at a high level – the greater likelihood for the NHL is expansion simply because contraction isn’t a viable option. That being said, when you dig down deeper, how much is it worth for any league to expand at this point? Most NBA and NHL franchises are better off using Seattle as a threat to current markets within their footprints to ram through new stadium deals than putting a team in Seattle itself. Leading into your next question, the NFL has used this type of threat better than anyone with the lack of a franchise in Los Angeles. Think about it if you’re Jacksonville, St. Louis or San Diego – if the NFL won’t put a team in LA for not having an “acceptable” stadium, then they sure as hell won’t care about you if you don’t have the right building.

The team that should move to LA is the Jaguars (nothing against Jacksonville, but it truly doesn’t make sense how that market has an NFL franchise), but it appears that their stadium lease is extremely difficult to break. That leaves LA’s two prodigal sons of the Rams and Raiders as frontrunners (franchises with aging stadiums and relatively low contractual barriers to deal with) along with the Chargers (a fairly short geographical move).

Of course, remember point #1: LA must have an “acceptable” stadium. That has always been the dilemma. The proposed Farmers Field in downtown LA near the Staples Center and LA Live had always made the most sense to me from afar since it presents the best opportunity to be a catalyst to further economic development in that area. Downtown LA still isn’t anywhere near as walkable as New York City, Chicago or San Francisco, but a football stadium is a logical addition to what the LA Live complex has already brought there. Unfortunately, that proposal seems to be dead right now.

The problem is that the massive size of the LA market almost works against it in an environment where getting the right stadium deal matters more than anything else in attracting an NFL (or any other pro sports) franchise. The LA market is so lucrative that tons of potential high profile investors want to get into the action, which means that the region as a hole continuously fails to coalesce around a single stadium proposal. The City of Industry and Orange County, for example, see Downtown LA as a competitive threat as opposed to a partner, so we’ve been seeing lots of stadium proposals from various municipalities and factions over the past two decades without any of them getting broad support. In contrast, smaller markets have a better ability to get behind a single proposal with little infighting.

I’ve been thinking that LA would have an NFL team within the next 5 years for the past 15 years, so while it makes sense to virtually everyone with half a brain, it’s pretty obvious that the NFL won’t budge whatsoever on the stadium issue even with a gaping hole in the #2 TV market in the country. Roger Goodell would rather work with markets that have top tier stadiums in place… like London*.

(* Look – I love London. It’s one of the few places that I’d ever consider moving to by choice from Chicago. However, Goodell’s continuous rhetoric about possibly putting a Super Bowl and/or team in London is wearying. The NFL needs to separate the interest of the American expat population in England that’s interested in the league with the fact that native Brits are unbelievably resistant to the overtures of U.S. sports leagues much more compared to other European countries. The most successful franchises in terms of attendance in the old NFL Europe developmental league were actually located in Germany, while Spain, France and many Eastern European countries are solid followers of the NBA. London simply isn’t a good growth spot for the NFL at all.)

Enjoy the upcoming games, everyone!

(Image from HitFix)

A message from a reader:

Well, I deserve that. I know it’s been a long hiatus here with the new college football and NFL seasons starting, over half of the Breaking Bad final season passing by and lots of twerking since my last post, so let’s get to answering some questions in part 1 of an overflowing mailbag Q&A:

There were a ton of “Division 4″ questions, so here’s a sample:

My overarching thought on the impact of the proposed Division 4* is (going along with the Breaking Bad theme) that there won’t be any “half-measures”. On the conservative end, this could be a straight-forward exercise for the football schools to get more leverage in rule-making (which is what Big Ten commissioner Jim Delany has intimated). Contrary to popular belief, the vast majority of FBS schools (from the SEC down to the Sun Belt) have been in favor of instituting full cost of attendance payments to athletes, whereas the main opposition has come from non-FBS Division I schools. If the impetus behind creating a Division 4 is to simply get more control over the NCAA governance process, then that suggests that all FBS conferences will end up in that top division. Jeremy Fowler of CBSSports.com has reported that that this is what NCAA faculty representatives are essentially recommending.

(* Is it just me, or does everyone associated with the NCAA have the naming ineptitude of Kim Kardashian and Kanye West? They changed the perfectly logical Division I-A and Division I-AA to FBS and FCS. They messed with the even more logical NCAA Tournament regional names of East, South, Midwest and West for several years before reverting back. Now, we’re talking about a “Division 4″ that’s supposed to be referring to the top level of college sports even though one would think that this would be below Divisions II and III. Nothing about the name “Division 4″ makes sense, which means that the NCAA will probably end up choosing it in the end.)

On the other end of the spectrum, Division 4 could truly be the formal separation of the 5 power conferences plus Notre Dame (no matter what you think of the Irish, you have to always include Notre Dame) so that there could be more radical changes down the road. Maybe there could be payments to players beyond the full cost of attendance. Maybe athletes will be allowed to auction off their autographs on ebay. Probably most intriguing (and what I think is the long-range goal) is that this is all about setting up an 8-team playoff with the 5 power conference champs with auto-bids and 3 at-large bids without having to deal with the “riff raff” of the Group of Five leagues (and protecting the power leagues from any legal challenges to that playoff system on top of that). Imagine a playoff with a traditional Rose Bowl (Big Ten champ vs. Pac-12 champ) plus the Sugar Bowl (SEC champ vs. at-large), Orange Bowl (ACC champ vs. at-large) and Cotton or Fiesta Bowl (Big 12 champ vs. at-large) as quarterfinals. The ratings and money would be through the roof along with supercharging the interest in the regular seasons of all of those power conferences (meaning even more ratings and money) and they get to control all of it without having to share with the revenue takers. That can be done with a totally separate Division 4 in a way that probably can’t occur in the current NCAA structure.

What I don’t see is something in between, where a Division 4 is formed with the 5 power conferences plus, say, the American Athletic Conference and Mountain West Conference. There is very little point in the power conferences going through the exercise of creating a Division 4 when the end result is only relegating the MAC, Conference USA and Sun Belt. The power players aren’t going to deal with a litany of acrimonious lawsuits unless the end game is complete and 100% control with only the conferences that they deem worthy (and judging by the fact that the 5 power conference commissioners keep speaking with each other as a group without the involvement of anyone else, it should be pretty clear who they want to deal with). Either it’s going to be a massive change to the system (separation of the 5 power conferences plus Notre Dame into a new division) or little change outside of NCAA procedural matters (giving all FBS schools more latitude in setting their own rules). The “half-measure” of the AAC and MWC coming along for the ride with the power conferences doesn’t seem very likely to me, which is why individual Group of Five schools need to hope for more conference realignment for guaranteed protection. Speaking of which…

I don’t believe that further conference realignment is necessary for a Division 4 split. As we’ve gone over before on this blog, for all of the moves in conference realignment over the past few years, where we stand today really isn’t that much different than where we stood in 1998 when the BCS system first started (only we’ve consolidated from 6 power conferences into 5). Every school that was in one of the 6 BCS conferences in 1998 is still in one of the 5 current power conferences today with the exception of Temple (who was a football-only member of the Big East that was relegated for reasons completely outside of conference realignment), while a grand total of 3 schools (TCU, Utah and Louisville) have been elevated. This indicates that the power conferences are pretty firm in who they want to associate with and changing perceptions is a glacial process. Now, that doesn’t mean that there isn’t hope for some schools…

I can now answer this question nicely since we had a successful “Hate Cincinnati” weekend in the Frank the Tank household (Illini over Bearcats on Saturday, which frankly shocked the hell out of me, and Bears over Bengals on Sunday). Cincinnati and its AAC/old Big East zombie counterpart UConn are definitely power conference material on paper. The issue is more about whether any of the power conferences will see a need to expand proactively while everyone other than the SEC is at the start of long-term grant of rights agreements that make it difficult (if not impossible) for power schools to move amongst themselves. Overall, the Big 12 is more likely to want to expand at some point because of their small size, poor demographics outside of the state of Texas and the fact that IF a grant of rights agreement were to be broken (a massively large IF), it would be in the context of the Big Ten raiding the Big 12 again (more on that in a moment), which would bode well for Cincinnati. The Bearcats have a solid football program in a good TV market with access to a great recruiting area for athletes of all types (whether football or basketball) while also providing a geographic bridge to West Virginia for the Big 12. As a result, Cincinnati is likely next in line for the Big 12 (alongside BYU) if that league wants to expand. The problem for Cincy fans, of course, is no one knows if or when that expansion would happen in the near future.

The ACC would probably favor UConn over Cincinnati if it had to choose, although that conference did deviate from its traditional criteria in choosing Louisville last year. The main issue for any school with hopes of joining the ACC is that it doesn’t seem plausible that it would expand outside of either (a) backfilling in the event of a raid by the Big Ten and/or SEC or (b) pairing a school with Notre Dame joining as a full member, neither of which seems to be on the horizon in the short-term. There’s at least some argument that the Big 12 would proactively expand regardless of what the other conferences do, so that at least gives Cincinnati some hope.

Some Big Ten conference realignment questions:

Let’s start with my previous post, where I point out how difficult and unlikely it is to break a grant of rights arrangement over the next decade or so. As a result, the likelihood of Big Ten expansion in the near future is extremely low, as I don’t believe that the conference is interested in anyone that isn’t already in one of the 5 power conferences (meaning no one in the AAC or any other Group of 5 conference is compelling enough).

Now, whenever the Big Ten expansion does kick up again, Kansas is certainly high up there on the list. The Jayhawks are to future Big Ten expansion in the way that Pharrell Williams ended up singing on the two largest Billboard hits of the summer (“Blurred Lines” and “Get Lucky”) despite not headlining either of them: it’s hard to see KU not involved as a contiguous AAU school with an elite basketball program, but they also can’t be the biggest athletic name in that expansion, either. One thing that I’ve loved about writing this blog is that I hope that I’ve helped to elevate the discussion of conference realignment to take into account factors that many fans didn’t consider previously (i.e. academics, TV markets, branding, etc.), yet we sometimes do need to take a step back and realize that the product on the field (or court) is still what makes all of the off-the-field money possible, so expansion has to serve those needs. Thus, a hypothetical Kansas/Virginia or Kansas/Missouri (not that I think the Big Ten is ever going to poach the SEC and vice versa) expansion combo for the Big Ten might serve some TV market and AAU status purposes, but that doesn’t have the requisite athletic (and more specifically, football) impact that is required for what could conceivably be the last two spots in the Big Ten. (For all of those that would counter, “Rutgers and Maryland weren’t added for sports!”, I would say that (a) there was a football goal achieved since New Jersey and Maryland were the two top non-Sun Belt states for football recruits that weren’t already in the Big Ten footprint and (b) pure TV market additions were acceptable when looking that them in conjunction with the elite football addition of Nebraska.)

Putting aside the obvious no-brainer additions like Texas, I’m firmly in camp of supporting the addition Oklahoma to the Big Ten and I don’t believe that it’s a purely fan-focused football move. The main detraction for Oklahoma that I often see is that it isn’t an AAU member, but its academic metrics aren’t really far off at all from now-non-AAU member Nebraska and its neighboring old Big 8 AAU schools (Missouri, Kansas and Iowa State). There isn’t the wide academic gap between OU and Nebraska that there was in the case of Louisville compared to the rest of the ACC. Some Big Ten observers believe that the non-AAU status of Oklahoma is a non-starter, but I doubt that the conference would have engaged performing due diligence on the Sooners unless there was some legit interest involved. More importantly, the lack of AAU status for other expansion candidates was simply another reason on top of a number of other factors that made the target school undesirable (i.e. geography, lack of a fan base, lack of a football brand name, not a new TV market, etc.). It’s easy for the Big Ten to ignore a merely “good” football program based on academics (i.e. West Virginia or Louisville), but Oklahoma is a top level king school that would bring a ton of national TV dollars. Even Oklahoma’s smaller home state population on paper is mitigated by the fact that its fan base crosses over into North Texas and the Dallas-Fort Worth area (and Kansas, by the same token, can’t just be looked at by its home state population alone since it’s the top college team in the Kansas City market that takes a large chunk of Missouri).

The upshot is that if the Big Ten goes to 16 schools, then the last 2 additions actually need to make markets irrelevant. What are the 2 additions that can truly transform the BTN from a regional network to a legit national network? Sure, if the Big Ten has the choice, they’d want Texas and Notre Dame (or some other unattainable major market prize like North Carolina or Florida). However, if we’re talking about the top brand names that are willing to reciprocate the Big Ten’s overtures, Oklahoma and Kansas are sitting right there to supercharge the conferences’ football and basketball lineups, respectively. Penetrating a diverse market like New York City has as much to do with the national interest in various teams as it does with local interest, which aids the cases of OU and KU.

Frankly, the biggest factor working the Big Ten going after either OU and KU (much more than academic concerns) is the political pressure of those schools’ respective in-state brothers (Oklahoma State and Kansas State). I believe the Big Ten would expand with an OU/KU combo, but the conference won’t be willing to take either Oklahoma State and Kansas State in the process. Those “little brother” schools might be non-negotiable from a political perspective even if Jayhawk and Sooner fans don’t want to believe that to be the case, so that could stop Big Ten expansion regardless of any Big 12 grant of rights concerns. So, that brings me back to my initial point that Big Ten expansion isn’t likely, albeit it’s still fun to talk about after all of this time.

I’ll be back with Part II of the mailbag going over issues such as EA Sports NCAA ’14, Big East expansion and pro sports realignment shortly. Talk to you again soon!

(Image from Zap2It)

I’ve been trying to write about topics other than conference realignment lately, but our favorite blogging crack habit has been buzzing in my ear like a hit summer song that you can’t avoid (see “Blurred Lines” now and “Call Me Maybe” last year)*.

(* For your perusing pleasure, Billboard put together a list of the top 10 songs for each summer since 1985. I can’t help but smile at some of the memories of these songs, particularly from my junior high years of 1991 and 1992. Sir-Mix-A-Lot!)

First, Dennis Dodd of CBSSports.com casually drops the following in a column last week about the latest power conference meetings:

Big Ten expansion: It isn’t done. That’s about all I can say. Hint: The conference will begin negotiating on a new TV deal next year. The current contract expires in 2016. Definitely stay tuned.

This of course got the blog and message board world humming again with apocalyptic tales of the Big 12 and/or ACC imploding along with the Big Ten adding anywhere from 2 to 10 schools. To be sure, the chatter actually did produce something of value in the form of a West Virginia(!) an Ohio State fan procuring a copy of the Big 12 Grant of Rights agreement, which we’ll take a look at in a moment.

Joe Schad of ESPN then Tweeted this quote from Oklahoma AD Joe Castiglione yesterday:

This is plausibly relevant since OU is one of those schools that could be in the mix if all of this starts swirling again. Of course, the quote ignores the context of the conversation, as it appears that Castiglione also said that such realignment would be over the next “10 to 15 years” as opposed to immediately.

What does this all mean? Like Castiglione, I’m still thinking nothing at least in the short-term. Further consolidation among the power conferences is possible, but it continues to seem more likely to occur in the 2020s at the earliest. If the Big 12 Grant of Rights agreement is substantially similar to what the Big Ten, Pac-12 and ACC have in place (and there isn’t much reason to believe that there would be much deviation), it makes little sense to believe that more realignment is imminent.

The Big 12 Grant of Rights agreement (the “GOR”) states that each school will grant to the conference its applicable media rights (in this case, first and second tier tights for football and men’s basketball) for the duration of the term of the agreement, regardless of whether such school is a member of the conference or not. As we’ve noted here previously, this means that even if, say, Texas were to leave for the Big Ten or Pac-12, the GOR mandates that the Texas first and second tier rights would still be owned by the Big 12 until the GOR period ends in 2025.

What’s most instructive about the GOR contract is what it doesn’t say. There isn’t a termination provision. There isn’t a liquidated damages clause. There isn’t any mechanism to calculate potential damages for a member leaving early. In fact, there isn’t any procedure at all about what would occur in the event that a member leaves the conference other than a couple of flat statements that the GOR is in effect for such member until 2025 no matter what. The Grant of Rights agreement is intentionally ambiguous.

As someone that served some hard time in the slammer of a large corporate law firm, fighting over ambiguous contracts can rack up mountains of billable hours more than virtually any other type of litigation. When you have a 200-page contract that covers every single scenario possible, that document might have been complex to draft but it’s usually a fairly straight-forward process in terms of applying it. However, when hundreds of millions of dollars are at stake, as there are in the GOR agreement, and it’s covered by a 4-page contract that is a simple grant without any termination or dispute resolution procedures, that in and of itself is a massive deterrent to anyone challenging the agreement. It’s almost impossible to determine the legal and financial exposure that a school that is contemplating leaving a GOR arrangement would have. There could be no exposure at all or it could be a large enough amount to literally bankrupt a school, and there’s very low confidence in assessing what’s more likely. In contrast, a school dealing with an exit fee understands its exposure immediately and can balance whether the worst case scenario (i.e. Maryland having to pay the full amount of its $50 million exit fee to the ACC) is still worth risking a defection over.

To be sure, there are plenty of theoretical arguments to challenge the GOR. As Jason Hutzler argued at Outkick the Coverage earlier this year, if a TV network decides to keep paying a conference with one or more defections as much or more than what it was paying prior to such defections (as was the case with the Big 12 over the past 3 years), then a school trying to break the GOR could argue that the conference didn’t suffer any damages at all and, as a result, shouldn’t have to pay a dime upon leaving. I don’t quite buy this argument as fully working, as virtually every school that has challenged any exit fee in this latest round of conference realignment has attempted to argue this in some form and has had little-to-no success, but it’s certainly a starting point when there isn’t any type of liquidated damages clause. A school could also attempt to argue that the GOR taken together with the Big 12 Bylaws that states that a withdrawing school will not receive any revenue arising out of the GOR (see Section 3.1 of the Bylaws) constitutes an unconscionable agreement (as the member would not be receiving any media revenue despite it still being subject to the GOR). That’s a tough argument, though, as that defense is typically used by parties that don’t have much bargaining power or were victims of fraud (which wouldn’t be applicable here).

Regardless, most lawyers could probably think of numerous ways to break a GOR arrangement on paper, but the practical problem is that none of them are high confidence lines of attack. As a result, a school that attempts to break a GOR would be heading into a situation where there is unknown and unlimited legal and financial exposure, which is a horrible position to be in. For every argument out there that there aren’t any damages to conference that suffers a defection, there’s a counterargument that such conference is entitled to the fair market value of all of the TV rights for the school that’s leaving. That FMV for a marquee program like Texas could easily run into the hundreds of millions of dollars (remember that ESPN is paying Texas an average of $15 million per year for its leftover third tier rights for the Longhorn Network, much less its top football and basketball games), which eliminates any financial incentive to leave no matter how much a new conference might be promising in terms of more revenue. You don’t want to jump into a lawsuit in those types of circumstances, especially with the amount of dollars that are involved in connection with power conference media deals. The proof is in the pudding with the amount of weight that the conference commissioners have assigned to these GOR agreements and the fact that similar arrangements are enforced in entertainment industry all of the time. Believe me – when Disney bought Marvel Entertainment in 2009, the Mickey Mouse conglomerate (which also happens to be the primary beneficiary of these GOR contracts via ESPN) employed armies of lawyers to try to figure out how to get out of all the long-term or even perpetual licenses that the comic book company granted to other competing movie studios when it was on the verge of bankruptcy in the 1980s and 1990s and they came up empty. Thus, Sony (via Columbia Pictures) continues to have the movie rights to Spider-Man* and Fox has the full suite of X-Men characters at its disposal despite Disney having paid $4 billion for Marvel.

(* Prior to the string of hit movies over the past decade, the Spider-Man movie rights had been passed around Hollywood like a doobie. James Cameron was actually in line to write and produce a Spider-Man movie in the early-1990s. Later, in the midst of litigation between Columbia Pictures and MGM over who actually could produce Spider-Man movies, the film companies ended up with a novel settlement: Columbia would drop all of its own claims that it could produce James Bond movies (which MGM had lorded over since the 1960s). Essentially, Spider-Man was traded in Hollywood for James Bond, which has ended up working out incredibly well for both of the studios involved. Sports fans have distinct memories of lopsided trades, such as Brock-for-Broglio, but I can’t think of a trade involving two legit superstars (the equivalent of Spider-Man and James Bond) that worked out for all parties.)

So, the GOR’s strength isn’t that it’s an ironclad complex agreement that doesn’t include any loopholes. Instead, it’s an arrangement that is a triple-dog-dare to schools that want to attempt to challenge it since there isn’t any reliable precedent about how to calculate damages. This is proverbial Russian roulette in a practical legal context – the damages could be more than you could imagine… or they could be less than what a normal exit fee would have been. That makes it a great moot court exercise for people like me and other writers in the peanut gallery, but a dangerous contract to challenge in real life. Lawsuits that are brought on principles other than money, such as constitutional challenges filed by the liberal ACLU or conservative American Center for Law and Justice, can afford to tackle these types of ambiguous arrangements. However, conference realignment is almost entirely about money, which means that the great risk of trying to challenge the GOR (even if there are viable legal arguments against it in theory) is likely going to be enough to dissuade any school from leaving a conference that has that type of contract in place. As much as I’d love to sit here and say that the Big Ten ought to add, say, Kansas and Oklahoma to its western division, without a prescribed course to challenge GOR agreements or a university president with the cajones to risk everything (who I’ll grant might be out there), power conference realignment is stopped dead in its tracks.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

(Image from NewsOK)

(Note: In case you’ve missed it, I had Q&A with Burnt Orange Nation on conference realignment with a Big 12 and Texas focus last week. Here are parts 1, 2 and 3.)

One of the major topics that has been on my list to address this summer is whether there is a sports TV rights bubble, which has turned out to be prescient with a recent blog post from Patrick Hruby at Sports on Earth and a front page article in today’s Wall Street Journal (subscription required) addressing the subject. Both pieces are well-written and informative and generally come to the conclusion that sports TV rights are heading upward in a bubble-like manner. Hruby provides a lot of background on the cable subscription model that is funneling massive amounts of revenue towards sports while pointing out the risk of that collapsing with more people “cutting the chord” to reduce costs and the rise of Internet streaming options, such as Netflix, Amazon and Hulu. Meanwhile, the Wall Street Journal looks at the sports rights fees situation from the perspective of the cable operators themselves that are dealing with the rapidly rising costs of sports networks (particularly new regional sports networks). These stories play into the broader increasing calls for a la carte pricing for cable (meaning that a subscriber would purchase only the channels that he or she wants as opposed to paying for large packages). I’ve written previously about why sports have been increasingly and disproportionately valuable compared to other types of programming since they are watched live and, as a result, viewers will watch commercials in a way that they no longer do with other types of shows that they watch on their DVRs or online streaming sites. That’s generally common knowledge at this point. However, here are a few thoughts on some items that I believe a lot of “sports rights skeptics” are glossing over:

(1) The values of sports TV rights overall have never, EVER dropped – While past returns are not a guarantee of future success, as any financial adviser in CYA mode will tell you, we’ve seen the “We’re in the middle of a sports TV rights bubble!” story on a consistent basis ever since the 1980s, yet they have never dropped overall. Deadspin had a great comparison of quotes from “bubble” articles from 1989 and 2013 and you could hardly tell when either one was written. Now, certain properties might not have enjoyed the same increase in rights as others (see the Oympics, where NBC actually is paying about the same or even less on an inflation-adjusted basis for the 2016, 2018 and 2020 games as it did for the other Games that it has broadcast during this century), but the marquee sports properties (NFL, NBA, Major League Baseball and power conference college football) have been rising in an unfettered manner for nearly four decades straight. Once again, that doesn’t mean that this will continue on in perpetuity, but on the flip side, it’s simple-minded of observers to argue that the rapidly rising sports rights fees being paid out today must indicate a bubble.

(2) Bundling is the real culprit of rising cable prices – I appreciate Hruby spending a quite a bit of time on the bundling aspect of the cable subscription model, which I believe is a larger cause of increased cable prices more than anything. A lot of sports TV rights critics love to point out that ESPN is receiving $5.00 per subscriber per month from every cable household in America, whether they watch it or not, but that isn’t necessarily an unfair deal considering how much high value sports programming that it provides. There’s a fairly substantial segment of the population that wouldn’t bother subscribing to cable at all without access to ESPN, so it behooves any cable operator to pay whatever price it takes to keep the Worldwide Leader on the air. However, when ESPN’s parent Disney uses that leverage to force cable operators to buy 10 or 20 other commonly-owned channels to have any access to ESPN at all, that’s where you truly see large scale increases on your cable bill. Turner, Fox, Viacom, Comcast (which is both a cable network owner and a cable operator) and other cable network companies take the same tact, where they will only allow operators to carry their most popular channels, such as TBS, TNT, FX, MTV and USA, if they pay for larger bundles of channels that might not otherwise survive in the marketplace on their own. To me, bundling is the real market inefficiency right now when it comes to cable pricing: cable operators are being forced to give money and channel space to a whole host of channels simply to have access to the most popular ones that have common parents. This is distinct from the individual consumer-based complaint of not being able to pick and choose individual channels on an a la carte basis, which is something that I don’t believe would ever legitimately fly. Americans definitely like the idea of a la carte pricing (after all, it’s “un-American” to have to pay for channels that you’re not watching), but their actions show that they would still rather have all-you-can-eat buffet pricing.

(3) Netflix and other streaming websites are all-you-can-eat buffets just like cable (as opposed to being a la carte) – Further to the last point, we’re seeing a rapid rise in the popularity of Netflix-style on-demand streaming. While a lot of cable detractors point to the popularity of streaming as an indicator that support for a la carte is gaining traction, it’s really the opposite. Think of what Netflix (or Amazon or Hulu) actually does for the consumer: it aggregates content from a whole slew of providers and provides an all-you-can-eat (as opposed to pay-per-view or a la carte) price to access such content. I can’t only ask and pay for the Disney shows being streamed on Netflix any more than I can try to get only the Disney-owned cable channels from DirecTV. The entire value proposition of these streaming sites is you can get an entire universe of shows from a whole variety of sources (including Netflix itself with its in-house productions like House of Cards and the resurrection of Arrested Development), which is much different than a la carte pricing (where you receive a limited set of programs from a single source). In fact, the main reason why Hulu was formed in the first place was that the major TV networks were failing to gain traction with streaming their shows on their own respective websites. Consumers ultimately wanted to go to one place online to watch all of their favorite TV shows, which is an Internet mirror of the experience of turning on the TV and flipping through the channels with a remote.

By the same token, the business model of The Asylum, which is the B-movie studio that produced last week’s Twitter-fueled SyFy sensation Sharknado!, is actually based upon producing as much inexpensive filler content as Netflix desires. Seriously – Netflix explicitly asks the studio to produce cheap and terrible movies in order to create the perception that the website has a vast library of content. From the linked Pacific Standard article (which I highly recommend reading in its entirety):

At surviving brick-and-mortar stores like H. Perry Horton’s, renters gravitate toward the big-studio releases shelved at eye level. But on Netflix, “You click through and see all the titles—new Hollywood releases mixed in with direct-to-video,” Davis says, all crammed into a grid of thumbnail posters. Filtering in low-budget films with the high-budget versions “fuels this perception that there’s a wealth of new content.” And in the endlessly filterable world of Netflix, where your preferences are sorted into hyper-specific genres, a full page of results for horror films with nightmare-vacation plotlines makes you feel like Netflix is tailoring its product just for you. “The bottom line is that it’s there, and you saw it,” [DePaul University assistant professor Blair] Davis says—even if you didn’t actually watch it.

Much like the vast number of cable channels that people are paying for but never watch, Netflix is providing a ton of movie titles that subscribers are also paying for and never watching. Sounds like basic cable, no? Netflix is simply a horse of a different color when compared to cable – the underlying buffet approach of providing lots of content that you’ll never end up watching is the same with only the delivery system (Internet instead of cable or satellite) being different. Of course, $9.99 per month for Netflix streaming is a helluva less daunting than paying $100 or more per month for cable service, so it’s easy to see why it has gotten so much traction so quickly.*

(* If you have young children like I do, Netflix streaming is right next to food, water and shelter on Maslow’s hierarchy of needs at this point. There are still a lot of limitations on the movie and TV show offerings on Netflix streaming right now, but the suite of children’s programming makes it indispensable to parents.)

So, Netflix and the like might very well encroach upon the territory of cable operators, but the point is that no one should mistake the rise of streaming with a desire for a la carte pricing. The likelihood of most Americans having the desire or tolerance to try to choose a customized lineup of channels on an a la carte basis is fairly small. Besides, the economic underpinnings of the cable industry mean that a la carte pricing would likely kill all but a handful of the most popular cable channels (i.e. only the basic cable lineup from circa 1990 would survive), which destroys the overall desirability of a la carte in the long-term. Instead, what people really want is the same type of buffet access to content at a lower price point, whether it’s via cable or the Internet.

(4) Sports streaming is inherently different than movie and TV show streaming – The rise of streaming websites is undeniable and flattening the content distribution universe. However, what I think a lot of observers miss is that the desire to stream movies and TV shows is inherently different than streaming sports. Specifically, the single biggest attraction for streaming movies and TV shows is that it’s on-demand: a viewer can watch the content whenever and wherever he or she wants.

Now, the “wherever” component still applies to streaming sports, as you can use the Internet to watch games on your tablet or smartphone. That’s huge for convenience for any sports fan that’s away from home. Yet, a key distinction is that the “whenever” advantage of streaming doesn’t apply to sports. While many people have made the connection that fans generally watch sports live, which in turn makes them attractive to TV networks since that means that such fans are much more likely to watch advertising (thereby increasing revenue all around), they seem to have a blind spot that this is a large deterrent to a mass movement to watching sports online. The typical sports fan doesn’t have a preternatural need to watch a replay of an NFL game on Tuesday where the outcome has already been determined – the entire value of sports is that there are a lot of people that want to watch the exact same event at the exact same time. That happens to be exactly what television has done (and probably will always do) better than the Internet.

In essence, the convenience of streaming sports is primarily based on mobility, whereas the value from streaming movies and TV shows is based on both mobility and time-shifting ability. While a broad sports streaming platform like ESPN3 could turn into a “Netflix of Sports” (if it hasn’t already), it isn’t clear that it could ever really be a more desirable option for the standard run-of-the-mill sitting-at-home-on-the-couch viewer compared to live television in the way that Netflix/Amazon/Hulu can very much be the preferred vehicle for such viewer simply because on-demand viewing is such a game changer for movies and TV shows compared to sports.

Of course, that’s not to say that sports entities are going to be in the clear and enjoy massive media rights profits forever. In my next piece, I’ll take a look at some factors that are dangerous to sports leagues and teams that not even the “sports rights skeptics” are paying much attention to right now and could kill the proverbial golden goose.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

(Image from Apple Insider)