Conference Expansion: Delany Goes Corleone

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Conference football realignment began in earnest on June 2nd, 1984. On that date, the US Supreme Court rendered its decision in NCAA v. Board of Regents of the University of Oklahoma. Prior to that ruling, the NCAA solely negotiated college football broadcast rights--from every NCAA member institution--and distributed the revenue, after taking its cut off the top, to every NCAA member institution. This, the Supreme Court ruled, violated the Sherman Anti-Trust Act, and the ethos underpinning the Ayn Rand School for Tots.

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As a result of the June 2nd decision, institutions were able to negotiate directly with the broadcast television entities. The College Football Association (CFA), a 64-member subset of the NCAA, negotiated its own deal with ABC that year, and kept the revenue in-house. But by 1990, with TV money exploding, some members (probably Texas) decided that splitting 64 ways was still too much sharing. So conferences began negotiating media rights deals on their own, and the CFA was kaput. The Big Ten and Pac-10 landed individual deals with ABC. Notre Dame reached an agreement with NBC. And CBS struck a bargain with the SEC.

Conferences, in most instances being a group of like entities, brought more to the negotiating table than independent institutions, and consequently garnered better television deals. This signaled the end of the road for most independents, including Penn State, Miami, Florida State, and, well, pretty much every one, with the exception of Notre Dame.

With that as a brief historical context, why are universities so eager to realign today? As best I can tell, there are five top reasons, as follows:

  1. Money.
  2. Money, to fill gaps caused by bankrupt state budget cuts.
  3. Money, to fuel the fleet of university jets that universities can't afford not to have.
  4. Money, as future media rights payouts go through the roof. And,
  5. "Stability", defined as membership in a conference that will maintain its place at the (money) feeding trough.
In recent years, conferences engaged in a handful of tactics to make more TV money.
  1. Add a 12th team, and hold a conference championship game. Twelve is the number thou shall count, and the number of thou counting shall be twelve. Thou shall count 11, only if it then be followed by twelve. Thirteen shall thou not count. Sixteen is right out! (for this play, anyway). When the Big Ten added Nebraska, FOX forked over an estimated $145 million for the first six championship games - a little over $24M per game. That's some sweet action.
  2. Add more members (aka, the total gross eyeball play). These TV agreements may span a decade or more when executed, but contain clauses allowing for adjustments - both up and down - based on changes in membership. If your conference adds a national brand or two, you can expect a bump. If it adds Pitt and Syracuse, you shouldn't hold your breath. Pitt and Syracuse increase your gross eyeball count, but there can be more to it than that (explained further below).
  3. Develop marketable properties, and sell them. Those properties may be an inter-conference battle royale (Big Ten vs. Pac-12). Or, it might be just a single 'Champions' Bowl' that very closely mimics what the Big Ten and Pac-12 have in the Rose Bowl.
  4. Develop marketable properties, like an ice hockey league, and sell said properties to yourself - because you created your own cable network. Then, charge every cable subscriber in nine states 60 cents per month for the network, on top of the ad revenue the network brings in. Sure, other conferences will laugh at you when you announce the idea, but you're five years smarter than everyone else. So don't sweat it.
There were 64 institutions that broke from the NCAA pack in 1984. There are probably 20 institutions - or less - that represent the reason media companies shell out billions of dollars for broadcast rights. TV pays for eyeballs, and generally speaking, the more eyeballs you bring to the table, the more cash you get. As it turns out, the NY Times penned an article on conference eyeball counts. Here are your summary totals from that article, adjusted for the most recent realignment activity:
  1. Big Ten - 12 members - 17,527,996
  2. SEC - 14 members - 16,670,957
  3. ACC - 14 members - 12,752,137
  4. Big 12 - 10 members - 8,353,867
  5. Pac-12 - 12 members - 7,440,752
  6. Big East - 12 members - 4,608.878
  7. Notre Dame - 1 Touchdown Jesus - 2,261,738
  8. All other conferences - who cares.
Obviously, the cash you get is not just raw eyeball counts. The Big East could make itself into a 100-member conference with 19 million pairs of eyeballs, and it would still be a poo-poo platter to TV execs. Only the hardest of diehard college football fans will tune in to watch Central Florida face off against SMU, when said diehard is not a fan of either team.

But that's not the case for a handful of marquee brands. A casual football fan will tune in for Michigan vs. Ohio State, or Alabama vs. Auburn, or (Jim Delany hopes) Penn State vs. Oregon/USC/Stanford. Networks know this. Barbasol knows this. Ro-Tel knows this. Marketable, national athletic brands are few, and they command premium payouts.

Looking at the Times' figures, you would assume that the ACC would be better positioned than either the Big 12 or Pac-12 - they have more total eyeballs, and with Florida State and Miami, they have a couple of nationally recognized brands, right? Plus, they are a preeminent basketball conference. My God, don't forget the basketball! So why is the ACC ripe for pillaging? There are a couple of reasons.

First, the TV networks say that basketball sucks. ABC/ESPN told the ACC that they can have all the alley-oops they want; they can have a big alley-oop party in the middle of Tiananmen Square and it won't make a lick of difference, because basketball ads don't bring 30% of what football ads bring. Only football maters. Or, at least, that's how Clemson's Athletic Director explained it. (Cheer up, Clemson. The NY Times pegs you with the largest, most masochistic fan base in the ACC. So you have that going for you.)

Second, ABC/ESPN told the ACC that they suck at football, and so do Pitt and Syracuse. Yes, the ACC crowed about a re-negotiated TV deal that would pay out $17 - $20 million per team annually - on average over the life of the contract. Ah, the devil is always in the details. The reason Florida State's Chairman is angry is because the payout doesn't materially change in the near term. The contract is a back-loaded public relations play so the ACC can save face by appearing to approximate the Pac-12's and Big 12's recent deals. But by the time the ACC reaches those increased payouts in 2027 - yes, 2027 - the Big Ten and SEC will have purchased their own continents on Jupiter for broadcasting into the ESO 137-001 galaxy. Or in other words, the ACC's total gross eyeball gambit failed.

Third, the BCS is dead. We don't yet know what shape the playoff will take, or how bowls will be impacted. But, with the SEC/Big 12's announcement of a new Rose Bowl-like-substance, we can draw a few hypotheses. Try these on for size:
  1. The big six power conferences could - could- become four power conferences (Big Ten, Pac-12, SEC, Big 12). Who will be the ACC's dance partner, to stay at six? The decaying corpse formerly known as Big East football? A twice beaten MAC champ?
  2. Outside of the Rose Bowl and the new Rose Bowl-like-substance, where intentions are fully declared, does the Orange (or Fiesta, or Sugar/Cotton survivor) really want to maintain an ACC/Big East tie-in in a non-BCS world? The ACC is 2-13 in BCS bowl games, and can't fill the stadium, not to mention the flaccid TV ratings. Contrast that picture with the fact that the Big Ten has received two BCS bids every year, no matter how bad those two teams were (hello, 9 - 3 Zookers). Why? Those bowls--and their cash--want the most marketable properties to make the most bucks. Would the Orange Bowl rather stage a Wake Forest vs. Rutgers showdown, or a 3rd place Nebraska vs. a 2nd place Georgia? Puh-lease. Delany knows where this is going because he's guiding it there, Corleone-style. That's why he's suddenly ready to re-evaluate the Big Ten's bowl tie-ins, which are among the best already.
So there you go. The ACC is in play for poaching because they could be without a chair at the big boys' table when the music stops. And, thanks to the SEC, the suddenly stable Big 12 could make some more dough by adding two teams (would you mind holding, Louisville? DeLoss has a call from Tallahassee).

How does this affect the Big Ten? Would Jim Delany want any of the ACC properties?

In short - no, he (probably) does not.

Florida State has two MNC's and a (sort of) national appeal. I think they're a great football school. But, according to the New York Times and the people writing paychecks, they aren't on the 'elite' level (and neither is VaTech). The Times estimates FSU as the 38th largest fanbase (for reference, PSU is 3rd)--and that's not totally unreasonable. FSU was actually known as "The Rocco Club For Womens' Typewriter Maintenance", or something like that, until 1947. They're on the Florida panhandle (read, Alabama). And simply put, they aren't like Penn State within the state of Florida. That's where the University of Florida fits in. FSU, on the other hand, is like a (much better) Pitt. And so is Miami, when they're not on probation and short 30 scholarships. That's not my opinion, by the way. It's ABC/ESPN's.

Would Delany be interested in Duke, UNC or UVa? How about Maryland? They have academics and basketball, and in Maryland's case, Under Armor jersey appeal. My God - the Big Ten could grow to 64 teams and be THE ONLY BASKETBALL CONFERENCE IN THE WORLD!

"Yawn", according to those who hold the purse strings. As stated above, basketball contributes less than one-third of football in dollar terms FOR THE ACC, whose basketball is great and football significantly less so. It's more probably less than one-fifth - a drop in the bucket. But whatever the fraction, it is not accretive to the existing conference members. Rules #1 through #12 in conference expansion: you don't add teams to make less money on a per-team basis (paying attention yet, ACC?).

How about a Rutgers/UConn combo; or a Maryland/Pitt/Syracuse? They could get the Big Ten the NY/NJ and/or DC television markets? New TV markets - that'd be worth something, right?

Probably not. Penn State affords as much exposure in those markets as any of those choices - to the extent those are even college oriented markets (they aren't, of course). But most importantly - Rutgers, UConn, Maryland, Pitt, Syracuse, and most likely, any combination thereof, are still not accretive to the Big Ten's existing per-team payout. Coffee is for closers, you see, and they aren't it. It's not personal, Pitt. It's just business.

On the other hand, Notre Dame has the 4th largest fan base according to that Times article.

That's right, the Golden Domers. The mythical flying unicorn of conference expansion.

Notre Dame, despite being essentially a 13th Big Ten team, and despite not being any good at all since shortly after signing that NBC contract in 1990, and despite being more obnoxious than Bret Bielema going for 2 against Minnesota when he's leading by 39 in the fourth quarter...would likely be accretive to the Big Ten - or any conference, for that matter. But they aren't budging. Notre Dame reportedly makes somewhere in the neighborhood of $9 million per year from its NBC deal - that's a Delany restaurant tip. If it was about cash to Notre Dame, they would already be in the Big Ten, where the payout to that 2-win Minnesota team (thanks, Hawkeyes!) is in the $20+ million range, and climbing.

That's right, Tomahawk Nation. Minnesota and Indiana raked in north of $60 million over the last 3 years, winning an FCS-assisted average of a grand total of 3.57 football games, while you were making $11 - $12 million slogging it out against Oklahoma and Florida in your non-con. Doesn't that thought make you want to vomit? And that number is only going to increase, by the way. The Big Ten Network is a cash cow that's only getting fatter; and, the Big Ten is the one power conference that has NOT renegotiated its first-tier (ABC/ESPN) football rights in the last couple of years, as far as I'm aware of. Yep - the Big Ten makes the most money today, with the oldest set of contracts, in a fast growth market. The ABC/ESPN deal expires in 2016/17. When that contract comes up for renegotiation, just watch out.

Do I love the Big Ten? Actually, no. I'm old enough to remember PSU independence, and jumping on my dad's back when Pete Giftopolous sealed the 1987 Fiesta Bowl. It's taken 20 years for me to move from shock to acceptance, and grudgingly into the realm of maybe-liking-membership-a-little. But I cannot deny the business acumen with which the conference has positioned itself. There simply is no better place to be for the next 20 years.

All of which requires me to tip my hat to Don Corleone Jim Delany and gang, for that, at least.

Now take your Stagg-[redacted] Trophy and shove it - right into that massive, dump-truck pile of cash you split evenly, which secures my alma mater's athletic future, despite outsourced PR firm billings that exceed the GDP of Djibouti.

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