Category: College Basketball

The Hypocrisy of College Sports Leaders and Pay for Play: Why Minor Leagues Aren’t a Substitute

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Sports741 Comments

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)

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Frank the Tank Mailbag: Part II – No Half Measures

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Major League Baseball, NBA Basketball, NFL Football, NHL Hockey, Soccer, Sports579 Comments

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)

Frank the Tank Mailbag: Part I – I’m Not in the Realignment Business. I’m in the Empire Business.

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Illinois Fighting Illini, Sports763 Comments

A message from a reader:

https://twitter.com/PaJosKo/status/377236445855252480

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)

Summertime Conference Realignment Walking Dead: A Look at the Big 12 Grant of Rights Agreement

On By Frank the TankIn Big Ten, College Basketball, College Football, Sports1,830 Comments

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)

Is There a Sports TV Rights Bubble? – Part 1: Why It’s Not as Simple as A La Carte Pricing

On By Frank the TankIn Big Ten, College Basketball, College Football, Major League Baseball, NBA Basketball, NFL Football, NHL Hockey, Sports868 Comments

(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)

Power Conference Breakaway: Can It Benefit Student-Athletes?

On By Frank the TankIn Big Ten, College Basketball, College Football, Sports871 Comments

(Note: as conference realignment has slowed down, I’m going to shift back toward looking at some of the broader issues in the business of college sports, such as the impact of television rights, tensions between the power conferences and the NCAA, and the new playoff system. I’ll also likely get into some related pro sports angles with how the NFL, NBA, NHL and Major League Baseball are dealing with domestic franchises along with looking internationally for new markets and fans. Obviously, if conference realignment heats up again, I’ll cover it thoroughly here. For those that still need a conference realignment fix, I had a Big Ten-focused realignment Q&A last week with Off Tackle Empire and will have a different Big 12/Texas-focused one with Burnt Orange Nation in the near future.)

The notion of the power conferences splitting away from the non-power leagues to form either a new association separate from the NCAA or a different division (hereinafter called the “Super FBS”) has been percolating over the past few years. For various reasons, the talk has been intensifying lately with the settling of the conference realignment landscape and increased calls for greater compensation for student athletes beyond their respective scholarships (with the Ed O’Bannon lawsuit against the NCAA as a backdrop)*. There is already a de facto split between the 5 power FBS conferences (Big Ten, Big 12, Pac-12, SEC and ACC) and the rest of Division I schools in terms of TV and postseason football revenue, so it seems natural to many observers that a split along those lines would make sense.

(* In the interest of full disclosure, I’m personally a strong supporter of paying college athletes. While the cost of a college scholarship is substantial, the power conference athletic departments are still receiving outsized revenue gains off of the backs of football and men’s basketball players and they ought to be compensated accordingly. Now, I understand why colleges want to fight those types of payments to the death and there are major Title IX implications, as it’s likely that payments would have to be made across the board to all non-revenue sport athletes on top of the revenue generators. It’s easy to point to the quarterback whose jersey is getting sold nationwide and say that it isn’t fair that he hasn’t been compensated fully, yet should a water polo player at the same school be receiving the same type of payment? There’s no easy answer to this. From my vantage point, the inequity of the quarterback not getting fully compensated for the revenue that he’s bringing in for a school is much greater than the thought that non-revenue athletes would have to get paid, too, but I know others may disagree.)

Warren K. Zola had an excellent commentary in the Chronicle of Higher Education that outlined several potential proposals that a Super FBS division could implement that would serve both the commercial reality of college sports and improving student-athlete welfare:

  • Have athletics scholarships cover the full cost of attendance and not be capped at tuition and fees, room and board, and required books. A stipend, in the neighborhood of $3,000 per student, according to a recent study, would help reduce the growing underground compensation system for elite athletes.

  • Embrace the Olympic amateur model by lifting the restriction on college athletes’ commercial opportunities. This shift would offer any student the opportunity to secure endorsement deals or receive payment for the use of his or her name and image.

  • Create an education fund that provides continuing financial assistance to college athletes, allowing them to complete their degrees even after their athletics eligibility, and corresponding scholarship, has expired.

  • Provide full health insurance for all athletes and cover all deductibles for injuries related to participation in an intercollegiate sport. Offer full disability insurance to elite athletes, protecting them against catastrophic injuries that could derail their professional careers.

  • Allow athletes to hire agents to protect their rights, including providing assistance in evaluating scholarship offers from institutions, negotiating commercial opportunities, and navigating the transition from college to professional sports.

I believe that all of these suggestions are on the mark. The reference to the “underground compensation system” is astute and one of the largest issues that I have with the current NCAA model of anachronistic recruiting regulations on the books with haphazard and inconsistent enforcement of those terrible rules on top of them. NCAA recruiting rules are sort of like campaign finance regulations in Washington – everyone publicly votes for them on one day and then privately tries to find loopholes around them the next day. I’m much more of a full disclosure-type of person as opposed to attempting to put the brakes on market-based transactions, where I believe colleges and universities would have better control over the “underground” market if they acknowledge that it exists and provide a viable alternative that allows for athletes to take advantage of their talent to get stipends directly from schools and commercial endorsements.

The last bullet about allowing athletes to hire agents is an interesting one. There have been many prominent power brokers over the years, such as Worldwide Wes for basketball*, that have effectively taken that role, so I believe that there’s some benefit to formalizing that type of relationship. The NCAA’s agent contact rules are just as backwards with spotty enforcement as the organizations recruiting rules, so having a reactionary stance of zero tolerance simply isn’t realistic in today’s world. It’s better to get those relationships out in the open and snuff out as much under-the-table action as possible.

(* If you haven’t read it already, this GQ piece on Worldwide Wes from a few years ago is one of the most fascinating profiles that you’ll ever see of a behind-the-scenes sports figure.)

So, I see a lot of potential benefits to separating the power conferences away from the non-power conferences simply from the student-athlete perspective. Of course, the increased control and, in turn, revenue that the power conferences would see from a breakaway would be the real reason why they’d want to do it. That isn’t necessarily a bad thing in and of itself, but it also makes it difficult to draw up clear criteria as to why a school or conference would be in “regular” FBS while another one is in Super FBS. For instance, would it really benefit the 5 power conferences very much if, say, the AAC and Mountain West Conference are willing to pay student stipends, thereby qualifying for Super FBS? It would seem that the power conferences would only want to split off into a new division if they could ensure that they’re the only ones in it or else it would defeat the purpose of that split*.

(* Speaking of power conference revenue, one byproduct of the Ed O’Bannon case is that the specific terms and payment schedule of the Pac-12’s new contract with ESPN and Fox have been disclosed. Nothing is too surprising, although it’s interesting to see some of the items that we have speculated on confirmed, such as the rights fees escalating approximately 5% per year. The term sheet is here.)

Now, there’s the more nuclear option of the 5 power conferences simply breaking away completely from the NCAA that would serve as a clean revenue-based split, although I find that to be an option that guys such as Jim Delany and Mike Slive would prefer to keep in their back pockets than one that would ever be implemented. While I generally believe that many non-power conference fans overstate their influence with politicians (i.e. mistakenly thinking that they’ll step in to help them with the playoff system or taxing power school revenue), a full-scale break-off would be one of those events that could definitely spur an untenable political backlash. It might be a move that the power conferences would secretly like in the back of their respective heads, but there are too many political landmines (particularly at the state-by-state level) to realistically engage in that scenario.

The upshot is that nothing is really easy or clear here. Power conferences definitely want more autonomy, but the process of making sure that they’re truly their own group without perceived “interlopers” might be more difficult to achieve than any changes about compensating student-athletes. All of Zola’s suggestions could still be implemented in theory without creating a Super FBS Division – it’s just that the power schools and maybe a couple of the non-power conferences are probably the only ones that could afford to put them into place.

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

(Image from Real Clear Sports)

B1G East Coast Expansion: Big Ten Adds Johns Hopkins Lacrosse and the Pinstripe Bowl

On By Frank the TankIn Big Ten, College Basketball, College Football, Illinois Fighting Illini, Sports1,129 Comments

The Big Ten continues the march to increase its presence on the East Coast by adding Johns Hopkins men’s lacrosse as the conference’s first-ever affiliate member and the Pinstripe Bowl based at Yankee Stadium in New York City as a bowl tie-in. These moves aren’t necessarily earth-shattering in the way that the expansion with Maryland and Rutgers was back in November, but they show how Jim Delany and the Big Ten’s university presidents are aiming to make the league as much of an East Coast conference as it is a Midwestern conference.

As far as men’s lacrosse programs go, Johns Hopkins is considered to be the gold standard with more national championships than any other school and clung onto independence in the same way that Notre Dame continues to do so for football.* At the same time, the Big Ten has long had the stance that schools with either “all in” or “all out” (hence the hardline resistance to ever offer schools like Notre Dame any non-football membership). So, it was a bit of a surprise when news broke a few months ago that the Big Ten and JHU were exploring an affiliate relationship. Johns Hopkins then formed a Blue Ribbon Committee that ultimately recommended that the men’s lacrosse team should join a conference last month in a fascinating report. Among the requirements that JHU deemed to be important were an initial membership period of 5 years and that the school could maintain its current TV contract with ESPNU. A number of Big Ten observers thought that the latter TV rights item would be an obstacle on paper (since increasing the inventory of desirable non-football/basketball programming has been a primary goal of the Big Ten Network), but that was assuaged by the fact that Johns Hopkins would not receive any conference revenue (which would make any potential complications as to how an affiliate member would partake in the BTN money trough moot).

(* For anyone that remembers the original version of The Official Preppy Handbook, I always recall that lacrosse was listed as a preppy sport simply because people from Baltimore loved it and that the city was “very prep”. That’s quite a jarring characterization these days for people that have seen The Wire.)

Looking back, this was a perfect storm for both parties to get to this position: the Big Ten needed 1 more school to create a men’s lacrosse league after it had added Maryland and Rutgers, Johns Hopkins had been concerned about how conference realignment was changing its ability to remain independent in men’s lacrosse even before it had failed to make it to the NCAA Lacrosse Tournament for the first time since it began in 1971, and JHU would provide the Big Ten an elite academic research powerhouse located in close proximity to the conference’s other Eastern members and the very best program in the history of the sport. Plus, the only sports that Johns Hopkins sponsors at the Division I level are men’s and women’s lacrosse*, while the rest of its athletic department operates under Division III. Finally, if JHU ends up joining the Committee of Institutional Cooperation (CIC), which is the academic research consortium that includes all 14 Big Ten members plus the University of Chicago, then it’s a coup in terms of prestige. (For whatever reason, Penn State’s official press release on the new Big Ten lacrosse league is the only place that I’ve seen that mentions Hopkins contacting the CIC.) All of those factors make this situation quite unique compared to thoughts of adding Notre Dame for various non-football sports or, say, Boston University for hockey. As a result, I don’t see the addition of Johns Hopkins for men’s lacrosse as any indication of a broader intent by the Big Ten to search for affiliate members in other sports. Johns Hopkins was the right program in the right sport with the right academic profile at the right time for the Big Ten.

(* Interestingly enough, the Johns Hopkins women’s lacrosse program is going in the opposite direction of choosing independence after having been a member of the American Lacrosse Conference. The ALC featured three Big Ten programs, including national powerhouse Northwestern. I’m personally not a fan of JHU going in this direction as the school would have technically been “all in” with the Big Ten for all of its Division I sports if women’s lacrosse had joined, but it’s less of an issue since men’s lacrosse is clearly the marquee program there. It’s akin to Notre Dame stating that it would join a conference football but go independent in its other sports, where pretty much any league would say, “That’s kind of weird, but HELL YES, we’ll take that deal!” Also note that Northwestern and Maryland have more women’s lacrosse national championships between them than all of the other schools that sponsor the sport *combined*, so the intense competition level may have also been a factor for JHU. That being said, there still seems to be somewhat of a door open for the women’s program to join the Big Ten down the road, as the powers that be have claimed that they “haven’t discussed it” yet.)

Meanwhile, a little further north, the Big Ten and New York Yankees announced that the conference will have a tie-in with the New Era Pinstripe Bowl for the next 8 years (with the opponent almost certainly coming from the ACC). From the standpoint of increasing the Big Ten’s mindshare on the East Coast, the tie-in makes perfect sense. The long-term goal of Jim Delany is to make the Big Ten into the de facto “home conference” for the New York City market in the same way that it is in Chicago already. To be sure, that’s a monumentally tough task (as the number of Big Ten grads in the Chicago market is massive by comparison), but the hope is that the cumulative effect of the presence of Rutgers, the Pinstripe Bowl tie-in, and the fans and alums from other Big Ten schools that have a large presence in the NYC area (particularly Penn State, Michigan, Ohio State and now Maryland) will gain traction there in a way that none of the other conferences would be able to (which is arguably a risk well worth taking considering the size and power of that market). In an interesting marketing wrinkle, the Big Ten will actually have a fixed sign in Yankee Stadium along the first base line along with being part of the rotating ads behind home plate during regular season Yankees games starting in 2014, which might end up being the best advertising that the conference could get in that market.

Whether the Pinstripe Bowl will actually be a great deal for traveling fans is a different matter. Believe me – I love New York City and enjoy the idea of playing a bowl game there, but most of the Big Ten territory prefers its winter destinations to be escapes from the cold weather of the North*. At the same time, Yankee Stadium isn’t in Manhattan or even in a neighborhood comparable to Wrigleyville in Chicago. (As a White Sox fan, it always amuses me when people complain about the “bad” neighborhood that surrounds U.S. Cellular Field as being a drag on attendance since it makes it clear that they’ve never visited the Bronx.) I could see how Rutgers, Penn State and Maryland could travel up to the Pinstripe Bowl fairly easily, but it remains to be seen how the rest of the conference would travel there.

(* If the speculation is true that the Big Ten bowl rotation will consist of the Rose, Orange, Capital One, Outback and Holiday at the top, a mix of the Kraft Fight Hunger, Pinstripe and Gator/Music City at the next level, and a new Detroit Lions bowl against the ACC and maybe the Heart of Dallas in the old Cotton Bowl at the bottom, then I’ll be pretty happy with that lineup. It would hurt to lose the Buffalo Wild Wings Bowl since the Phoenix area is such a large home base for Big Ten transplants, but the Kraft Fight Hunger is going to turn into a top notch game when it moves to the new 49ers stadium in Santa Clara and I will always quickly find any excuse to head out to San Diego. I’ll have a more in-depth analysis of the entire Big Ten bowl lineup once it’s officially confirmed.)

The overall message from the Big Ten today is that it’s going full steam ahead in heading to the East Coast. I’ve long been confident that the strategy will work around leveraging Maryland to get into the Washington, DC and Baltimore markets (which will only be further aided by adding Johns Hopkins as an affiliate member), yet the New York City portion of this cycle of expansion and bowl contracts will determine whether Big Ten is going to end up being the second most powerful sports entity in America after the NFL in 10 years or we’ll be sitting around wondering why the conference had chased after cable network fool’s gold. There’s a better chance for the former to occur than what a lot of conference realignment skeptics believe, but the latter could certainly still happen.

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

(Image from Baltimore Sun)

Conference Realignment Reset: A Look at the Power Conferences’ Expansion Plans (or Lack Thereof)

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Sports1,995 Comments

The main question that I’ve been getting over the past few weeks is the following: “Is conference realignment really done? Seriously? Isn’t everyone still lying?” Well, from my perspective, power conference realignment is finished for the foreseeable future with one possible exception (which I’ll get to in a moment). The fact that the Big Ten, Pac-12, Big 12 and now ACC all have grant of rights arrangements in place really puts a damper on any further movement. Even if grant of rights agreements could be challenged and struck down, the issue is that none of the 4 conferences that have them in place have any incentive to test that (or else they’d be challenging the strength of their own protections). It’s simply slim pickings in terms of expansion candidates that are outside of the 5 power conferences for the healthiest leagues. Let’s take a look at where everyone stands:

(1) Big Ten – The Big Ten certainly has no need to expand at this point without a school from the ACC or Big 12. A school such as UConn might provide a nice market in theory with elite basketball, but that was already a massive stretch candidate with its lack of AAU status and FBS football history. Plus, even if the Big Ten wanted UConn, who the heck else would the conference add with them? Let’s disregard any notion that an odd number of football schools can be workable from this point forward – what was acceptable with the 11-team Big Ten without divisions and a conference championship game is simply not acceptable in the new larger Big Ten. There has to be a Noah’s Ark expansion approach for any conference that has more than 12 members. As much as I’m a Big Ten fan, I’m also not delusional enough to trick myself into thinking that they could raid the SEC since that’s the only power league doesn’t have a grant of rights arrangement as of yet. Note that the Big Ten passed on Missouri (the most oft-referenced school that would plausibly defect) multiple times when the school was a Big 12 member, so it makes little sense that Jim Delany and the university presidents would even target them now, while a school like Vanderbilt might make the ivory tower-types happy but does little for the financial football goals of the conference (and believe me, as much as I enjoy talking about the CIC and academic status of the Big Ten, the “football” part of the equation still needs to be met). After adding Penn State, the Big Ten was more than willing to wait for two decades to find the correct non-Notre Dame expansion candidates, so I find it to be entirely consistent that they’d be fine with waiting another decade to see if schools like Texas, UNC, UVA, Georgia Tech, Kansas and/or Oklahoma are willing to test the free agent market at that point.

(2) SEC – Meanwhile, the SEC is essentially in the same boat as the Big Ten: all of the candidates that it would realistically want are sitting in the ACC or Big 12. The new SEC Network being formed with ESPN isn’t going to gain anything without a UNC-level addition, which means that expansion is pointless for Mike Slive’s group for the next decade. I don’t subscribe to the Clay Travis bloviations that the SEC Network will blow everyone else out of the water (there are some basic concrete reasons why the Big Ten will very likely continue its current TV revenue dominance for quite awhile, not the least of which is that Jim Delany will get to send the Big Ten’s first tier rights out for open market bidding in a couple of years and that would result in a massive windfall even if Maryland and Rutgers don’t add another dime of revenue to the BTN), but the league will certainly make enough to make it rain in the clubs.

(Note that the key market to watch for SEC Network carriage is the state of Texas. To be clear, I believe that Texas A&M has significantly more pull in its home state than, say, Rutgers has in New Jersey. However, the state of Texas is already home to two of the most high profile ongoing sports network carriage disputes in the country with the ESPN-owned sister channel Longhorn Network not being able to strike a deal with any major cable or satellite carrier other than AT&T U-Verse and Comcast SportsNet Houston, which carries Astros and Rockets games and is co-owned by those teams, still not having anything in place with DirecTV and DISH Network (which is particularly problematic in the Texas market that has higher satellite penetration compared to Northeastern markets such as New York, Boston, Philadelphia and Washington, DC that have larger percentages of traditional wired cable customers). Now, the SEC Network is going to provide significantly better content than the Longhorn Network, but the fact that such a large portion of the Houston market hasn’t had access to the Rockets led by James Harden, Jeremy Lin and Omer Asik (I still can’t believe that my battered but still fighting Bulls let that guy get away for nothing in return) for an entire season and currently the Astros (as horrible as they might be on-the-field these days) is an indicator that the SEC Network isn’t just going to get Texas cable and satellite operators to roll over. I fully acknowledge that no cable operator will be able to last a day within the state of Alabama if they’re not carrying Crimson Tide football, so I’m just pointing out the Texas market specifically here as a place to focus upon.)

(3) ACC (plus Notre Dame) – At the same time, the ACC is likely going to spend the next decade in the same mode that the Big Ten was during the 1990s: reserving a spot for Notre Dame. Now, that doesn’t mean that Notre Dame has any intention of joining the ACC as a full football member. Quite to the contrary, I believe that Notre Dame’s ability to stay independent is stronger today than it was 10 years ago when the ACC began its multiple raids of the Big East. Notre Dame has secured an long-term extension of its NBC deal, isn’t subject to any conference championship requirement to have access to the new College Football Playoff, will have access to the Orange Bowl and all secondary ACC bowl tie-ins, and will be in a great power league for basketball and non-revenue sports. There’s less logic in Notre Dame giving up independence today than when it appeared that the Big East was going to collapse without a home for non-football Irish sports in 2003. However, never underestimate how much university administrators delude themselves into thinking that they’re going to be the ones that change the hearts and minds in South Bend. Jim Delany, Deloss Dodds and John Swofford, who I consider to be smart men (whether or not you agree with their actions), have all been fooled on this front. With a grant of rights in place, the ACC doesn’t need to proactively grow at this point and can use the “We’ll wait for Notre Dame to come around” retort to further expansion for awhile (even though anyone that has any clue about how single-mindedly focused the Notre Dame alumni base will fight any hint of giving up football independence knows that they’ll never come around). There’s really no need for the ACC to act unless (until?) it gets poached again by another power conference.

(4) Pac-12 – The Pac-12 is an interesting case since it could conceivably benefit from further expansion with schools that are outside of the 5 power conferences (particularly the Mountain West) from a pure financial standpoint, but none of the realistic candidates for that league fit the requirements for markets and/or academics. BYU has a great brand name with a national following and solid academics, but the political viewpoints of the LDS make that school into a non-starter at places like Berkeley. UNLV provides a great market with potentially a gleaming new football palace in Las Vegas, yet the school is far off from what the Pac-12 wants for academics and even worse on the actual on-the-field football front. New Mexico has a similar decent market/horrific football combo. Hawaii could possibly pass muster in terms of academics and football, but this is one case where geography is likely untenable. (It’s still a quicker flight from Los Angeles to Miami than it is from LA to Honolulu.) Boise State’s football prowess and national TV appeal can’t overcome its academic standards that the Pac-12 won’t accept. So, the Pac-12 seems to be boxed in even if it wanted to expand.

(5) Big 12 – As a result, any realistic chance for further power conference expansion in the near future rests with the Big 12. When Jim Delany, Mike Slive, John Swofford and Larry Scott tell reporters that their respective conferences are happy with their current membership levels, I believe them. All 4 of those conferences are at natural stopping points. In contrast, the Bob Bowlsby and the Big 12 seem to have unfinished business – being at 10 members in this environment of larger conferences is much more tenuous than it was 3 years ago, so there’s going to be a lingering feeling of instability with the Big 12 until it gets back up to at least 12 schools in the same way that no one could rest easy when the Big Ten sat at 11 members. While the Big 12 doesn’t have any truly obvious expansion options, they have a bit more leeway compared to the Pac-12 geographically, academically and culturally. For instance, what bothers the Pac-12 about BYU isn’t going to fluster a conference that has a member that didn’t allow any dancing on campus until the Tupac/Biggie feud was at its zenith. The Big 12 could also conceivably expand in virtually any direction within the continental United States, so it’s not implausible that the conference could consider any of UConn, Cincinnati, Colorado State,New Mexico and/or UNLV.

The problem, though, is that the Big 12 is boxed in financially. Unlike the Big Ten, Pac-12 and SEC (and maybe eventually the ACC), the Big 12 doesn’t have a conference network that can leverage additional households in expansion and is entirely dependent on its national ESPN/Fox deal for conference TV revenue. Now, schools such as Texas and Oklahoma enjoy lucrative third tier rights deals within the Big 12, yet that doesn’t do anything to support overall conference expansion. Plus, the expansion candidates are still largely flawed, as the best football schools like Boise State don’t bring any solid TV markets or recruiting grounds while the schools with the best demographics (e.g. UNLV, New Mexico, Colorado State) have some of the worst FBS football programs anywhere. BYU plus Cincinnati or UConn would seem to be the best shot for the Big 12 to maximize financial value in expansion out of what’s realistically available, yet that combo may not be enough. Unfortunately for the Big 12, the conference’s leaders (or maybe just Texas AD Deloss Dodds specifically) got sidetracked for awhile by chasing the expansion lottery dreams of Notre Dame and Florida State while passing on what could have been lucrative and stability-producing additions with Louisville (which would have given a nearish geographic partner for isolated West Virginia) and BYU. The ACC grabbed Louisville to backfill for Maryland, though, and that ended taking a lot of solid expansion combos for the Big 12 off the table (as any desirable expansion for the Big 12 that didn’t include the pipe dreams of Notre Dame and/or Florida State involved Louisville on some level).

To be sure, the Big 12 (a) probably will always be a pretty good conference in terms of football on-the-field by virtue of being the most prominent conference in the recruiting rich state of Texas and (b) will unequivocally be a power conference with high national TV revenue numbers and bowl appeal as long as Texas and Oklahoma are members. However, that’s also a blessing and a curse, as the conference’s over-reliance on the state of Texas and a couple of marquee brand names exposes some of the same weaknesses in the Big 12 that eventually caused the old Southwest Conference to collapse. The demographic growth prospects of the state of Texas specifically are fantastic, but that masks the fact that the Big 12’s demographics outside of Texas are the worst out of all of the 5 power conferences by a wide margin. (This is a large reason why I never bought what was seemingly a widespread belief that ACC schools would defect to the Big 12 no matter what financial arguments some observers attempted to make.) Long-term, the Big 12 is at risk because there isn’t a ready reservoir of brand names that it can expand or merge with in the way that the old Big 8 took Texas, Texas A&M, Texas Tech and Baylor from the SWC. That doesn’t necessarily mean that the Big 12 is at risk of completely breaking up like it did back in 2010-11 since I firmly believe that Texas desires the ability to control (or have perceived control over) a conference more than even making the most TV money, but it’s still the power conference that is bound almost entirely by the strength of its current TV contract (which will eventually expire) as opposed to the strength of its bonds beyond that (unlike the academic bonds of the Big Ten, ACC and Pac-12 or the geographic institutional football focus of the SEC). So, the Big 12 is still be the power conference that will be most susceptible to raids in the future, just as it was 3 1/2 years ago when Jim Delany first announced that the Big Ten was looking to expand. We may just have to wait another 10 years before power conference chaos happens once again. Until then, we’ll need to pay attention to the non-power conferences and basketball leagues (Oakland moving to the Horizon League was announced today and Davidson appears to be heading to the Atlantic 10 as rumored) for our conference realignment fixes.

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

(Image from Sports Illustrated)

ACC Grant of Rights: The Beginning of the End of Conference Realignment?

On By Frank the TankIn Big Ten, College Basketball, College Football, Sports1,326 Comments

Despite being a Big Ten guy that would personally love to have Jim Delany add Florida State, I’ve repeated the following statement many times on this blog: the ACC is much stronger than what people give it credit for. It’s not that I’m a fan of the ACC at all, but simply a reflection that it has never been as open for poaching as so many conference realignment observers thought or wanted it to be. Despite perceived TV contract problem, it’s a conference with strong brand names and good-to-great academics in arguably the most demographically desirable geographic footprint of any league in the country. So, it wasn’t a surprise to me that the ACC finally solidified its position to the outside world with its members unanimously agreeing to a grant of media rights to the conference through 2026-27. For the uninitiated, the “Grant of Rights” is a key tool in protecting a conference’s membership since each school individually grants its media rights to its league for a set period of time, which applies even if such school ends up defecting. For example, if an ACC school now attempted to leave for the Big Ten, SEC or Big 12, the ACC would still own that school’s media rights until 2026-27. That effectively makes ACC schools worthless from a raiding conference’s standpoint since they either can’t get access to those media rights or would have to pay a large buyout to the ACC to obtain them. The Big Ten, Pac-12 and Big 12 schools have already agreed to a grant of rights to their respective conferences.

With 4 of the 5 power conferences having a vested legal interest in seeing grant of rights agreements being upheld in court (and the 5th power conference that doesn’t have a grant of rights, the SEC, being so strong financially off-the-field and competitively on-the-field), it’s likely that we have seen an end to power conference realignment for the next decade or so. There’s a chance that the Big 12 may be compelled to expand back up to 12 or more members from its current 10 or that the Pac-12 could eventually find a current Mountain West Conference member attractive, but the shifting between the power conferences themselves is probably over. From the Big Ten’s perspective, it’s probably all well and good. As much as I personally wanted the Big Ten to look at a school like Florida State, it likely only had eyes for the AAU likes of Virginia, North Carolina and Georgia Tech, all of whom would have been extremely difficult to poach (particularly UNC). The SEC also was set on looking at UNC and maybe rival Duke as a pair, which also would have been a monumental task to pull off. Much like the Big Ten was better off seeing Texas stay in a weakened Big 12 as opposed to heading off to a stronger Pac-16, if Jim Delany can’t nab his alma mater of UNC for himself, maintaining the status quo is much more preferable than seeing UNC head off to the SEC (as unlikely that would have been). From both the conference financial and fan perspectives, there isn’t any Big Ten expansion scenario that makes any sense without 2 or more schools from one of the ACC or Big 12. I’m sure that Mike Slive and SEC fans would feel the same way about SEC expansion.

The conference realignment game has been particularly cruel to American Athletic Conference* orphans UConn and Cincinnati. Their most realistic paths back to power conference status were all via further raids of the ACC opening up more slots. Neither school fits the profile of what the Big Ten and SEC would be looking for, the Pac-12 is out of geographic reach, and the ACC isn’t likely going up to 16 with either of them and would only be interested in them as backfill candidates in the event they ever do lose other members. The best hope for UConn and Cincinnati at this point (and it’s a bit better for the latter) is that the Big 12 ends up having an urgent need to expand again. Using 20/20 hindsight, the Big 12 might rue the day that they passed over taking Louisville and a 12th school (either BYU or Cincinnati) as the ACC surprised a lot of people in grabbing what has ended up being a fairly valuable football and basketball chip off of the table. A Louisville/BYU combo was likely financially viable to the Big 12 in a way that any BYU/Cincinnati/UConn combo probably can’t be, so the Big 12 seems stalled at 10. That might be perfectly fine for the conference’s university presidents and athletic directors at this time, but having a lack of viable expansion options is a much more acute long-term problem for a 10-school conference than ones at 12 or 14 members. I’ve never been a proponent of any conference expanding simply for the sake of expanding, yet it feels like the Big 12 didn’t take advantage of a momentary position of strength after they signed their new TV deal with ESPN and Fox last year. Now, to be sure, I never bought for one second that the Big 12 had any legitimate chance at Florida State and Clemson (the former was really only interested in shaking the money trees of the Big Ten and SEC). However, adding Louisville and BYU would have been a solid expansion both athletically and geographically for the Big 12 and that’s an opportunity that has slipped away. The ACC’s choice of Louisville over UConn and Cincinnati effectively blocked Big 12 expansion, whether John Swofford intended for that to happen or not (and I tend to agree with Andy Staples that Swofford is a ninja that has been underestimated by a lot of college sports fans).

(* My vote for the new AAC logo is here.)

As for the ACC itself, there’s little point in entertaining expansion for the foreseeable future. Contrary to the belief of a surprisingly large number of sports fans, the fact that the ACC has an odd number of basketball teams as a result of Notre Dame’s non-football membership has absolutely zero bearing on conference realignment. The only time that an odd number of schools matters is for a football alignment, which wouldn’t apply in the case of the ACC. Therefore, the conference certainly wouldn’t add a single all-sports member to create an odd number of football schools, and it’s doubtful that going up to 16 is appealing with the ongoing hope (however misguided that it might be) that Notre Dame might join the league as a football member within the next 40 years.

Speaking of Notre Dame, the Irish have managed to solidify their independence for the foreseeable future with an extension of their contract with NBC through 2025. If one thing has been made clear through conference realignment over the past 3 years (to the extent that it wasn’t already clear), it’s that Notre Dame’s ironclad principle is to maintain independence above making the most TV money (which, to be sure, is still quite good for them), scheduling concerns or any other factor besides being structurally foreclosed from winning a national championship (which will be far from the case in the new 4-team playoff format). The ACC is honestly a perfect setup for Notre Dame – the Irish get access to a power conference for non-football sports and a full slate of bowls with a partial conference scheduling commitment that consists largely of schools that they would generally be willing to play, anyway. They’re not going anywhere for a loooong time.

Now, conference realignment for the world outside of the five power football conferences is far from over. The formation of the “new” Big East is spurring a large scale realignment of non-FBS Division I conferences (starting with the Atlantic 10 adding George Mason and Davidson and the Missouri Valley Conference taking Loyola). Many FCS football programs are finding themselves in financial purgatory where they are looking to move up to FBS homes. There might even be a full scale realignment of the college sports world with a possible breakaway of the top football leagues from the NCAA. Still, it feels like the big conference realignment moves (outside of that possible NCAA break-up) have been completed… except, of course, for Johns Hopkins going to the Big Ten.

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

(Image from ImageEvent)

Back Home: Big Ten Division Thoughts and Sweet Missouri Valley Conference Expansion

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, DePaul Blue Demons, Illinois Fighting Illini, Sports889 Comments

I’m finally back from a spring break vacation in Arizona (80 degrees for the White Sox spring training game that I attended last Wednesday compared to 30 degrees for Opening Day in Chicago yesterday), so let’s get a few updates since I haven’t posted in awhile:

(1) Big Ten Divisions – It appears that the Big Ten office is heeding the calls for the “Keep It Simple Stupid” approach of dividing the soon-to-be 14-team conference into East and West divisions, with Michigan State heading East with Michigan, Ohio State, Penn State, Rutgers and Maryland, the West having Illinois, Northwestern, Wisconsin, Nebraska, Iowa and Minnesota and the only debate being where Indiana and Purdue will be placed.  IU-PU will then be the only protected cross-division rivalry.  Assuming that this comes true, my message to the Big Ten office is the following: THANK YOU! THANK YOU! THANK YOU!  While I initially advocated Michigan State being placed in the West with both Indiana-based schools in the East, the newly rumored setup was the next best alignment from my perspective.  The Pac-12 was smart in not trying to force any protect cross-division games outside of the California-based schools playing each other annually, so it’s great that the Big Ten reportedly will only keep the Old Oaken Bucket as protected while the West can continue to rotate through Michigan, Ohio State and Penn State more often in this KISS alignment.  (Note that it’s a heck of a lot less heartburn for the West schools to see Indiana or Purdue falling off the schedule more often compared to Michigan, Ohio State and Penn State, which was likely a large driver for Sparty getting placed in the East.) It still makes a lot more sense in my mind for Indiana to head to the East since it’s (1) actually further East than Purdue, (2) a school with a disproportionately large East Coast student population and (3) better for competitive balance purposes.  The only reason that I can think of for IU pushing back on an Eastern placement is that it knows that it will never break its Rose Bowl drought competing in a division with resurgent Michigan and Ohio State programs.  Regardless, the Big Ten seems to finally be making the right choices on its divisional alignment.  Let’s just hope those right choices also extend to burying the Legends and Leaders division names next to Jimmy Hoffa*.

(* The Meadowlands aren’t that far from Rutgers, so it would still be in the Big Ten footprint.)

(2) Sweet Missouri Valley Conference Expansion – The “new” Big East consisting of the old Catholic 7 schools poached Butler and Xavier from the Atlantic 10 and Creighton from the Missouri Valley Conference right before the start of the NCAA Tournament, which is likely going to trigger a massive realignment of the midmajor non-FBS conferences.  While the MVC is celebrating Wichita State’s Final Four run, it is also the league most openly pursuing expansion/replacement options as of now (Missouri State’s president actually Tweeted that he’s out visiting interested expansion candidates)*.  Various reports so far indicate that the MVC has had some conversations with Oral Roberts, UMKC, Loyola (Chicago), UIC** and Valparaiso.  The latter three Chicago area schools don’t surprise me at all: I Tweeted a few weeks ago that my gut feeling was that those programs plus Belmont would be at the top of the MVC list if Denver wasn’t going to be considered.  (Reading between the lines in this interview by MileHighMids of Denver’s athletic director, it appears that the MVC would have been interested in Denver if the school were to add more sports, but the AD isn’t willing to commit to that right now.)

(* For a great analysis of potential MVC candidates using Google Maps, check out this anonymous posting.)

(** For disclosure purposes, my parents met at and graduated from UIC, with my father then spending over 3 decades working at that campus. I don’t have any real rooting interest in the UIC Flames sports teams, but I’ll admit to having an affinity for the institution overall with my family connection.)

Perusing some MVC message boards and blogs, I’ve generally seen fans vomit over these choices with calls that they could either (1) do better or (2) stand pat at 9 schools.  It reminds me of the recent UCLA basketball coaching search*, where much of the fan base seemed to be incredulous that they couldn’t lure the likes of Brad Stevens or Shaka Smart and had to settle for the protector of a rapist… er… Steve Alford.**  The MVC fans seemed to have hopes for the likes of SLU and/or Dayton (the former of which is definitely going to be in the Big East, where it’s just a matter of when, while the latter likely will be there but has to sweat it out a bit with Richmond as a competitor for spot #12) and are now facing the reality that the realistic candidates aren’t nearly as desirable.

(* For what it’s worth, I believe that UCLA is an elite program with only Kentucky, Kansas, North Carolina, Indiana and those rat bastards from Duke being in the same class. However, the Bruins’ lack of a sexy hire was the result of an elitist approach to job security by the school and fan base. That is, they just fired a guy in Ben Howland who went to three Final Fours, pulled in a top-ranked recruiting class last year and won the Pac-12 regular season championship this year.  At most schools, that record warrants a lifetime contract – Shaka Smart is going to be able to parlay a single Final Four run into perpetuity at VCU.  I fully understand how many UCLA fans believed the trajectory of the program was going in the wrong direction with Howland and a change might have been needed simply for the sake of a change, but they might have failed to understand how top level coaches in stable positions aren’t exactly enthralled with the prospect of taking a job where a 3-time Final Four coach got canned right after winning a conference championship. Hence, the pool of interested parties was much more shallow than anticipated.)

(** I highly recommend Black Heart Gold Pants blogger Patrick Vint’s message to UCLA fans about Alford on Bruins Nation.)

From my perspective, the MVC isn’t going to be able to add any real home run additions on-the-court. Belmont has the best performance over the past few seasons of the potential candidates, but geographic fit seems to be an issue in that case and their attendance figures have been subpar.  As a result, the MVC likely needs to concentrate on attacking its worst weaknesses as opposed to attempting to replace the irreplaceable Creighton in terms of basketball performance.  To me, that worst weakness is that fact that Wichita is the MVC’s largest TV market at #69 overall in the US.  Those of you that read me regularly know that I’m not in favor of expansion only for the sake of additional markets, but in the case of the MVC, having Wichita as your largest market is Charles Barkley turrible. Even if some of the candidates in large markets aren’t necessarily great TV draws, the MVC is eventually going to need them for recruiting purposes for long-term survival.  (This is why even if SLU and Dayton end up leaving the Atlantic 10 on top of Butler and Xavier, that league is still in much better position going forward with its footprint.) That means that a school like Murray State, which has had solid attendance and on-the-court performance, might appear to be desirable for MVC fans but not so much for the conference’s university presidents.

As a lifelong Chicagoan, I have a particular interest in how the MVC is going to proceed since I firmly believe that it should have a better presence in the Chicago market than it does today. Illinois State, Southern Illinois and Bradley all predominantly draw students from and send alumni to the Chicagoland area (with Northern Iowa and Drake also sending large contingents to the region, too).  However, the MVC doesn’t draw the coverage that it ought to considering the in-place fan base since it lacks a direct Chicago presence (which is critical unless you’re the University of Illinois or Notre Dame).  Therefore, it’s not a shocker that two city schools (UIC and Loyola) and a university on the periphery of the metro region in Northwest Indiana (Valpo) are being visited by the MVC powers that be. The MVC leadership likely recognizes what I see in that Chicago is a large market that can be legitimately leveraged by the conference.  It’s not so much that the MVC thinks that UIC or Loyola can “deliver” Chicago in a way that Illinois, Northwestern, DePaul or Notre Dame are able to, but rather that the critical mass of MVC students from and alums living in the area can give the league a solid presence akin to what the A-10 has in Philadelphia or Washington, DC. The MVC doesn’t have any type of major market anchor right now and that’s increasingly going to be a negative risk factor if it’s not rectified.

I haven’t forgotten that ORU’s crosstown neighbor of Tulsa just got invited to the “Old” Big East (or Conference TBD) today. I’ll have more thoughts on that the status of that league in a separate post. Until then, enjoy the Final Four!

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

(Image from mgoblog)