CFP expansion = el muerto

[CL82]

I state facts about what the money is spent on and you come back with speculation about how colleges feel about sports besides basketball and football and won’t spend at the same level. I don’t buy it.

Jim, let’s try it this way. What expenses does the NCAA have now that a P5 breakaway wouldn’t have? The first is easy. Emmert’s salary of roughly $3 million. Link

The next is the $88.5 million that the NCAA pays towards Division II and Division III schools. Link

Assuming the NCAA did everything else the same, that’s $91 million annually that the P5 would make from breaking off.

Finally, about $43 million goes into the NCAA’s administration, so figure 40,000,000 in excess of Emmerts salary. Of that 40 million a significant amount is being paid towards enforcement, which has been notoriously unevenly enforced, and given the NIL rules, basically become pointless at this point. A P5 breakout certainly wouldn’t dedicate any serious amount of money toward that function. In fact there’s already been an accounting study saying that it ought to be dramatically reduced.

Now, that’s not all the money that the P5 would make by virtue of breaking off, those are just the obvious items for which I could quickly find documentation. Keep in mind this is an one off these are the amounts that the P5 schools would make annually. I’m betting if I spent more than five minutes on it be able to find significant additional amounts of money. I believe NCAA revenues are roughly $222 million a year largely all earned from March Madness that is too much money to leave on the table.

 

[Vowelguy]

So the P5 would have no administration expenses? No rules? No marketing?

 

[06029]

So the P5 would have no administration expenses? No rules? No marketing?

They already do and it does not change.

 

[UCFBfan]

The big stadium SEC, B1G, etc. schools will not agree to an expanded playoff until they are certain it will not jeopardize the value of the regular season to their fan bases. As an example Bama has sports revenue in the range of 200 million. About 50 Million comes from the SEC payout. Most of the rest comes from revenue derived from game days at Bryant-Denny.

This is very true, but would an expanded play off effect attendance at most of these SEC schools? Their culture and fanbase runs so deep that I can't see it matter if a P5 gets a bid or not. The regular season games matter. Heck, you could even add a high stakes OOC game and it still won't affect your chance at making an expanded CFP. The same can be said for many B1G schools. Even in down years, you see schools like Florida, Penn State, Michigan, LSU, still pack their massive stadiums.

 

[John Greene]

Personally I agree that an 8-12 school playoff should not reduce the importance of regular season games. On the other hand I also know two people close to the Bama AD who say they are not sure the AD would take the chance without the guarantee of a much bigger media payday over the present system. That means a much bigger payday for Bama not overall.

 

[UConnJim]

They already do and it does not change.

Again, people are underestimating what the NCAA does. Ever seen a manual for hosting an NCAA tournament round? I have been to NCAA tournaments in many different sports and it would be a huge task for a new organization to recreate them.

I do think college football will look different in the future as the P5 already controls almost all of the revenues and they want to play by their own rules. In general, the other sports work under the NCAA and it is funded by the men’s basketball tournament.

 

[Vowelguy]

They already do and it does not change.

They do for their league, but who would coordinate rules across the leagues? Tournaments?
Or would individual schools be allowed to offer however many scholarships and pay players whatever they wanted with no limit?

 

[the Q]

Jim, let’s try it this way. What expenses does the NCAA have now that a P5 breakaway wouldn’t have? The first is easy. Emmert’s salary of roughly $3 million. Link

The next is the $88.5 million that the NCAA pays towards Division II and Division III schools. Link

Assuming the NCAA did everything else the same, that’s $91 million annually that the P5 would make from breaking off.

Finally, about $43 million goes into the NCAA’s administration, so figure 40,000,000 in excess of Emmerts salary. Of that 40 million a significant amount is being paid towards enforcement, which has been notoriously unevenly enforced, and given the NIL rules, basically become pointless at this point. A P5 breakout certainly wouldn’t dedicate any serious amount of money toward that function. In fact there’s already been an accounting study saying that it ought to be dramatically reduced.

Now, that’s not all the money that the P5 would make by virtue of breaking off, those are just the obvious items for which I could quickly find documentation. Keep in mind this is an one off these are the amounts that the P5 schools would make annually. I’m betting if I spent more than five minutes on it be able to find significant additional amounts of money. I believe NCAA revenues are roughly $222 million a year largely all earned from March Madness that is too much money to leave on the table.

Yeah, you wouldn’t keep all of it; but you could significantly cut down on admin support and leave more of it to the ADs or committees of ADs

 

[ZooCougar]

The answer here is very simple and they already are getting it. TV money. And do you think a súper league wouldn’t generate more money?

And as it has already been laid out in this thread, without having to share revenue with Directional State U, their margins for whatever championship they develop will be wider.

Honestly, the only hope for the G5 now is to exit the NCAA first and find a way to straight up pay players. I don’t know if that’s possible. The only other thing to do would be to structure some significant NIL deals somehow.

Generate more money? That’s kind of irrelevant. First off they probably would make more money per member and they don’t have to share as much with everyone else.

 

[CL82]

So the P5 would have no administration expenses? No rules? No marketing?

Of course they would, but unless you feel that the NCAA is currently operating as efficiently as possible the savings there are likely to be considerable. Do you believe the P5 would pay an administrator 3 million a year? I don’t. And do you believe the P5 would have a separate enforcement arm, I don’t, but certainly it wouldn’t be anywhere near as big as the NCAA‘s current one. Read the study I linked in my prior post which suggests that it’s extraordinarily inefficient.

But even if the P5 break off operates as inefficiently as the NCAA currently does, which is extraordinarily unlikely, by virtue of eliminating administration expenses for division II division III and the G5 saves it over 100 million annually. I don’t know about you, but if I see $100 on the ground in in front of me, I’m going to bend over and pick it up. Eventually so will the P5.

 

[CL82]

Again, people are underestimating what the NCAA does. Ever seen a manual for hosting an NCAA tournament round? I have been to NCAA tournaments in many different sports and it would be a huge task for a new organization to recreate them.

I do think college football will look different in the future as the P5 already controls almost all of the revenues and they want to play by their own rules. In general, the other sports work under the NCAA and it is funded by the men’s basketball tournament.

Jim, with Bizlaw you wanted to talk specifics that generalities. Do you disagree with any of the specific numbers that I posted above? I provided links for each of them, so they’re not speculative.

 

[nelsonmuntz]

All the experts on a future split seem to think that every single P5 school is on exactly the same page with how a post-NCAA world would look. I highly doubt that is the case.

 

[UConnJim]

Yeah, you wouldn’t keep all of it; but you could significantly cut down on admin support and leave more of it to the ADs or committees of ADs

You do realize that the committed are already made up of ADs, assistant ADs, and conference reps?

 

[shizzle787]

Jim, let’s try it this way. What expenses does the NCAA have now that a P5 breakaway wouldn’t have? The first is easy. Emmert’s salary of roughly $3 million. Link

The next is the $88.5 million that the NCAA pays towards Division II and Division III schools. Link

Assuming the NCAA did everything else the same, that’s $91 million annually that the P5 would make from breaking off.

Finally, about $43 million goes into the NCAA’s administration, so figure 40,000,000 in excess of Emmerts salary. Of that 40 million a significant amount is being paid towards enforcement, which has been notoriously unevenly enforced, and given the NIL rules, basically become pointless at this point. A P5 breakout certainly wouldn’t dedicate any serious amount of money toward that function. In fact there’s already been an accounting study saying that it ought to be dramatically reduced.

Now, that’s not all the money that the P5 would make by virtue of breaking off, those are just the obvious items for which I could quickly find documentation. Keep in mind this is an one off these are the amounts that the P5 schools would make annually. I’m betting if I spent more than five minutes on it be able to find significant additional amounts of money. I believe NCAA revenues are roughly $222 million a year largely all earned from March Madness that is too much money to leave on the table.

That is between 2-5 million per P5 school. That's not enough of an incentive to split up and deal with a major PR backlash.

 

[CL82]

That is between 2-5 million per P5 school. That's not enough of an incentive to split up and deal with a major PR backlash.

Assuming that figures correct that’s an extra 2 to 5,000,000 a year. 20 to 15,000,000 in 10 years. You don’t think that’s worth “a PR backlash“? For what it’s worth, you don’t think that amount of money lets them manage the “PR“ narrative? How much PR backlash did they get from football autonomy?

JMO

 

[Hskies4Ever]

Generate more money? That’s kind of irrelevant. First off they probably would make more money per member and they don’t have to share as much with everyone else.

Yes. That’s exactly the point. Both would happen.

 

[BlueDogs]

These cartel arrangements only last for so long before they fall apart. It's hard to predict when and how, but the pigs will take it one step too far and start destroying the very thing that makes CFB worth following. How long before some NIL deal is implicated in a sports betting scheme? People have short memories when it comes to corruption and greed. This is headed towards a major crap show.

 

[UConnJim]

Jim, with Bizlaw you wanted to talk specifics that generalities. Do you disagree with any of the specific numbers that I posted above? I provided links for each of them, so they’re not speculative.

First, I want to make clear that I don't like the way the NCAA is run at all, but that doesn't mean that college athletics doesn't need a governing body. For those of you thinking you could eliminate Emmert and gain $4 million, that is what a P5 commissioner makes and you would still be paying someone who runs a $1 billion business about $4 million per year, so that is not a savings. Plus, out of the ~$44 million in NCAA management and general expense, only ~$13 million is salaries. (Running events falls under different categories of expenses.) And, current P5 athletic departments don't have the resources or capability to run a parallel NCAA organization. (Ask any AD if they have the ability or desire to do it.) The P5 would need to set up a new organization with the responsibilities currently handled by the NCAA. BTW, I do think the P5 will set up their own rules for football.

Now, on to the numbers.

Most important, the CBS NCAA men's tournament media deal runs through 2032, so I don't think you will see a change for the next decade. In conference realignment, it seems movement happens around media deals expiring.

I don't disagree that D2 and D3 are paid $53 million and $35 million respectively. There are some revenue offsets as members pay dues, etc,.... of ~$16 million per year, but that includes all divisions. (Note: If you eliminated these payments, D2 and D3 athletics would have to be dramatically downsized. I'm not saying that D2 and D3 athletics should be dependent on the NCAA men's basketball tournament in order to succeed, but that is the current situation.)

What I disagree with is that you could have a P5 only basketball tournament and still generate the same amount of media and ticket revenues. Right now, there are 67 games in the tournament. I guess the P5 could host an all-comers P5 tournament to keep the number of games flat, but I don't think that would generate the same level of interest and dollars. Think about this. There would be 14 states (small states) plus DC that would never have a participant and there are 12 states that could only possibly have 1 participant. How does that increase interest in the tournament? I would think the overall revenue pie would shrink, although it is possible that revenue per P5 school could go up. But, by how much?

Let's assume that the P5 could keep all the current profit margin of the basketball tournament and eliminated the payout to the D2 and D3, that would result in about $300 million of maximum potential increase in payout. I'm assuming all the other revenues and expenses offset each other which I think is generally a fair assumption if they are managing all of the other functions of the NCAA. So, if you believe eliminating all the teams from outside the P5 and the P5 could keep the revenue flat (which I don't believe), the maximum increase in payout for the 69 P5 schools is ~$4.3 million per school. So my estimate of the potential increase per school would be $1 to $3 million per year, but even those numbers wouldn't happen if the tournament was only 32 teams.

A potential $1 to $3 million per year is not an immaterial number, but it is not guaranteed and is the P5 willing to blow up a current cash cow and all NCAA championships, decimate D2 and D3 athletics, legal issues, etc for that level of increase in payout? I don't think so and I think you can make more money over time keeping the NCAA Tournament intact than you can by breaking it up.

Also, would the P5 walk away from the assets of the NCAA? Some of the assets include $600 million on the NCAA balance sheet, a free HQ building in Indianapolis (ever wonder why the Final 4 in is Indianapolis ~every 5 years?), the March Madness trademark, past tournament rights,.... And what about the football concussion legal settlement which costs ~$25 million per year? The men's basketball tournament is currently paying for that.

 

[CL82]

First, I want to make clear that I don't like the way the NCAA is run at all, but that doesn't mean that college athletics doesn't need a governing body. For those of you thinking you could eliminate Emmert and gain $4 million, that is what a P5 commissioner makes and you would still be paying someone who runs a $1 billion business about $4 million per year, so that is not a savings. Plus, out of the ~$44 million in NCAA management and general expense, only ~$13 million is salaries. (Running events falls under different categories of expenses.) And, current P5 athletic departments don't have the resources or capability to run a parallel NCAA organization. (Ask any AD if they have the ability or desire to do it.) The P5 would need to set up a new organization with the responsibilities currently handled by the NCAA. BTW, I do think the P5 will set up their own rules for football.

Now, on to the numbers.

Most important, the CBS NCAA men's tournament media deal runs through 2032, so I don't think you will see a change for the next decade. In conference realignment, it seems movement happens around media deals expiring.

I don't disagree that D2 and D3 are paid $53 million and $35 million respectively. There are some revenue offsets as members pay dues, etc,.... of ~$16 million per year, but that includes all divisions. (Note: If you eliminated these payments, D2 and D3 athletics would have to be dramatically downsized. I'm not saying that D2 and D3 athletics should be dependent on the NCAA men's basketball tournament in order to succeed, but that is the current situation.)

What I disagree with is that you could have a P5 only basketball tournament and still generate the same amount of media and ticket revenues. Right now, there are 67 games in the tournament. I guess the P5 could host an all-comers P5 tournament to keep the number of games flat, but I don't think that would generate the same level of interest and dollars. Think about this. There would be 14 states (small states) plus DC that would never have a participant and there are 12 states that could only possibly have 1 participant. How does that increase interest in the tournament? I would think the overall revenue pie would shrink, although it is possible that revenue per P5 school could go up. But, by how much?

Let's assume that the P5 could keep all the current profit margin of the basketball tournament and eliminated the payout to the D2 and D3, that would result in about $300 million of maximum potential increase in payout. I'm assuming all the other revenues and expenses offset each other which I think is generally a fair assumption if they are managing all of the other functions of the NCAA. So, if you believe eliminating all the teams from outside the P5 and the P5 could keep the revenue flat (which I don't believe), the maximum increase in payout for the 69 P5 schools is ~$4.3 million per school. So my estimate of the potential increase per school would be $1 to $3 million per year, but even those numbers wouldn't happen if the tournament was only 32 teams.

A potential $1 to $3 million per year is not an immaterial number, but it is not guaranteed and is the P5 willing to blow up a current cash cow and all NCAA championships, decimate D2 and D3 athletics, legal issues, etc for that level of increase in payout? I don't think so and I think you can make more money over time keeping the NCAA Tournament intact than you can by breaking it up.

Also, would the P5 walk away from the assets of the NCAA? Some of the assets include $600 million on the NCAA balance sheet, a free HQ building in Indianapolis (ever wonder why the Final 4 in is Indianapolis ~every 5 years?), the March Madness trademark, past tournament rights,.... And what about the football concussion legal settlement which costs ~$25 million per year? The men's basketball tournament is currently paying for that.

Jim, I feel like we’re making progress in that you now agree that by leaving the NCAA which is a voluntary organization, the P5 would make more money. We disagree as to the amount. For example your assumption that the P5 would definitional he pay someone the same amount they pay Emmert it is flawed. It’s far more likely in reasonable that they would pay administrator a six figure salary. Likewise, there is likely considerable bloat in NCAA salaries up and down the line given that they don’t have any downward pressure to keep salaries in check. The savings by eliminating Division II and Division III payments is an in dispute in keep in mind that there are costs associated with those institutions in the other line items as well that would also be eliminated. We keep hearing about “blow back” from the P5 leaving the NCAA. I don’t think they’d be much. They have no obligation to support division II in division III institutions, which is in essence what they’re doing right now. Likewise, they have no obligation to support Mid major and low major division one institutions, which, again is what they’re doing right now. Best upon the numbers in my link are probably looking at somewhere in the vicinity of 5 million per year, per institution if the P5 broke off. As the arms race of the better facilities and more expensive coaches continues there will be more pressure to find more money. Leaving the NCAA is an easy way to do that.

In any event, you wanted hard figures to support BL‘s position that a P5 departure will eventually happen. I was happy to provide that to you.

 

[freescooter]

I actually think one possibility is a return to the situation that existed through the mid-1980s or so. Everyone knew that the “major” northeast programs, except Penn State, weren’t as good as the Big 10 or the SEC. But it really didn’t matter. You might play 1 or 2 games a year if you were Syracuse or BC or Pitt, and you didn’t expect to win those. Oh every now and then an eastern power would crop up. Pitt when Tony Dorset was there. Syracuse with Floyd Little BC with Flutie. But mostly they played each other, and a few other local teams plus an ACC team or 2, some teams now considered FCS Like Villanova, William & Mary, Colgate Holy Cross ( those teams tended to play a mixed schedule of what we now see as FCS). The SEC will be more or less insular.

 

[huskymedic]

 

[CL82]

Was the SECs raid on the Big 12 premature the accidentally killing expansion before they could take advantage of it or was it a brilliant move to maintain the status quo?

 

[DoctorWho85]

Was the SECs raid on the Big 12 premature the accidentally killing expansion before they could take advantage of it or was it a brilliant move to maintain the status quo?

Status quo while bringing in more TV with Texas.