A few observations:
- Frank may be a lawyer but he's just wrong if he thinks the purpose of antitrust law is to defend free markets. No, its motivating purpose is to prevent cooperation among competitors in a way that disadvantages other competitors or consumers. There would be an antitrust case. So far no one has been incentivized to bring one, as offending the power conferences would have blowback, but if the P5 succeed in concentrating 90% of the revenue among themselves, the other schools would have every incentive to sue. Antitrust law is confused and incoherent, so any case is a 50-50 crapshoot.
- What is motivating this? A desire to pay athletes? I doubt it. They have never wanted to share money with athletes in the past, nor with anyone else not a revenue producer. Nor is it about football money. The P5 are already getting 90% of the football money. They cannot get more football money by breaking away. It's presumably a mix of (a) basketball money which is now shared among 356 schools but the $1 bn tourney money could as easily be split among 100, adding $7 mn per year to the major schools; and (b) power to direct their own destiny without having to placate smaller schools. If it's about basketball money, presumably that bodes well for UConn being included, also the new Big East and some others.
- I have to believe money woes are the major driver of everything. The higher education bubble is now dependent on spiraling student loan debt for continued growth and awareness is growing that the return on that debt is poor. The federal government has reached the limits of its ability to grow spending, and entitlements will increasingly pressure higher education and research spending. The universities are facing declining revenue and don't want to cut spending. They are searching for revenue. But this is going to pit college against college. There will be a great loss of collegiality in higher education as this plays out.
- I think the concerns several have voiced about college sports losing public interest are valid. If 65 schools break away and many schools are left out and it is a clear money grab, and the players get paid so it is semi-professional, there will be pushback in many ways, not just antitrust lawsuits. The public will be less enamored of mercenary ventures with rigged playing fields. The pro sports will be more inclined to compete, for instance by establishing developmental leagues to take players. Currently there is a law preventing the NFL from scheduling games in competition with college games. What if those are repealed? What if the NBA expands the developmental league and competes for high school players? Colleges have relied heavily on public and alumni goodwill to carve out this privileged position in athletics, but the more they become mercenary and conniving institutions the less goodwill they'll have.
- Continued evolution of the TV market with a shift toward Internet distribution and marriage of TV and computing may make these lucrative TV contracts ESPN and Fox have given the conferences money losers for the networks. Economic woes will also pressure cable subscriber bases and fees. The schools that are left out have a chance to build a low-cost Internet alternative that provides a free or low-cost sports viewing alternative to the $50+ per month cable subscriptions that are driving P5 revenue. Although the outsiders will have far less money, they may have greater visibility, I could see a scenario where 50% of the country drops to $7/month TV and 50% pays the expensive cable, and the major colleges lose fans while the second-class ones gain them. This is another channel of pushback against the P5. They won't want to see new competitors rise up.
So I think the P5 will realize they don't want to get too greedy and risk killing the golden goose, and will accommodate schools like UConn. This doesn't mean we'll have as much money as they will, but I think we'll have an opportunity to compete athletically.
