Was the Alston case (NIL) the trigger for this round of realignment? | Page 3 | The Boneyard

Was the Alston case (NIL) the trigger for this round of realignment?

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While the USC/UCLA add increases these contracts by anywhere from 15-25% the real value is revenue thru the BTN.

As long as cable stays alive, and both the NFL & SEC have linear TV deals in place thru 2033 & 2034 so it's probably here for at least another 10 years, the BTN carries a premium rate in the Los Angeles DMA (5.7MM TV homes) with possible increased fees in surrounding markets.

At $1.50/month the BTN generates $8.5MM/month in revenues before any ad sales in the Los Angeles DMA with USC/UCLA

So basically another $100MM/year.

Also, the B1G schools own 40% of the BTN. That's why they make schools "buy" their way into the conference. Adding 2 more schools dilutes the existing school's shares but, if it increases the value of the shares then it's a plus. I don't have any idea how the addition of USC/UCLA changes the valuation plus or minus, but my guess is that a network that has the ability to provide live sports programming for 12+ hours across the country has a significant value
 

nelsonmuntz

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While the USC/UCLA add increases these contracts by anywhere from 15-25% the real value is revenue thru the BTN.

As long as cable stays alive, and both the NFL & SEC have linear TV deals in place thru 2033 & 2034 so it's probably here for at least another 10 years, the BTN carries a premium rate in the Los Angeles DMA (5.7MM TV homes) with possible increased fees in surrounding markets.

At $1.50/month the BTN generates $8.5MM/month in revenues before any ad sales in the Los Angeles DMA with USC/UCLA

So basically another $100MM/year.

Also, the B1G schools own 40% of the BTN. That's why they make schools "buy" their way into the conference. Adding 2 more schools dilutes the existing school's shares but, if it increases the value of the shares then it's a plus. I don't have any idea how the addition of USC/UCLA changes the valuation plus or minus, but my guess is that a network that has the ability to provide live sports programming for 12+ hours across the country has a significant value

BTN is included in the Big 10's headline revenue number.
 

nelsonmuntz

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Back to my original post, NIL means that it will be harder to stockpile talent. Why sit the bench at Ohio State when you can start, and get paid real NIL money, at Pitt? I am not sure how a power play by the Big 10 and SEC would work. Would they refuse to play other leagues and announce that the winner of their leagues is national champion? Would that work? That is a lot of Big 10 and SEC teams picking up a lot of losses, and would fans look at the SEC/Big 10 "Championship Game" as a true champion?

If that doesn't work, all the two raids have done is pull power programs out of the Big 12 and Pac 12, and give other schools the opportunity to take up the mantle. For example, Oregon, with Nike plus Portland's corporate and booster market behind them to fund NIL, and USC is out of the way, should become a perennial superpower in college football.

I think the Big 12 has already made the right moves. Houston, Cincinnati and BYU in a major conference will be forces to reckon with in hoops and football. All are in or near major cities, and should be able to generate meaningful NIL revenue for their athletes, enabling them to compete effectively for talent. Throw in the fact that none of those 3 schools has an Alabama or Georgia or Ohio State sitting in front of them in the conference, they may not see some of the headwinds that the recently departed schools will see.

If I was the Pac 12, I would add SDSU and Boise State. It needs a presence in Southern California, and Idaho/Montana is one of the fastest growing parts of the country.
 

nelsonmuntz

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And here we go. SEC Commissioner Sankey is threatening to destroy the NCAA Tournament. It appears that the main driver of this round of expansion was to destroy the other leagues and try to keep it all for themselves.
 

McLovin

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And here we go. SEC Commissioner Sankey is threatening to destroy the NCAA Tournament. It appears that the main driver of this round of expansion was to destroy the other leagues and try to keep it all for themselves.
Season 9 Wow GIF by The Office


Took ya long enough.
 

McLovin

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So you argued with me for 3 pages about this but now you are saying "I told you so". Got it.
What? I’ve always said it was a power play to make the conferences more money. You’re the one who couldn’t wrap your head around the fact that adding more big brands increases their power.
 

nelsonmuntz

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What? I’ve always said it was a power play to make the conferences more money. You’re the one who couldn’t wrap your head around the fact that adding more big brands increases their power.

See below? That is the first post of this thread. The fact that this is a power play and less about financials, at least in the short term, is the whole point of this thread. Maybe you should try fewer generic insults and spend more time learning to read.

The NIL case may have been a driver to the effort to potentially wipe out 1/3 of the P5 plus everyone else. NIL money would make it much harder for programs to stockpile talent, because players have to play to get paid. A 5* will be a lot less willing to be a backup on Alabama instead of going to Mississippi or even UCF and starting immediately. And getting paid.

So if you are one of the college football superpowers, how do you maintain your control over the top recruits? Wipe out your competition by aligning with the other top programs so you will have all the power in recruiting.

NIL is such a game changer to recruiting that I can see why the SEC and Texas/Oklahoma have to move now. If they wait 5 years, the talent could be dispersed so broadly that 15-20 schools will no longer dominate recruiting like they do now. And that could cost them in revenue as other schools emerge or simply the teams at the top turn over more rapidly.
 

McLovin

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See below? That is the first post of this thread. The fact that this is a power play and less about financials, at least in the short term, is the whole point of this thread. Maybe you should try fewer generic insults and spend more time learning to read.
And why are they making a power play…………. Money.
 
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Actually the original raid on the Big East was not the kick off
in the 1990’s The SEC raided the SW conference for Arkansas. The remnants of that conference and the Big 8 allegedly merged but ESPN stepped in and said only 4 Texas Schools to the supposed surprise of the SW commissioner.
Texas , Texas A&M , Texas Tech , and Baylor were chosen by Bristol .
Houston, SMU, TCU and Rice were left behind.
Apparently no one in Providence was
paying attention.
 

nelsonmuntz

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I think the playoff expansion basically cements that at least the P5, and maybe some additional schools in the G5, could be players in the post-NIL world. This season we are still seeing the residuals of a world where reputation and in the case of SEC schools and a few others, the willingness to cheat, drove recruiting. But now boosters paying players is no longer cheating, and so the SEC no longer has the huge recruiting advantage that it had in the past. You can see reputation slipping away with Texas sliding to mediocrity and Oklahoma leaving the elite. Texas' problems are mostly self-inflicted, but Oklahoma has some competitive disadvantages that could result in a long-term decline relative to where the program has been historically.

It is important not to conflate the TV contracts with NIL. While many of the P2 schools will be among the leaders in the NIL game, the TV money goes to the school, not the players. NIL money goes to the players.

I think the recruiting drivers will be:

1) Money - obviously. Tradition and reputation and proximity to home will be less important in recruiting than they were in the past. The ability of schools to generate local booster support to drive NIL money will be paramount.

2) Opportunity to play - you need to play to get really paid in an NIL world. A 4* or even 5* kid in the old model would be willing to ride the bench at Auburn or Clemson or Alabama because he was getting paid so what did he care? Going forward, a kid could make a lot more money starting at UNC or Texas Tech than he could riding the pine at a Top 5 school.

3) Opportunity to be seen - These 4* and 5* kids will want to play on good teams that have a shot at the playoffs. The 16 team conference model basically banishes the bottom half of the league to permanent competitive Siberia. No one is going to want to watch a 3-9 South Carolina team play anyone. But schools like Cincinnati and Baylor and Houston and Pitt and Oregon and Washington and (if they ever get out of their own way) Miami and Florida State have a clear path to the playoffs. I think this will change the way teams schedule. Kids will not want to play in a Minnesota/Generic FCS school game. The middle of the pack programs in particular are going to need to schedule good opponents in the non-conference to attract players.

4) Access to the Playoffs - the NCAA basketball is already broadly available to all the P5 teams, and I don't see a lot changing in terms of access for the near future so access won't be a competitive recruiting advantage for anyone. The move to a 16 team playoff dramatically expands access for a lot of schools that were consistently just missing. Establishing a program in the top half of a conference is important, although I think realistic access could extend a bit beyond that. For example, I don't see Minnesota consistently being in the Top half of the Big 10, but I could see that program occasionally getting a playoff bid. Schools like Rutgers and Indiana will have a hard time selling playoff access because the hill is just too high to climb for those programs. No one will care about the bowls going forward, so the bottom feeders in the P2 and P5 could have a hard time being even remotely competitive. The G5 will be interesting, but I don't have a great theory for what will drive their success going forward.

5) Urban markets - Cities generally have more rich people and more corporations that can fund NIL, so the cities will have a natural advantage. In basketball, playing in big markets will be a huge advantage in recruiting because urban markets generally have more basketball fans. I think the mid-sized cities in particular could do well because they are too small to get pro teams but they are still big enough to have enough corporations and wealthy people to support a top tier athletic program. Long-term Texas and Ohio State should have a big advantage over the other top programs in the P2. Outside the P2, I like Miami (if they can get their act together) UNC, Pitt, Oregon, Washington, Houston, BYU, Cincinnati and Louisville in all sports and all the Big East schools in basketball to stay competitive. Schools like Mississippi State, Indiana, and Mississippi could struggle in the new model. UNLV is a program to watch, because there is so much money in Vegas that it could become nationally competitive overnight in hoops and football if the locals got behind it. Boise and Memphis are two others to watch.



Things that are no longer a meaningful advantage in recruiting:

1) Prime TV slots - with streaming and people cutting the cord, anyone can watch any game they want from wherever they want. The old prestige of the 3:30 Saturday slot or Big Monday in basketball are much less valuable now.

2) Conference prestige - I think conference prestige matters a lot in hoops. Players want to play against the best because those are the games that get watched. I see less of an advantage for football, and if the other factors end up mattering more as I predict above, conference affiliation could be a net negative. Over time, NIL will spread talent and that could also dilute the television revenue advantage of the P2.

3) Tradition - Tradition has mattered less over time, but still had somewhat of a hold as a signal to top recruits of where other top recruits were going. Now, NIL is driving it, and recruits will have agents that can help them navigate the recruiting landscape. Nebraska is in a lot of trouble on this score. No recruit will remember when Nebraska was a top program, and being outside a city and in a conference with an established top tier, Nebraska could struggle to ever regain his traditional footing.
 
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How many years until streaming becomes more important than broadcast ad revenue?
 
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How many years until streaming becomes more important than broadcast ad revenue?

Streaming is just a broadcast method...there will still be ad revenue.

ESPN and Disney have monitored the streaming technology.......and are in a position to make a big jump in the subscription fees.

The Disney-backed streaming-video sports service intends to raise its monthly subscription fee by $3 a month — a 43% price hike that outstrips even the current rate of inflation — and it is doing so at a time when big media companies find the prospect of monetizing new streaming efforts to be significantly more challenging.

Other streaming outlets are also searching for new ways to keep cash flowing as consumers have a wider array of choices from which to select — and for which to pay. Netflix earlier this week unveiled a new partnership with Microsoft to launch an ad-supported tier of its service, and Disney+ is also set to debut a new advertising-supported option. Warner Bros. Discovery’s HBO Max has an ad-supported tier that is in many cases cheaper to buy than the linear HBO package sold by cable and satellite distributors.
 
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If the SEC & B1G start flat out paying players (not NIL) that would likely tip the scales. They will eventually use their money disparity to their advantage. What's to stop them from taking $10MM/yr off the top of their revenues and paying that to their 500 or so athletes?

While the thought has been that a kid would rather transfer down and get playing time vs. sitting on the bench at at big school, if he is being paid $20K/year does that sway his decision? Is that a way for the SEC & B1G to corral the talent for themselves?
 
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I think the playoff expansion basically cements that at least the P5, and maybe some additional schools in the G5, could be players in the post-NIL world. This season we are still seeing the residuals of a world where reputation and in the case of SEC schools and a few others, the willingness to cheat, drove recruiting. But now boosters paying players is no longer cheating, and so the SEC no longer has the huge recruiting advantage that it had in the past. You can see reputation slipping away with Texas sliding to mediocrity and Oklahoma leaving the elite. Texas' problems are mostly self-inflicted, but Oklahoma has some competitive disadvantages that could result in a long-term decline relative to where the program has been historically.

It is important not to conflate the TV contracts with NIL. While many of the P2 schools will be among the leaders in the NIL game, the TV money goes to the school, not the players. NIL money goes to the players.

I think the recruiting drivers will be:

1) Money - obviously. Tradition and reputation and proximity to home will be less important in recruiting than they were in the past. The ability of schools to generate local booster support to drive NIL money will be paramount.

2) Opportunity to play - you need to play to get really paid in an NIL world. A 4* or even 5* kid in the old model would be willing to ride the bench at Auburn or Clemson or Alabama because he was getting paid so what did he care? Going forward, a kid could make a lot more money starting at UNC or Texas Tech than he could riding the pine at a Top 5 school.

3) Opportunity to be seen - These 4* and 5* kids will want to play on good teams that have a shot at the playoffs. The 16 team conference model basically banishes the bottom half of the league to permanent competitive Siberia. No one is going to want to watch a 3-9 South Carolina team play anyone. But schools like Cincinnati and Baylor and Houston and Pitt and Oregon and Washington and (if they ever get out of their own way) Miami and Florida State have a clear path to the playoffs. I think this will change the way teams schedule. Kids will not want to play in a Minnesota/Generic FCS school game. The middle of the pack programs in particular are going to need to schedule good opponents in the non-conference to attract players.

4) Access to the Playoffs - the NCAA basketball is already broadly available to all the P5 teams, and I don't see a lot changing in terms of access for the near future so access won't be a competitive recruiting advantage for anyone. The move to a 16 team playoff dramatically expands access for a lot of schools that were consistently just missing. Establishing a program in the top half of a conference is important, although I think realistic access could extend a bit beyond that. For example, I don't see Minnesota consistently being in the Top half of the Big 10, but I could see that program occasionally getting a playoff bid. Schools like Rutgers and Indiana will have a hard time selling playoff access because the hill is just too high to climb for those programs. No one will care about the bowls going forward, so the bottom feeders in the P2 and P5 could have a hard time being even remotely competitive. The G5 will be interesting, but I don't have a great theory for what will drive their success going forward.

5) Urban markets - Cities generally have more rich people and more corporations that can fund NIL, so the cities will have a natural advantage. In basketball, playing in big markets will be a huge advantage in recruiting because urban markets generally have more basketball fans. I think the mid-sized cities in particular could do well because they are too small to get pro teams but they are still big enough to have enough corporations and wealthy people to support a top tier athletic program. Long-term Texas and Ohio State should have a big advantage over the other top programs in the P2. Outside the P2, I like Miami (if they can get their act together) UNC, Pitt, Oregon, Washington, Houston, BYU, Cincinnati and Louisville in all sports and all the Big East schools in basketball to stay competitive. Schools like Mississippi State, Indiana, and Mississippi could struggle in the new model. UNLV is a program to watch, because there is so much money in Vegas that it could become nationally competitive overnight in hoops and football if the locals got behind it. Boise and Memphis are two others to watch.



Things that are no longer a meaningful advantage in recruiting:

1) Prime TV slots - with streaming and people cutting the cord, anyone can watch any game they want from wherever they want. The old prestige of the 3:30 Saturday slot or Big Monday in basketball are much less valuable now.

2) Conference prestige - I think conference prestige matters a lot in hoops. Players want to play against the best because those are the games that get watched. I see less of an advantage for football, and if the other factors end up mattering more as I predict above, conference affiliation could be a net negative. Over time, NIL will spread talent and that could also dilute the television revenue advantage of the P2.

3) Tradition - Tradition has mattered less over time, but still had somewhat of a hold as a signal to top recruits of where other top recruits were going. Now, NIL is driving it, and recruits will have agents that can help them navigate the recruiting landscape. Nebraska is in a lot of trouble on this score. No recruit will remember when Nebraska was a top program, and being outside a city and in a conference with an established top tier, Nebraska could struggle to ever regain his traditional footing.
Here are my thoughts on these topics:

Money - I agree 100%

Opportunity to play - Depends. The B1G and SEC have the best media coverage and ratings, so the NIL deals are likely to be better in those conferences. Even mid pack B1G teams have decent ratings with the advantage of being state flagship universities. This likely means they will have decent NIL interest from companies.

Opportunity to be seen - See above. Minnesota is a state flagship in a metro area. There will likely be decent NIL deals in the Twin Cities. Who pays them the most? That’s where recruits will go.

Access to playoffs - The P2 mid and lower tier teams can better sell at large bids. No need for Northwestern or Vanderbilt to win the conference, just don’t drop more than 2 games in conference and you are in the discussion. Other conferences can’t say that.

Urban markets - Agree. I think USC will benefit the most of everyone. UCLA, Rutgers and Northwestern could potentially benefit greatly here as well. There is something to be said about being in the three largest media markets in the country.

Prime TV slots - Disagree. The B1G just signed a record breaking media rights package that brands 12pm on Fox, 3:30 on CBS and 7pm on NBC. There will be an opportunity to brand the late night window with further western expansion too. Likewise, the SEC will have the 12pm, 3:30pm and 7pm windows branded on ABC and ESPN.

Conference prestige - I think it still matters for at large CFP bids and maybe better NIL deals.

Tradition - I agree. Most traditions have been/will be lost.
 
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If the SEC & B1G start flat out paying players (not NIL) that would likely tip the scales. They will eventually use their money disparity to their advantage. What's to stop them from taking $10MM/yr off the top of their revenues and paying that to their 500 or so athletes?

While the thought has been that a kid would rather transfer down and get playing time vs. sitting on the bench at at big school, if he is being paid $20K/year does that sway his decision? Is that a way for the SEC & B1G to corral the talent for themselves?
Exactly. I agree 100%. This is the road we are heading down.
 

nelsonmuntz

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UConn would have been picked by the ACC over Louisville if NIL existed in 2011. Louisville was cheating like crazy back then and UConn was playing by the rules and still getting in trouble for weird stuff like APR.

If it had been an even playing field, and NIL had started in the 2000’s, UConn definitely gets the call from the ACC.
 

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