Why the College Football Playoff is stuck in a stalemate (original) (raw)

MIRAMAR BEACH, Fla. — Sandwiched between talks of new-look governance and rising basketball costs, SEC administrators met this week on the Florida Panhandle with the College Football Playoff’s future still hanging over the room.

The league’s stakeholders departed with no decisions and, more pressing, a deeper understanding of the CFP’s real question — whether there’s actually enough new money to justify a jump from 12 to 24 teams.

“When professional sports have added to their postseason, it’s always been a small adjustment,” SEC commissioner Greg Sankey said. “Four to 12 [teams] was monumental, but I think it was justifiable. You want to be careful about how far you go.”

That question sits at the center of a CFP stalemate. The SEC and Big Ten wrested control of future format discussions during the most recent media rights negotiations. The result: two conferences at odds over whether to push the field to 24 teams, remain at 12 or find a middle ground — with little agreement on what comes next.

The rights opening

The central issue is whether new playoff inventory would command enough in the media rights market to justify expansion.

Terms of the ESPN agreement that runs through the 2031-32 season grant the network control over new inventory up to a 14-team format. Beyond that, any new games would likely be open for bidding — an avenue competitors such as Fox and others would jump at.

“Twenty-four solves an enormous amount of problems,” Fox Sports CEO Eric Shanks said at the CAA World Congress of Sports in April. “You’ve had people in the SEC come out and say that their championship game has run its course. … It’s probably inevitable that it expands, and hopefully, at least from the research we’ve done, the best model we’ve seen is 24.”

That said, Fox would have difficult rights calls to make, as the company faces future decisions on the FIFA World Cup, MLB and even the Big Ten and Big 12 — not to mention a looming increase for its NFL deal.

There’s also no guarantee Fox, which had the Bowl Championship Series from 2007 to 2010, would get CFP rights without stiff competition. College football has solidified its place as the No. 2 sport in the country in terms of viewership, and there would be plenty of suitors ready to pounce.

“There is an opportunity of course for Fox to participate, but at the same time it’s open then to anybody,” said Tag Garson, president at Excelsior Sports & Entertainment, who consults on media rights and worked on BCS deals while at ABC/ESPN. “At that particular point, the metrics and the dynamics could be very, very different, which would then lead to it not necessarily being just a traditional broadcast partner.

“It could be an Amazon or Netflix that could also raise their hand and say, ‘Look, we’re interested in this and we don’t want it to be a sublicense, and we want to have some of the bigger games as the tournament progresses.’”

The championship game tradeoff

Conference championship games sit at the center of CFP expansion discussions. Industry insiders suggest the Power Four conferences generate roughly 200millioninrevenuefromleaguetitlegames:SEC,200 million in revenue from league title games: SEC, 200millioninrevenuefromleaguetitlegames:SEC,100 million; Big Ten, 50million;andBig12andACC,50 million; and Big 12 and ACC, 50million;andBig12andACC,25 million each.

How much the eight additional games in a 24-team format are worth is a bit of a guessing game — though CFP leaders are expected to receive more tangible projections during a meeting in Denver later next month. Even a 400millionto400 million to 400millionto500 million valuation might be optimistic, which would create only 200millionto200 million to 200millionto300 million in new money.

Would spreading roughly 200millionto200 million to 200millionto300 million across the leagues justify the additional games and the potential devaluation of the regular season? That much is less clear.

CFP expansion has become a media rights calculation over how much new TV inventory a larger field would create — and whether that value justifies 24 teams. Getty Images

What the first round showed

The viewership value of the early-round games is also an important factor. Last season, the four first-round contests averaged 9.9 million viewers, but the audiences varied widely.

ESPN’s two first-round games avoided NFL competition and averaged just under 15 million viewers — shy of the two most-watched games of the regular season (Ohio State-Michigan and Ohio State-Texas), as well as the SEC and Big Ten conference championship audiences.

Meanwhile, TNT Sports’ first-round games — which involved Group of Six teams Tulane and James Madison — notched less than half the audience ESPN received (both games pulled under 6.5 million viewers with NFL head-to-head competition). Those figures put TNT’s games well outside the top 30 regular-season game audiences, and even less than the TCU-North Carolina game on Labor Day on ESPN.

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“First of all, we are under contract with ESPN for a while,” Texas A&M Athletic Director Trev Alberts said. “But, secondly, without that data point, how do you make an informed decision? That’s all that Greg Sankey has been saying, ‘Before we run to decision making that we later regret, let’s do the work to have the data to understand what that value really is.’”

ESPN is adamantly opposed to expansion beyond 16 teams, sources said, given the trickle-down effect it might have on the regular-season inventory it controls. ACC Commissioner Jim Phillips acknowledged the network’s opposition to 24 teams during his league’s spring meetings in early May.

Downstream upside

Still, getting to 24 teams in the CFP could have downstream benefits for media partners who may not be bidding for the playoff but have ties to the sport.

“There’s games of more consequence toward the end of the regular season — that’s where the upside is for us,” said Mike Perman, senior vice president of sports at The CW Network, which has the ACC, Pac-12 and Mountain West. “It’s a matchup that may not have been good a year or two years before, but towards the end of the regular season, we’re getting a better matchup for a P4.”

Though CFP rights might not align with The CW’s strategy, that doesn’t mean Perman and his team aren’t paying attention to prospective avenues should a 24-team CFP come to pass.

“With expansion, there might be other opportunities,” he said. “We’re trying to be creative on other opportunities around that.”

As fall approaches, the SEC is in no hurry to move off its preferred stance of a 16-team field. Sankey and SEC administrators have preached patience and a desire to see all available information before committing.

“Studying all the options is the most important thing,” Vanderbilt Athletic Director Candice Storey Lee said. “We have access to more data than we’ve ever had, for better or worse. It’s a great opportunity for us to study and review all of our options and then do what’s best.”

What is best? No one is quite sure — and no answer seems to be on the immediate horizon.

“We’re the No. 2 sport in America on the football side,” said Tennessee AD Danny White. “There’s huge opportunity. We’ve just got to clean up some of our structure, the relationship with athletes and get the postseason right.”

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