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| More Money - More Headaches |
Our friend ProveIt has dropped by again for his third article on ITS. Today he covers just how Delany is working the playoff/BCS scene.
Portions of Delany’s playoff model were recently leaked - a seeded 4 selected using the BCS formula with the 1st round played at the home field of the top 2 teams. The location of the title game would be bid on by prospective hosts.
Portions of Delany’s playoff model were recently leaked - a seeded 4 selected using the BCS formula with the 1st round played at the home field of the top 2 teams. The location of the title game would be bid on by prospective hosts.
The Slippery Slope
From the initial SEC proposal to the present, the majors have said they don’t believe a seeded 4 or plus 1 would appreciably impact yearly revenue. They believe a seeded 4 risks becoming a slippery slope to larger formats. They believe larger formats would result in a decrease in revenue for the year. This is the common findings of the networks, bowls, and independent research groups. When dropped like a hammer to the head of mid major commissioners, they have never denied this, choosing instead to quickly change the topic.
It is worth noting:
1. Nobody with access to, and the ability to project from, pertinent information has ever claimed a plus 1 or seeded 4 playoff would result in a notable change in revenue for the year for the majors. They have all claimed a larger format would result in a yearly loss in revenue for the majors.
2. Prior to the recent talks (and perhaps still now), no major had ever stated their conference supports a playoff of any size – this includes the SEC and ACC.
- If you have a link to show otherwise, it would be greatly appreciated. If you have a series of unsupported plausible sounding statements, you have something anyone could make up.
This is not the 1st Time Delany Walked the Slippery Slope
Courtesy of Pariahwulfen at Off Tackle Empire, Delany promoted a true Plus 1 format to the B1G in 2005.
“Henry Bienen, president of Northwestern University, told Yahoo! Sports that Delany actually favored a playoff-type system that Delany decried in 2005… the so-called Plus-One model, the two top-rated teams that emerged after the Rose Bowl, Sugar Bowl, Fiesta Bowl and Orange Bowl were played would advance to a national championship game. “
I disagree with the author’s reasons. There were concerns with the decrease in the Rose Bowl TV ratings when a conference champion played in the title game:
1998 – 13.3 TV Rating
1999 – 14.1
2000 – 14.0
2002 – 11.3 tOSU in the NCG
2003 – 14.3
2004 – 12.4 USC in the NCG
2001 and 2005 - Rose hosted the title game
When a conference champion was lost, the ratings dropped over 15% from 13.7 to 11.9. The actual drop was more – the ratings were slowly trending upwards, tOSU and USC would be expected to have larger audiences than Wisconsin, Purdue, UCLA, Stanford, Washington, and Washington State.
I believe Delany wasn’t seeking a revenue increase or addressing any issues of fairness – he viewed a true plus 1 as a means of keeping the conference champs in the Rose, while preserving the BCS and title game revenue.
I disagree with the author’s reasons. There were concerns with the decrease in the Rose Bowl TV ratings when a conference champion played in the title game:
1998 – 13.3 TV Rating
1999 – 14.1
2000 – 14.0
2002 – 11.3 tOSU in the NCG
2003 – 14.3
2004 – 12.4 USC in the NCG
2001 and 2005 - Rose hosted the title game
When a conference champion was lost, the ratings dropped over 15% from 13.7 to 11.9. The actual drop was more – the ratings were slowly trending upwards, tOSU and USC would be expected to have larger audiences than Wisconsin, Purdue, UCLA, Stanford, Washington, and Washington State.
I believe Delany wasn’t seeking a revenue increase or addressing any issues of fairness – he viewed a true plus 1 as a means of keeping the conference champs in the Rose, while preserving the BCS and title game revenue.
Regardless of the reasons, this demonstrates Delany is more willing to risk the slippery slope than generally believed if there is a sufficient financial gain, but will not risk a playoff for the sake of a playoff because others want a playoff.
What Brought Delany and others to the Table?
You can credit the mid majors willingness to trade access to the top bowls for elimination of AQ status.
The traditional expectation was removal of AQ status meant all of the BCS participants would be selected strictly by BCS rankings – a change that did not offer anything of value to the majors.
Instead, Delany introduced a “Free Market” approach where the term “AQ” would be eliminated by separating the bowls from the BCS. No at large bowl bids = no AQ status
The tone of Delany's initial response in December, 2011 reflects a hint of sarcasm, doubting the mid majors would trade bowl access for the elimination of AQ status:
"As long as I can go to the Rose Bowl, I'm OK without automatic bids. If (CUSA commissioner) Brit doesn't want automatic bids, that's fine with me. And if he doesn't want me to have one that's OK, as long as I can go to Pasadena... If they (mid majors) are saying, essentially, let the system be market based, I can't object to that."
Delany missed projecting 2 shifts in the mid major landscape:
1. The mid majors now have far greater concerns than BCS revenue.
The MWC gutted the WAC, then the Big East gutted the MWC and CUSA in search of AQ status. Without the quest for AQ status, fewer teams would have been poached.
2. The mid majors aren’t giving up very much.
They are further than ever from gaining AQ status. They weren’t likely to have routine BCS participants in the near future – the comparison isn’t their BCS revenue of the past, but their projected BCS revenue looking forward.
The B1G, SEC, and Big 12 believe they would each garner 2 conference tie-ins to the 4 major bowls. 2 major bowl tie-ins, with only 2 sharing the Rose revenue, plus sharing of the title revenue could increase B1G shared revenue by $1.5-2 Million per member – enough to entice Delany to walk the slippery slope.
The separation of the bowls from the BCS wasn’t included in the leaked information, but it is critical – it is the only item bringing Delany to the table.
The Basic Format
Delany would prefer a single game format to avoid the slippery slope:
“That (playoff expansion) is what happened in I-AA (football). It's what happened in the (NCAA) basketball tournament. It's what would inevitably happen here. I don't necessarily think the slippery slope is theoretical. I think the slippery slope is practical."
Delany previously stated "I'm not morally, philosophically opposed to one and two playing. I think that's good. I'm not morally, philosophically opposed to four…"
At the end of my most recent post, Some Tests are Too Easy, I missed the revenue from a 1 game format is close, but not quite enough, to finance a substitute for the existing BCS. Without the bowls for support, Delany needed a larger revenue source.
Delany would prefer a true plus 1, but a true plus 1 format wouldn’t simultaneously provide sufficient shared revenue to replace the BCS, and reach his goal of a “Free Market” for the 4 major bowls, and eliminate AQ status in any format.
There are no changes in the NCAA landscape that would impact the revenue projections of large format playoffs. Seeded 6, 8, or larger formats are just as undesirable now as they have been in the past.
A seeded 4 isn’t Delany’s preference - it is actually his 3rd. Delany is left with the seeded 4 for lack of a better option to meet his goals.
Finding Footing on the Slippery Slope
The separation between the mid majors and the majors on playoffs isn’t revenue total, but their revenue sources. This became apparent at the 2010 IMG Conference beat down of the mid majors:
Delany – "Some of us (mid majors) don't have a great investment in the regular season. If you look at attendance, you look at television, tradition, you look at the kind of matchups we have – there's no doubt about it…”
Beebe – "We've Jerry-rigged the free market system to the benefit of those institutions and a lot are institutions that don't even fill their stadiums.”
The majors have an established well developed regular season revenue streams; the mid majors have very little invested in the regular season.
The economic key to plus 1, 1 game format, or seeded 4 format is they are so small they have nominal impact.
To find footing on the slippery slope, Delany’s goal is to diminish a seeded 4, not exalt it. He wants a playoff that appears more like an extension of the regular season and 1 bowl game than an end of the year summary parallel to the bowls.
1st Rounds Played at Home Stadiums
This alleviates ticket sales concerns, but sacrifices the revenue from local sponsorship and selling the game to a host city (not a minor sacrifice).
While revenue from these 2 games are hurt, his playoff 1st round is more like a highly anticipated regular season game than a major bowl event, diminishing its impact on other revenue sources.
Expect 1st Round Played as Early as Possible…
…1 or 2 weeks after the conference championship games. This is a bit of a jump with no statements on their dates. There is a practical side – the earlier the games are played, the less likely they are to encounter severe weather.
The lengthy separation between the 1st round of the playoffs and the bowls diminish the 1st round to appear more like an extension of the regular season than a parallel to the bowls.
The 2 losing 1st Round Teams Enter the Pool of Bowl Candidates
I admit this is my biggest jump, and I readily admit it may not be under consideration. My basis for this belief:
1. My belief Delany proposed a plus 1 to the B1G in 2005 to keep conference champs in the major bowls – removing 2 teams for a playoff title game is no different than the current BCS, removing 4 teams becomes substantial.
2. The majors want their better teams in the bowls to increase interest and shared revenue – allowing 2 additional top teams into the bowl pool cascades down through all of the tie-ins of their conferences improving 1/3 to ½ of the bowl games.
3. Eligibility for the bowls makes the 1st round of playoffs appear more like an extension of the regular season than a parallel to the bowls.
The drawback is the risk the major bowls could be seen as a consolation prize.
BCS Rankings - Blocking out the NCAA
A format could have turned the selection process or even the entire playoffs over to the NCAA... but if the NCAA is directly involved they could increase the size of the format in the future – a historic landslide along the slippery slope.
Maintaining the BCS formula maintains the legitimacy of the champion – the title isn’t awarded by the BCS or the NCAA, but by the voting polls who agree to vote the winner #1.
The BCS formula deflects criticism of the teams invited – invites aren’t determined by those overseeing the playoff, but by thousands of current and former sports writers, coaches, and players nationwide.
Don’t expect changes to the BCS formula – it took a lot of trial and error and negotiations to get the current formula acceptable to the voting polls.
Title Game Location to the Highest Bidder
They would love to market the title game like the Super Bowl - year by year charging potential hosts a fee just to submit a bid – but no NCAAF title game comes close to the worldwide exposure of the Super Bowl. Expect the host to be selected in several year increments. The advantage is the hosts can spread out their risk over several years, and market multi-year sponsorship deals.
This demonstrates the BCS bowls don’t have a lot of pull in the current negotiations; otherwise they would still be rotating hosts.
This helps diminish the stature of the title game - by varying the location, the title game does not gain a tradition thru association with a city such as Pasadena, New Orleans, Miami, etc.
Revenue Distribution
Expect the 1st round participants to share most if not all of the gate receipts close to an even split +/- 10%. Expect the host to keep all concessions, parking, etc. revenue. The hosts have to honor their program’s media advertising commitments, but game sponsorship and all broadcasting rights go into the playoff pool of shared revenue.
The title game participants can expect appearance fees comparable to the appearance fees currently awarded to BCS at large teams – just slightly above the largest non-BCS bowl game.
Expect the remaining revenue to be split among the conferences and independents similar to how the mid majors split their BCS revenue – approximately 50% of the revenue split evenly, the remainder based on performance in the BCS computer polls.
I am much more conservative than others in my projections, placing the total shared revenue around $80-100 Million (approx. the same as the current title game plus the Sugar and Fiesta broadcast contracts). Needless to say, I find claims that a seeded 4 would be worth upwards of $400 Million (2.5 times the current 5 game BCS) less than credible.
If Delany has his way, he will dismantle the BCS, eliminate AQ status, eliminate the BCS distinction between the bowls, gain a 2nd major bowl tie-ins for the B1G, eliminate the need for the B1G and PAC to share the wealth of the Rose, and create a healthy payout from a playoff.
In the process, he will add footing to the slippery slope by limiting NCAA involvement, diminishing the playoff 1st round to look more like regular season games than bowl games, elevate the stature of the title game, but prevent the title game from obtaining a tradition of association with a particular city or group of cities.
The result substantially protects the existing revenue streams of the majors, and adds up to $2 Million per program to the B1G shared revenue… not bad for 4 months of work.
