Football Fridays: Big Ten Gets Big Money

Football Fridays: Big Ten Gets Big Money

What the Big Ten's New $7 Billion Media Deal Tells Us About Realignment

Welcome to The Modern Day Renaissance Man newsletter. I, Trey Layton, write about the things that interest me, often covering topics such as startups, sports, and entertainment. If you'd like to receive these newsletters directly in your email a few times a week, go ahead and subscribe to never miss an email!

Happy Friday, folks.

Though it feels like it should already be fall with Thursday night football and Halloween candy in stores, it's still miserably hot for most of the country. It sure does make me thankful for my working AC, but not all of us are so fortunate. This ain't Ghostbusters, but if your AC ain't Decoldest, you know who to call:

I lucked out when the biggest college football news of the week broke as I was two sentences into a newsletter on the very topic of media rights contracts and their impact on conference realignment. Low and behold, a Denny's mix-and-match cup of Fox, CBS, and NBC dropped an oh-so-meager $7 billion (would rank as the 158th largest GDP globally) on the next seven years of Big Ten athletics broadcasts. More info on the specific breakdown by year and sport can be found in the linked ESPN article, but the most notable result is the divorce of high school sweethearts, the B1G and ESPN. Left carrying boatloads of cash, ESPN is now likely to be the frontrunner in bids for Pac-12 and Big 12 conferences which are now devoid of major brand names while The Big Ten gets to add USC and UCLA (and potentially others👀☘️) to a conference already including THE Ohio State, Penn State, and Michigan. It seems that Kevin Warren is keeping the kids.

For most, skimming through this information would be like I me trying to read Plato in my freshman year Intro to Political Theory course: all a blur, and with Sour Patch Kids sugar all over my sweatpants.

However, the big words and bigger numbers provide the explanations for the seismic shifts already seen in conference realignment over the past couple of years which will shape the future of college football.

Last summer, college football was left shellshocked when it was leaked at SEC Media Days that Texas and OU were joining the SEC. While most immediately questioned the logic of the move considering the Sooners' lack of playoff success against SEC opponents and Texas' lack of regular season success against anyone, the reasoning becomes clear when the existing $37 million Big 12 payout is compared to the $44 million SEC schools made in 2020 and the $60M expected with the addition of 2 of CFB's 6 most valuable brands. Losing such brands will have the opposite effect on payouts for the remaining (and entering) Big 12 schools. Sorry, West Virginia. You're just not that marketable.

Fast forward to this past month when news broke that USC and UCLA were joining the Big Ten (which already had 14 teams???), and similar rationale was at play. The Pac 12 hasn't truly been relevant since Reggie Bush's Heisman 2005 season. The lack of on-field success has contributed to West Coasters choosing Malibu over Memorial on Saturday afternoons, and the viewership numbers reflect this.

In turn, the value of the Pac-12's media rights has plummeted, thus reducing the payout each school collects from the shared media revenue pool. The Trojans and Bruins will each immediately go from receiving $34M in the P12 to $54M in the B10, a number that is expected to jump to between $80M-$100M by the third year of this budget-busting new deal. The total value of the Pac-12 is expected to decline by 40% with the loss of its two biggest names with each remaining school expected to soon pocket only $25M.

The Big Ten contract will reshape the CFB media game in two primary ways. First, it has raised the bar on the monetary value of media deals, completely resetting the market in the process. Just a few years ago, Texas A&M was ridiculed for offering Jimbo Fisher a massive 10-year, $75 million contract, making him the third highest paid coach on an annual basis but creating the largest total contract the sport had ever seen by a wide margin. Now, even despite an extension and raise paying him more than $9M/year starting this season, Fisher is only the 8th highest paid coach, and contracts dwarfing his have been reported every offseason since his hire. A similar phenomenon of high tides raising all boats will be seen when each of the other conferences have their media rights go up for sale over the coming decade.

In addition, the deal set an important precedent for future College Football Playoffs rights deals in its multi-network structure. Currently, The House of Mouse (ESPN) is the exclusive home of the CFP through 2026. The existence of a multi-network deal such as the B1G's (and NFL with the Super Bowl) indicates that a rotating deal might be in play once the existing contract expires, especially as it is less likely to get Big Ten sign-off on another exclusive contract with ESPN when the network has a vested interest in an SEC conference which has already set up permanent shop in the final four.

This, folks, is why we're seeing conference realignment.

The SEC and B1G have been the strongest conferences in college football for a decade, and with the resources member institutions continue to pour into athletics, the gap will only continue to grow. Take a look at any recruiting service and drown out the cries of the "sTaRs DoN't MaTtEr" crowd, and you will see the evidence of this in the team rankings.

Success on the field breeds eyeballs on the screen, and Dr. Pepper ads become much more valuable when shown between the 3rd and 4th quarters of a top-ten matchup between Alabama and LSU watched by 15 million people than an Oregon State and Cal game watched by 1.2.

The rich are getting richer, and I don't enjoy ending on such a gloomy note, but the future becomes cloudy for the schools left on the outside with already thin athletic budgets. Some "Power 5" schools might even question whether keeping a football programs is even worth it, especially for those universities for which athletics are not as centric to their identity (*side glance at that Tree school🌲👀*).

At the end of the day, all we as fans can do is to watch the games that we choose to watch. If you truly cannot bear the product that is on the field each Saturday, don't watch. Otherwise, for three hours each Saturday in the fall, we can try to tune out the noise and enjoy getting to watch our favorite teams playing the same sport they've always played.

No pleading of "I miss the way the game used to be!" is going to convince those in power of changing their mind. Besides, their ears are probably too stuffed with cash to hear you anyways.

Cheers to another day,

Trey