Big Bang Theories: The Countdown To Super-Conferences

[TyBull]

Big Bang Theories: The Countdown To Super-Conferences (Part 1)

December 18th, 2012 03:53 PMâ•‘ Posted By: John Pennington â•‘ Permalink â•‘ Schools: Alabama, Arkansas, Auburn, Florida, Georgia, Kentucky, LSU, Mississippi State, Missouri, Ole Miss, South Carolina, Tennessee, Texas A&M, Vanderbilt

Tags: ACC, Atlantic Coast Conference, Big East, Big Ten, Southeastern Conference, Sun Belt Conference, Total Revenue, Western Athletic Conference

http://www.mrsec.com...erences-part-1/

As the power brokers of the college football world steered their sport toward a brave new world featuring a four-team playoff, it was widely believed that most conferences would slow down a bit on the expansion and realignment front. Instead, the Big Ten craftily nabbed Maryland from the ACC and Rutgers from the Big East last month, setting off yet another wave of changes, long before the new playoff format and revenue split had even been fully fleshed out.

After the Big Ten’s shocking move, it was only a matter of time before more dominoes began to fall. And with seven Big East basketball schools deciding last week that they would break away from the Big Whatever, we believe the Big Bang is here. We mean the big, Big Bang, too. Super-conferences rising. Small leagues folding or partnering with one another for survival. A super-division of the richest four or five conferences separating itself along a haves and have-nots border. Television executives dropping stone dead from exhaustion as they negotiate, renegotiate, and then renogotiate again major TV deals worth billions of dollars.

In other words, we’re on the brink of a full-on, A-1, top-drawer madhouse.

We’ve examined conference expansion at MrSEC.com dating back three-plus years now. We’ve taken a by-the-numbers approach each time because that’s what all this mess has been about — numbers. Last October we put together a 10-part series on the math of conference expansion/realignment and you can find the final summary to that series here (as well as links to all the other nine parts).

But this latest burst of expansion is an even simpler breakdown. This time, you can just follow the money. Schools are looking for new homes because they want to guarantee themselves larger revenue streams. Many would like to find some stability, too, but the key factor is the cash.

A seat is nice. A comfy throne is better.

Meanwhile, conferences are trying to cash in on television deals and playoff revenue. With the Big East on the verge of being adios’ed, it’s already been snipped from the list of major football conferences. Instead of six big conferences splitting the lion’s share of postseason cash, in the future just five leagues will dominate the playoff era. And that’s only if the ACC survives. If it gets picked apart a la the Big East — and money suggests it will be — then there will be but four big-time leagues to horde the majority of playoff cash.

Those four conferences will also dominate the television landscape. For half a decade, folks have debated whether the SEC got things right by inking huge contracts with CBS and ESPN or whether the Big Ten made the shrewdest move in launching its own TV network. Turns out, they were both smarter than the rest of the pack. To make the haul of greenbacks as big as possible, a conference wants both huge, national television contracts and its own network.

So this round of moves comes down to much simpler math than anything we’ve seen before in the expansion/realignment game. It’s about revenue and it’s about cable households. Sure, some leagues won’t take schools if they don’t fit a certain academic profile, but now more than ever academics are taking a bigger backseat to cash and television ratings.

With that in mind, this week, we’re going to provide you with some very simple data. Today, we’ll look at the schools that might be interested in switching conferences. It’s not hard to figure out which schools would listen to another league’s offer. Just look at the revenue.

We’ve taken the US Department of Education’s most recent figures regarding collegiate athletic budgets nationwide — from fiscal year 2011-2012 — and we’ve broken things down by league. By “league,†we mean by the leagues as they’re currently supposed to look in the future. Have we listed a school in the wrong conference somewhere on this list? Probably. Schools are jumping from one league to another at warp speed. What was correct when it was written might be wrong by the time you read it. Yes, it’s that crazy.

But you can still get a good idea of which leagues are bringing in the biggest amount of cash (and which conferences should have the easiest time finding new dance partners) by looking at the tables below. Just be sure to keep three things in mind:

1. We’re using gross revenue. As schools can cook their books to make it look like they’re really making less money than they are, we’re avoiding the athletic expense and net income lines. We just want to see the full amount being brought in by each school. The differences from athletic department to athletic department and conference to conference are truly eye-opening.

2. This is a one-year snapshot of revenues. Missouri’s sports revenue should get a nice boost in the next fiscal year as it’s shifted from the Big XII to the more profitable SEC. Northern Illinois will get an enormous lift from this year’s Orange Bowl appearance. So what you’re looking at could have been impacted by losing seasons, unpopular coaches, facility building projects that might have cut into stadium/arena capacity, etc. Or a school might have won a championship and sold more merchandise than usual to boost its revenue. This data is for one year only, but it’s still telling.

3. Amazingly the biggest FBS school in terms of 2011-12 revenue (Texas) brought in about $153 million more than the smallest money-maker in the FBS (Louisiana-Monroe). Staggering. And if you can’t see the motivation for a school like Maryland to move to the Big Ten then you’re not looking very hard. This past fiscal year, Maryland took in $62.6 million in athletic revenue. In the new 14-school Big Ten to come, that number would rank 12th ahead of only Northwestern and fellow newbie Rutgers. By entering Jim Delany’s league, however, the Terrapins have guaranteed themselves a bigger payday each year. In turn, that should guarantee that Maryland athletics won’t fall behind the best programs in the country for financial reasons.

As we go through this series of breakdowns, we also want you to remember that conference expansion/realignment is not about you. Or us. Or any of our wishes. College presidents and conference commissioners aren’t trying to make things easier or better for football fans. They’re out to make money. So while the quaint idea of having four 16-school super-conferences might make for nice symmetry, that’s not likely to be the end result of all the moves to come. As stated above, this is about cash and television (meaning both cable households and content).

So without further ado, here are the FBS conferences as they’re currently scheduled to look by 2015. Take a gander at those revenue numbers. The smaller the number, the more willing a school’s board members will be to abandon its current conference for a spot in a higher-dollar conference. We’ll start at the top of the food chain from a revenue perspective and move our way down through all 10 remaining conferences and the football independents.

Southeastern Conference

Current of Future School

Total Revenue in ’11-’12 in Millions

Alabama

124.1

Florida

120.2

LSU

113.9

Auburn

105.9

Tennessee

105.8

Arkansas

99.7

Georgia

91.6

South Carolina

87.6

Kentucky

85.6

Texas A&M

79.0

Missouri

61.2

Vanderbilt

55.8

Mississippi State

54.8

Ole Miss

42.9

The total revenue for those 14 schools was $1.22 billion in 2011-12. That’s billion with a B. That’s a per-school average of $87.7 million in total athletic revenue.

The SEC has six schools at or above the $100 million mark. And revenue will only rise further with an SEC Network, re-worked television contracts, and a massive portion of the revenue from football’s soon-to-launch playoff.

There’s a reason the SEC has no exit fee for member institutions. No one’s going anywhere.

Big Ten Conference

Current or Future School

Total Revenue in ’11-’12 in Millions

Ohio State

142.0

Michigan

128.7

Penn State

108.2

Wisconsin

101.4

Iowa

97.4

Minnesota

83.6

Nebraska

81.6

Michigan State

79.0

Indiana

72.0

Purdue

70.4

Illinois

63.9

Maryland (future)

62.6

Northwestern

61.1

Rutgers (future)

57.4

The total revenue for those 14 schools was $1.20 billion in 2011-12. That’s a per-school average of $86.3 million in total athletic revenue. The Big Ten — had Maryland and Rutgers been in the league this past year — would have been the SEC’s only real competition from a revenue standpoint.

The Big Ten’s moves for the Terrapins and Scarlet Knights suggest that the conference is still in growth mode. Will that league’s presidents vote to expand again to 16, 18, or beyond? We believe they will if they think it can further boost league revenue.

Atlantic Coast Conference

Current or Future School

Total Revenue in ’11-’12 in Millions

Louisville (future)

87.8

Florida State

81.4

Virginia

81.3

North Carolina

78.8

Duke

78.6

Syracuse (future)

73.2

Clemson

66.9

Boston College

66.1

North Carolina State

65.5

Virginia Tech

64.8

Miami, FL

62.0

Georgia Tech

60.2

Pittsburgh (future)

56.3

Wake Forest

48.7

The total revenue for those 14 schools was $971.6 million in 2011-12. That’s a per-school average of $69.4 million in total athletic revenue.

Louisville — ironically enough — would have been the biggest money-maker in the league this past fiscal year. Now, the ACC is certainly more stable than the Big East and the Cardinals figured to make less money moving forward had they stayed in that conference (even if it had survived). Still, it’s odd to see a top 20 school in terms of revenue shift leagues. That tells you that Louisville AD Tom Jurich and the folks in Northern Kentucky realized just how doomed their old league really was.

When you compare the ACC’s numbers to those of the other major conferences, it’s easy to see why we believe John Swofford is captaining a sinking ship. The league ranked third in overall revenue in 2011-2012, but new TV deals stand to push the Big XII and the Pac-12 past the ACC in future years.

We’ve talked to multiple sources at various SEC schools, inside the college sports industry, and inside the collegiate equipment-supply business over the past two weeks. Of all the scuttlebutt we’ve heard during those talks, the two most widely held beliefs are that Georgia Tech and Virginia are already good to go to the Big Ten and that Delany and company want Duke and North Carolina, as well. True or not, a lot of insiders believe Tech and UVA are thisclose to moving.

If two more ACC schools really do have their feet out the door already, then the ACC will most likely lose all of its top-shelf athletic brands. The only reason for the delay at this point? More than one person suggested to us that Georgia Tech and Virginia are waiting to see if Maryland has to pay a full exit fee as it departs from Swofford’s conference.

Forget the “all’s well†note from the ACC’s presidents earlier this month. If those presidents were serious about saving their conference, they’d merrily sign a grant-of-rights agreement as the schools in the Big XII did. Anything short of that — and it doesn’t sound like there’s a strong move in that direction — suggests that multiple ACC schools are indeed ready to bolt if they feel they’ll help their own bottom lines by doing so.

Big XII Conference

Current or Future School

Total Revenue in ’11-’12 in Millions

Texas

163.2

Oklahoma

106.4

Oklahoma State

84.1

West Virginia

80.0

Kansas

79.1

TCU

68.0

Baylor

67.8

Kansas State

63.5

Texas Tech

59.5

Iowa State

55.1

The total revenue for those 10 schools was $826.7 million in 2011-12. That’s a per-school average of $82.7 million in total athletic revenue.

No other conference sees a $108 million gap between its biggest revenue school and its smallest. If you still wonder why the Big XII had to spackle and paste itself together over the past year, that disparity should help you figure it out.

Still, the Big XII schools signed a grant-of-rights deal that effectively binds the 10 remaining schools together for more than a decade. If one school leaves, its media rights — meaning TV revenue — will belong to the Big XII, not the school or its new conference. Contracts are made to be broken, but the Big XII’s deal is believed to be about as ironclad as a pact can get in this day and age.

For that reason, don’t expect any of the schools from Bob Bowlsby’s league to be looking for new homes. Instead, the Big XII figures to grow if it moves at all. But look at the per school average. Content is important and a league championship game would help the bottom line, too, but in a 10-school league the revenue splits are so much bigger.

Pac-12 Conference

Current or Future School

Total Revenue in ’11-’12 in Millions

Stanford

89.1

Southern California

84.1

Washington

82.5

Arizona

75.9

Oregon

73.9

UCLA

70.7

California

68.1

Arizona State

63.7

Colorado

57.0

Oregon State

53.8

Washington State

47.9

Utah

46.1

The total revenue for those 12 schools was $812.8 million in 2011-12. That’s a per-school average of $67.7 million in total athletic revenue.

The new TV deals Larry Scott recently brokered will provide his league’s schools with added revenue, but the Pac-12′s league-owned networks have had a hard time gaining cable/satellite carriage. To date, those channels haven’t become a cash cow just yet. (It took the Big Ten time to get its network rolling, too.)

It would be unlikely that any Pac-12 schools would be desperate enough to fight the time zone battle and depart. There are few big name programs on the West Coast and it’s likely they’ll all stick together. But will they try to grow their league further? And if so, who could bring in enough revenue to offset the increase in mouths to feed?

Big East Conference

Current of Future School

Total Revenue in ’11-’12 in Millions

Connecticut

63.8

Memphis (future)

46.7

South Florida

43.5

SMU (future)

42.6

Cincinnati

39.5

Temple

38.9

San Diego State (future)

38.5

UCF (future)

37.5

East Carolina (future)

34.0

Houston (future)

32.3

Boise State (future)

31.0

Tulane (future)

27.9

Navy (future)

No Data Available

The total revenue for those 13 schools was $476.2 million in 2011-12. That’s a per-school average of $39.7 million in total athletic revenue (not counting the US Naval Academy’s revenue).

The Big East has been hemorrhaging schools since 2004. With seven more hoops-first schools deciding to pack their bags, it’s only a matter of time before the best of the remaining sorta-large Big East football schools escape as well.

Since 1999, UConn has won three NCAA basketball tournaments and been to a BCS bowl game. But the Big Ten and ACC have both balked at adding the Huskies in recent years. (The Big Ten because UConn isn’t an AAU school and the ACC because Boston College has fought to be the only league member in New England.)

Cincinnati, Memphis and South Florida all have their pluses. Of those three, the Bearcats — thanks to their location in recruit-rich Ohio and in a top 30 television market — are probably in the best position to move.

Meanwhile, Boise State makes the most sense from a football perspective as the Broncos have become a national brand. But Idaho is hardly a prime location for conference annexation and the school will have to overcome a reputation — fair or not — of being a so-so academic school.

In reality, all of the Big East’s schools are up for grabs.

Conference USA

Current or Future School

Total Revenue in ’11-’12 in Millions

Old Dominion (future)

35.2

Tulsa

31.1

Rice

30.2

Florida International (future)

27.4

UAB

27.3

Marshall

26.4

UTEP

23.5

Middle Tennessee State (future)

23.1

Florida Atlantic (future)

21.7

North Texas (future)

20.4

Texas-San Antonio (future)

20.2

Southern Miss

19.7

Louisiana Tech (future)

17.0

Charlotte (future)

14.3

The total revenue for those 10 schools was $337.5 million in 2011-12. That’s a per-school average of $24.1 million in total athletic revenue.

Now we’ve really hit the zone of the have-nots. C-USA has had to rebuild itself as the Big East has raided it to refill its ranks. When you’re getting raided by the Big East, it’s not a good sign.

It’s hard to imagine any of the current C-USA programs finding their way into one of the remaining major conferences. For that matter, could any of those schools afford to pay its athletes? You can bet that when a new “super-division†inside the FBS forms, providing bigger scholarships will be a big piece of the puzzle. These schools probably couldn’t afford to keep up.

Mid-American Conference

Current or Future School

Total Revenue in ’11-’12 in Millions

Ohio

28.6

Miami, OH

27.8

Massachusetts

27.3

Central Michigan

25.7

Arkon

25.5

Western Michigan

24.7

Kent State

23.8

Eastern Michigan

23.0

Toledo

22.3

Ball State

20.8

Northern Illinois

20.4

Bowling Green

18.2

Buffalo

15.9

The total revenue for those 10 schools was $304.0 million in 2011-12. That’s a per-school average of $23.4 million in total athletic revenue.

Like the C-USA roster, there’s just not much chance that one of the biggest conferences will reach into the MAC to expand. Massachusetts might someday jump to a reconfigured Big East or ACC, but the rest are likely to stick together.

Mountain West Conference

Current or Future School

Total Revenue in ’11-’12 in Millions

UNLV

54.0

Hawaii

34.8

New Mexico

30.9

Wyoming

30.4

Fresno State

29.3

Colorado State

25.3

San Jose State (future)

23.9

Utah State (future)

21.5

Nevada

19.5

Air Force

No Data Available

The total revenue for those 10 schools was $269.6 million in 2011-12. That’s a per-school average of $30.0 million in total athletic revenue (not counting the US Air Force Academy’s revenue).

Take a look at that revenue figure for UNLV. There’s always been a stigma surrounding the Runnin’ Rebel program simply because of its location. But now that Vegas has become a more family-friendly destination, sports leagues are starting to embrace it more often. In particular, the Pac-12 has been warming to the city. If Lake Mead doesn’t dry up and take Sin City with it, UNLV could be one of the few schools from this list to find itself a suitor. The Las Vegas television market helps, too.

Hawaii’s budget is sound for this level of program, but travel issues will most likely keep any of the big leagues from eyeballing the Warriors.

Sun Belt Conference

Current or Future School

Total Revenue in ’11-’12 in Millions

Texas State (future)

26.2

Western Kentucky

25.7

Georgia State (future)

22.7

South Alabama

17.7

Troy

16.7

Louisiana-Lafayette

15.3

Arkansas State

13.2

Louisiana-Monroe

9.4

The total revenue for those 10 schools was $146.9 million in 2011-12. That’s a per-school average of $18.4 million in total athletic revenue.

At some point out in the distance a school like Georgia State or Texas State might find its way into a major conference due to its alumni base (both schools have around 30,000 under-grad and graduate students) and proximity to a major television market (Atlanta and San Antonio, respectively). But for now, they’ll have to climb up the ladder just to get on a big conference’s radar.

Football Independents

Current or Future School

Total Revenue in ’11-’12 in Millions

Notre Dame

97.1

BYU

53.0

New Mexico State

24.0

Army

No Data Available

The total revenue for those 4 schools was $174.1 million in 2011-12. That’s a per-school average of $58.0 million in total athletic revenue (not counting the US Military Academy’s revenue).

Notre Dame and BYU are obviously the two schools most likely to be targeted by others. The Fighting Irish have already agreed to move their non-football sports to the ACC (and play five ACC foes per season on the gridiron), but with their current home (the Big East) breaking apart early and their soon-to-be-home (the ACC) looking shaky, one must wonder what the future holds for the folks in South Bend. You can be sure the Big Ten and Big XII are watching with great interest.

BYU has a good athletic program and the Cougars could provide the Salt Lake City television market, but there are issues with Brigham Young. From a culture standpoint, the Mormon school might not be a perfect fit with the leagues on either side of it (the Pac-12 and the Big XII). Additionally, a school that refuses to play games on Sunday will make scheduling a challenge for any new conference.

Western Athletic Conference

Well, the WAC is dead. Or dying. It announced after the last round of defections that it would transition out of the college football game. Just wanted to point that out for any who might have missed the memo.

There you have it. The revenue numbers for every current or soon-to-be FBS program in the country (minus the three service academies, who won’t be moving into major conferences anyway). Assuming for a minute that the ACC, Big Ten, Big XII, Pac-12 and SEC all look in 2015 as they’re currently scheduled to look, there are only six schools outside of those leagues that brought in more than $42.9 million in athletic revenue in 2011-2012: BYU, Connecticut, Memphis, Notre Dame, South Florida and UNLV.

Now toss the ACC teams back into the mix with all the other non-SEC, non-Big Ten, non-Big XII and non-Pac-12 schools and you basically have 76 schools looking for a way to increase their current level of revenue. If that means moving, we suspect any of those 76 would be willing to jump if invited by a major conference.

But many of those 76 schools don’t have a prayer of landing in a top-flight conference. In fact, we think only the following 25 schools have any hope of landing in some newfangled super-conference (and in some cases that hope is only very small):

13 ACC schools

Boston College, Clemson, Duke, Florida State, Georgia Tech, Louisville, Miami (FL), North Carolina, North Carolina State, Pittsburgh, Syracuse, Virginia and Virginia Tech

9 Big East schools

Boise State, Cincinnati, Connecticut, Houston, Memphis, San Diego State, SMU, South Florida, and UCF

2 Independent football schools

BYU and Notre Dame

1 Mountain West school

UNLV

In the next part of our series, we’ll take a look at the major conferences, what they’re after, and who can fill their needs.

[TyBull]

http://www.mrsec.com/2011/10/expansion-by-the-numbers-10-the-big-finish/

Hummmmmmm......

[Economics_Nerd82]

really?

[tampatony]

USF is better in both recruiting and market... Wow... Not saying we are a better option but man come on

[Ghost]

wow Louisville brings in the dough(relatively speaking)

They bring in more than FSU. Very surprising.

[Ghost]

lol ranked last on the second link. w00t!!

I dont want to be in the SEC anyway. ACC please.

I did like what he said about market v. brand. We bring a good market, but not a good brand.

[SRQ]

the longer 'final' expansion does not take place the better for USF.

[Triple B]

That's got to be the longest, words only post ever ...

[Skingraft]

I agree, we need to rebuild this mess we call a football team first and then move into a better position. Weaker competition is our best shot at digging ourselves out of this hole quicker...

[Bull-by-Marriage]

Second link is from 2011