OT(for now): Detailed article of FSU looking to raise private equity money for, among other things, ACC buyout

Submitted by crg on February 15th, 2024 at 11:55 AM

Fascinating article about the intersection of private equity and college sports, *and* how FSU is setting the stage for an escape from the ACC (and a bad ESPN contract) and likely a jump to Big Teb (and FOX).

The coming weeks/months will be interesting, it appears.

Link: https://billfarley.substack.com/p/fsus-acc-exit-hinges-on-a-bidding?r=of4cg&utm_campaign=post&utm_medium=web

RibbleMcDibble

February 15th, 2024 at 12:03 PM ^

If the Big Ten gets to 20 teams, they should absolutely do relegation/promotion. 

Imagine the following:

Tier 1: Michigan, Ohio State, Penn State, Wisconsin, USC, Oregon, Washington, Florida State, Notre Dame, Clemson

Tier 2: Michigan State, Iowa, Northwestern, Indiana, Nebraska, Illinois, Maryland, North Carolina, Minnesota, Purdue

Bottom 3 of Tier 1 and Top 3 of Tier 2 flip every year. This way everyone plays everyone in their Tier and a real champion is decided. 

Bye Rutgers

ex dx dy

February 15th, 2024 at 12:26 PM ^

Relegation won't happen with college sports for the same reason everything else is happening: money. Everyone wants a stable source of high conference income, so the top brands are clambering for the B1G and SEC money streams. The networks want all the top brands consolidated in a few super-conferences because it produces big games that generate viewers.

Who's going to watch Tier 2 games? Nobody. So the networks aren't going to pay as much for them, resulting in decreased conference revenue. What if Tier 2 had decreased revenue? Why on earth would the schools agree to that? With that Tier 1, a down year for any of those teams could result in relegation. No one would be absolutely safe. That would result in a year of MUCH lower revenue, which would be terrible for budgeting. It would also be terrible for recruiting. Either you get a wide variety of teams cycling through the two tiers regularly, in which case no one's getting the reliable high revenue stream they signed up for, or you end up with the same 6 teams getting flipped back and forth every year, creating what amounts to a P5 and G5 conference with a weird relationship. In that case, the schools in Tier 2 never get the high revenue, and nobody in Tier 1 knows who's going to end up getting flipped back and forth a lot until it happens.

And this doesn't even begin to consider other sports. Are all the other sports getting jerked around by the performance of football? Or is football completely decoupled from the other sports and conference affiliation is now by sport? Both would require massive changes to how college athletics is run.

If the #1 concern for the schools is football fan service, then sure, they might consider relegation. But if we've learned anything over the last few years, it's that the schools don't give two shits about the fans in the pursuit of money and wins. Relegation, therefore, is completely off the table as an option until either people stop watching college football, or the schools decide that money and winning aren't all they're cracked up to be.

RibbleMcDibble

February 15th, 2024 at 1:04 PM ^

Bingo. You negotiate for the conference as a whole.

How many people are watching Iowa vs. Northwestern right now in the current state of college football? Are people going to be watching next year when both teams are duking it out for 13th place? Wouldn't people more interested if it were a promotion battle?

Also, it allows more schools to win a trophy. 

I think it would be great for fans and I think it would just fine money-wise. Michigan is likely playing 5-6 gigantic conference games every year, as is Ohio State, Florida State, Notre Dame, etc. 

 

Mr Miggle

February 15th, 2024 at 1:17 PM ^

What this setup would demonstrate is that the equal share of TV revenues is getting even more unfair. Every school in that tier 1 is going to want more $$ much more than they want a tougher schedule.

Change is coming and not just to the Big Ten. The interests of the top programs in the SEC and B1G are aligned more closely than they are with lesser programs in their own conferences. If even the top two conferences want to survive intact after the media deals expire, they are going to have to offer some sort of proportional revenue. Networks are going to quote potential payouts for a super conference.

 

mgoblue_in_bay

February 15th, 2024 at 2:33 PM ^

The numbers will matter.  Will Michigan jump ship to super conference for 25% more money?  I think that's not likely.

100%?  Maybe.

500%? Seems like malpractice not to.

But I assume super conference would try to limit itself to football only, since that would make it easier to be formed.

Vasav

February 15th, 2024 at 3:05 PM ^

per this, and granted this is just one year, OSU-Michigan are titans that only Alabama garners as much attention. Beyond that, both leagues kind of match each other in terms of eyeballs - but the SEC has a few teams which had bad seasons that hung around with some good (future) big ten teams. Schools with over 3M viewers are 3 Big Ten, 3 SEC, FSU, ND and Colorado (I think that's a one-off). Schools with over 2M are 7 Big Ten, 9 SEC, and the same 3 others. The difference is, the big ten has only 1 BAD team in this list (Nebraska), whereas the SEC had quite a few that had disappointing seasons (Auburn, Florida, A&M).

Wisconsin, MSU and Iowa are all below that line, along with Mizzou. Mizzou had a top 10 season, the other 3 all disappointed, but you'd expect in good years they'd likely draw more - but Florida, Auburn and A&M all disappointed too. Clemson is surprisingly below that line, likely due to a 9-win campaign that started off 4-4.

There is parity in viewership (and in 2023, in on-field performance) between the new Big Ten and SEC. There are 18 teams that clearly garner a lot of attention - and in the SEC that's win or lose, I think it's safe to say that's the same for about 5 Big Ten programs (M, OSU, PSU, USC and NU). Throw in Clemson and take your pick of Iowa, Wisconsin or MSU and you likely have a pretty clean football super conference. 2030?

bluebyyou

February 15th, 2024 at 5:33 PM ^

With the new playoff schedule, teams playing in those games will skew the average viewership numbers way up.  If you included Michigan's two playoff games in those weekly averages, I suspect Michigan would have .been at the top.

During the middle of the signgate mess someone posted the percentages of viewership each team in the B1G was contributing to the conference total.  I think OSU was at 22% and Michigan at 18% and then things fell off quickly, even with PSU.

What this tells me is that from a financial perspective, if you really want to make the big dollars, you need to create a superconference from within college football and say goodbye to the B1G.

ex dx dy

February 15th, 2024 at 3:24 PM ^

This setup would probably result in less money being paid out per school because fewer people are going to watch Tier 2 if they're not playing Tier 1 schools. Michigan-USC is going to draw a lot of eyeballs. Michigan-Indiana is going to draw fewer eyeballs, but still quite a bit simply because Michigan. Indiana-Illinois isn't drawing anything. Having more Michigan-USC style games will not make up for the fact that no one's watching any Indiana games anymore because they never play anyone.

On the other hand, what if it does work and the Tier 1 games make up for the Tier 2 games? Then you have massive instability where Tier 1 schools are dragging the other half along despite never playing them. It's one thing to subsidize Indiana when you play them regularly and have tons of history together. It's quite another thing to subsidize them when you have nothing in common at all anymore. Tier 1 would break off into its own conference pretty quickly to have access to all that money. Right now the only thing holding the Tier 2 schools in the B1G is tradition and momentum. If you do this Tier 1 and Tier 2 thing, you do the hard work of eliminating tradition and momentum up front, so there's almost no barrier remaining to the Tier 1 schools breaking away completely.

I'm assuming here that the schools in Tier 1 and Tier 2 remain pretty stable, which is a good assumption. If, when playing similar schedules for a century, the conference naturally settles into tiers of competitiveness that stay mostly stable for decades at a time, then formally dividing these tiers is not suddenly going to create more parity. The only thing a relegation model does is pave the way for the conference to formally divide into the haves and have nots.

MichiganiaMan

February 15th, 2024 at 1:20 PM ^

I just do not understand the appeal of relegation in college football.
 

The lack of parity in college football is a feature, not a bug. And the most memorable games, aside from rivalry matchups, are the upsets (think Purdue-OSU) that probably wouldn’t even be scheduled under a relegation system. Count me among the (maybe) few who hopes realignment ceases for at least the next decade. 

rice4114

February 15th, 2024 at 1:26 PM ^

Talking about relegation is silly. Im not joining a European Soccer blog talking about a "playoff committee" to decide who is allowed to win their championship. 

Tier 1 teams arent going to agree to falling off into a lesser division ever.  Michigan, Ohio State, Penn State, Wisconsin, USC, Oregon, Washington, Florida State, Notre Dame, Clemson arent ever going to agree to something with only 100% downside. They arent hoping Northwestern gets a shot. That is not how any of this works. Every few weeks we have to discuss this. Soccer fans I get it but please let it die. 

Thank you for joining my Teb Talk.

Vasav

February 15th, 2024 at 2:26 PM ^

I think the way to make relegation work is to make the divisions small to preserve rivalries, give every team access to the championship every year, and relegate/promote every 2 years based on performance.

So take your 20 teams, keep Rutgers, and set up 3x7-team divisions (Big 7, Middle 7, Little 7). 9 conference games means play 6 teams in your division and 3 rotating opponents (can be rivals). Have the Middle Champ and LIttle Champ play into the championship game. Every two years, championship game participants (max 4) are in the Big tier, and sort the rest by full league record. Michigan will play Sparty and OSU every year, no matter what, and those games count no matter what.

omahablue

February 15th, 2024 at 3:16 PM ^

I know it won't happen, but I would love it if Michigan could make it so they didn't play Michigan State every year. I know many of you would disagree, but I live in the Lansing area, and these guys are assholes! I honestly believe they would rather see Michigan lose than Michigan State win. Fuck them. They can play Purdue.

Perkis-Size Me

February 15th, 2024 at 2:45 PM ^

I like the idea in theory, but in practice it'll never happen. Know why? 

Money. 

While schools like Purdue, Northwestern and Indiana would jump at the chance to jump up to a higher league and make more money, do you think Michigan, OSU and USC are ever going to agree to a league where they can potentially get demoted and make less money

Again, I really like the idea in theory, but the top half of the conference would never, ever agree to it. 

Vasav

February 15th, 2024 at 3:08 PM ^

yea, i think what's most likely is the big ten splits between haves and have nots - and the SEC may follow as well - and the super 2 either becomes more exclusive or becomes a super 1.

The have-nots will basically be like the new Big 12/ACC. They'll play entertaining football. They'll win some games, make the playoff, knock off the big boys every now and then. They'll act like they're Boise State. It'll be fine.

joeyb

February 15th, 2024 at 3:14 PM ^

So, Big 10 and Little 10?

I do think that the idea of having the top 10 teams playing a round robin is an obvious next step to maximize viewership. A 9-game round robin results in 45 games. Spread over 13-14 weeks and you have 3-4 games per week. That's one for Fox, one for NBC, one for CBS, and maybe one for BTN. That's also one for each of the main time slots each Saturday so that they don't compete.

They could also go with 5 divisions and take the top 2 from each division. The divisions being regional would allow lower-tier teams to play more rivalries and minimize travel. The top 2 teams of the lower-tier in each division could play the two teams in the upper division during relegation week, which would replace championship week.

TruBluMich

February 15th, 2024 at 12:17 PM ^

Everyone knew that was a bad deal when they signed it.  However, the ACC teams were so scared that the ACC would break up that they all rushed to sign away their soul to the four-letter network.  I don't even want Florida State in the B10 just so everyone can laugh at them when they end up paying hundreds of millions of dollars to become independent.

Amazinblu

February 15th, 2024 at 1:29 PM ^

FSU is seeking $ 500M for this - separation from the ACC and some other stuff.

Penn State will rebuild Beaver Stadium for an estimated $ 700M.

Northwestern's proposed replacement of Ryan field has an $ 800M price tag.

There's definitely not enough money in college football / sports.   /s

jblaze

February 15th, 2024 at 1:40 PM ^

How is FSU (or any PE investor) expecting to make up a $500M buyout with a B1G contract?

Even if the B1G gives full revenue sharing, TV rights won't cover it. Presumably, everything else (tickets, merchandise sales...) would remain the same if FSU were in the B1G or ACC.

COLBlue

February 15th, 2024 at 1:50 PM ^

How long until the B1G (NFC) and SEC (AFC) are all that's left and they form the PCFL (Professional College Football League)?

Athletes are employed, there is a salary cap, and it's the defacto Minor League for the NFL.  Education is also available, if desired.

Amazinblu

February 15th, 2024 at 2:28 PM ^

"Salary Cap."   A very interesting topic of conversation.   

Let's say the conferences get together and reach some kind of agreement on media revenue sharing.   I'm fine with NIL as how it was inteneded - and, I'm fine with media revenue sharing. 

I do believe any solution needs to address ALL student athletes - regardless of gender and sport (revenue / non revenue generating).   So - conferences - perhaps the entire NCAA could reach some kind of solution / guideline / rule about media revenue sharing.   This - could theoretically have some kind of a cap which everyone would need to agree to.   And as soon as the agreement is readhed - certain schools / conferences will begin lookin for a way to "get around" it. 

IMO, the real issue is - NIL.  What is to stop any individual / collective to offer an opportunity to a student athlete?   I believe the NIL Pandora's box cannot be closed.  And, NIL is where the difference is today.   The only way I can foresee it changing is - donors to NIL / Collectives will eventually get tired of seeing their donations go to kids driving around a campus in a Lamborghini (and, I'd heard that Georgia's QB - Carson Beck - just picked up a Lambo) - when the results on the field don't make them (the donor) happy enough.

I have no issue with players being able to build on their success - and commitment.  Caitlin Clark is a great example at Iowa.  I will always appreciatd Blake, JJ, and the Michigann teams of the last few years - and respect their approach to NIL.   Hopefully, the team attitude can be sustained.