- Extra Points
- It didn't have to be this way
It didn't have to be this way
I feel bad for college sports...but this is tremendous shareholder value
Good morning, and thanks for spending part of your day with Extra Points.
It’s been a very busy last few days. I’ve been thinking and I want to get something off my chest.
I owe part of my career to conference realignment. I wrote a book that spends tens of thousands of words on the Airplane and Super Metro Conferences. Writing about previous Big 12 expansion processes taught me many of the intricacies of Open Records Requests, and many Extra Points readers originally found this publication because of work I did covering mid-major realignment decisions.
In fact, I started last week making phone calls about a completely different realignment story that wasn’t connected to the Big 12, Big Ten, or Pac-12 at all.
Nathaniel Hawthorne famously said that '“Families are always rising and falling in America”, and so it is with college athletic conferences.
Media moguls and college administrators have put their thumbs on the scales and let their own greed, pride, ignorance, and personal feuds shift athletic conference affiliation since the days of Fielding Yost’s bigotry keeping Notre Dame from the Big Ten. I know it isn’t new, and many of those historical decisions have had lasting negative consequences.
But I really believe last week was different. The seismic changes the Pac-12, Big 12, Big Ten, and even Florida State and the ACC, will heave big-time college sports in a direction it was already trending—one that legitimately threatens the very core of what made it compelling.
We are moving into a new era, and you’re not going to like it, even if you think your school or conference “won” last week.
How did we get here?
One of the hard things about systemic failures is that it can be very difficult to pinpoint exactly where important individual failures happened. The full autopsy of the Pac-12 conference is a book, not a 2,000 word newsletter, but let’s try a quick cliff notes version.
The Pac-12 (a college athletic conference) hired Larry Scott (professional tennis) to be their commissioner. Scott reported to university presidents (academic administrators), selling them on the dream of a media empire, and then both dramatically missed revenue projections and overspent on vanity projects. His bosses (again, academic administrators) failed to course correct.
Then Scott left, and the Pac-12 (a college athletic conference) needed to hire a new commissioner. They hired George Kliavkoff (pro sports, casinos). The league then promptly lost their two flagship institutions to the Big Ten (a college athletic conference) led by Kevin Warren (professional sports). Over the next year, the Pac-12 was then increasingly outflanked by the Big 12 (a college athletic conference), led by Brett Yormark (professional sports, Roc Nation).
The dust settles, and now the Pac-12 is functionally dead. The Serious Professional Business Guys were defeated by Other Serious Professional Business Guys and the failing strategy was not corrected by Serious Academic Administrators. And now a college sports conference is dead.
When you describe it this way, it feels like completely ridiculous governance. Because it is.
And of course, now that the Pac-12 is in shambles, who pays the price? Larry Scott is generationally rich. Kliavkoff will probably lose his job, but I’m sure he’ll land on his feet. None of the Pac-12 presidents who enabled (or even caused) this crisis will lose jobs or prestige among their peers (the guy who led the hiring committee at Oregon for Kliavkoff, Michael Schill, got promoted to take over Northwestern, although he may yet be fired for his poor handling of a completely different athletic crisis). Michael Crow at Arizona State still gets to talk into microphones for some reason.
But you know who will pay the price? Athletes at places like Oregon and Washington are already complaining about how increased travel obligations will make their experience worse. Athletes at Oregon State and Washington State will see their competitive and athletic experience decline, and might even see their sports dropped altogether. A lot of athletic department and Pac-12 conference staffers, the sort of people who work a million hours for $56,000 a year, are going to lose their jobs.
Hundred-year-old rivalries will be interrupted. Alleged student-athletes will miss even more class time and college experiences. Consumers will be given new inventory they didn’t ask for in broadcast windows optimized for places they don’t live.
And for what?
And it’s going to get worse
I really understand the impulse from many fans of Big 12 schools to actively celebrate the events of the last few days. After years of worrying if their conference would be on the brink of disintegration, now they get to go on offense. The fact that their '‘truck stop” schools in mostly rural states get to do the poaching, while the elitist snobs on the coast face an existential crisis, has to feel rewarding.
I get it. Nobody should expect a BYU fan to mourn if something bad happened to Cal or Stanford.
But last week was a pyrrhic victory, a temporary speed bump on the path toward the relentless consolidation of power by the biggest brands in college sports. In a few years, once Yormark leaves like virtually all of this new generation of conference executives will, the Big 12 will be saddled with navigating the administrative, competitive, financial, and logistical challenges of a national league, without the resources of the Big Ten or SEC. The final obstacles preventing complete power consolidation by the Big Ten and SEC are crumbling.
If this era of college sports does not have room for Stanford, there’s little guarantee that it will find room for Iowa State, especially as we head into an explicitly professional model for college sports.
And I’d look to Florida State to better understand why
You might have missed this in the barrage of news last week, but I suspect this development may actually go down as an even bigger deal than the dissolution of a major conference.
Florida State does not want to be in the ACC anymore. Their leaders are concerned that the ACC’s TV deal (locked in until 2036) will leave them financially uncompetitive against major payouts from the Big Ten, SEC, and even the Big 12.
But leaving the ACC, right this second, requires an enormous amount of money. Florida State might be able to sue and break up the Grant of Rights agreement, but such a dispute would be risky, politically dangerous, and also enormously expensive. Between the Grant of Rights agreement, exit fees, and assorted IP issues to resolve, industry analysts have told me the total withdrawal cost could go as high as $500 million. Maybe you win a lawsuit, burn a ton of bridges, and get out for $100 million. Either way, nobody in college sports has that kind of money.
So Florida State is reportedly looking at somebody outside of college sports. Specifically, private equity. Specifically, JPMorgan, who you might remember as the guys who tried to finance the European Soccer Super League.
Spinning off all media rights (and potentially other revenue, like MMR or even ticket sales) into a third-party company, and then selling an equity stake in that company, does happen in European soccer. It’s one of the exact scenarios I wrote about a month ago for how, say, the Saudi Sovereign Wealth Fund could get involved in college sports…or any number of other investors fans probably don’t want involved.
This scenario should be highly alarming to sports fans. Private equity doesn’t have a great track record with many of the other industries it’s gotten involved in, from media companies to health care to the housing market. Selling an equity stake to a third party also means that Florida State athletics will lose some measure of control over the operations of the athletic department. What happens if JPMorgan wants to raise ticket prices, or drop the women’s soccer team? What happens if Florida State can’t secure a huge bump in their TV revenue? What assets will be stripped for parts?
But even beyond that, if Florida State can raise $500 million to get out of an allegedly ironclad contract and league affiliation in the name of chasing more money…anybody else can do that too. The only thing stopping the Big Ten from kicking out Minnesota and Indiana, or Ohio State, Michigan and friends from forming a new Super League that promises even more money is administrative restraint or political backlash.
Do YOU want to bet against broadcast money now? After the last few days, do you think there is ANY line that what passes for senior leadership in this industry won’t cross?
Among the many sad things here…is the fact that all of this undermines exactly what makes college sports so wonderful
This is not an original observation, but it’s still a correct one and is worth repeating.
The true appeal of college football is not that it features the very best elite athletes and the best quality of football. It doesn’t. The worst NFL team would stuff the Georgia Bulldogs into a trash can. Even the most elite college football teams, ones that feature 30 NFL draft picks, still require key contributions from future buff dentists and insurance executives. For college basketball, that disparity is even more apparent.
The true appeal, what gives the entire industry its romanticism, is that it is provincial and personal. I do not have a degree from the Cleveland Cavaliers, a corporation that exists primarily to turn a profit. I have a degree from The Ohio State University. My name is carved in the stadium belltower. I went there.
Much like South American and European soccer clubs, college sports fandom is still very much about the direct, personal relationship you have with the institution, which is connected to where you grew up, your religion, occupation, cultural experiences, and more. And what makes the rivalry games so passionate and explosive isn’t just because of on-the-field stakes, but because of the connection to the people off the field. To love college sports is to constantly engage in American anthropology. It is a major reason why I love this job.
Growing up outside of Columbus, it was easy to root against schools like Wisconsin and Michigan, not just because those games were essential to my team winning a title, but because I knew so many people who went to those schools. Madison was not some far-away intellectual abstraction. I’ve been there. I knew that after the game, there would be people at school, work, church, the gym, wherever, who were connected to those places.
That won’t be the case for teams that are 1,300 miles away. The Arizona State fan who lives in Mesa probably won’t know anybody who went to UCF. I don’t know anybody that went to Washington. The only people in Morgantown with a connection to BYU are Gordon Gee and whatever two missionaries were sent to serve in the Morgantown ward. It just won’t be the same.
FOX and ESPN executives know that. They just don’t care. They’re not building a world to serve the guy who has a 247 subscription, or the longtime season ticket holder. They’re building a world to serve the casual fan, six states away, who tunes into a broadcast because they recognize the helmets, and might buy the shampoo mentioned on the commercial break.
They’re chasing volume.
And that makes me feel especially sad
I’ve seen this trend play out over the last decade in the media industry. Private equity, venture capital and other institutional investors bought up newspapers and digital media outlets, cut expenses, and sought to appeal to the broadest, most national audience they could, in the service of maximizing clicks. Your local newspapers have almost certainly gotten worse over the last decade. We’ve seen this in sports as well, in the rollbacks at B/R, SB Nation (RIP), Vice Sports, The Athletic, ESPN, and countless others.
I recognize this is pollyannish of me, but I deeply believe this approach is wrong. It creates a worse product for the consumer, and it degrades the people making the product. I write what I write about, market Extra Points how I do, and operate under this business model not just because I think it makes the most financial sense for me, but because I really believe that going small and niche makes for a better internet.
I so badly want Extra Points to work not just so I can make a living writing about the Missouri Valley or academic research or fun things I found in a university archives system, but because I believe that if I can make this work, other people can too, and we can make for a more interesting, more informative and more sustainable industry.
I don’t want to live in a world of just perfectly optimized national chains. I don’t want to live in a world where content that doesn’t ‘go viral’ can’t make any money. And I don’t want to live in a college sports world that can’t have room for Oregon State’s kickass baseball program, or The Backyard Brawl, or for a noon kickoff between two schools that actually know each other. We already have one NFL. We don’t need a second, worse one.
The only way to potentially stop this march to nationalized, industrialized college sports would be with dynamic, engaged, leadership. The NCAA, of course, is too preoccupied with spending every drop of its tiny amount of political capital to try and restrict athlete earnings before the federal courts rule everybody as professionals. They’ve said nothing about conference realignment, and probably won’t. They know nobody would listen.
During the Board of Regents Zoom Call at Oregon, as the school prepared to exit the Pac-12 and head to the Big Ten, the Chair of the Board of Regents took the call from a golf course. The “front porch” of his university was on fire, and he demonstrated the seriousness of the event by golfing.
If these are our leaders, this is what we’re going to get.
And it sucks.
Extra Points does occasionally run paid ads, but this publication exists because of subscriber support. Paid Extra Points subscribers not only get access to every single newsletter I write, and access to a FOIA directory that will come back online later this week, but they can play Athletic Director Simulator 3000. If you’d like to give running a mid-major department a crack, join our community and subscribe today:
If you’d like to buy ads on Extra Points OR in ADS3000, good news! They’re affordable, and we have openings this season. Drop me a line at [email protected]. If you have news tips, I’m at [email protected]. Otherwise, I’m at [email protected], @MattBrownEP on Twitter, @ExtraPointsMB on Instagram, and @MattBrown on Bluesky.