Episode 5: Is the new CAA media rights deal THE FUTURE?

In the media rights space, the Mountain West Conference and BYU are the biggest entities who should be signing new agreements soon. But Monday morning, another league broke news of a new, innovative media rights deal: the CAA.

The CAA (Colonial Athletic Association) announced a new four-year deal to make FloSports their primary media provider. That makes the CAA the first D1 league to sign a digital, streaming OTT company as their primary rights holder, as opposed to a linear channel like an ESPN or Fox. With the deal, over 500 CAA events will be streamed on FloSports, including about 50 football games and 140 men’s and women’s basketball games. The LAX Sports Network will continue to broadcast men’s and women’s lacrosse games, and a package of regular season men’s basketball games, along with the CAA Tournament Final, will be on the CBS Sports Network.

I wrote an executive summary of this story for SB Nation earlier this week, where I talked to the CAA commissioner, as well as another television executive involved in media deals. There’s a few details I couldn’t fit in that story that may be interesting to this audience, though.

For one, you can be forgiven if you haven’t heard of FloSports. Hell, I hadn’t even heard of it.

That’s probably because they carry a lot of highly niche sports right now. If you want to watch professional bowling, track and field events, Big Ten baseball, or something called the Ohio Combat League, they’re your streaming platform. They’re clearly ambitious though, since they recently purchased the rights to a few MLS teams like the DC United and Cincinnati FC. The DC United broadcasts…didn’t go so well at first.

This deal is unique in a lot of ways, even if you don’t care about the CAA

And there’s a good chance you don’t care about the CAA. It’s a great FCS football league, and will produce a few top 125 KenPom basketball programs a season…but it’s an FCS football and single-bid basketball league. That’s some pretty mid-majory stuff.

It’s big for FloSports, who now holds their highest profile collegiate rights ever. It’s big for the CAA, as a league that typically gets very little in way of rights fees will be getting a “seven-figure” deal, money that goes a long way when your annual athletic budget is under $25 million, which is the case for some CAA programs. For what it’s worth, the CAA has claimed they’ve never received a rights fee before, but the other TV executive told me that was “untrue”.

Online, I saw the reaction from CAA fans was mixed. Many were worried that they wouldn’t be able to watch their football teams on local TV anymore. Commissioner Joe D’Antonio told me that while he couldn’t specify exactly which markets this would apply to, if a team already had an arrangement with local TV for football, they could keep it. The SBJ reported this was the sticking point between the FloSports and ESPN+ offers, which would make sense. UConn is not happy that they may not be able to do something similar for women’s basketball, thanks to the new AAC media deal.

The SBJ also reported there was plenty of interest in the CAA’s streaming rights. Twitch, Facebook Watch, Stadium, and even other companies kicked the tires, although only ESPN+ and FloSports were willing to pay a substantial fee. D’Antonio didn’t confirm specific firms to me, but did say they had plenty of interest.

Will this deal mean fewer people watch CAA events in 2019 than they did in 2018? Probably, although it’s not like CAA football was on ESPN2 every weekend anyway. In exchange, CAA schools get a little bit more money, a lot more flexibility, and get to be the big fish in a much smaller pond. I’d expect CAA programming on FloSports beyond just the games with year-round coverage, seeing as they’re now one of the flagship media properties of the network.

Both the SBJ and the executive I spoke to were skeptical more leagues were going to get similar deals in the near future. This might be more about FloSports trying to make a splash than the wave of the future.

But it’s an interesting development, for sure.

A few other notes. On BYU’s upcoming deal:

• The same television executive told me fans shouldn’t read anything into BYU’s plans to join a conference if their next media deal extends beyond 2024-2025. “Tom Holmoe is one of the best athletic directors in the country, and I know this from personal experience,” he told me. “He is smart, and he will do nothing to put BYU at any type of risk. So if there’s an opportunity to go join a conference, that’s not going to be prohibited by a media rights deal.”

• He continued. “Generally, these {media rights deals} don’t have penalty clauses with individual schools. I haven’t seen a deal where an individual school would get paid less if they joined a conference. Plus, generally, you have a wind-down period.”

• Finally, he recommended to not get too caught up in the final number. BYU’s ability to get rebroadcast rights, avoid paywalls, allow BYUtv to get a game, etc, are all important to the program’s mission, but could shave money off what they might otherwise get. In his estimation, a 20% financial increase while staying true to their institutional goals is a “better deal” than one that gives them a 40-50% increase, wins the headlines, but doesn’t meet those goals. I expect many BYU fans would agree.

On the Mountain West Conference’s deal:

• The executive indicated there would be plenty of interest in the MWC’s rights, not just from current partners like ESPN and CBS Sports, but other companies, including traditional outlets that haven’t worked with the MWC before.

• But he also cautioned that the MWC would take a really “holistic approach”, considering balancing rights fees, distributions, the schedule of kickoff times (something multiple schools have complained about). He added that “{Thompson} has been really innovative…they had their TV network years ago…they were ahead of the curve. They were also one of the first leagues to get into the digital business. They’ve had deals with Stadium, so {Thompson} has always been out in front.”

• He also cautioned against reading too much into the final revenue number, no matter what the deal is for. A school might get $5 million a year from rights fees, but if they suddenly need to produce more events on campus, a chunk of that is going right back into camera equipment, production staff, etc…it isn’t really $5 million. A desire to “win the headline” could make a deal look better than it really is. He suggested that part of the reason the American went for such a long term deal was so they could get "a billion dollars” in the headline.

I wouldn’t expect the MWC to sign a deal like the CAA, where the majority of their rights go to digital streaming. But I wouldn’t be shocked if some football or men’s basketball games end up somewhere other than linear ESPN or CBS Sports.

And now, for something that has nothing to do with TV rights: let’s talk about Liberty real quick

Liberty University is an easy school to goof on in my corner of college football internet. From the school’s leadership clumsily embracing Trump, to Hugh Freeze’s performative to the point of parody hiring press conference (lmao remember Liberty hired Hugh Freeze), to the school’s rehabilitation of other, less savory athletics administrators , there’s plenty of material.

The school is trying to be more than a meme for smartass bloggers who went to Sunday School, though. It has ambitions of becoming something of a Notre Dame or BYU for a certain flavor of evangelical Christians. It has an enormous enrollment, fancy athletics facilities, and the budget to hire and retain quality coaches.

But Liberty hasn’t been embraced by the college football establishment, even at the G5 level. Despite having better facilities, more money, and probably more fans than most Sun Belt or Conference USA programs, the two leagues haven’t extended membership. Without a conference, Liberty football can’t really grow very much.

Without question, the school’s politics are partly to blame for that. But there’s another reason too.

The New York Times took a closer look at exactly how Liberty has grown so much, so fast. The biggest reason has been explosive growth in their online enrollment, coupled with lower per-pupil spending than even competitors in their space like the University of Phoenix. Thanks to bountiful federal student aid and aggressive recruiting tactics, the school is now awash in cash. And if some of those recruited students aren’t ready for college level coursework, or aren’t likely to earn enough to pay back those loans? Well, that’s for the student and Uncle Sam to figure out, not Liberty.

Right now, Liberty, and schools who have followed similar growth strategies, are far more responsible for the student debt crisis than say, overpriced elite private schools. If politicians in Washington ever get serious about student debt relief, some sort of regulatory change seems likely, perhaps limiting federal aid to schools who fail to meet certain graduation benchmarks.

It’s ironic, that crackdowns from the Obama administration on predatory online schools helped elevate Liberty (since they’re a non-profit), but I don’t think this gravy train can last forever. And that’s true for other schools, like Grand Canyon or even Arizona State, that made chasing online students, at scale, a priority.

Take it from a guy that worked in online education a few careers ago. You can have an elite instructional experience teaching online, you can have a high volume of online students, or you can have a great profit margin. But you can’t have all three. You might not even be able to have two, at least not forever.

For now, the school has plenty of cash. Their football team might win seven, maybe even more games this season. In the near future, they’ll probably be better than several teams in the Sun Belt or Conference USA. If Hugh Freeze hangs around, they’ll certainly sign a few recruits they have no business signing. But I’d be very surprised if a conference invite came their way in the near future.

Higher education is probably full of lots of bubbles. But it’s hard for me to look at this growth strategy and not see another one.

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