The BCS Monopoly and How BYU’s New Holy War Will Reshape College Football

In the college football game of Network Monopoly, your program is only as safe as the network dollars it commands.

Just when we thought the music had stopped and everyone had grabbed a chair, we get this news: the Mountain West Conference absorbs Nevada and Fresno State in a preemptive move to keep Brigham Young University from going all Notre Dame stupid on the conference.  And, as the buzzards get set to pick at what’s left of the WAC, once the fattest cat in the alley, the conference sits precariously poised to go the way of the the Dodo bird, the Edsel, and the Notre Dame championship (hint, those are all things that used to exist).  And lurking on the horizon, the imperial bald eagle, set to challenge the old boy network with an all out assault on the fat cat’s Brinks armored trucks following in tow.  Get your scorecards back out ladies and gentlemen, because the rumored expansion detente that was to follow preservation of the All Big Texas Conference is about as certain as a retirement guarantee from a particular NFL quarterback who will remain nameless in this column.

As Ray Ratto of CBS put it:

In the last two days, Brigham Young announced it might be leaving the Mountain West for independence in football and would take its other sports to the WAC, except that the WAC is losing Fresno State and Nevada to the Mountain West, leaving the WAC with an angry commissioner in Karl Benson and six teams, none of them particularly eye-watering, except that Louisiana Tech may be bolting the WAC for Conference USA and UTEP may [be] coming to the WAC, which still leaves the WAC a six-team conference, unless it grabs North Texas from the Sun Belt or Cal Poly-San Luis Obispo from the Great West signs on, unless it simply throws up its hands and gives in to the gravity of 21st-century college sports, while the West Coast Conference (the home of Gonzaga and St. Mary’s basketball, most notably) makes a run at BYU for its non-football business.

Did you follow all of that?  Many assumed that the conference expansion chaos ended when Texas seized control of the conference formerly known as the Big 12.  Now the threat by BYU to go independent, and the tactical gambit utilized by the MWC to destroy the WAC, has set college football up for a showdown that may very well center around a certain religious school presently engaged in a colossal temper tantrum.  You see, BYU, reeling from Utah’s invite to the Pac 10, was planning last week to copy the Notre Dame Plan and go independent in football, hoping to join the WAC for all other sports.  Sensing the loss of a valuable property, and still clinging to the pipe dream that the big boys will one day invite them to the party, the MWC added arguably the best of what was left of the WAC, Nevada and Fresno State.  By adding these two stalwarts of college football, the MWC was attempting to eviscerate the WAC and force BYU’s hand by eliminating a destination for its non-football programs.  The result, at least for now, was to forestall BYU independence by using a tactic that has left the WAC once again on the precipice of extinction.

BYU’s decision to go independent or join the MWC may trigger an epic reconfiguration of NCAA football.

But many think that this is just the beginning.  As Frank of Frankthetank.wordpress.com astutely noted, Senator Orrin Hatch may not be pacified by the fact that Utah has found a home in an AQ conference, the Senator being a graduate of Brigham Young University and all.  In his article, Frank outlined four possibilities for BYU:

SCENARIO A: BYU stays in the MWC.  In 2 years, the MWC meets the BCS AQ numerical criteria and the BCS conferences decide to let the conference into the party.  This means that the BCS conferences have to give up at least $18 million per year and an at-large bowl slot.

SCENARIO B: BYU stays in the MWC.  In 2 years, the MWC meets the BCS AQ numerical criteria, but the BCS conferences decide to keep the MWC on the outside because it makes zero financial sense to invite them in.  Sen. Hatch raises a political and legal shit storm unlike anything seen before and puts the entire BCS system in jeopardy.

SCENARIO C: BYU becomes a football independent, but the BCS conferences don’t give the school a Notre Dame-type deal.  Sen. Hatch raises a political and legal shit storm unlike anything seen before and puts the entire BCS system in jeopardy.

SCENARIO D: BYU becomes a football independent and the BCS conferences extend the school a Notre Dame-type deal.  With both Utah and BYU now within the BCS system, Sen. Hatch suddenly has a new-found love for the BCS bowls and Washington leaves college football alone entirely.  Meanwhile, it cuts the legs out from under the MWC and any other viable non-AQ upgrade possibility.

The reality of the matter is that the BCS is a $225 million dollar Cartel whose sole objective is to protect its monopoly.  I agree with Frank, there will be no financial incentive to include an independent BYU or the newly affiliated MWC in the BCS mix, meaning that scenarios A & D above, absent congressional meddling, are but a pipe dream for the two entities.  If a prospective member of the Cartel does not increase overall revenue to exceed their $18 million dollar cut, then why would rationale economic actors (read greedy fat cats) voluntarily make room at the trough for another hungry sow?  The answer is, they wouldn’t.

Looming on the horizon appears to be a David versus Goliath encounter that threatens to completely reshape the college football landscape, only David won’t have to fight the good fight alone.  If you thought the latest round of conference realignment dosey-do got a little messy, wait till the United State’s Congress throws it’s over sized sombrero into the ring (if pro is the opposite of con, what’s the opposite of progress?)

Think that Congress has bigger fish to fry (you know, health care, two wars, a messy oil spill to clean up just to name a few), then consider the following:

  • In 2005, Congress held hearings on the BCS.  A House Energy and Commerce subcommittee, chaired by Joe Barton, said “[c]ollege football is not just an exhilarating sport, but a billion-dollar business that Congress cannot ignore,” said the Texas Republican.
  • In November of 2008, the night before his election, candidate Barrack Obama said in an interview with ESPN that college football needed to do away with the BCS and go to a playoff.
  • In December of 2009, a House subcommittee approved legislation aimed at forcing college football to switch to a playoff system to determine its national champion.  “What can we say — it’s December and the BCS is in chaos again,” said the bill’s sponsor, Rep. Joe Barton of Texas, the top Republican on the House Energy and Commerce Committee.  He said the BCS system is unfair and won’t change unless prompted by Congress.  The bill would prevent the BCS from calling it’s game a championship game unless a playoff is utilized.
  • In June of 2010, just days before Nebraska joined the Big Ten, Iowa’s two U.S. senators asked Big Ten Conference officials to disclose expansion plans and financial information about the league’s cable television network
  • Sen. Orrin Hatch (R-Utah), has pressed for a Justice Department antitrust investigation into the BCS, following what he perceived was the snubbing of Utah in 2008.
  • In March of 2010, Senator Hatch drafted a letter to BCS Executive Director Bill Hancock, with his specific concerns regarding the BCS system.  Hancock responded recently with his own, five-page letter.  “While I appreciate your interest, I believe that decisions about college football should be made by university presidents, athletics directors, coaches and conference commissioners rather than by members of Congress.”  Less than satisfied with the response, Senator Hatch wasted no time firing back:  “Today, the BCS simply confirmed what most fans of college football have known for some time – that the BCS system is biased, secretive and harmful to schools and competitors.  Our letter gave them an opportunity to reply with openness and transparency about how the BCS system actually works.  In response, we got an arrogant rebuke and a series of incomplete and evasive answers to simple questions.”
  • On August 17, 2010, Boise State’s Athletic Director, Gene Bleymaier, said that he is going to push for legislation mandating home-home scheduling in college football.  Many have suggested that scheduling is one way the big programs can control access to the BCS by denying smaller markets the advantage of home games against the bigger programs.

The way this author sees it, and he correctly predicted the salvation of the All Texas Conference, BYU will eventually decide that they have a much better chance of becoming BCS relevant by remaining in the MWC.  Even if the school was successful in obtaining a Notre Dame Independence-type deal, BYU would only be guaranteed a BCS bowl if it finished in the top eight of the BCS rankings, a feat the school has rarely accomplished.  Also, it would seem that BYU might find it difficult to schedule twelve national games each year, both because they do not have the national cache of Notre Dame and because they lack the established non-conference rivalries necessary for scheduling purposes (leave the MWC high and dry, and good luck scheduling games with members from that conference).  I mean, who exactly will the Cougars play when all but a handful of programs are engaged in conference play for the bulk of the college football season?  And without the national following of Notre Dame, just how much money can BYU realistically expect to earn from the rights to carry the BYU network? All of this adds up to BYU remaining in the new, and not necessarily improved, Mountain West Conference.

With Larry Scott’s failed Pac 16 experiment, many think we won’t see super-conferences any time soon.  Don’t bet on it.

Assuming BYU stays in the MWC and the Cartel is unenthusiastic about forking over $18 million dollars to the new kids on the block, it might appear that we are headed for scenario B, Frank’s “Hatch shit storm.”  While some have suggested that the Cartel will disband and go back to the old bowl alliance to avoid a college playoff, don’t bet on it– this author believes this stodgy alliance of millionaires and billionaires will try and find a way to preserve the status quo.   So, adding to Franks work, I add  Scenario E, what I call the Walmart Model, which offers the best solution of preserving the status quo and keeping Congress out of the business of NCAA football.

For those unfamiliar with the approach of the nation’s retail marketing giant, Walmart has cornered the market by purchasing goods in such a high volume that they are able to dictate the price they pay their suppliers for those goods (don’t let us sell your pickles for less than what you can make a profit on, and you’ll lose the entire Walmart account).   Economists call it “economies of scale,” which basically refers to the cost advantage that a business obtains due to expansion.   By getting bigger, WalMart has been able to provide their merchandise cheaper than their smaller competitors, eventually absorbing the competition or driving them out of business altogether.  What Walmart figured out was that the easiest way to beat David was to avoid fighting him in the first place.

Dennis Dodd, of CBS sports, explained the “less is more” rationale that is the driving force behind the TV network game.  The year was 1984, ironically the same year that BYU won a National Championship, that the college football landscape was altered permanently.  That year, the nation’s top football playing schools won a Supreme Court battle that allowed them to control their TV rights.  The first to strike gold was a Leprechaun, forming a then unrivaled alliance with the National Broadcasting Company that cemented the Fighting Irish as arguably the nation’s premiere national program, splitting profits just the one way while having each game broadcast to a national audience.  As it turns out, this was but a stepping stone for a blue print that would be improved upon, as the Big Ten turned its most valuable properties into a quarter of a billion dollar annual venture by striking deals with ABC/ESPN and creating its own network.  As Dodd put it:

There have always been more Big Tens than WACs that matter. From the time television first became interested in college football, one truth rang out. Those who owned the networks were only interested in televising the top 40, maybe 50 college football-playing schools. It took the others as a necessary evil, because they were in the same conference.

So how does this work on the BCS level?  It’s simple really.  Consolidate all the big time (read profitable) programs into four conferences of sixteen teams, establishing a new FBS of 64 teams (roughly the number of entities the networks are interested in televising).  Each conference will strike a new and even more  lucrative deal with the limited networks that televise college football based on the strength of offering 16 properties instead of 10 or 12.  Just like Walmart, the consolidation of the nation’s premier college football properties will allow each conference to command top dollar for its television rights.

And what of the rest of the 56 present day FBS entities you ask?  As the big boys negotiate deals with all of the available networks for the most lucrative entities, these “Mom and Pop shops” of college football will be completely cut off from the network revenue streams necessary to fund competitive programs.  This will result in most of these programs either folding completely, joining the FCS, or finding other creative ways to try and compete with the big boys (such as this week’s proposed Mountain West-Conference USA championship game orchestrated for the sole purpose of trying to garner BCS AQ status).  I mean, this is essentially what the BCS has been doing from a finanical perspective anyway, so why not just make it official?  Sixty-six schools, just more than half of Division I-A, shared 85 percent of the $217 million generated by the 2006-07 bowls.  Why not keep the other 15% percent and let the least profitable entities fend for themselves?  Isn’t that how free enterprise is supposed to work anyway?

Contracting the official size of the FBS while consolidating resources would allow the NCAA to restructure their product, akin to professional sports leagues controlling the number of franchise licenses.  So long as you let BYU and all top revenue generators into the mix of 64, just who is going to stand up to the old boy network when the fight is to preserve the tradition of a minority of schools that will garner little if any political clout?  And for good measure, to make sure those pesky do-gooders in the beltway stick to issues more befitting a federal law making body, make each of your four new super-conferences play a championship game with tie-ins to the BCS bowls.  With this de-facto playoff system in place, just what will Congress and the fans have left to cry about?

And here’s the best part–no grand conspiracy is necessary to pull this off because it’s likely to happen anyway, probably well before Congress is able to shift gears from reverse to neutral.  The reason this is inevitable is because it will always be more profitable for the big time conferences to expand under the economies of scale logic presented above–a 16 team conference is simply more lucrative for a network than a 12 team conference.  And once one conference does it, you can bet the competitors will follow suit out of fear of becoming financially irrelevant.  One need look no further than Larry Scott’s failed attempt at a hostile takeover of the Big 12 to realize how close we came to this exact scenario happening as early as 2012.

Sounds like a win win for everybody, right?  Sure, there will be less FBS football for the consumer on Saturdays, and about 56 FBS schools will be left homeless in the process.  But in the end, as long as the Longhorns and Buckeyes and Trojans and Gators of the world can continue to line their pockets with never ending supplies of cash, don’t we all win?  Isn’t that what college athletics is supposed to be about, taking advantage of their tax free status to maximize profits on the football field?

Don’t look now, but pickles are on sale at Walmart again.

Advertisements


Categories: College Football

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

3 replies

  1. It is all about the money. Where the money is they will go.

  2. Rick, I wish I could say I disagree. If you have read a few of my articles, it’s pretty clear I’m a follow the money man. I just hope the NCAA doesn’t sell out in my life time to the point that I can no longer enjoy the sport.

Trackbacks

  1. The BCS Monopoly and How BYU’s Decision to Go Independent will further polarize college football « The Pole's Position

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: