The BCS Monopoly and How BYU’s Decision to Go Independent will further polarize college football

In a day when the Big Ten announced that Michigan and Ohio State would indeed be in different divisions, yet again making another of my expansion predictions ring true, the Brigham Young Cougars humbled yours truly by announcing their intention to go independent.

In the conference expansion soap opera that could best be titled “As the Mid-Major Crumbles,” the Cougars cut a deal that left the MWC conference twisting in the wind.  While BYU has set themselves up by lining their pockets with some of the Evil Empire’s cash, the collateral damage of this decision will be felt in places like Boise Idaho, where the little blue engine that could just saw their BCS dreams go up in smoke.  In part one of this article, I wrote the following:

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 be guaranteed a BCS bowl only  if it finished in the top eight of the BCS rankings, a feat the school has rarely accomplished.  Also,  BYU might find it difficult to schedule twelve national games each year because they do not have the national cache of Notre Dame and because they lack the established non-conference rivalries necessary for scheduling purposes. ( This would leave the MWC high and dry. Good luck scheduling games with members from that conference).  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.

I could not have been more wrong–the perils of the sports prediction business, I guess.  But the decision made by BYU to go independent will actually be better for the BCS monopolist.  In the end, BYU will garner a Notre Dame-type deal because it will reduce overall BCS payouts.  This will further guarantee that the MWC and any other hopeful will never achieve AQ status.  To understand how this works, one needs to understand the only data that matters to the BCS monopolist, the numbers by which decisions are made as to who is BCS worthy and who is not.

Simply put, in order to become “worthy” and get its hands on some $18 million and change, the prospective program or conference must increase the overall BCS pot by more than this amount.

Here’s how it works (or doesn’t if you happen to root for a team that isn’t one of the chosen few).  First, look at the payout data from the 2007-08 season, which can be found in its entirety here.  I selected  information from this season because it is the most recent season for which I could find complete data for bowl revenue shares, overall program revenue rankings, and television viewership shares for the various bowl games.

The total BCS revenue was $145,846,923, with the vast majority of this money coming from television revenue and title sponsorship, totaling $88.4 million.  The Big 10 and the SEC took the biggest overall cuts,  $22 million apiece (Total shares are based on the number of teams from your conference that appear in a BCS game, and the SEC and Big 10 lead the way in 2007 with two teams apiece).  The remaining BCS conferences (Pacific 10, ACC, Big East, and Big 12) earned slightly more than $18 million dollars apiece from the BCS in 2007-08.

Consider what happens to the BCS have-nots, those programs without AQ status, meaning that the winner of their conference does not automatically qualify for a spot in a BCS game. (These teams may be considered for one of the five remaining at large births under the present system, but the decision is  solely at the discretion of BCS monopolist.).  The figures, for 2007-08 are as follows:

  • The WAC share was $9.1 million;
  • The MWC share was $3.7 million
  • The Conference USA share was $2.6 million
  • The Sun Belt’s share was just over $2 million
  • The MAC share was about $1.5 million
  • Notre Dame’s share was $1.3 million (though Notre Dame would earn an equal share of the BCS money in those years that it appeared in a BCS game).
  • All the rest of the conferences earned shares less than $1 million dollars.

To complicate matters, the unstated assumption is that the BCS monopolist will place its most profitable programs in the BCS games. Thus, the networks achieve the ratings to justify the payouts that make up most of the $88.4 million dollars referenced above.  All things being equal, the BCS has an incentive to select those programs that garner the highest television ratings, which translates to the the biggest and historically most successful of the college football programs.  Make no mistake, though the selection rules are intentionally complicated and convoluted, the BCS has enough discretion to choose those programs that will secure network ratings.  In recent years, the bowl selection committees have almost shamelessly admitted that potential ratings have become a primary factor (Here is one author that suggests that the BCS is only trying to set up good bowl match-ups rather than determine a champion in order to maximize revenue).

More people watched the 2008 Capital One Bowl, which featured a Michigan upset over Florida, because of the marquee value of the teams involved.

Below is a listing of all of the 2007-08 bowl games, including the match-ups, the network that televised the game, and the number of television viewers that watched it, the next piece of the puzzle:

  • San Diego County Credit Union Poinsettia Bowl: Utah/Navy, ESPN [1,932,246]
  • R+L Carriers New Orleans Bowl: Florida Atlantic/Memphis, ESPN2 [1,561,000]
  • Bowl: Cincinnati/Southern Miss, ESPN2: [2,167,420]
  • New Mexico Bowl: New Mexico/Nevada, ESPN: [1,888,695]
  • Pioneer PureVision Las Vegas Bowl: Brigham Young/UCLA, ESPN:  [2,390,098]
  • Sheraton Hawaii Bowl: East Carolina/Boise State, ESPN: [1,415,395]
  • Motor City Bowl: Purdue/Central Michigan, ESPN: [2,584,994]
  • Pacific Life Holiday Bowl: Texas/Arizona State, ESPN: [4,223,682]
  • Champs Sports Bowl: Boston College/Michigan State, ESPN: [3,561,309]
  • Texas Bowl: TCU/Houston, NFL Network: [326,650]
  • Emerald Bowl: Oregon State/Maryland, ESPN: [3,463,061]
  • Meineke Car Care Bowl: Wake Forest/Connecticut, ESPN: [3,607,429]
  • AutoZone Liberty Bowl: Mississippi State/UCF, ESPN: [3,986,674]
  • Valero Alamo Bowl: Penn State/Texas A&M, ESPN: [2,568,881]
  • PetroSun Independence Bowl: Alabama/Colorado, ESPN: [1,828,965]
  • Bell Helicopter Armed Forces Bowl: California/Air Force, ESPN:  [1,928,556]
  • Roady’s Humanitarian Bowl: Fresno State/Georgia Tech, ESPN2:  [745,082]
  • Brut Sun Bowl: Oregon/USF, CBS: [2,554,678]
  • Gaylord Hotels Music City Bowl: Kentucky/Florida State 28, ESPN:  [3,883,875]
  • Insight Bowl: Oklahoma State/Indiana, NFL Network: [458,918]
  • Chick-Fil-A Bowl: Auburn/Clemson, ESPN: [4,919,331]
  • Outback Bowl: Tennessee/Wisconsin, ESPN: [3,260,313]
  • AT&T Cotton Bowl: Missouri/Arkansas, Fox: [3,974,484]
  • Konica Minolta Gator Bowl: Texas Tech/Virginia, CBS: [2,960,799]
  • Capital One Bowl: Michigan/Florida, ABC: [10,301,679]
  • Rose Bowl presented by Citi: Southern California/Illinois 17, ABC:  [12,531,880]
  • Allstate Sugar Bowl: Georgia/Hawai’i, Fox: [7,850,519]
  • Tostitos Fiesta Bowl: West Virginia/Oklahoma, Fox: [8,736,935]
  • FedEx Orange Bowl: Kansas/Virginia Tech, Fox: [8,345,715]
  • International Bowl: Rutgers/Ball State, ESPN: [1,528,141]
  • GMAC Bowl: Tulsa/Bowling Green, ESPN: [1,096,521]
  • Allstate BCS National Championship: LSU/Ohio State, Fox:  [16,291,263]

As far as the numbers, certainly one would expect that the magnitude of the game itself has something to do with how many total viewers tune in to watch a particular game.  For example, one would expect more viewers to be interested in the BCS National Championship Game (approximately 16 million in 2007)  than  the Champs Sports Bowl (about 3.5 million the same year).  But that’s not all that is going on here. The BCS folks know that if all things are equal, more fans will tune in to watch the Florida Gators than will tune in to watch the Central Michigan Chippewas. Ratings, ratings, ratings.

By studying these television numbers, it’s easy to establish the list of programs that light up the television sets from those that do not.  For instance, consider that the 2010 Sugar Bowl between the Florida Gators and the Cincinnati Bearcats was watched by some 8.5 million people.  Compare this number with the 10.1 million viewers that watched the same Florida Gators play the Michigan Wolverines in the 2007-08 Capital One Bowl.  The only explanation is that viewers were more interested in a match-up featuring the Wolverines and Gators than one between the Bearcats and those same Gators.  This explanation is further cemented  when one considers that the latter was a BCS bowl that featured the last collegiate game of the Gators’ two-time national championship winning quarterback. (I refuse to mention the E$PN poster-boy’s name in my column).  Bottom line is that the #4 revenue generating Michigan Wolverines turned on more television sets than the #67 ranked Cincinnati Bearcats managed to accomplish two years later.

The purpose of bringing Nebraska to the Big 10 is to create more marquee match-ups for the television networks.

The premise of “television worthiness”  drove the last round of conference expansion and will, in the opinion of this author, lead to further expansion.  Exactly what will trigger the next round of expansion is impossible to predict (No one would have accurately guessed that Colorado would be the first team to  switch conferences in the last go around).  Nonetheless, I will attempt to outline a model of what college football might look like as we enter the age of the super-conference, when television revenue, and not the quality of the product, becomes the driving force.

I  remain convinced that conferences will expand to 16 teams, if only because the economies of scale dictate that consolidation of production into fewer producers will maximize profits (Sixteen teams seem the best compromise between maximum profitability and conference stability).  If the networks truly are interested in televising only the top fifty or so programs, then clustering these programs into fewer conferences allows the networks to avoid televising teams with limited or no marketing appeal.  Nebraska versus Ohio State will always generate more television revenue than Ohio State versus Northwestern.  Remember that the Capital One Bowl (10.2 million viewers) featuring Michigan and Florida captured a far higher rating than the Bowl (slightly less than a half a million total viewers), a game which offered a contest between the Oklahoma State Cowboys and the Indiana Hoosiers.

By my calculations, college football will eventually gravitate toward four super power conferences of 16 teams, essentially merging the top 64 revenue generating programs of the current five BCS conferences (and note from the list above that there are 32 bowls that feature 64 teams, whose participants are selected almost exclusively from the list of the highest revenue generators each bowl season).

As I outline possible super-conferences, keep in mind that this effort is not meant to accurately predict the location of each team, but rather, to demonstrate what conferences, based on revenue, could look like in the future.  While using revenue figures to group the teams, I point out to the reader that while revenue rankings are a good indicator of a program’s contribution to the BCS (as there is a correlation between a team’s popularity and their overall revenue), the rankings can be a bit misleading.  For example, Vanderbilt’s #52 ranking for the 2007-08 season is likely inflated significantly by its inclusion in the SEC (which is another way of saying that even a low revenue generating team would receive a boost if it were brought into one of the elite conferences).  While revenue figures probably correlate well with the overall BCS “worthiness” of the programs that will be selected, the reality is that the decision makers will also look at factors such as ratings for the individual programs, stadium attendance figures, and merchandise sales.  Nonetheless, the use of revenue figures allows me to draw some basic conclusions that portend plausible future super-conferences.

Bob Stoop’s Sooners almost ended up in the Pac 10 in 2012.  This author still believes that the Big 12 will dissolve and the Sooners may again be looking for a new home.

As it turns out, the basis for my future super-conference model of four sixteen team conferences reads like a summary of many of the rumors bantered about the internet this spring by the pundits and talking heads (I’ll let the reader decide to which group I belong).  As the reader will see, these rumors, not coincidentally, are exclusively centered around  programs expected to generate the most additional revenue for the target conference, a not so shocking revelation.  Below are four possible new conferences of sixteen teams. Each team’s overall revenue ranking for the 2007-08 season immediately follows in parenthesis, with the new additions in italics.

Big 16 (a.k.a. “we’re still calling the damn thing the Big 10“): 1.  Ohio State (2); 2. Michigan (4);  3. Wisconsin (5); 4. Penn State (6); 5. Notre Dame (14); 6. Iowa (15); 7. Michigan State (16); 8. Nebraska (20); 9. Minnesota (29); 10. Purdue (30); 11. Illinois (35); 12. Indiana (38); 13. Rutgers (45); 14. Missouri (46); 15. Syracuse (54); 16.Northwestern (59).

SEC (a.k.a. “SEC, SEC, SEC”): 1. Florida (3); 2. Auburn(7); 3. Alabama(8); 4. Tennessee (9); 5. Louisiana State(12); 6. Georgia(13); 7.  Oklahoma (17); 8. Texas A&M (21); 9. Kentucky(22); 10. South Carolina (24); 11. Arkansas (27); 12. Miami (51); 13. Vanderbilt (52); 14. Florida State (53) 15. Mississippi (65); 16. Mississippi State (75);

Pacific 16 (a.k.a. “the we’re now relevant conference”): 1. Texas (1); 2. Oklahoma State (10); 3. Kansas (11); 4. Stanford (18); 5. Southern California (19); 6. UCLA (25); 7. California (28); 8. Washington (33); 9. Oregon (36); 10. Arizona State (42); 11. Colorado (43); 12. Oregon State (48); 13. Arizona (50); 14. Texas Tech (58); 15. Washington State (62); 16. Utah (80).

ACC-Big East (a.k.a. “a marriage of convenience”): 1. Duke (23); 2. Virginia (26); 3. North Carolina (31); 4. Boston College (32); 5. Clemson (34); 6. Virginia Tech (37); 7. Connecticut (39); 8. West Virginia (40); 9. Maryland (41); 10. Louisville (44); 11. Georgia Tech (49); 12. North Carolina State (55); 13. Wake Forrest (60); 14. Pittsburgh (61); 15. Southern Florida (66); 16. Cincinnati (67). (none of the teams are in italics as this is essentially a merger of the ACC and the Big East).

Prior to BYU’s decision to go independent, the question was, “What will become of the Cougars, the nation’s #64 highest revenue grossing team according to figures from 2007-08?”

Using information from a fellow blogger, I outlined four possibilities based on whether BYU would go independent or remain in the new MWC. Before learning of BYU’s deal with ESPN and their contract with Notre Dame, I assumed the Cougars might stick it out in the new MWC.  But here is why BYU probably made the right decision, using my assumption that conferences will eventually expand to 16 teams.  Here is what a fifth potential “BCS worthy” conference of 16 teams could look like, taking the best of what is left, again using revenue rankings from 2007-08:

MWC/WAC/USA Amalgam (a.k.a. “the kids picked last for kickball”):  1.  Kansas State (47); 2. Baylor (56); 3. Texas Christian University (57); 4. Iowa State (63); 5. Brigham Young (64); 6. Memphis (68); 7.  SMU (69); 8. Hawaii (70); 9. UNLV (71); 10. San Diego State (72); 11. Houston (73); 12. Air Force Academy (74); 13. New Mexico (77); 14. Fresno State (82); 15. Boise State (89); 16. Nevada (93).

You’ll  notice that the new Aamalgam Conference (“AC” hereafter) really doesn’t appear all that “BCS worthy.”  That’s because it isn’t, and its lack of worthiness can be easily calculated using the revenue ranking numbers provided above.  As a basis of comparison, the mean revenue average for the Big Ten Programs is 26.1, while the median average (the point where half the programs are above and half are below) is 24.5.  Compare those numbers to that of the AC: 70.3/70.5 respectively.  If  revenue figures closely correlate with television rating numbers, then why would the BCS monopolist hand the AC a check each year for some 18 million odd dollars by way of a guaranteeing the conference winner a spot in one of the BCS games?  Since they would only be draining the pot (i.e. since a large enough number of fans wouldn’t tune in to watch a team like Nevada in a BCS bowl to be attractive enough to corporate sponsors, the $18 million dollar pay out to AC would represent a net loss to the BCS), the rational economic actor will only make such a payment if forced to do so.

BYU’s  going independent, bails the BCS monopolist out and throws the MWC under the bus in the process.  By  paying BYU the same $1.3 million that  they pay Notre Dame each year, the conference keeps the other $16.7 million dollars for the big boys, at least in those years when BYU does not make it to a BCS bowl. (This would require them to finish in the top of the BCS rankings, a feat that BYU has rarely accomplished).  And here is the best part: since it will be extremely difficult for BYU to put together the type of schedule that makes it “BCS worthy,” what we’ll call the “Boise State Problem,” the computers can continue to exclude the Cougars in the same fashion that the BCS presently keeps mid-majors from crashing the party.

And what of the MWC, the leftovers from the WAC, and maybe a Kansas State here or there you say?  The BCS monopolist will be more than happy to beat them into submission on the field each year while extending them a small cut of the BCS action for their troubles.

Without a Hatch-like mouthpiece behind them, the Boise States of the world may be permitted to “pass go” each year, they just won’t be allowed to collect their $200.

Categories: College Football

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1 reply

  1. Interesting read, and very well written and researched. I see two different issues being addressed: 1) the reason for super-conference formation for purposes of creating more REGULAR SEASON matchups; and 2) super-conference formation to allow the main conferences to horde the BCS Bowl pot. while option 1 makes sense to me (i.e. that super-conferences will result from college football’s effort to capitalize off of TV revenues), option to 2 does not. the most obvious reason being, the more teams per conference, the more diluted the “cut” per team per conference would be. It would be interesting to find out what revenue those lesser bowls generated–and what $$ the BCS teams (and conferences) derived from non-BCS bowls. my point is that super-conferences would present the danger of too many incestuous match-ups in the lesser bowls (i.e. “the leftover bowls”), where you could have (potentially) teams from the same conference being pitted against one another. to me that would provide less intriguing match-ups, and potentially less revenue (at least in the non-BCS bowl games).

    I don’t subscribe to the BCS monopolist theory that intimates that the BCS is the capitalist super Id gone wild against which Marxist philosophy warned. it’s kind of a “chicken or the egg” question: and to me it seems that the BCS didnt create these monopolies, but instead reacted to the reality that in college football there are 20 or 30 perennial top-notch schools that have some degree of coast-to-coast mass appeal, wide alumni base, etc. and year after year these power houses (because of recruiting bases, superior talent, superior coaching, superior competition) found themselves in prestigious bowl games, year in and year out–bowls to which their conferences, by tradition and contract, were committed–thereby sometimes preventing from the #1 and #2-ranked teams from playing (and, some people would say, the current system still prevents this–cue the “we want a playoff system” chorus). college football has always been a “monopoly”, but not in a capitalist sense: it has been a monopoly of talent, where the strongest teams are based more on the fact that their campuses reside in, or close to states that have strong recruiting bases (california, tx, florida, ohio) and storied traditions, more than simply deep pockets. to scold the BCS for simply attempting to maneuver the top 2-ranked teams at the end of the year into the same bowl game–i.e. “fix the glitch” of the previous non-BCS system–is to argue for an automatic qualifying bid for a team that at least now has a chance at big money (and a BCS berth–see Boise State), whereas before there was the possibility that a #2-ranked Boise State team could have been relegated to a lesser bowl, and overlooked by a Fiesta or Sugar Bowl more interested in taking a 2 or 3-loss SEC or ACC team with a more established fan base (and therefore more attractive revenue stream).

    of course, all of the concerns you raise would be assuaged, if not altogether removed, by a 4 or 8-team playoff system.

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