ESPN and the College Football Playoff have reached a “handshake agreement” on a new 24-team format for next season. And while money was certainly the driving force, schools likely won’t see much incre...
ESPN and the College Football Playoff have reached a “handshake agreement” on a new 24-team format for next season. And while money was certainly the driving force, schools likely won’t see much increase in their media distributions under the new deal.
All told, ESPN is reportedly set to pay an additional $345 million for the expanded playoff, which represents about a 26% increase over the $1.3 billion per year it already paid for a 12-team format. Given that ESPN is doubling the playoff inventory it will own, paying just a 26% premium for the new inventory says a lot about how the network values these additional early-round games between schools in the back half of the top-25.
That $345 million isn’t entirely new revenue, however. To secure that extra money, college football leadership agreed to eliminate conference championship games, which were revenue drivers themselves. Estimates peg the 10 conference championship games at $200 million to $300 million each year, with most of that revenue coming from the Power 4.
According to reports, ESPN will receive a $140 million rebate from the conferences for the conference championship games it will no longer get to air. That brings ESPN’s total additional outlay for the expanded playoff down to $205 million. Additionally, Fox will receive about a $50 million rebate from the Big Ten for the cancellation of its conference championship game. So all told, the additional CFP inventory is generating about $155 million in new revenue each year.
Using that $155 million figure, we can estimate how much each FBS school stands to make from the expanded playoff, assuming previously reported conference distribution percentages remain the same.
Per figures previously published by The Athletic, the SEC and Big Ten each collect 29% of the media rights fee ESPN pays for the College Football Playoff. The ACC collects 17%. The Big 12 earns 15%. The entire Group of 6 is given 9%. (There are also special carve-outs for independents Notre Dame and Connecticut, along with Oregon State and Washington State as former Pac-12 schools.)
Using those distributions, SEC schools can expect to earn an additional $2.8 million per year from expansion. Big Ten schools will earn about $2.5 million more per year. ACC schools will earn an additional $1.5 million. Big 12 schools will earn an additional $1.5 million. And Group of 6 schools will earn a whopping $200,000.
For reference, schools can share about $21.5 million directly with athletes across all sports this year, per the guidelines set forth in the House v. NCAA settlement. At best, CFP expansion will pay for just over 10% of that outlay.
It’s this reality — that the schools are gaining so little from such drastic expansion — that makes this situation all the more frustrating for fans. College football leadership has potentially done permanent damage to the sport’s regular season, long its bread and butter, so athletic departments can pocket a relatively small amount of money.
It doesn’t take an economist to tell you this tradeoff doesn’t seem worth it. Yet here we are, completely altering the makeup of college football for entirely incremental gains.
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