You're listening. To the Back Home Network
presented by Home Field Apparel. Welcome back to Crimson Cast
folks. Galen Clavio here.
We've got a mini episode today and we're excited about it.
We've got our good friend Andy Whittry back once again joining
us on the show as we've got some more college sports business to
discuss here today. Some news that came down
yesterday. We're trying to do some more
episodes like this where we we had a topic, we don't need to do
an hour, we can do 10 minutes. So we're gonna do 10 minutes on
this topic and and just kind of feel out where it's at and kind
of give people an update on where things are going cuz I
think it'll be of interest to you folks out in the audience.
First of all, Andy, great to see you and talk with you again how,
how are things going? Things are good.
I told you I'm wearing my Georgia Bulldogs hoodie.
Have no affiliation with Georgia.
This is not some like Tom cream bit, but if we're here to talk,
a bunch of 15 and 17 Power Five schools, I thought was dressed
for the occasion. So I'm ready to talk about a 16
team conference. Tournament that frankly, no one
asked for. So let's do it.
Yeah, this is a really fascinating area.
We're going to talk through this first.
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All right, so let's talk about what Andy referred to.
And that is this news that came down yesterday, which was
reported, I think, originally by Seth Davis.
And essentially what it said was that Fox Sports are our old
friends, are in negotiations with several power conferences
to, quote, hold a postseason men's basketball tournament in
Las Vegas featuring teams that did not qualify for the NCAA
tournament. And as Andy pointed out, it's
intended to include sixteen teams.
And they would play during the final week of March at T-Mobile
Arena, which is where the Vegas Golden Knights play.
And I think there's like two or three power conference
tournaments or regular conference tournaments that play
there as well. So there's a lot to unpack with
this. First of all, you're absolutely
right. If I were to pick the team that
was most likely to be in this tournament, of all of the teams
in the power conferences, Georgia would be, I think, the
absolute first pick, probably closely followed by Minnesota,
you know, So these are the kinds of programs we would likely see.
Rutgers would be a regular participant in this.
There's a bunch of things I think that need to be talked
about right off the bat. So first of all what you said
this is a tournament that nobody really asked for and it is
essentially a tournament that is in direct competition with the
NIT and you know that's been something that really has been
brought out There were some quotes in a sports sorry was
that this was A and that's the IT was an si.com piece from
Gonzaga Nation. Dan Dickow the the the Gonzaga
alum and great who played basketball for them had a quote
saying that this tournament has proposed quote it will
completely destroy the NIT tournament and it's going to
create an even bigger gap between your haves and have nots
in college athletics. And Andy, let's kind of start
there. It it looks like a proposal that
is 100% aimed at the NIT tournament and trying to cut it
off at the knees basically. It really was.
And there's no sort of, you know, NIT traditionalist that
existed and probably since like the 1940s, right?
Like no one is clamoring for, oh, we we need the NIT.
But I think it was the latter point of Dan Dickows quote,
something that Matt Brown addressed today in the Extra
Points newsletter, which I highly recommend.
Is this more of the the representation of what this
means? It's not that this is going to
kill the NIT, although it might it it's what does this mean if a
broadcaster has this kind of leverage?
And can make this kind of chess move frankly and say, you know
what, we're going to create our own tournament.
We'll stage it ourselves. You've mentioned to me over text
the angle of supplementary revenue of can this generate a
few extra million for some of these power conferences?
Is that what if this is just the first step towards the eventual
breakaway of of, you know, high major schools and forming their
own tournament? Is that this is just step one?
What is step three or four look like?
If this thing is a success and however we even measure success
for the tournament like this. Yeah, I I think there's two main
pieces and you kind of brought up all of them.
So the first is this idea of, you know, if you're paying
attention to the sports media landscape, there is a clear belt
tightening happening on the network side, which is where all
the money has come from. I mean ESPN lost the entire
first couple of weeks of college football and almost lost the
Monday Night Football game last night to you know, to not having
people who are on Charter or Spectrum cable, which is like
10% or 15% of cable households in the United States, like it
just wasn't on. And then they they made a deal
yesterday. So Monday Night Football was on.
You know both sides gave up some concessions.
I think ESPN and Disney kind of won that battle a little bit.
But that's a that's a shot across the bow in terms of how
the revenue structure is working right now.
In as much as ESPN does not have a limitless supply of revenue
forever coming in and cable providers are going to start
looking at the amount of money that they're paying to Disney
and ESPN and saying you know what, especially if you're going
to go over the top, if you're going to go direct to consumer,
why are we paying you this extra money when most of our users of
cable don't use this service in the 1st place.
And so I think you know, part of it is the conference is looking
around and saying uh oh okay, that's may not, that's not
affecting us in the current negotiation for media rights
because there's a lot of those have been signed.
But what about the next one? What about, you know, the the
next SEC negotiation? What about the next Big 10
negotiation which leads then to looking at their media partners
and saying where can you find us additional revenue?
And much like Fox did with finding extra money to bring
Oregon and Washington into the Big 10 in in football and all
sports, this to me strikes me as a way for Fox to say, hey, look,
we can create something that may not be initially successful, but
this is clearly going to be a new source of revenue that isn't
already there, that we might be able to pay directly to you, the
power conferences who are part of it.
I think what is interesting too Galen you mentioned is this
actually a play that the conferences sort of floated
almost like inception wise through the networks you know
through Fox. And I think that Bret your mark
to maybe bring this full circle and I, you guy I think the
father of an I U alarm or current I U student.
He's been very active in pushing college basketballs basketball
as far as the value, you know that he sends it out.
What if we break that apart from the football rights?
And that is almost its own TV package.
Yeah. Well, it's taking the Big 12 to
mix it. He's taking them to New York
City. Yeah.
And is this a way that he's looking for that around the
margins revenue that you mentioned?
Yeah, I mean, I so I think it's important for people to
understand what like where does the money go?
Like, why is why is football considered more valuable than
basketball? And part of the reason is
football. And the money from football is
not controlled by the NCAA. It's controlled by the
conferences and Notre Dame. And they're the ones that make
the deals directly with the networks.
They're the ones that make the deals for the College Football
Playoff collectively and then they get the money and
distribute it. It isn't shared with all of the
schools, all what, 10-11 hundred schools in the NCAA.
That's not the case with basketball.
Basketball is controlled, at least the tournament is
controlled by the NCAA. Teams are paid out in wind
shares. You know, so you know you're you
get 8 teams in the tournament and depending on where they
finish in the tournament, you're going to get X number of wind
shares and then that is paid out on a five year rolling average.
Very convoluted system, but that's 8085% of the NCAA's
operating budget comes just off of what they make off the men's
NCAA tournament which is like a billion or a billion 1A year.
Looking at this, I mean, you look at it, it's like, well,
it's, you know, Charlie Baker, the NCAA commissioner,
specifically asked FOX don't do this.
Like please do not do this because we're worried about the
NIT, the same tournament they they tried to kill and then took
over 20 years ago. I mean, just keep in mind.
So it's I I I've got a little bit of a suspicion about how
authentic those concerns are for the NIT on the part of the NCAA.
But they're looking at this and they're saying right now we
control essentially almost all of the postseason revenue.
They don't control the CB. I I don't think the CIT even
exists anymore, and that was minuscule anyway.
But they're controlling all the revenue for the top 96 teams
basically in college basketball, peeling away even a part of
that. And showing power conference
schools and the power conferences themselves that,
hey, you don't have to have 40% of the revenue that your teams
are generating going to like Montclair State or or Hanover
or, you know, whatever small college that you know is part of
the NCAA but isn't. Division One like that is not to
be that way. Instead, what we can do is set
up a deal directly with you pay the conferences that are
participating the money. You keep more of the money and
we can probably generate more because we can leverage our
assets from a commercial perspective to bring additional
revenue in that the NCAA can't do by subcontracting at all to
ESPN. You know, the way that they're
doing it right now. It really is a flank right.
It's a way that you can kind of get outside the current purview
of the in state of life governance structure and all the
finances you just touched on. And that's why I think it is
concerning if not the immediacy of it.
But is it forecasting what lies ahead.
And we've seen with the current summer realignment, the power
that Fox and especially ESPN have been really dictating.
Who are you going to pay for? What schools, what brands, who
draws eyeballs? And this is sort of a corollary
to that of a new tournament that's Fox controlled.
Based on their their inventory, what schools are part of that?
And I don't know who's going to wash it outside of some really
sicko betters, but it's kind of the forecasting of how
concerning is this for the future of this whole entity.
Yeah, well, it is. And and look, I think the, the
larger item that the NCAA should really be worried about is what
you just said. I mean, we always hear like
college basketball not as not as valuable as college football,
and it probably never will be because football is just so much
more popular as a sport. But I also think there's a real
argument to be made from a market perspective that the
NCAA's management of the NCAA tournament and the overall lack
of leadership around college basketball has to some degree
artificially lowered the current market value of the product.
The product is loved by a lot of people.
Lot of people really love college basketball.
But because there's nobody in charge of the sport and because
the tournament is still organized in essentially the
exact same way it was organized in 1979, that, you know, quite
frankly, there's there's, you know it, it it serves a
different purpose than what a lot of the conferences and the
schools are interested in. And in an era, as we're seeing
in college football, where you're likely to see maybe about
half of the FBS subdivision dropped to a lower tier from a
revenue generation perspective because the top schools are
like, hey, why are we just spreading this money around?
Why aren't we consolidating it and keeping it ourselves?
There's a real good chance a similar thing might happen in
college basketball. And I know fans don't want to
see that, but that's what schools and conferences want to
see. And that's ultimately who's
making a lot of these decisions. I don't know if it's too much of
A stretch compare this to like the live Golf Tumor or some sort
of like true horse, but we've seen for I feel like a year,
year and a half now Galen that there's been for this trial
balloon of would have expanded by tournament to 96 or to the
high 80s. And a lot of traditionalists and
purists, which I think will be the overall majority of fans and
observers, seem pretty against that.
I don't know what the practical implications would be of an
expanded bracket, but. 64 and then 65.
Now 68 feels like a pretty good number, fits perfectly.
And 8 1/2 by 11 sheet of paper. People love the bracket.
Is that. I do wonder, is this some sort
of sacrificial lamb? If you know what, we're going to
float this, if they have to, to kill that to maybe increase the
size of the tournament, increase the field size.
Because you think about conferences, It will now be 18
teams and potentially more in the future.
If you're one of these bigger conferences, you're the Big 10
and you want now. 12/13/14 schools, to get a bid, something
has to give, right? Because it is 6018 tournament
you're showing probably is what, 10 bids, I'd say.
But now if you're going to be a really solid, I don't know, UCL
squad in five years and you're going to finish 10th or 11th and
you're in the bubble, the Big 10 doesn't want that.
So is this some way to actually create some leverage
artificially by saying, you know what, we'll have this new
tournament? But OK, if you expand the field
maybe we'll we'll kill this off or change the format.
I I don't know if that's the new, but that did cross my mind
as well. Well, the other one other thing
I'll note in this and this will will end on this note, in the
original reporting, there's only three conferences involved in
this. It's not all the power
conferences, it's the Big 10. It's the Big 12 and it's the Big
East. And what do all those have in
common? They have a direct tie in with
FOX. This is a FOX sponsored
tournament. You know who's not involved in
this is the ACC. And and that that's a huge thing
to keep in mind because we've already seen these fault lines
drawn when it comes to college football and who's tied in with
what. And a lot of these items that
we're seeing in college football are predicated on Fox and to a
lesser extent CBS and NBC chipping away at the ESPN
hegemony that has existed for years around college football.
And they're succeeding because ESPN, to some degree has allowed
themselves to get outflanked by connecting themselves so closely
with the SEC and the ACC. And so for Fox, not just to, you
know, design this, but basically say, hey, if you're a close
partner of ours, if you're Big 12, Big 10, a Big East, you're
going to be not only invited, but you're going to get to share
in this extra revenue that the SEC&ACC schools aren't.
Now you're getting an even greater bifurcation existing in
college sports where it's not just about power versus non
power, but it's about who did what horse did you bet on 10
years ago, 15 years ago in terms of your media partners and your
overall revenue structure. That's why I think this proposal
might be the best maybe for those second, third conferences,
the Big 12 in the Big East, because the Big 10, as we know,
will have no shortage of revenue.
They'll always want more, but they'll have no shortage
relatively SEC and the rest of the conferences.
But when the Big 12 is positioning itself for. 3rd
place, if you will, in the Big East.
Where does that factor in? In the basketball landscape?
Where does an extra, you know, I don't know, 5 or 10 million go
for those conferences in the schools.
That might mean more for the Big 12 and Big East than this new
bloated Big 10. Especially going back to Bret,
your remark, the love of basketball and looking for new
opportunities there. If that's you know Big 12 versus
ACC and the people know has this tie in and the ACC does not and
they still have the infighting with Clemson and Florida State
and North Carolina. That might go a long way around
the edges, especially as far as the messaging and how aggressive
the Big 12 has been. I do think that's certainly an
angle to watch. Yeah.
And I'll I'll end on this. Maybe this is the actual
strategic alliance that the Big 10, Big 12, Big East, not the
Big 10, ACC, PAC 12, one that got floated 2 years ago and then
immediately got destroyed. So, Andy, some fascinating stuff
is always here. And any final thoughts from you,
I guess, before we wrap up? I would say unlike the actual
alliance from 2 summers ago, there would be an actual
contract, presumably not just a bunch of grown men making eye
contact and shaking hands. Presumably you'd think there
would be an actual, you know, pen to paper agreement to keep
these people in line, unlike Jim Phillips, George Cliff Cough and
Kevin Warren. Yep, that's.
I think you're probably right because I'm guessing this is
being drawn up at the network level, not necessarily at the
conference level. So you can be sure that they'll
be some actual ink on paper with this.
Anyway, as always, great to have our friend Andy Whittree joining
us. We'll hopefully have him on more
throughout the course of the fall.
Because Andy, I got a sense that college sports business not
going anywhere for a while, probably going to have some
stories coming out of this on a regular basis.
So. So thank you for joining us and
thanks all you folks for listening in.
Thanks to our partners at the Back Home Network.
Thanks to our presenting sponsor, Home Field Apparel.
We'll be back later on this week.
We got a big I U Louisville football preview, keep an eye
out for that. Until then.
I'm Galen Clavio for Crimson Cast.
We'll catch you folks on the flip side.
Bring back the Bison. So long, everybody.