This past Friday, September 2nd, the College Football Playoff Board of Managers unanimously voted to expand the current 4-team playoff structure to a 12-team format by 2026.[1] The new format will include the six highest-ranked conference champions, along with six at-large teams. Id. Moreover, the four highest tanked conferences champions will be seeded one through four and each will receive a first-round bye. Id.
In lieu of an eventful offseason, one that included seeing the likes of USC and UCLA separating from the PAC-12 to the BIG TEN, the College Football Playoff Board of Managers felt that a demand for a clearer illustration of where college football “needs to be headed.”[2] Now, the College Football Management Committee, which is made up of 10 FBS commissioners and Notre Dame athletic director Jack Swarbrick, will be responsible with implementing the board’s decision.[3] Specifically, the management committee must determine dates for games, broadcast entities, revenue allocations, sites of the 11 playoff games, terms of the agreement and whether or not implementation of the 12-team playoff can be done by the 2024-2025 season. Id.
Importance of Broadcasting Rights
Of the logistical challenges noted above, it appears that the most important decision will be finding the best broadcasting rights deal. Currently, ESPN, is the exclusive rightsholder of the current four-team College Football Playoff. Id. Under the terms of the agreement, ESPN has first right of refusal for games added during their duration of their contract, which extends through the 2025-2026 season. Id.
Despite the agreement stating a 12-team expansion by 2026, there will be financial pressures to expand even earlier. For example, it is estimated that if the playoffs were to expand for the 2024 season, its television rights could increase from $470 million a year to $695 million a year during its last two years under the current contract with ESPN.[4] Moreover, the College Football Playoff will likely be incentivized preview their product early to maximize their next television deal. According to some executives and consultants, it is anticipated that the next broadcast deal for the College Football Playoff could yield nearly $2 billion in annual television revenue. Id.
If those estimates prove to be true, the college football playoff would surpass the NCAA’s March Madness tournament as the largest annual television rights deal in college sports. Id. Currently, the March Madness tournament is expected to average $1.1 billion in television revenue per year beginning later on this decade. Id.
Direction of College Football
In addition to maximizing the next broadcasting deal, the College Football Playoff Board of Managers were incentivized to expand to a 12-team playoff in order to provide all of college football more direction.[5] Recently, college football has undergone significant fundamental changes. Specifically, the beginning of the player compensation era, looser transfer rules, sports gambling, and the soaring values of television broadcast deals.
These fundamental changes have forced institutions to re-evaluate and re-define their programs. In doing so, institutions then looked around the landscape to situate themselves with institutions that share similar philosophies regarding player compensation, transfer rules, sports gambling, television deals, etc. For example, in an attempt to maximize their brand, the University of Texas and the University of Oklahoma chose to part ways with the Big 12 Conference to head to far more competitive, and lucrative, SEC conference.[6] Officially, Texas and Oklahoma will move into the SEC beginning on July 1, 2025. Id.
In addition to the two Big 12 giants realigning, this past summer, UCLA and USC shocked the sports world when they announced their decision to separate from the PAC 12 to join to Big Ten on August 2, 2024. These seismic shifts highlight the new era of college football, one that involves institutions strategically aligning with like-minded institutions in an effort to maximize their brand.
Now, with the 12-team playoffs on the horizon, institutions can more clearly formulate a plan to best position their programs to compete for an opportunity to be a part of this event. Therefore, it is likely that we will continue to see seismic changes across the landscape of college football.
[1] https://theathletic.com/3562242/2022/09/02/cfp-expansion-12-team-playoff/?source=user_shared_article
[2] https://www.nytimes.com/2022/09/02/sports/ncaafootball/college-football-playoff-expansion.html?smid=nytcore-ios-share&referringSource=articleShare
[3] https://theathletic.com/3562242/2022/09/02/cfp-expansion-12-team-playoff/?source=user_shared_article
[4] https://www.nytimes.com/2022/09/02/sports/ncaafootball/college-football-playoff-expansion.html?smid=nytcore-ios-share&referringSource=articleShare
[5] https://www.nytimes.com/2022/09/02/sports/ncaafootball/college-football-playoff-expansion.html?smid=nytcore-ios-share&referringSource=articleShare
[6] https://www.sportsbusinessjournal.com/Daily/Issues/2022/09/01/College-Football-Preview/CFB-Big-12-Texas-Oklahoma-could-join-SEC-earlier.aspx