Not too long ago we were screaming at the narrowness of the two-team BCS. Four teams seemingly worked good enough, and that expansion was frankly validated, given two of the CFP champions so far were four seeds that were controversially picked and almost left out of the bracket entirely. Of the seven CFP championship games, only three times did we see a 1 vs 2 matchup, which is a long way of saying the expansion away from a two-team BCS has proven to be the right call.
But if two four seeds who were dangerously close to not making the playoff were good enough to win the championship, the argument is out there that the field is still too narrow. Whether that’s the case or not, many fans do seem to like the idea of expanding. And you can bet your ass the conference commissioners, athletic directors, coaches, and television partners do as well given financial implications of expanding.
So here we are. 6 teams? Nope! 8 teams. Nope! Barring some heavy-handed politicking, we’re going to the moon with 12 teams.
The recommendation from the CFP's working group will be a 12-team model, sources tell @TheAthletic. Six highest-ranked conference champions + six at-large spots.
— Nicole Auerbach (@NicoleAuerbach) June 10, 2021
I’ll spare you moaning about how this cheapens the regular season and how this will be a huge strain on the student athletes and fans who hope to travel to follow their team. At the end of the day, while some of this was aimed at getting better representation in the playoff, which has been heavy on the usual suspects (Alabama, Clemson, Ohio State, and Oklahoma), this mostly boils down to money. So how much of a score will this possible expansion end up being?
Let’s start with where we are.
ESPN signed the current CFP deal in 2012, which sees them pay roughly $475 million a year for the television rights to the CFP. Rights fees have gone up since then (they always do!), so even if the powers to be decided let’s stick with what we have, a renewal by ESPN or any other possible TV partner would be much higher. I’m told from 2012 to now and given the ratings, “A 50% increase would be conservative. Probably closer to 75%”, from a source who regularly consults on television rights deals.
Let’s go with a 60% increase over the current deal, which would set a pricetag of $760 million a year for the championship and semifinals games. Now let’s get into the added games of a 12-team playoff.
$760 million for three games is a nice haul, but now you would have eight more total games in two new expanded rounds (the opening round and then the quarterfinals). Let’s break this down by round, particularly because the round of 12 would omit what is believed to be the top 4 conference winners. Thus, you’d have a round likely often without some of the sports’ biggest ratings drivers, who would have a bye that round. So how much would these first games rights be worth?
Michael Wilbon with the look of someone who 100% agrees but also knows how hard it is to get a raise at ESPN these days pic.twitter.com/Dl6ARKvLQJ
— Awful Announcing (@awfulannouncing) June 10, 2021
After some back and forth with my source, we settled on the idea that these games were probably worth 1.5-2x what a conference championship game would be worth. You’re deprived of the best four teams in the country playing in these games, but you’ll have some larger fanbases playing here regularly like a Texas, Penn State, Notre Dame, and Florida. Unlike some of the conference championship games where the stakes are not as high or only high for one of the teams, both fanbases will be highly interested in the game. And national ratings would certainly be higher than an average conference championship game. So what does that number look like?
A few years ago, ESPN secured the rights to three Big 12 Championship games. The Big 12 was hoping to get $20 million a game but ESPN came in lower and instead they added some streaming rights for ESPN+ to get the overall number to $40 million a year. Let’s say that if this were today, perhaps the Big 12 would have gotten their $20 million a year given the trend of increasing fees.
Let’s also say that the Big Ten and SEC Championship games are worth considerably more than the Big 12’s, and that the ACC and PAC-12 championship games are probably in the same ballpark as the Big 12’s championship game. If we were to say that the SEC and Big Ten Championship games are worth $35 million a year and the rest of the games clock in at around $20 million a year, the average on the conference championship games would be $26 million ($130 million divided by 5). If the round of 12 games are indeed worth 1.5-2x of this number you’d be looking at a number of $156 million to $208 million for the opening round of the 12 team playoffs ($39 million to $52 million per game). For simplicity’s sake, we’ll go with the round number of $200 million, which would be $50 million a game.
As for the quarterfinals/elite 8 games, my source and I settled on a 50-75% ballpark increase of what the opening round would be. My source pointed out that ESPN renewed the Rose Bowl at $80 million a year in 2012. “These games are in the same neighborhood in stature as the Rose Bowl, or at least what the Rose Bowl used to be before the playoff expanded”. For simplicity’s sake, we’ll go with a round number of $80 million per game which falls in the middle of that range and would bring in an another $320 million.
So, the back-of-the-napkin math on this looks like this.
Semifinals and championship game: $760 million a year
Quarterfinals: $320 million a year (80 million a game)
Opening round: $200 million a year ($50 million a game).
Total: $1.28 billon annually, a whopping 805 million increase over the current deal and nearly a 270% increase.
This is before we even get into ticket sales and other big revenue opportunities. As you can see, even if you have to spread around $800 million to a hundred plus colleges, it’s a pretty big deal. And that’s why this will most certainly get approved. Money talks, and most fans will go along simply because eight new schools can tune in each year with a glimmer of hope they’ll be crowned champions in a month’s time.
Pending approval – which it will be approved – @CFBPlayoff headed to 12 teams. Earliest start would be after 2023 regular season, sources told @Stadium. Because of impact of expanded playoff, expect anywhere from 4-10 bowls to be eliminated by 2023, sources said
— Brett McMurphy (@Brett_McMurphy) June 10, 2021
The biggest questions are in terms of what would this new playoff schedule look like in terms of when the games are played, if this new system will incorporate some of the existing bowls, and if this will this cool the rising costs of broadcasting regular season games, conference championship games, and the existing bowl games (all of which will have diluted importance after this). Would ESPN automatically gobble up this new package, or would other bidders emerge? If so, would ESPN look to split the package, or claim it entirely and spread it across ABC, ESPN, and perhaps even dare to put one game on ESPN+?
The reality is that for quite some time when leagues and conferences have needed to get their treasure maps out and start digging, manufactured peril has long been their best to dig up new money. Play-in games, expanded playoffs, tiebreaker games, etc. When it’s win or go home, people reliably tune in. It moves the needle. People get paid.
ESPN knows this and is likely behind the scenes subtly steering a lot of this expansion process. And when you look at the financial upside from abandoning the four-team setup and going to a 12-team system, that seems like a lock. It’s unclear what schools and conferences will benefit the most, but ultimately one thing can be 100% assured- your cable bill is going to go up, as will the salaries across the sport. It’s good, it’s bad, it’s capitalism, for better or for worse.