Which college football program would be most like the Lakers if sold on the open market?

Big-time sports properties are selling for big bucks, and you have questions…

From Willie

If a private equity firm was given the opportunity to buy and college football program, which school would have the highest financial evaluation?

I’m not as sure as everyone else that the PE revolution is coming to college football. It’s not only that most programs are run by public universities. I’m struggling to see how a PE firm would extract the exorbitant return on investment it would expect from a large cash infusion.

The quickest way to make more money on college football is with the next media rights deal. But those take place at the league level, not at the school level (except for Notre Dame). And the only way the media rights money truly levels up is if all the leagues get together and sell their rights as one. (Which they might not even be allowed to do at this point.) 

But Willie brings up an interesting question during the same week that the Buss family agreed to sell the Los Angeles Lakers for $10 billion. What programs are the college football version of the Lakers or the Dallas Cowboys or the New York Yankees? What teams would fetch the highest price if they suddenly went on the market?

I think the top three is fairly easy to determine.

1. Ohio State

The Buckeyes are the biggest guarantee of high ratings — seemingly independent of opponent. Ohio State has a massive, passionate alumni base and sells out a 105,000-seat stadium every game. The team is never bad. 

Buckeyes fans are nodding, but they’re also sad because under the current deal, this is why Ohio State has to play so many noon games. When Fox knows that even Marshall-Ohio State is going to do a big number, that becomes a Big Noon game even though the outcome isn’t really in doubt.

2. Texas

It helps that the Longhorns have finally turned their resource advantage into results on the field, but let’s be real. A lot of people enjoyed watching Texas lose when the Longhorns struggled (by their standards) through the 2010s. Texas is a huge brand with a wealthy, motivated alumni base. If the Longhorns were for sale, the price would be massive.

3. Notre Dame

The Fighting Irish have networks fighting to televise their games, and they sell out every visiting stadium or neutral site. There are plenty of sidewalk fans who love the school, but there are even more people who hate-watch the Irish. The fact that Notre Dame is so relevant on the field again makes the Irish even more valuable now.

After that, it becomes more difficult to parse. Programs like Alabama, Georgia, Michigan and Penn State would occupy the next (still very expensive) tier. Then would come a list of other Big Ten and SEC schools that routinely pack huge stadiums and deliver consistent ratings.

But I think this exercise will fortunately remain strictly in the realm of the hypothetical. The schools will hopefully remain smart enough to keep these tremendously valuable assets to themselves and not sell off any pieces.

From Derek in South Bend

This email is too long to read, but I just want to plant the idea here, because you get into it some, but I think you’re not quite appreciating the value of the 4+4 College Football Playoff model for the Big Ten and the SEC.

You are absolutely right that the SEC might get five or six teams into the playoff in a 5+11 model.

Recall that a conference gets around $4 million for each team in the CFP. That might grow a little if the playoff expands, but not by much. The marginal benefit of going up from 4 to 5 or 6 in a given year is only $4 to $8 million for the whole conference.

It’s possible that also increases the odds of you advancing if you have more teams. But let’s face it. The 5th and 6th best SEC teams are not going to advance far and not going to win the national championship. So just getting more teams in gets you really only a little more exposure and a little more cash.

But imagine you had four guaranteed spots as a conference. You can suddenly do all kinds of things with it.

The SEC goes from eight to nine conference games — you’ve discussed this. Who cares if half the conference (more or less) gets an extra loss? You can light those losses on fire because you still get four in.

And suddenly, the SEC media rights package is more valuable–I assume, way more valuable than (sometimes) $4 million a year.

— B1G creates a play-in tournament at the end of the year (and you’ve hinted at this). Again, it’s not that Iowa deserves a shot at the playoff. It’s that the B1G can create a new package of games to sell, again way more than (sometimes) $4 million a year.

— SEC and B1G challenge. They can now schedule an intersectional rivalry for a series of years with prime matchups. And then you can sell that new package. Again, no big deal if you lose out of conference.

I know you’ve mentioned some of these possibilities, but I just want to point out, all three are (1) way more valuable than the 5th or 6th team entering the playoff some years, (2) you can use all of them as possible new revenue streams, and (3) they are feasible because you have four guaranteed slots you can do whatever you want with, and you’re not jockeying with other conferences in the regular season to try to schedule strategically of tough but not too tough.

In any case, I think the point is, giving up a 4+4 model is literally tens of millions of dollars each year that the B1G and the SEC would be giving up, and it’s a reason why it’s still being discussed.

Either Derek is running a burner account for Big Ten commissioner Tony Petitti or he has a future as a TV executive.

But the factor to remember about the CFP debate over multiple automatic bids (the Big Ten’s preference) and more at-large bids (everyone else’s preference) is it isn’t only about money. Power is as important or more important in this particular negotiation.

Yes, the SEC would make more money by agreeing to the format that allows four automatic bids each for the Big Ten and SEC, two each for the ACC and Big 12 and one for the highest-ranked champ of the other leagues. That system also would include three at-large spots, and presumably, the Big Ten and SEC believe their teams would claim the bulk of those. This format would allow the SEC to easily shift to nine conference games with no fear of losing playoff spots, and Disney/ESPN would, in turn, increase its payout to the SEC. 

But even though we’re assuming the Big Ten and SEC will somehow meld together in the coming years into some sort of super league, that isn’t necessarily how those inside the conferences view it. SEC leaders want their league to be considered the most powerful and most influential when the next CFP deal comes around. Not coincidentally, that happens just before the SEC’s current media rights deal expires. While there are potentially bigger financial gains there, the power dynamic still might mean more. 

If the sport is heading for further consolidation, someone will have to run the more consolidated entity. Neither the leaders of the Big Ten nor the SEC want that to be someone who isn’t them. But they also probably don’t want to run it together. In their minds, someone has to come out on top.

And that’s what all of this is really about. Because if it were about money, this format would have been decided long ago.

From Ryan

I was just catching up on yesterday’s show and the Diego Pavia discussion got me thinking about  eligibility restrictions. I believe you are both correct about Pavia’s NFL prospects. He’s likely a late round pick or UDFA and hopefully he’ll catch on somewhere. If that prediction comes true, he will make considerably less money than he is making now at Vandy and may only survive for a short time in the league. 

My question is when do you think we will see a player sue over eligibility restrictions? 

It seems like you could make a pretty solid argument that the NCAA is violating the Sherman Act and restricting players’ earning potential by imposing eligibility limits. 

Diego Pavia seems like the perfect candidate for this argument and he could, in theory, stay in college football for several more years while making millions of dollars each season as opposed to trying his luck in the NFL where he might not even be able to make a 53 man roster. 

For the record, I don’t want this to happen and believe it would be bad for the sport but I think it’s an argument that could be won from a legal perspective. (Side note: I’m not a lawyer but I, like Ari, have watched a lot of Law & Order)

What do you guys think? Will we ever see this and if so, when?

We’re actually seeing it over and over, Ryan. Multiple lawsuits have been filed since the Pavia ruling, but the courts have not been as unanimous as they seem to be in the cases regarding NCAA rules that restricted players’ incomes. 

Just last week, a judge denied former Tennessee basketball player Zakai Zeigler’s request for an injunction that would have allowed Zeigler to keep playing in college after exhausting his eligibility. Zeigler has appealed. 

In April, a North Carolina judge denied a request for injunctive relief from several former Duke football players who also challenged the NCAA’s eligibility rules.

Pavia’s case is different because it involves his time in junior college and whether the NCAA should consider 2020 an exempt year because the NCAA paused the eligibility clock for every athlete playing in the NCAA during the 2020-21 school year. The newer crop of cases tend to involve players who simply want more years of eligibility.

In antitrust law, a court may rule that a certain restriction is justified if there is a pro-competitive reason for it. In these cases, the schools and NCAA might be able to convince a court that limiting participation to the traditional college window makes the product more appealing to the consumer. 

The schools and NCAA failed miserably when they argued that denying players money made the product more appealing, but I suspect they might have better luck with this argument. Either that, or the courts will disagree and we’ll someday see a 42-year-old Johnny Manziel suiting up for a Sun Belt school.