With the preliminary discussions of the initial meetings of the BCS members emerging and the fact of the BCS as we now have it soon to be relegated to the history books, I'd like to take time to review the players in the drama, the framework of talks and the potential potholes.
The Public - We are the most important piece of this puzzle. Do the major post-season bowl games galvanize us? What are the best changes to make to the current BCS system that will increase viewership, appeal to media partners and guarantee an increasing success of college football? The flagging viewership and attendance outside a couple of bowls is a red flag and a sign that change needs to happen. As viewers, our silence and not tuning in speaks volumes.
Media Partners - The lion's share of bowl revenue for conferences come from the contract with ESPN for the BCS bowl participations. With that contract ending after the 2013 season, systemic changes need to appeal to the largest markets with the most attractive package of format of games. Whenever the BCS commissioners have fashioned a defense of the current system, it is founded around the priniciple of entertainment.
The six BCS conferences and Notre Dame appeal to the largest audiences. A number of years ago, the World Wide Leader hosted a national poll to identify both regional and national fan preferences. Notre Dame had the highest following at 5-6% of all college football fans. Notre Dame was the only team that crossed regional borders, placing in the top five of each region in the country. Who would you choose to appeal to the markets in New York, Chicago, Boston and Philadelphia - as well as be a major participant in the markets of Los Angeles, Dallas, Atlanta, DC and Houston?
The second question will be what's the best platform and technology in which to offer the new top college bowls. ESPN derives almost all its revenue from cable subscription, amounting to $500 million a month and $6 billion a year before selling any advertisements. The current contract pays the BCS $125 million a year, and estimates for the next contract range up to $500 million per year.
But Internet-based platforms are gaining in viewership. Jack Swarbrick is committed to exploring this option for Notre Dame's next media contract.
Current BCS Bowls - The Orange, Sugar, Fiesta and Rose want to continue their lucrative arrangements with the BCS or whatever it evolves into. Consider them advocates against a university-based playoff system. The Sugar bowl has a long alliance with the SEC and the B1G and Pac-12 want to preserve their lucrative affiliations with the "Granddaddy of them all".
University Presidents - The final decision makers are the University Presidents, not the Commissioners or individual Athletic Directors. They have been unswervingly commited only to games that do not interfere with the academic calendars, e.g. after finals about December 21st through January 1st. Recent statements by BCS Commissioners reflect a dedication to this schedule.
The NCAA - Current NCAA President, Mark Emmert, characterized the NCAA in response to the head of the Justice Department's Anti-Trust Division, Christine Varney:
"The NCAA is, by definition, an association and not a professional league like the NFL or Major League Baseball....Athletics in all divisions of the NCAA are ultimately controlled by the presidents and chancellors of the member institutions."
Emmert described the NCAA's ability to control post-season games this way:
"The bottom line, Ms. Varney, is the NCAA president doesn't have the juice to control the Big Six conference commissioners, who are doing very, very well for their leagues. They work for their conference's university presidents..."
The NCAA lacked "the juice" due to a Supreme Court decison in which Notre Dame came close to joining the appellants, Oklahoma and Georgia:
"I suggest you go back and read the 1984 decision by the U.S. Supreme Court in the case of the NCAA vs. the Board of Regents at the universities of Oklahoma and Georgia. In that case, the high court held (7-2) that individual schools, not the NCAA, owned and controlled television and other rights pertaining to college football games. In fact, that case held that the NCAA's control of television rights for football violated the Sherman Antitrust Act."
Having gained those rights, the BCS decision-makers - the Big Six conferences and Notre Dame - also inherited the responsibility not to violate any antitrust laws or suffer the consequences.
The Justice Department's Antitrust Division - Ms. Varney has moved back to private practice, but she changed the direction of the Division with an increase in emphasis on protecting consumer rights over contracts that offer "pro-competitive" advantages. As far as the future of the BCS and college football, consumers would be defined as the viewers, fans of teams, universities and their teams, and the surrounding communities who benefit from the football. Forbes estimated Notre Dame, for instance, generates $10 million additional spending for each home game, impacting the immediate community of South Bend, the state of Indiana, and even Chicago, home of our current President.
Every contract, especially one that would generate up to $500 million per year for its participants, would be examined closely by Antitrust to weigh whether its pro-competitive advantages over any previous agreements would outweigh any anti-competitive impacts of a contract (read any new "BCS" agreement).
Ms. Varney rejected this as the primary consideration for violation of antitrust laws and returned the department's emphasis on how the consumer would be adversely affected. A previous Report that formed the policy around the pro-competive vs anti-competitive argument, which was policy she was appointed, was withdrawn by Ms. Varney.
She characterized it in this way:
"The Report, however, goes too far in evaluating the importance of preserving possible efficiencies and understates the importance of redressing exclusionary and predatory acts that result in harm to competition, distort markets, and increase barriers to entry. The ultimate result is that consumers are harmed through higher prices, reduced product variety, and slower innovation." (Italics mine)
Varney warned businesses with market power:
"In short, while preserving the right of firms with market power to continue to compete, we cannot allow them a free pass to undertake predatory or unjustified exclusionary acts...the Section 2 Report no longer represents the policy of the Department of Justice with regard to antitrust enforcement under Section 2 of the Sherman Act."
Translating the legalese means that no longer will and agreement like the BCS which increases competition by providing a national champion will outweigh the impacts on consumers and non-participants by its anticompetitive features.
I doubt that any new agreement would exclude Notre Dame with its extensive fanbase and attempt to so negatively impact its football future.
This would be a huge pothole that the BCS would want to avoid especially since such a case would take years to resolve, most likely involve any media and bowl partners and since Notre Dame is such an attractive party to any media partner.
Vested Interests for Conferences - The B1G and Pac-12 would like to renew their exclusive arrangements with the Rose Bowl. The SEC wants to continue their arrangement with the Sugar Bowl. The SEC does not want to limit a four team playoff to just conference champions. The ACC and the Pac12 are positioned well for continuing as major participants.
The Big East, the most vulnerable, would need to be included even after the losses of West Virginia, Pittsburgh, Syracuse and, possibly, Louisville due to their geographic appeal, especially adding markets in Houston (Houston), Dallas (SMU), Orlando (UCF), Navy (DC), San Diego (San Diego State), Memphis (Memphis), Boise (Boise State) and possibly Philadelphia (Temple). Not counting the Philadelphia market, when it adds all its new members by the 2013 season, the Big East will have the potential to reach 31 million homes or 28% of all U.S. households.
Framework For an Agreement
The ultimate decision-makers, the University Presidents, will come up with a framework that includes:
- Avoiding antitrust issues by crafting a contract that is agreeable to all major parties and provides potential for each to compete for the national championship. Using polls and computers has the appearance of independent decison-making
- Involving Notre Dame despite their independent status
- Maintain the current regular season of twelve games and the lucrative championship game
- Craft a playoff that attracts fans and their media partners
- Have the playoff games between December 21 and January 1st
- Preserve some of the conference allegiances to at least some of the major bowls, while involving the potentially lucrative neutral site games
- Continue to control all rights
In my next article, "What's on Second", I'll examine the specific proposals within this framework. For now, I'm farmatert. Talk among your selves.