This is a post from a guy with the handle u/mattiemaddness on r/cfb.
I am fascinated by realignment speculation and was hoping someone could help me make sense of this guys numbers.
By the Numbers: Further Conference Growth to, at least, 21 schools each (42 total minimum) is needed for the SEC and B1G to full capture the National Broadcast Market.
I was listening to podcasts this morning as I got ready for Easter this morning. When my new podcasts finish it jumps to older episodes, and I ended up listening to an interview with Bob Thompson from November in which he said some things that got the wheels turning in my brain today. Bob Thompson is the former, retired, President of Fox Sports and in his retirement he does a lot of media interviews.
He made it sound like there are three tiers that media companies look at when negotiating a contract with a conference:
1. National Network Broadcasts
2. Cable Broadcasts
3. Streaming Broadcasts
The first two of these are judged by what I'm dubbing "Viewers Above Replacement." Anyone who follows Baseball knows that a common stat is "Wins Above Replacement" which is an assessment of how many wins a player gets you above a replacement level player. Viewers Above Replacement would be the same idea: how many Viewers does a school get you above the replacement level school in that time slot.
For streaming broadcasts there is no "replacement" because the number is unlimited. This value is replaced by viewers-above-cost, because so long as you get the minimum number of viewers to replace the cost of production and rights to that game you are in the clear. Under a media contract the average broadcast needs to be X viewers large on National Networks, Y Viewers large on Cable Networks, and Z Viewers large on Streaming. Different numbers for each figure. So when you're forming a conference you need to look at "how many games are they going to produce above replacement for X, how many for Y, and what will the baseline average be for Z?" If the number is above the mark, the network is happy. They want as few replacement-level games on National Broadcasts as possible, and then as few replacement-level games on Cable as possible. After that, they just need the streaming level games to be above the cost of production and rights, no worries about replacement games.
So what's Replacement Level? In order to produce games while playing Conference Weeks you need to take half the schools and then the midline down from there, so a replacement school would be at the 75% (3/4) of the conference. From the numbers below **BOLD = Replacement Level School.**
According to Sports Media Watch data from 2015-2023, here is each school's average on Nationally Broadcast games. (These are Cable and Broadcast combine, the first two categories):
SEC School | Average
---|---
Alabama | 5.03
Georgia | 3.75
LSU | 3.03
Auburn | 2.95
Oklahoma | 2.82
Texas | 2.44
Florida | 2.21
Tennessee | 2.13
Texas A&M | 1.86
Ole Miss | 1.72
Arkansas | 1.50
South Carolina | 1.22
**Mississippi St.** | **1.01**
Missouri | 0.99
Kentucky | 0.79
Vanderbilt | 0.42
Any School Added above 1.01 average increases the number of Viewers Above Replacement for the SEC.
B1G School | Average
---|---
Ohio State | 5.44
Michigan | 4.46
Penn State | 2.81
Oregon | 2.26
Michigan St. | 2.19
Wisconsin | 2.19
Washington | 2.05
USC | 1.97
Nebraska | 1.89
Iowa | 1.87
UCLA | 1.39
Indiana | 1.29
Minnesota | 1.25
Maryland | 1.22
**Northwestern** | **1.01**
Illinois | 0.89
Purdue | 0.80
Rutgers | 0.45
Any School Added above 1.01 average increases the number of Viewers Above Replacement for the B1G.
ACC School | Average
---|---
Clemson | 2.63
Florida State | 2.16
Miami | 1.31
Stanford | 1.25
Louisville | 1.16
Virginia Tech | 1.03
UNC | 0.90
Cal | 0.88
Pitt | 0.86
NC State | 0.83
Syracuse | 0.70
Georgia Tech | 0.67
Virginia | 0.64
**Wake Forest** | **0.53**
Boston College | 0.36
SMU | 0.33
Duke | 0.32
Any School Added above 0.53 average increases the number of Viewers Above Replacement for the ACC.
Big 12 School | Average
---|---
Oklahoma State | 1.64
TCU | 1.51
Utah | 1.44
Baylor | 1.25
West Virginia | 1.19
Texas Tech | 0.97
Arizona St. | 0.93
Iowa St. | 0.87
Kansas St. | 0.85
Cincinnati | 0.84
BYU | 0.83
Colorado | 0.79
**Arizona** | **0.62**
UCF | 0.59
Houston | 0.56
Kansas | 0.39
Any School Added above 0.62 average increases the number of Viewers Above Replacement for the Big 12.
Pac-12 School | Average
---|---
Washington St. | 0.96
Oregon State | 0.55
Notable Others | Average
---|---
Notre Dame | 4.46
Navy | 1.01
Boise State | 0.81
Memphis | 0.45
SDSU | 0.32
In listening to the Bob Thompson interview, he said that Apple was expecting to charge "about" $4 per viewer for advertisers to advertise on the proposed Pac-12 deals. "Obviously ad deals are more complicated than that" he added, but that was his rough estimate. There's no real way to calculate the number of viewers per streaming game, however, as those numbers are kept internal (and as we saw with the Pac-12 Network, not reliable). There's just an interesting facet of "so long as you're hitting your baseline of viewers, it doesn't matter how many games you have on streaming" to this.
What networks care about is viewers in their Nationally Broadcast spots. Which means that conferences, to increase value, need to both raise their inventory of games while also increasing their Viewers Above Replacement.
When he talked about Oregon and Washington being added to the Big Ten said that they were added "for the next negotiation" because more schools that increase the viewer average increases the bargaining power of a conference. It means fewer schools in other conferences above the average nationally across all conferences.
However, there's something else to consider here: Market Capture.
The more schools a conference loses above their VAR, the less valuable they are as a conference as a whole. If the ACC were to lose all of their schools above 1.01 then their Replacement School drops as well as their total conference average. Not only would the conference taking those schools increase their average and their VAR, but they would cripple the other options for networks to negotiate for. That is monopolistic market capture economics: depriving the buyer of other options.
Losing any school above the conference median, therefor, harms a conference's ability to negotiate in the next round, which boosts the bargaining position those that take them. This would mean taking any school above 0.86 from the ACC or 0.87 from the Big 12 would improve the bargaining positions of the SEC and Big Ten while harming the bargaining position of those conferences.
To sum up:
Schools that would improve the SEC and B1G VAR:
* Notre Dame
* Clemson
* Florida State
* Oklahoma State
* TCU
* Utah
* Miami
* Stanford
* Baylor
* West Virginia
* Louisville
* Virginia Tech
* Navy
Schools that would further depress the bargaining power of the ACC and Big 12 and might be worth taking purely to capture the market:
* Texas Tech
* Arizona State
* UNC
* Cal
* Iowa State
* Pitt
Note that this does not consider regional dynamics, conference fit, or duplicated markets but is purely a viewership consideration.
The next thing to look at would be how many games each network needs per season above replacement for their Nationally Broadcast Network Time Slots, including Friday and Thursday Broadcasts:
* FOX - 40
* CBS - 25
* ABC - 25
* NBC - 14
Total: 104
National Cable Broadcasts:
* ESPN - 34
* FS1 - 28
Total: 62
A conference would have to produce a minimum of 83 games of value in order to capture half the market production of Nationally Broadcast games with a value addition. In order to do this they would need a minimum of 16.25 schools playing quality games every week. Given the OoC schedules and lower tier conference member, you would need an additional 4.25 schools to guarantee that.
**This means the SEC and B1G conferences need a minimum of 20.5 schools each** to produce the number of quality games to capture half the Broadcast market and remove other conferences from bargaining power in the next media cycle. Since 20.5 is a non-whole number, both conferences will need 21 members to put themselves into position to tell media partners that the threat of using different conferences is dead.
So, to put themselves into position to over-power the media networks at the negotiating table the two conferences need to add 8 schools combined. Three to the Big Ten, and 5 to the SEC, if they want to capture the market. These schools will definitely come from the list above, primarily if not exclusively. There are 19 schools on those two lists. The P2 only needs half of them to take the upper hand in market negotiations.
Further conference growth to, at least, 21 schools each is inevitable for the SEC and B1G to full capture the national broadcast market. However, a larger number such as 24 each might make more sense to further give themselves a cushion, further deprive the alternative-market, and could be done without sacrificing average revenue so long as the members added continued to hold their weight in the streaming market.
I am fascinated by realignment speculation and was hoping someone could help me make sense of this guys numbers.
By the Numbers: Further Conference Growth to, at least, 21 schools each (42 total minimum) is needed for the SEC and B1G to full capture the National Broadcast Market.
I was listening to podcasts this morning as I got ready for Easter this morning. When my new podcasts finish it jumps to older episodes, and I ended up listening to an interview with Bob Thompson from November in which he said some things that got the wheels turning in my brain today. Bob Thompson is the former, retired, President of Fox Sports and in his retirement he does a lot of media interviews.
He made it sound like there are three tiers that media companies look at when negotiating a contract with a conference:
1. National Network Broadcasts
2. Cable Broadcasts
3. Streaming Broadcasts
The first two of these are judged by what I'm dubbing "Viewers Above Replacement." Anyone who follows Baseball knows that a common stat is "Wins Above Replacement" which is an assessment of how many wins a player gets you above a replacement level player. Viewers Above Replacement would be the same idea: how many Viewers does a school get you above the replacement level school in that time slot.
For streaming broadcasts there is no "replacement" because the number is unlimited. This value is replaced by viewers-above-cost, because so long as you get the minimum number of viewers to replace the cost of production and rights to that game you are in the clear. Under a media contract the average broadcast needs to be X viewers large on National Networks, Y Viewers large on Cable Networks, and Z Viewers large on Streaming. Different numbers for each figure. So when you're forming a conference you need to look at "how many games are they going to produce above replacement for X, how many for Y, and what will the baseline average be for Z?" If the number is above the mark, the network is happy. They want as few replacement-level games on National Broadcasts as possible, and then as few replacement-level games on Cable as possible. After that, they just need the streaming level games to be above the cost of production and rights, no worries about replacement games.
So what's Replacement Level? In order to produce games while playing Conference Weeks you need to take half the schools and then the midline down from there, so a replacement school would be at the 75% (3/4) of the conference. From the numbers below **BOLD = Replacement Level School.**
According to Sports Media Watch data from 2015-2023, here is each school's average on Nationally Broadcast games. (These are Cable and Broadcast combine, the first two categories):
SEC School | Average
---|---
Alabama | 5.03
Georgia | 3.75
LSU | 3.03
Auburn | 2.95
Oklahoma | 2.82
Texas | 2.44
Florida | 2.21
Tennessee | 2.13
Texas A&M | 1.86
Ole Miss | 1.72
Arkansas | 1.50
South Carolina | 1.22
**Mississippi St.** | **1.01**
Missouri | 0.99
Kentucky | 0.79
Vanderbilt | 0.42
Any School Added above 1.01 average increases the number of Viewers Above Replacement for the SEC.
B1G School | Average
---|---
Ohio State | 5.44
Michigan | 4.46
Penn State | 2.81
Oregon | 2.26
Michigan St. | 2.19
Wisconsin | 2.19
Washington | 2.05
USC | 1.97
Nebraska | 1.89
Iowa | 1.87
UCLA | 1.39
Indiana | 1.29
Minnesota | 1.25
Maryland | 1.22
**Northwestern** | **1.01**
Illinois | 0.89
Purdue | 0.80
Rutgers | 0.45
Any School Added above 1.01 average increases the number of Viewers Above Replacement for the B1G.
ACC School | Average
---|---
Clemson | 2.63
Florida State | 2.16
Miami | 1.31
Stanford | 1.25
Louisville | 1.16
Virginia Tech | 1.03
UNC | 0.90
Cal | 0.88
Pitt | 0.86
NC State | 0.83
Syracuse | 0.70
Georgia Tech | 0.67
Virginia | 0.64
**Wake Forest** | **0.53**
Boston College | 0.36
SMU | 0.33
Duke | 0.32
Any School Added above 0.53 average increases the number of Viewers Above Replacement for the ACC.
Big 12 School | Average
---|---
Oklahoma State | 1.64
TCU | 1.51
Utah | 1.44
Baylor | 1.25
West Virginia | 1.19
Texas Tech | 0.97
Arizona St. | 0.93
Iowa St. | 0.87
Kansas St. | 0.85
Cincinnati | 0.84
BYU | 0.83
Colorado | 0.79
**Arizona** | **0.62**
UCF | 0.59
Houston | 0.56
Kansas | 0.39
Any School Added above 0.62 average increases the number of Viewers Above Replacement for the Big 12.
Pac-12 School | Average
---|---
Washington St. | 0.96
Oregon State | 0.55
Notable Others | Average
---|---
Notre Dame | 4.46
Navy | 1.01
Boise State | 0.81
Memphis | 0.45
SDSU | 0.32
In listening to the Bob Thompson interview, he said that Apple was expecting to charge "about" $4 per viewer for advertisers to advertise on the proposed Pac-12 deals. "Obviously ad deals are more complicated than that" he added, but that was his rough estimate. There's no real way to calculate the number of viewers per streaming game, however, as those numbers are kept internal (and as we saw with the Pac-12 Network, not reliable). There's just an interesting facet of "so long as you're hitting your baseline of viewers, it doesn't matter how many games you have on streaming" to this.
What networks care about is viewers in their Nationally Broadcast spots. Which means that conferences, to increase value, need to both raise their inventory of games while also increasing their Viewers Above Replacement.
When he talked about Oregon and Washington being added to the Big Ten said that they were added "for the next negotiation" because more schools that increase the viewer average increases the bargaining power of a conference. It means fewer schools in other conferences above the average nationally across all conferences.
However, there's something else to consider here: Market Capture.
The more schools a conference loses above their VAR, the less valuable they are as a conference as a whole. If the ACC were to lose all of their schools above 1.01 then their Replacement School drops as well as their total conference average. Not only would the conference taking those schools increase their average and their VAR, but they would cripple the other options for networks to negotiate for. That is monopolistic market capture economics: depriving the buyer of other options.
Losing any school above the conference median, therefor, harms a conference's ability to negotiate in the next round, which boosts the bargaining position those that take them. This would mean taking any school above 0.86 from the ACC or 0.87 from the Big 12 would improve the bargaining positions of the SEC and Big Ten while harming the bargaining position of those conferences.
To sum up:
Schools that would improve the SEC and B1G VAR:
* Notre Dame
* Clemson
* Florida State
* Oklahoma State
* TCU
* Utah
* Miami
* Stanford
* Baylor
* West Virginia
* Louisville
* Virginia Tech
* Navy
Schools that would further depress the bargaining power of the ACC and Big 12 and might be worth taking purely to capture the market:
* Texas Tech
* Arizona State
* UNC
* Cal
* Iowa State
* Pitt
Note that this does not consider regional dynamics, conference fit, or duplicated markets but is purely a viewership consideration.
The next thing to look at would be how many games each network needs per season above replacement for their Nationally Broadcast Network Time Slots, including Friday and Thursday Broadcasts:
* FOX - 40
* CBS - 25
* ABC - 25
* NBC - 14
Total: 104
National Cable Broadcasts:
* ESPN - 34
* FS1 - 28
Total: 62
A conference would have to produce a minimum of 83 games of value in order to capture half the market production of Nationally Broadcast games with a value addition. In order to do this they would need a minimum of 16.25 schools playing quality games every week. Given the OoC schedules and lower tier conference member, you would need an additional 4.25 schools to guarantee that.
**This means the SEC and B1G conferences need a minimum of 20.5 schools each** to produce the number of quality games to capture half the Broadcast market and remove other conferences from bargaining power in the next media cycle. Since 20.5 is a non-whole number, both conferences will need 21 members to put themselves into position to tell media partners that the threat of using different conferences is dead.
So, to put themselves into position to over-power the media networks at the negotiating table the two conferences need to add 8 schools combined. Three to the Big Ten, and 5 to the SEC, if they want to capture the market. These schools will definitely come from the list above, primarily if not exclusively. There are 19 schools on those two lists. The P2 only needs half of them to take the upper hand in market negotiations.
Further conference growth to, at least, 21 schools each is inevitable for the SEC and B1G to full capture the national broadcast market. However, a larger number such as 24 each might make more sense to further give themselves a cushion, further deprive the alternative-market, and could be done without sacrificing average revenue so long as the members added continued to hold their weight in the streaming market.
