There is no argument: College football is the nation’s second-most popular sport when factoring in ratings, attendance, hype and, of course, the billions generated. Only the NFL is bigger, but even in that space, there is a discussion to be had about passion and how to measure it. For example, there is no NFL comparison to the profound, solemn debate over whether to get married on an SEC football weekend.
Some things are just too important to interrupt, even for wedding vows.
In a parallel universe, though, there is also little argument the game is undervalued, perhaps even tremendously so. In fact, as we enjoy this offseason before Season No. 156, there is a crossroads looming.
To that point, there is so much money being left on the table in major college football that something has to give.
“We are at the fork in the road no matter what anybody says,” said Casey Wasserman, one of the most powerful entertainment and sports executives in the world as head of the Wasserman Group. “College football is either leaving (the current structure) and keeping all the money or they’re staying … It’s not that complicated.”
Those with Wasserman’s view are talking about a $4 billion-$5 billion valuation shortfall in college football. The Power Four media rights deals are currently worth a combined $17 billion — and that’s not counting the $1.3 billion College Football Playoff deal with ESPN. That’s mainly because conferences negotiate individual media rights that suit them but doesn’t necessarily maximize revenue.
The sides on either end of the discussion have separated like political parties. One side is ready to tap into that valuation like it’s a new vein of crude discovered in the North Dakota oil reserve. The other is a formidable blockade with a desire to keep the status quo — and power.
That reckoning Wasserman is referring to is upon us. The revelation of the Super League and Project Rudy last year reflected at least proposals to gather the game’s top powers in one league and bundle their rights. (The Super League is proposing 72 teams, while Project Rudy would feature 70 teams. There are currently 134 FBS programs.)
Both proposals would be a further reflection of what the Power Four commissioners have done with conference realignment: more consolidation. Just in a different way.
“If your story says that there’s far greater selling power with the conferences rolling all their rights (together) at the same time, in a unified way …,” said one Group of Five commissioner, “then you’re literally not missing a thing.”
For this discussion, it’s all about the media rights Benjamins. That’s where the majority of revenue comes for major college sports. Ticket and sponsorship revenue lag behind that revenue stream. The relationship between schools, their brand and major networks has been ingrained since the Supreme Court deregulated college football television in 1984.
Unraveling that relationship for a single-entity College Football LLC is like trying to untie a Gordian Knot.
But the signs are there that a new economy is emerging. AAC commissioner Tim Pernetti summed up that economy recently during an appearance at the Sports Business Journal Intercollegiate Athletic Forum, an annual college athletics summit.
“(Non-Power four schools) don’t care any less about their experience and access to compete at the highest level than anyone in any other conference,” he said. “So we’re at a very dangerous tipping point. So, if we don’t organize and protect the product, we could be headed for rough waters in the future.
“Whatever your opinion is on change, you need to park it because we need to have these conversations. Having a conversation doesn’t mean you’re going to do it,” he continued. “But why are we so hung up that we know better than everyone else? This is a different business than it was five years ago, 10 years ago.”
The fact the game is trending away from the traditional financial model cannot be denied. CBS Sports has learned at least one venture capital entity had interest in buying into a Power Four athletic department.
Former Milwaukee Bucks co-owner Marc Lasry has become an industry leader in investing in undervalued sports. He was questioned by CNBC recently why he went hard into pro bull riding.
“What we’re trying to do is find sports that are undervalued and invest in those, so that five years from now, as they get their new media deals, that’s when you’ll capture the upside,” he told the network.
That perfectly describes the financial college football structure at the moment. For now, realignment has largely been muted because media rights contracts are more or less aligned. But those deals will expire on or around 2030 at an intersection of streaming and venture capital looking to make giant investments in the sport.
For those media rights contracts that expire in 2030 and 2031 (Big Ten, Big 12, CFP), those discussions will have to start as early as three years from now. For the other deals, such as the ACC (expiring in 2036) and SEC (2034), let’s just say if the ground begins to shift they won’t be bystanders waiting around until those expiration dates.
SMU billionaire donor David Miller recently hinted that more realignment is coming sooner than later.
If there is an über investor/sugar daddy in this space, it might be Lasry. The 65-year old, Moroccan-born venture capitalist has produced a modern-day blueprint for investing in those undervalued/distressed properties.
College football might qualify as both. The financial climate is at least unstable. Endless lawsuits and the looming House v. NCAA settlement are expenses that could be minimized — if not eliminated — with outside investment, corporate management and a collective bargaining agreement.
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Only a handful of athletic departments turn a profit. The stressors on the balance sheet have never been greater. That House settlement alone is forcing schools to opt into a pay-for-play model that will total at least $200 million per school over the next decade.
But the fact that number is capped invites even more lawsuits, which are sure to come.
Bull riding in the same orbit as college football? Absolutely. Try this fact on for incongruent math: College football was twice the viewership of the NBA, but the NBA generates twice the revenue as college football.
That doesn’t add up in the places where it should the most — those dozens of athletic departments facing financial strain. Those departments are labeled as non-profits but operate at the highest levels as Fortune 500 companies. That is, seeking bottom-line profit.
The venture capitalists are storming the gate because there is potentially so much new money to be made. Global giant CVC was involved for a time with the Big 12 last year. In late 2023, RedBird Capital founder Gerry Cardinale laid out in detail the full potential of college football in this era. Florida State has long been involved with Weatherford Capital, headed by former FSU quarterback Drew Weatherford.
Sources tell CBS Sports to keep an eye on Otro Capital, an emerging firm run by former RedBird partners who specialize in sports, media, gaming and entertainment. Travis Kelce, Patrick Mahomes, Rory McIlroy and actor Ryan Reynolds are among the investors.
The college targets of the venture capitalists are obvious; the Wall Street Journal recently estimated six of the top 10 college football programs are worth at least $1 billion.
Imagine this meeting, which has already happened at one Power Four school: A venture capitalist meeting with a university CEO offering to buy a half stake in the athletic department. The deal was never consummated, but that will not end venture capital’s interest in what amounts to a growth stock.
So the basic question becomes: Can the outdated financial model, overseen by commissioners and TV, survive when there is so much money to be made? The outside interest almost hints of the business world’s version of a hostile takeover.
However, any change in this discussion has to be blessed by the SEC and Big Ten, the de facto “owners” of major college sports at the moment.
“I don’t think it’s an accident that the Big Ten and the SEC look a whole lot like the AFC and NFC,” Wasserman said. “They’re partners. They’re not competitors.”
To this point, stereotypical aging, gray-haired fiscally conservative college presidents who oversee multi-billion dollar balance sheets have been reluctant. Partnering with venture capital means ceding at least some measure of power and perhaps taking on debt.
But it doesn’t have to be that way. CBS Sports has already reported on other avenues of maximizing revenue.
There are campus reserves, reallocation of existing funds, endowments, state subsidies as well as borrowing from the university. Even flat-out bank loans.
“Universities, because they’re big enterprises, actually have access to really cheap debt,” said Tony Altimore, a strategy consultant with Altimore Collins & Company. “Universities are zero risk (for lenders). The University of Michigan isn’t going anywhere.”
It’s the little things that add up to a bigger deal in this discussion of undervaluation on this week of the Final Four. Duke, Houston, Florida and Auburn do not get paid for actually playing in the Final Four. The so-called “units” that teams play for end after the regional championship, and they go into a pot that is distributed to conference members.
Each of the Final Four teams get five of those units — one for making the tournament and one for each of their four victories. Generally, those units are worth at least $1 million per victory.
“You’re paying a (NCAA Tournament) play-in team and they get a unit,” Big East commissioner Val Ackerman pointed out, “and the national champion gets a trophy.”
Meanwhile, the championship teams in the College Football Playoff each get $20 million. That’s the difference between the more egalitarian basketball tournament and the LLC for-profit CFP.
Big 12 commissioner Brett Yormark made news earlier this month when he supported expansion of the NCAA Tournament to 76 teams. The next question is: Should the membership trust the NCAA to negotiate for rights fees to expand the bracket?
The San Jose Mercury News’ Jon Wilner suggested that could be a precursor to the power conferences staging their own basketball tournament someday. Keep an eye on the debut this week of the College Basketball Crown event.
Sedona Prince’s revelation of inequities in the women’s game in 2021 literally changed the investment in the women’s tournament. A groundbreaking 2022 report concluded the women’s media rights had not been up for “competitive bid” in 20 years.
The men’s tournament alone produces $1.1 billion annually. The women’s tournament is bundled on TV with scores of other NCAA championships. The question is being asked with more frequency: Are both tournaments undervalued?
“That’s who we’ve entrusted right now to do the (men’s) deal, is the national office,” Ackerman said. “I think there probably will be more pressure this time around on the topic of membership participation in the process given the stakes.”
That Super League model would be similar to what the NFL did in the 1960s. Then-commissioner Pete Rozelle convinced owners that combining to be a single-entity business and sharing revenue would be more profitable — and competitive.
The proposed Super League (and Project Rudy) would do the same thing. One source told CBS Sports the projected annual revenue of such an arrangement would be at a minimum of $3 billion and as much as $10 billion.
There are Super League types who believe collective bargaining could be embraced with revenues shared within a players union, whether they were employees or not.
Sounds like a pro league? You’re way behind. Look around. We’re already there.
“The question is not whether our plan is dead,” said one Super League official. “The question is whether college sports is dead.”
The majority of Power Four conferences and their media rights holders are dead set against such radical change for the moment. The likes of ESPN, Fox, CBS and others remain all in on top-shelf content. For as much money as those networks are paying, they also assure cost certainty for those networks.
CEOs from the Big 12 and a portion of the ACC did meet with representatives of the Super League and Project Rudy late last year.
“The fact that people have interest in throwing ideas out, that’s up to them,” SEC commissioner Greg Sankey told reporters last year when word broke of the Super League. “I spend my time on what I have to do.”
So, it comes down to a faceoff between powerful players with disparate goals. Commissioners protecting their fiefdoms vs. the Super Leaguers who would believe a single entity would unlock billions.
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Think of Super League/Project Rudy as concepts, not necessarily the only options. To date, Sankey and Big Ten commissioner Tony Petitti have not met with Super League officials. It would be fair to say both commissioners continue to dismiss the idea.
Yahoo Sports was the first to report the Big 12 is looking at a “capital partner” again after considering private equity last year. CBS Sports can report that a partnership — different from the CVC venture — has been a possibility since at least September.
All this is being played out with streaming giants looming in the background. Apple, Netlifx, Google and Amazon are all assumed ready to spend big on sports in the next decade. Their combined worth is in the trillions.
Long-time media consultant Chris Bevilacqua said for colleges and conferences not to take advantage, “doesn’t make sense to me.”
That college sports needs financial help is undisputed. Rutgers must wait until 2027 to get a full share of media rights revenue from the Big Ten. The school borrowed against future earnings when it joined the league beginning in 2014.
UCLA joined the Big Ten last year for much the same reasons of financial distress.
“Right now, the reason the UCLA left the Pac-12 to go to the Big Ten is that we have $50 million more this year than we did last year,” said Wasserman, an influential Bruins booster whose name adorns the football facility. “Without that $50 million, UCLA is bankrupt.”
For this discussion, it should be noted that Bevilacqua is a Super League advisor. Among those on the board include Texas Tech AD Kirby Hocutt, North Carolina AD Bubba Cunningham, Tennessee AD Danny White, West Virginia president Gordon Gee and Cleveland Browns owner Jimmy Haslam.
While being against the Super League, the Big Ten is also reportedly considering a private equity investment. Since at least last summer, Pernetti has been bullish publicly on considering outside investment in his conference.
“The important point everybody needs to get their arms around. Things need to change,” Pernetti said. “The structure needs to change. Instead of looking at college football and saying, ‘There’s Big Ten football and ACC football and American football.’ College football is a product.”
The NBA, NFL and MLB all have lines of credit available to them. Last August, the NFL changed its rules to allow private equity firms to buy stakes in its teams. In December it was reported the Buffalo Bills and Miami Dolphins had sold minority shares of their teams to private equity houses.
CBS Sports first broke the story last June that the Big 12 was considering a private equity deal with CVC that would have netted the league up to $1 billion. League presidents eventually decided not to proceed.
Both the Super League and NCAA have lobbyists in Washington, D.C., pushing their agendas. The NCAA continues to seek an anti-trust exemption from Congress that would, in part, continue to cap athletes’ ability to earn money.
Of course, the association’s view is that it needs an exemption to effectively conduct business. The House settlement will codify things a bit, but several industry sources predict chaos with a multitude of resulting lawsuits.
Wasserman has one unique vision of how the NCAA could get its way: If President Donald Trump applies pressure in Congress, he could be a factor in this valuation discussion.
Wasserman called Sen. Ted Cruz — chairman of the Senate Commerce Committee overseeing possible exemption legislation — Trump’s “weapon of change.”
“Honestly, if (Trump) could save college sports, he would love that position. I know it sounds crazy, but it’s not as crazy as you think,” said Wasserman, also chairman of the 2028 LA Olympics organizing committee. “If he could say, ‘Hey, look, I can save amateur sports.’ That’s a pretty powerful place for him to sit.”
It continues to be argued the athletes themselves are underpaid. Consider in House that every athlete transaction worth more than $600 has to be approved. Now consider the coaches who lead those athletes. Several have uncapped eight-figure salaries.
Complicating matters is the pass-through nature of almost all the parties involved. They aren’t around that long. The athletes themselves are around only four or five years. The average college president lasts six years. The average AD stays around five years at one school. The average FBS coach lasts four to five years.
Until recently, being an FBS conference commissioner was somewhat of a lifetime appointment. There was a time not too long ago when the average Power Five commissioner stayed more than 21 years on the job.
Those commissioners continue to hold vast amounts of power, being in charge of the modern financial landscape.
Will that change?
“Our (venture capital) relationship could be as short as five years, it could be 50,” Weatherford said.
Weatherford Capital has been making giant strides into the college market. Like everything in this emerging market, specifics have yet to be revealed.
“I believe a private capital provider that is aligned … can actually create a stabilizing force,” Weatherford added, “when there is turnover at the presidential level, when there is turnover at the athletic department level, when there is coaching changes to have financial, organizational controls.”
With that type of arrangement, some power must be given up. These venture capital firms would have to go out of their way to assure schools as to the scope of their involvement. In the business world, private equity investors sometimes sit on boards of directors.
How long until those big investors in college sports start to flex on hiring a new coach?
Or is the corporate-college relationship simply inevitable? In the corporate world, businesses don’t stifle growth because the opposing argument is that’s the way it’s always been.
“What it speaks to is athletic departments have been businesses for 20 years,” TCU AD Mike Buddie said. “We’ve tried to pretend that they’re not. Now that they actually are, there are going to be business decisions that are counterintuitive to higher education.
“It’s not going to be good for Olympic sports. It’s not going to be good for United States Olympics. In 20 years are we going to have gold medals in anything?”
The role of those minor college sports in college football’s financial model cannot be ignored. In fact, they are accounted for in Super League economics. Part of the increased revenue earned from a single-entity model would be spent on supporting those sports.
College football supports minor sports now, but to varying degrees at different schools. In fact, powerful Ohio State was considering slicing sports last year in the wake of the economic drag caused by the House settlement. AD Ross Bjork subsequently announced Ohio State would continue to sponsor all 36 sports.
Such consternations have led to much oxygen being wasted addressing competitive balance in the current structure. But the only way that balance happens these days is, really, by chance.
Is the fact all four No. 1 seeds made the Final Four for only the second time a product of NIL dollars consolidating at the top? To be determined.
A couple of years ago, TCU played for a national championship for the second time in its history. Vanderbilt beat Alabama for the first time in 40 years last October, but the result revealed more about the system than the Frogs or the Commodores.
TCU is 13-10 since that championship game loss. The bigger issue for Vanderbilt may be the moment Alabama realizes the Commodores are making the same in media rights revenue as the Crimson Tide.
Yes, something has to give.
It begins with asking the central question raised by this story: Will either TCU or Vanderbilt make the cut if — or when — college football consolidates further?
To get the answer, think of college football as a long-term investment.
Who’s in?
