ESPN: ‘No one is expecting a financial windfall from a potential 24-team playoff’
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Over the past year, the potential of a 24-team College Football Playoff has steadily moved closer to reality. Now, CFP leadership and ESPN are negotiating the specifics, and most insiders have already resigned themselves to the fact that doubling college football’s postseason seems inevitable.
As with any change in college sports, money is the impetus. FBS conference commissioners, who together form the CFP leadership group that decides the sport’s postseason future, see expansion to 24 teams as a way to earn more television revenue, money that would then be distributed back to member schools.
However, the calculus is a bit more complicated than more games = more money. The 24-team playoff would require eliminating conference championship games, which together generate about $300 million in revenue. That means any playoff expansion would need to offset the revenue loss from eliminating conference championships. It’s certainly up for debate whether a handful of first-round playoff games between teams in the back half of the top-25 would be worth more than conference title games that often involve the nation’s top teams.
That’s the dilemma CFP leadership and ESPN are currently gamed out over, with ESPN holding the playoff’s exclusive rights. Last month, the CFP opened a 30-day negotiating window with ESPN, which ended Friday when the CFP sent the network a final proposal. ESPN will now have until Oct. 19 at the latest to agree to a deal. If no deal is reached — as the ongoing negotiations suggest — the CFP will take its 24-team proposal to the open market, where other networks can submit bids.
It’s interesting, then, that over the weekend, as numerous reports surfaced about the status of talks between the CFP and ESPN, ESPN’s own story included an anecdote that other reports did not.
“Sources told ESPN that no one is expecting a financial windfall from a potential 24-team playoff, but nobody wants to lose money along with their conference title games,” Heather Dinich’s report read on ESPN.com.
If that were the case, it raises the question of why a 24-team format is being pursued in the first place. Fans have largely spoken out against it, and so have many media members.
However, schools and conferences may still want playoff expansion, even if it doesn’t bring a significant financial windfall from TV rights. More playoff access would likely let schools keep their coaches longer and pay less in buyouts over the long run. Donors are willing to pledge more money when a school makes the playoffs. Conferences can market more of their members as playoff participants. It’d make everyone’s lives a little bit easier.
In other words, CFP leadership may be pursuing expansion for reasons not directly tied to how much media revenue an expanded playoff would generate.
But ESPN also has a financial incentive to signal that the market for a 24-team CFP is soft. For one, ESPN doesn’t want to get into a bidding war with another network for rights to the property. It already pays $1.3 billion annually for the CFP, and expansion would raise that price by at least $300 million per year or more (though ESPN is already allocating some $200 million to the would-be eliminated conference title games it airs, which it would no longer need to pay for). By pushing the narrative that it’s a weak market, ESPN could encourage other networks to submit lower bids than they otherwise would have.
ESPN has made college football a pillar of the network’s business. Outside the NFL, college football is the most popular sport in the U.S., and ESPN owns a large portion of the best inventory. Beyond exclusive playoff rights, ESPN owns all of the SEC and ACC, while sharing the Big 12. The network’s college football viewership dominance is well documented.
Ultimately, we won’t know how strong the market for an expanded CFP is until other networks can bid on the inventory. Most expect no finalized deal by Oct. 19, when other networks will start kicking the tires. But there’s also speculation that, even if the rights go to market, ESPN will likely remain the exclusive rights holder for a 24-team playoff. That would suggest that other networks like Fox, which helped push the 24-team format in the first place through its influence over the Big Ten, might not value the games as much as one would think. But again, that’s only speculation.
All this to say, ESPN’s clear motives to signal interest in a 24-team playoff are muted. But plenty of circumstantial evidence also suggests they’re right.
We’ll find out soon enough, when the rights to the 24-team playoff hit the open market and other networks submit bids.
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