The Next Wave of Conference Realignment (Proposed AAC Mega-Conference)

[MeanGreenGlory]

CU is reportedly bolting from the PAC-12. This will cause more delay in an already delayed media deal, and many believe that leadership at other top programs in the PAC-12 will follow CU in seeking conference stability by jumping ship. Regardless of which schools leave the PAC-12, there are two things that are strong assumptions right now:

1. The PAC-12 is an unstable conference with a floundering media deal
2. The MWC will likely be poached by the PAC-12 to backfill whatever spots they need

Aresco mentioned two things in his AAC media day speech regarding his conference realignment approach that stuck out to me: A) "Power Markets" and B) Strength in Numbers.

Based on those two criteria and the fact that the AAC has established stability with reputable media partners, I think Aresco has an opportunity to be aggressive here and genuinely solidify the AAC as a top 5 conference. We're at 14 football schools now, and I think he could make the AAC the first mega-conference of 20 by adding the following six programs. Since "power markets" are a factor, I included the market ranks in parenthesis based on the 2022-2023 Nielsen DMA Rankings.

 

1. Army (NY #1 / National)
2. Colorado State (Denver #16 / Ft. Collins)
3. Air Force (Colorado Springs #86 / National)
4. UNLV (Las Vegas #40)
5. SDSU (San Diego #30)
6. One of: Georgia State (Atlanta #6), Stanford (San Francisco-Oakland-San Jose #10), Cal (San Francisco-Oakland-San Jose #10), San Jose State (San Francisco-Oakland-San Jose #10), Utah State (Salt Lake City #29)

For the sixth spot, while I think the California schools add some nice brands, Georgia State brings the best market of the bunch, is in the middle of a stellar recruiting area, and could balance out the conference cleanly into two divisions. The two divisions could look like this:

EAST

• Army (NY #1 / National)
• Charlotte (Charlotte #21)
• East Carolina (Greenville #37)
• Florida Atlantic (West Palm Beach #39 / Miami #18)
• Georgia State (Atlanta #6)
• Memphis (Memphis #52)
• Navy (Baltimore #28 / National)
• South Florida (Tampa #13)
• Temple (Philadelphia #4)
• Tulane (New Orleans #50)

WEST

• Air Force (Colorado Springs #86 / National)
• Colorado State (Denver #16 / Ft. Collins)
• North Texas (DFW #5)
• Rice (Houston #7)
• SDSU (San Diego #30)
• SMU (DFW #5)
• Tulsa (Tulsa #62)
• UAB (Birmingham #45)
• UNLV (Las Vegas #40)
• UTSA (San Antonio #31)

Why would the schools consider doing this?

The PAC-12 leadership has repeatedly and publicly shown they are struggling. They can't secure a media deal, and we've all learned that media revenue drives all of this. Full stop. The MWC schools know the conference is about to be poached one way or another so they're probably already starting to feel on unstable ground. Aresco has secured a media deal that is better than the MWC, and he has demonstrated far better leadership than the PAC-12. With additional strong markets, the next AAC media deal will likely be stronger and better than a watered-down PAC12 deal and certainly stronger than any MWC, Sun Belt, and CUSA deal.

As @DentonStang called out in another thread, the watered-down PAC-12 likely looks something like this:

• Cal (San Francisco-Oakland-San Jose #10)
• Stanford (San Francisco-Oakland-San Jose #10)
• OSU (Corvallis - Portland #22)
• WSU (Pullman - Spokane #67)
• SDSU (San Diego #30)
• SMU (DFW #5)
• Tulane (New Orleans #50)
• Colorado State (Denver #16 / Ft. Collins)
• Boise State (Boise #98)
• UNLV (Las Vegas #40) 

Comparing the AAC Mega-Conference above with this Hypothetical PAC-12, there are a few things to note:

• The AAC Mega-Conference has double the teams, which means the media package would need to be double that of the Hypothetical PAC-12 to achieve the same payout per school, assuming equal distribution of funds. I'm no media expert, but I think it's possible because:
  • The AAC Mega-Conference offers 10 schools in the top 25 media markets as opposed to the Hypothetical PAC-12's 5 schools in the top 25 media markets
  • The average market size rank of the AAC Mega-Conference is 27.85 compared to 34.8 for the Hypothetical PAC-12's
  • The AAC Mega-Conference offers multiple scheduling opportunities across all four continental U.S. time zones (Eastern, Central, Mountain, and Pacific). The Hypothetical PAC-12's only offers three, with the vast majority being in Pacific and Mountain.
  • The AAC Mega-Conference offers three conference games of national notoriety in Army vs. AF, Army vs. Navy, and AF vs. Navy

If the AAC Mega-Conference were to happen, it would easily be considered a top-five conference. Over time, as additional funds from a higher re-negotiated media deal made their way through the programs, it could arguably surpass the ACC. This is especially true if the SEC/BIG10 poaches the top ACC programs.

Anyway, food for thought, as this could be the last round of realignment for a while, and I'd like to see Aresco do everything he can to leverage this opportunity to position the AAC above the stumbling PAC-12.

[DentonStang]

At that point, why would the top 10-14 schools break off and drop the dead weight?

[MeanGreenGlory]

46 minutes ago, DentonStang said:

At that point, why would the top 10-14 schools break off and drop the dead weight?

Because in this instance, "dead weight" is distributed across multiple criteria. For example:

• Georgia State could be considered "dead weight" from an institution or football performance perspective, but they bring one of the largest media markets in a hotbed recruiting area and are investing heavily in their program so they bring  a good deal of media/exposure value.
• UTSA could be considered "dead weight" in terms of facilities and all other sports except for football, but they bring a great media market and a recently successful football team which is driving a lot of this.
• Tulsa could be considered "dead weight" in terms of market and on-field performance, but they bring an Oklahoma presence which is important for recruiting purposes and respectable academics.

For the AAC, it's clear you aren't going to get the top state schools with mass followings (Alabama, Michigan, Texas, Florida, Oregon, Washington, etc.)—they're being gobbled up by SEC/BIG10. Therefore, the AAC has to be more focused on it's media revenue and recruiting territories to remain competitive.

The larger number of schools come into play when media outlets are looking to sign deals: If you're a media outlet looking to provide value to your viewers, and the SEC, BIG10, and BIG12 already have signed media deals, who do you prioritize next? A stable conference with the 20 next-best programs in major media markets across four time zones OR a smaller 10-team conference primarily located in one time zone?

[NorthTexasWeLove]

Yeah, this would be a really cool conference and with many of the universities included would give the AAC the push to hug up against the big12 in termw of the next tier of conferences behind the Big10 and SEC. I'm all for it. 

[UNT86]

If SMU wants to join the "new" PAC 12, I'll hold the door for them.

They will be like Colorado in ten years asking to come back.

 

[TIgreen01]

This is mostly wishful thinking.  Looking at that monstrosity of a conference, what matchups would people actually care about enough to drive TV ratings?  I don't see many.  I think TV has had 20+ years to collect enough data that they fully understand the ratings that that collection of schools are able to drive.  I don't think that they will bite on media market alone.  They are after brands and matchups that will draw advertisers.  You only draw advertisers with demonstrated ratings.  

Also, I can't see Stanford staying in that version of a Pac12.  Or even Cal for that matter.  Stanford has enough pull to be able to push into the Big10, or go flat out Independent ala Notre Dame as a backup.  I think people are too focused on realignment and discounting some of these bigger brands going independent, instead.  Another option for the California schools is to just drop down altogether.  There is already a ton of precedent for that within that state and the Cal system.  If they think they can't keep up with the Joneses, why keep trying?  They value academics more than football.

Edited July 27, 2023 by TIgreen01

[keith]

When we joined the AAC with the other 5, the deal cut was to keep the remaining members "whole" in terms of annual per team payouts for the ESPN media deal (goes through 31'-32') by reducing the payout to the incoming members relative to the existing members.  The payout per team was approximately $7M annually.  As I recall, the incoming members would receive around $2M annually and "go up from there."  Does anyone know the details around the "go up from there" statement and is there a point in the future where media revenues are shared equally?  Assuming the total annual revenue to the conference doesn't change, the only way to "go up from there" is for the payouts to the remaining members to "go down from here," right?  

There is a clause in the contract with ESPN that can trigger a renegotiation if the composition or value of the composition changes materially.  The exit of the three and addition of the six did not seem to trigger a renegotiation.

Something like this proposal seems like it would.  I understand why the payout deal was structured the way it was when we joined, but I'm not sure it's healthy for a conference to have two classes of members for an extended period of time.

[Tommy Gadberry]

Where everyone is missing the boat os once you get past the Big 2 the revenue is dropping way off.  The issue becomes how do you find the easiest path to one of the 12 playoff spots?

[Wag Tag]

Hell of a lot cheaper to combine AAC and the MWC just from a footprint standpoint. What would hold you back is the Pac12 leftovers joining the MWC. I like the idea that since we can’t attract P5 let’s bring in quantity with large market area teams when possible.

[MrAlien]

Once you get past the SEC and Big10, the next best thing to have are the big media markets.  This has been the AAC's game plan, and its one that I think will pay off in the next era of college sports media.  Though I dont think I would take as many schools, 16 tops. 

[TheColonyEagle]

Forgive my oversimplification:

But as I understand it, the reason ESPN, Fox, etc pay out these big TV deals, is so they can broadcast games from the conferences they’re paying the big TV deals to. 

In return, the ESPN, Fox’s of the world expect a return on their investment in advertising dollars and subscriptions.  A big “media market” is expected to bring more eye balls which leads to more advertising and subscriptions  

Here’s the problem:

That model is gone. Why is ESPN bleeding money and Disney laying people off? What exactly is the Pac12 offering ESPN or Fox in return for ESPN and Fox’s money? A big matchup between Wash St and Cal? The revenues aren’t keeping up with the expenditures. Netflix has impacted the entertainment industry the same way.  And actors and writers are striking right now because they’re trying to figure out what the future looks like. Same thing for sports entertainment. It’s happened in every sport. Look at the regional sports networks here in Dallas with Ballys (Mavericks, Stars and Rangers)  it’s amazing how many people in DFW in 2023 cannot watch the Rangers on TV. Everything is changing and these media companies, schools and conferences know it   

Also, why do people insist “SMU brings a top 5 market?” Not picking on SMU (you could say the same thing about UNT) I don’t understand the “media market” argument.  Not in todays world. What difference does it make where SMU is located if no one is going to tune in to watch them and thus see the advertising ESPN has traditionally depended on for revenue. It’s the tree in the forest. Is SMU going to make a sound? Who knows? Does Stanford, Cal, Oregon St and Wash St coming to Ford field 4 weekends every 2-3 years warrant millions? I think Colorado jumped on the Big 12 because left to their own merits, outside of local fans and alumni, no one is going to want Colorado. Not enough people care about them. So they jumped to what looks like a more stable conference (for now)
 

This entire model has changed and I think we are headed toward more online, More subscription based watching. The old way of consuming  sports is dead. I read something the other day that said in the near future, the Super Bowl could be pay per view. 
 

I absolutely agree. 

[Greenrex]

An additional possibility is another conference poaching AAC's commissioner, Mike Aresco.

[MeanGreenGlory]

36 minutes ago, TheColonyEagle said:

Forgive my oversimplification:

But as I understand it, the reason ESPN, Fox, etc pay out these big TV deals, is so they can broadcast games from the conferences they’re paying the big TV deals to. 

In return, the ESPN, Fox’s of the world expect a return on their investment in advertising dollars and subscriptions.  A big “media market” is expected to bring more eye balls which leads to more advertising and subscriptions  

Here’s the problem:

That model is gone. Why is ESPN bleeding money and Disney laying people off? What exactly is the Pac12 offering ESPN or Fox in return for ESPN and Fox’s money? A big matchup between Wash St and Cal? The revenues aren’t keeping up with the expenditures. Netflix has impacted the entertainment industry the same way.  And actors and writers are striking right now because they’re trying to figure out what the future looks like. Same thing for sports entertainment. It’s happened in every sport. Look at the regional sports networks here in Dallas with Ballys (Mavericks, Stars and Rangers)  it’s amazing how many people in DFW in 2023 cannot watch the Rangers on TV. Everything is changing and these media companies, schools and conferences know it   

Also, why do people insist “SMU brings a top 5 market?” Not picking on SMU (you could say the same thing about UNT) I don’t understand the “media market” argument.  Not in todays world. What difference does it make where SMU is located if no one is going to tune in to watch them and thus see the advertising ESPN has traditionally depended on for revenue. It’s the tree in the forest. Is SMU going to make a sound? Who knows? Does Stanford, Cal, Oregon St and Wash St coming to Ford field 4 weekends every 2-3 years warrant millions? I think Colorado jumped on the Big 12 because left to their own merits, outside of local fans and alumni, no one is going to want Colorado. Not enough people care about them. So they jumped to what looks like a more stable conference (for now)
 

This entire model has changed and I think we are headed toward more online, More subscription based watching. The old way of consuming  sports is dead. I read something the other day that said in the near future, the Super Bowl could be pay per view. 
 

I absolutely agree. 

Ehhh…I think you could argue streaming services are struggling more.

The Longhorn Network didn’t work well for fans, the PAC-12 Network lacked exposure which hurt the league, MLS is now exclusively on AppleTV and is leaving fans behind…

People seem to be okay paying for 1–3 subscriptions. Beyond that, it becomes cost prohibitive and people choose the most valuable ones to them. I think the network deals will retain value over time because you can buy one cable package or something like Hulu Live and access the majority of them. 

[Green Otaku]

I'll attempt to answer 2 of your questions.

1 hour ago, TheColonyEagle said:

That model is gone. Why is ESPN bleeding money and Disney laying people off? What exactly is the Pac12 offering ESPN or Fox in return for ESPN and Fox’s money? A big matchup between Wash St and Cal? The revenues aren’t keeping up with the expenditures.

 

They are bleeding money because the era of free money is over. For a long time the interest rate on loans has been near 0%, in the past year the Fed has had 10 rate hikes and the rate is now at 5.5%, this is an effort to slow inflation and to slow the economy down. Yes the government wants there to be less money and less spending. Every sector was expected to have cuts and layoffs. Eventually if things return to normal rates will drop back down, companies will begin to spend more and we will go back to steady growth. Essentially the PAC couldn't have chosen a worse time to have to negotiate a deal. 

 

1 hour ago, TheColonyEagle said:

Also, why do people insist “SMU brings a top 5 market?” Not picking on SMU (you could say the same thing about UNT) I don’t understand the “media market” argument.  Not in todays world. What difference does it make where SMU is located if no one is going to tune in to watch them and thus see the advertising ESPN has traditionally depended on for revenue. It’s the tree in the forest. Is SMU going to make a sound?

It's important for the AAC because the AAC is a known conference that builds up brands. Look at Houston, how long ago was it that people said Houston doesn't carry the Houston market? Look at it now, the program has strong support from the city. Look at Cincy, and UCF. Being in a big metro was a key point to bring in fans and interest when these teams started to make noise nationally. 

[wardly]

If history has taught us anything its that those of us on the outside are clueless about the workings of those on the inside.

[meanJewGreen]

1 hour ago, Greenrex said:

An additional possibility is another conference poaching AAC's commissioner, Mike Aresco.

Interesting possibility. But who? Yormack is doing well for B12, Pettiti just started Big 10, Sankey is entrenched in SEC... would Aresco really want to go Pac12? 

[Greenrex]

Article from NYT By Chris Vannini Jul 26, 2023 (behind paywall).

Pretty much repeats what has already been said...just good to see us included in a somewhat larger conversation:

 

“The parity of talent may be the most in the country from team one to 14,” Herman said at AAC media days this week, “and that’s going to make for a gauntlet of a season.”

"It’s a new era for the AAC, with three teams off to the Big 12 and six new schools in the league: Charlotte, FAU, North Texas, Rice, UAB and UTSA. Despite losing those three heavy hitters and the five New Year’s Six/College Football Playoff appearances between them, commissioner Mike Aresco remains as defiant as ever.

“This conference will continue to achieve at the highest level,” Aresco said Tuesday. “We will continue to upset the P5 narrative, we will continue to provide rocket fuel to our members. We will continue to will our conference to greatness.”

"One of Aresco’s biggest public pushes continues to be ending the “Group of 5” label as the 12-team College Football Playoff begins next year and treats all 10 FBS conferences equally in terms of opportunity. The man who pushed to Power 6 says his conference will continue using the word “power,” but not as a division.

"In a decade, his conference has collected scores of victories over Power 5 teams. Tulane beat Big 12 champion Kansas State and Pac-12 runner-up USC last year. This year, Tulane hosts Ole Miss, North Texas hosts Cal and USF hosts Alabama, two of which have the look of potential upsets on paper. In an era of realignment, postseason expansion and other major changes to the sport, the AAC won’t settle for how others want to box it in.

https://theathletic.com/4722420/2023/07/26/aac-football-members-conference-realignment/?source=freedailyemail&campaign=601983