College Football Conferences and TV Money

With the Bowl season behind us (told you Notre Dame was over rated) let's look at how the college football landscape will change for next season . Below are the conference members now and for the future. Below the chart are some thoughts on the role television plays in conference alignment.

                                 Conference Realignment for 2013

.	ACC Now	Future ACC		Big East Now	Future Big East
.	Boston College	Boston College		Cincinnati	Boise State
.	Clemson	Clemson		Louisville	Cincinnati
.	Duke	Duke		Pittsburgh	Connecticut
.	Florida State	Florida State		Rutgers	East Carolina
.	Georgia Tech	Georgia Tech		Syracuse	Houston
.	Maryland	Louisville		Temple	Louisville
.	Miami	Maryland		UConn	Memphis
.	N.C. State	Miami		USF	Navy
.	North Carolina	N.C. State			Pittsburgh
.	Virginia	North Carolina			Rutgers
.	Virginia Tech	Pittsburgh			San Diego State
.	Wake Forest	Syracuse			SMU
.		Virginia			Syracuse
.		Virginia Tech			Temple
.		Wake Forest			Tulane
.		*Notre Dame (sorta)			UCF
.					USF
.	Big Ten Now	Future Big Ten		Big 12 Now	Future Big 12
.	Illinois	Illinois		Baylor	Baylor
.	Indiana	Indiana		Iowa State	Iowa State
.	Iowa	Iowa		Kansas	Kansas
.	Michigan	Maryland		Kansas State	Kansas State
.	Michigan State	Michigan		Oklahoma	Oklahoma
.	Minnesota	Michigan State		Oklahoma State	Oklahoma State
.	Nebraska	Minnesota		TCU	TCU
.	Northwestern	Nebraska		Texas	Texas
.	Ohio State	Northwestern		Texas Tech	Texas Tech
.	Penn State	Ohio State		West Virginia	West Virginia
.	Purdue	Penn State
.	Wisconsin	Purdue
.		Rutgers
.		Wisconsin
.	C-USA Now	Future C-USA		MAC Now	Future MAC
.	East Carolina	Charlotte		Akron	Akron
.	Houston	East Carolina		Ball State	Ball State
.	Marshall	FAU		Bowling Green	Bowling Green
.	Memphis	FIU		Buffalo	Buffalo
.	Rice	Houston		Central Michigan	Central Michigan
.	SMU	Louisiana Tech		Eastern Michigan	Eastern Michigan
.	Southern Miss	Marshall		Kent State	Kent State
.	Tulane	Memphis		Miami (Ohio)	Miami (Ohio)
.	Tulsa	MTSU		Northern Illinois	Northern Illinois
.	UAB	North Texas		Ohio	Ohio
.	UCF	Old Dominion		Toledo	Toledo
.	UTEP	Rice		UMass	UMass
.		SMU		Western Michigan	Western Michigan
.		Southern Miss
.		Tulane
.		Tulsa
.		UAB
.		UCF
.		UTEP
.		UTSA
.	MWC Now	Future MWC		Pac-12 Now	Future Pac-12
.	Air Force	Air Force		Arizona	Arizona
.	Boise State	Boise State		Arizona State	Arizona State
.	Colorado State	Colorado State		Cal	Cal
.	Fresno State	Fresno State		Colorado	Colorado
.	Hawaii	Hawaii		Oregon	Oregon
.	Nevada	Nevada		Oregon State	Oregon State
.	New Mexico	New Mexico		Stanford	Stanford
.	San Diego State	San Diego State		USC	USC
.	UNLV	San Jose State		UCLA	UCLA
.	Wyoming	UNLV		Utah	Utah
.		Utah State		Washington	Washington
.		Wyoming		Washington State	Washington State
.	SEC Now	Future SEC		Sun Belt Now	Future Sun Belt
.	Alabama	Alabama		Arkansas State	Arkansas State
.	Arkansas	Arkansas		FAU	FAU
.	Auburn	Auburn		FIU	FIU
.	Florida	Florida		Louisiana-Lafayette	Georgia State
.	Georgia	Georgia		MTSU	Louisiana-Lafayette
.	Kentucky	Kentucky		North Texas	MTSU
.	LSU	LSU		South Alabama	North Texas
.	Mississippi State	Mississippi State		Troy	South Alabama
.	Missouri	Missouri		ULM	Texas State
.	Ole Miss	Ole Miss		Western Kentucky	Troy
.	South Carolina	South Carolina			ULM
.	Tennessee	Tennessee			Western Kentucky
.	Texas A&M	Texas A&M
.	Vanderbilt	Vanderbilt
.	WAC Now	Future WAC		Independents Now	Future Independents
.	Idaho	:(		Army	Army
.	Louisiana Tech			BYU	BYU
.	New Mexico State			Navy	Navy
.	San Jose State			Notre Dame	Notre Dame
.	Texas State
.	Utah State
.

  While the Big East scrambles to stave off its imminent collapse, whether it's by enticing Fresno State and UNLV to join up or begging UConn and Cincinnati to stay put, it can make no tangible promises because there's no TV dollars to back any such pledge.

Television money is the lifeblood of college sports - specifically college football, the second-most valuable property to television networks after the NFL. With the advent of DVRs and streaming services, sports is about the only thing left that can still deliver huge live audiences that advertisers crave. And that, in turn, brings in big bucks.

The Los Angeles Lakers signed a 20-year, $3 billion exclusive deal with the fledgling Time Warner Sportsnet, which commands a whopping $4 per subscriber fee and won a staredown with DirecTV. Just up the street, the Dodgers are expected to one-up that, with a new 25-year deal expected to be worth north of $6 billion. And then there's the mother of all monster deals - the NFL's next TV contract, scheduled to kick in for 2014, is worth about $5 billion annually.

College football has gotten in on the act, with the five major conferences each inking billion-dollar deals in the past two years. The annual payouts roughly go like this:

• Pac-12: $250 million ($20.83 million per school)
• Big Ten: $248 million ($20.67 million)
• Big 12: $200 million ($20 million)
• ACC: $240 million ($17.14 million)
• SEC: $205 million ($14.64 million)
• Notre Dame: $15 million

And please don't cry for the SEC, which is certain to renegotiate its current deal with CBS and ESPN before the next season and launch its own network by 2014. The new pact is expected to bring each SEC school more than $20 million per year.

So who's missing here? Yep, the Big East, the erstwhile member of the big boys' club that's about to get tossed out on its ear after the 2013 season.

The Big East was essentially done in by its own greed. In April 2011, the much-maligned former commissioner John Marinatto had a nine-year, $1.17 billion deal with ESPN on the table, which would've paid its full members about $13.8 million per season and the basketball-only schools $2.5 million. While it wasn't Big Ten money, it was more than commensurate with what the Big East was worth.

But the Big East presidents, including the ones in the "Catholic 7," rejected the deal, thinking they would be able to squeeze more out of it. Turns out, it was a gargantuan miscalculation that left the Big East in today's mess.

The Big East's current TV deal expires after this basketball season and the next football season. With the mass defections this past month, the value of that next contract is dwindling, and no network is all that eager to jump in to make a deal when more schools might abandon ship before long. The latest estimate has the conference getting about $40-$50 million per year - and that's assuming everybody stays put.

An optimistic model of $50 million yields a payout of about $4.17 million per year for the nine full members and $3.13 million per year for the four football-only schools (Boise State, San Diego State, East Carolina and Navy in 2015). It's dwarfed by the payouts in the major conferences, though it's still substantially more than what the Mountain West currently pays, which is around $1 million per school per year.

There is a tug-of-war between the remnants of the Big East and the MWC, vying to be the kingpin of the Group of Five in BCS 2.0. The Big East wants to continue to raid the MWC to pump up its value to potential TV suitors, while the MWC aims to lure Boise State and San Diego State back (though technically they haven't left yet). Both conferences would love to pick off BYU, but neither is likely to succeed because the Cougars are getting about $5-6 million per year from their own TV deal with ESPN as a football independent.

But the MWC apparently has gained the upper hand, according to reports Friday night. The conference's TV deal with CBS, which was to run three more seasons, is being redone as a make-good for the network's decision to shut down The Mtn. While terms of the new deal are undisclosed, its value would only increase if the Broncos decide to stay in the conference. That's why the MWC is now aggressively (re)-courting Boise State, which is clearly the kingmaker in the "Group of Five" universe though it must make a decision on its future soon.

As for the Big East, being demoted in the new BCS landscape is the lesser of its problems, as it's at risk to further disintegrate from more defections the longer it takes to lock down a TV deal. And if the worst-case scenario should happen - UConn and Cincinnati find new homes while Boise State and San Diego State get cold feet before next July - the Big East becomes Conference USA Lite, circa 2004. In that case, it should expect not much more than Conference USA money.

How much is that? C-USA signed its most recent TV deal in early 2011 with FOX and CBS, worth $14 million per year, total.

Reprinted from College Conference Realignment:The TV Money Game in 2013 by Samuel Chi in Sports Nation December 26, 2012

Free Agency and the Amateur Draft

Recently Chad Jenning of The LoHud Yankees Blog wrote:
     "I remember thinking my timing was pretty good. Brian Cashman had been asked about Rafael Soriano over and over and over again, and I happened to be the one on the phone when he finally decided to give a definitive response.

“I will not lose our No. 1 draft pick,” Cashman said. “I would have for Cliff Lee. I won’t lose our No. 1 draft pick for anyone else.”

That was two years ago today, the same day that Buster Olney tweeted about the Yankees being interested in Soriano only if he came “absurdly cheap.” It wasn’t going to happen. The Yankees weren’t willing to give the pick or the money necessary to sign Soriano.  

Of course, within days Soriano was signed and Cashman was publicly explaining that ownership went over his head to get it done."

It got me to thinking about how the compensation rules work regarding free agency and the amateur draft. What I found out is you need a PhD to understand it. What follows is the best explanation I could find. Thanks to Derrick Goold of the St. Louis Post Dispatch.

The concept of draft-pick compensation is nothing new for baseball and its free-agent season. Just last year the St. Louis Cardinals received four picks in the top 60 as compensation for losing free agents Albert Pujols,Edwin Jackson, and Octavio Dotel. The 19th overall pick, the one the Cardinals used to snag pitcher Michael Wacha, was gifted to them from the Los Angeles Angels because they signed Pujols.

The drag created by draft-pick compensation on the market for some free agents is not unique to this winter. It's happened before.

But for a free agent like former Cardinals starter Kyle Lohse, who has been lassoed to draft-pick compensation, this off-season has developed an unexpected hitch on the way to the usual free-agent riches. It's not losing the pick that's the problem. Not this time.

Follow the money.

Only not in the way you think.

This is the money that teams want to spend.

Stick with me here. A prong of the new Collective Bargaining Agreement that has its first run this winter is a change to the draft-pick compensation rules. Instead of the old Type A and Type B way of classifying players for compensation -- Pujols was a Type A, and thus brought two picks-- baseball has streamlined the rule. A qualifying offer is still necessary. The player's current team must still extend a contract offer for the next season to have the right to receive a draft pick.

But this year that offer is the trigger that classifies the player.

A pending free agent must have spent the entire season with the team to offer that team a draft pick. The Cardinals had two such players this past season: Kyle Lohse and Lance Berkman. With the Type A and Type B classifications mothballed, the decision to rank the players as worthy of compensation was up to the Cardinals. All they had to do was extend a qualifying offer for 2013, one that was set by a CBA-defined salary: the average salary of the top 125 free agents from the previous winter. This year, that's price tag was $13.3 million.

The Cardinals decided to offer Lohse a qualifying offer and banked on the righty passing it up to find a multi-year deal elsewhere. (There were corners of the Cardinals' organization that wondered if Lohse might take the sure-thing if he knew the chill the draft-pick compensation might have on his market.) The Cardinals decided not to offer Berkman the $13.3-million contract for 2013 because he would take it.

When Lohse passed on the qualifying offer, the Cardinals assured that they would get a draft pick, one sandwiched between the first and second round.

That pick is increasingly valuable.

Regardless of the player the Cardinals -- or any other team, for that matter -- select, that pick brings immediate and obvious cash value.

It's all about the purse.

Another new element of the current CBA is the bonus cap that is in place for the June amateur draft. All 30 teams are assigned a purse before the draft, and each faces a penalty for spending over that purse. Last year, the Cardinals had to pay a tax because they spent more on bonuses than their assigned $9.1-million cap.

Here is where the new compensation rules and the new draft-cap rule merge: It is doubly costly to lose a draft pick.

A team's bonus cap is calculated on where a team picks in the draft and how many picks that team has. The Astros, who picked No. 1 last season, had a $11.2-million draft bonus purse. A chunk of that, $7.2 million, was based on the fact that they had the No. 1 pick and its "slotted" (or suggested) bonus was $7.2 million. Minnesota had league-high $12.4-million bonus purse, and the Angels had the lowest bonus cap, at $1.7 million for eight picks.

If a team loses a pick through the draft-pick compensation rule, they also lose the projected bonus of that pick from their purse.

This is the real cost of signing Kyle Lohse.

I'll offer two examples to help illustrate how this happens.

Example A. The Oakland Athletics had the 11th overall pick in the 2012 draft, the first pick that would not be protected by the new rules. That pick had a suggested "slot" of $2.625 million. The A's overall bonus purse  was set at $8,469,500, according to Baseball America. Under the current compensation rules, if the A's signed a free agent, say Michael Bourn,  they would lose their pick (11th overall) and have their whole bonus purse recalculated. They would lose 31 percent of their purse.

Example B. The Cardinals had 14 picks going into the 2012 draft and the $9.1 million purse. With fewer picks, their bonus budget will also be lower in 2013. They are set to have the 20th overall pick, and that was slotted at $1.85 million. Let's say they sign Bourn in a sudden spending spree next week. That could take at least 25 percent from their purse.

What does that mean?

Well, consider that not all draft picks get their suggested slot. The suggested slot for the 86th overall pick in the 2012 draft was $574,500. The Cardinals used that pick to take prep third baseman Carson Kelly, and to sign him they had to offer a $1.6-million bonus, the largest for any player in the second round. The Cardinals were able to do that by a) saving space from their bonuses elsewhere in the top 10 rounds and b) going over their purse.

Signing a free agent like Lohse means losing the budget for that bonus.

Losing that slotted bonus means having less flexibility and means altering a draft strategy. The average suggested slot for picks Nos. 11 through 30 in 2012 was $1.7 million. That's big chunk to slice from an assigned purse of $9 million or less. It ties hands.

This is money teams are eager to spend.

There are two pitchers with Cardinals' ties who will be used to personify this conflict. By any measure, Lohse had a better season than Jackson in 2012. And while Jackson is younger, the speculation entering the winter was that Lohse was likely to get a richer contract. It's the first week of January and Jackson finalized a four-year, $52-million contract with the Chicago Cubs today. Lohse is unsigned.

Half of the players who received qualifying offers are unsigned.

CBS Sports baseball writer Dayn Perry has a much more-detailed primer on the new draft-pick compensation rules. ESPN's Buster Olney was one of the first to identify the ripple-effect of those rules, and a few weeks ago he suggested a way agents and teams might find a way around the cash cost. And this morning Dave Cameron, at Fangraphs.com, explores how to modify the new rule and why it hasn't had the intended effect. This is a brilliant observation:

The main issue, as I see it, is the imbalance of incentives on the two sides of the compensation ledger. In tweaking the system, the new agreement simultaneously raised the penalty for signing a player — only the first 10 picks are now protected, and the slotted values means that a team cannot make up for the loss of a high pick by paying more for players drafted with later selections — while reducing the reward of letting a player walk ...

This past season, Lohse privately got a kick out of the wonks who suggested that he had a skill for timing a career year on the eve of free agency. Lohse won 15 games for the Cardinals in 2008 and never hit the open market as the Cardinals signed him for more than $40 million for the next four seasons. This past season, he went 16-3 with a 2.86 ERA and received votes on several Cy Young Award ballots, including (full disclosure alert), mine. It appeared that unlike the last time he was a free agent he wouldn't be waiting and waiting and waiting on a market that, in 2007-08, didn't put him with a team until mid-March. His timing was applauded.

Not so fast.