You're listening. To the Back Home Network presented by Home Field Apparel. Welcome back to Crimson Cast folks. Galen Clavio here. We've got a mini episode today and we're excited about it. We've got our good friend Andy Whittry back once again joining us on the show as we've got some more college sports business to discuss here today. Some news that came down yesterday. We're trying to do some more episodes like this where we we had a topic, we don't need to do
an hour, we can do 10 minutes. So we're gonna do 10 minutes on this topic and and just kind of feel out where it's at and kind of give people an update on where things are going cuz I think it'll be of interest to you folks out in the audience. First of all, Andy, great to see you and talk with you again how, how are things going? Things are good. I told you I'm wearing my Georgia Bulldogs hoodie. Have no affiliation with Georgia.
This is not some like Tom cream bit, but if we're here to talk, a bunch of 15 and 17 Power Five schools, I thought was dressed for the occasion. So I'm ready to talk about a 16 team conference. Tournament that frankly, no one asked for. So let's do it. Yeah, this is a really fascinating area. We're going to talk through this first. Just a reminder to everybody that we are part of the back home network here at Crimson Cast.
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at this point. But there's also Bomber Jacket time, which is coming up pretty soon as the weather gets a little bit colder. Go to homefieldapparel.com, use the code home, HOME. Get 15% off your first order. All right, so let's talk about what Andy referred to. And that is this news that came down yesterday, which was reported, I think, originally by Seth Davis.
And essentially what it said was that Fox Sports are our old friends, are in negotiations with several power conferences to, quote, hold a postseason men's basketball tournament in Las Vegas featuring teams that did not qualify for the NCAA tournament. And as Andy pointed out, it's intended to include sixteen teams. And they would play during the final week of March at T-Mobile Arena, which is where the Vegas Golden Knights play.
And I think there's like two or three power conference tournaments or regular conference tournaments that play there as well. So there's a lot to unpack with this. First of all, you're absolutely right. If I were to pick the team that was most likely to be in this tournament, of all of the teams in the power conferences, Georgia would be, I think, the absolute first pick, probably closely followed by Minnesota, you know, So these are the kinds of programs we would likely see.
Rutgers would be a regular participant in this. There's a bunch of things I think that need to be talked
about right off the bat. So first of all what you said this is a tournament that nobody really asked for and it is essentially a tournament that is in direct competition with the NIT and you know that's been something that really has been brought out There were some quotes in a sports sorry was that this was A and that's the IT was an si.com piece from Gonzaga Nation. Dan Dickow the the the Gonzaga alum and great who played basketball for them had a quote
saying that this tournament has proposed quote it will completely destroy the NIT tournament and it's going to create an even bigger gap between your haves and have nots in college athletics. And Andy, let's kind of start there. It it looks like a proposal that is 100% aimed at the NIT tournament and trying to cut it off at the knees basically. It really was. And there's no sort of, you know, NIT traditionalist that existed and probably since like the 1940s, right?
Like no one is clamoring for, oh, we we need the NIT. But I think it was the latter point of Dan Dickows quote, something that Matt Brown addressed today in the Extra Points newsletter, which I highly recommend. Is this more of the the representation of what this means? It's not that this is going to kill the NIT, although it might it it's what does this mean if a broadcaster has this kind of leverage?
And can make this kind of chess move frankly and say, you know what, we're going to create our own tournament. We'll stage it ourselves. You've mentioned to me over text the angle of supplementary revenue of can this generate a few extra million for some of these power conferences? Is that what if this is just the first step towards the eventual breakaway of of, you know, high major schools and forming their own tournament? Is that this is just step one?
What is step three or four look like? If this thing is a success and however we even measure success for the tournament like this. Yeah, I I think there's two main pieces and you kind of brought up all of them. So the first is this idea of, you know, if you're paying attention to the sports media landscape, there is a clear belt tightening happening on the network side, which is where all
the money has come from. I mean ESPN lost the entire first couple of weeks of college football and almost lost the Monday Night Football game last night to you know, to not having people who are on Charter or Spectrum cable, which is like 10% or 15% of cable households in the United States, like it just wasn't on. And then they they made a deal yesterday. So Monday Night Football was on. You know both sides gave up some concessions.
I think ESPN and Disney kind of won that battle a little bit. But that's a that's a shot across the bow in terms of how the revenue structure is working right now.
In as much as ESPN does not have a limitless supply of revenue forever coming in and cable providers are going to start looking at the amount of money that they're paying to Disney and ESPN and saying you know what, especially if you're going to go over the top, if you're going to go direct to consumer, why are we paying you this extra money when most of our users of cable don't use this service in the 1st place.
And so I think you know, part of it is the conference is looking around and saying uh oh okay, that's may not, that's not affecting us in the current negotiation for media rights because there's a lot of those have been signed. But what about the next one? What about, you know, the the next SEC negotiation? What about the next Big 10 negotiation which leads then to looking at their media partners and saying where can you find us additional revenue?
And much like Fox did with finding extra money to bring Oregon and Washington into the Big 10 in in football and all sports, this to me strikes me as a way for Fox to say, hey, look, we can create something that may not be initially successful, but this is clearly going to be a new source of revenue that isn't already there, that we might be able to pay directly to you, the power conferences who are part of it.
I think what is interesting too Galen you mentioned is this actually a play that the conferences sort of floated almost like inception wise through the networks you know through Fox. And I think that Bret your mark to maybe bring this full circle and I, you guy I think the father of an I U alarm or current I U student. He's been very active in pushing college basketballs basketball as far as the value, you know that he sends it out. What if we break that apart from the football rights?
And that is almost its own TV package. Yeah. Well, it's taking the Big 12 to mix it. He's taking them to New York City. Yeah. And is this a way that he's looking for that around the margins revenue that you mentioned? Yeah, I mean, I so I think it's important for people to understand what like where does the money go? Like, why is why is football considered more valuable than basketball? And part of the reason is football. And the money from football is
not controlled by the NCAA. It's controlled by the conferences and Notre Dame. And they're the ones that make the deals directly with the networks. They're the ones that make the deals for the College Football Playoff collectively and then they get the money and distribute it. It isn't shared with all of the schools, all what, 10-11 hundred schools in the NCAA. That's not the case with basketball. Basketball is controlled, at least the tournament is
controlled by the NCAA. Teams are paid out in wind shares. You know, so you know you're you get 8 teams in the tournament and depending on where they finish in the tournament, you're going to get X number of wind shares and then that is paid out on a five year rolling average. Very convoluted system, but that's 8085% of the NCAA's operating budget comes just off of what they make off the men's NCAA tournament which is like a billion or a billion 1A year.
Looking at this, I mean, you look at it, it's like, well, it's, you know, Charlie Baker, the NCAA commissioner, specifically asked FOX don't do this. Like please do not do this because we're worried about the NIT, the same tournament they they tried to kill and then took over 20 years ago. I mean, just keep in mind. So it's I I I've got a little bit of a suspicion about how authentic those concerns are for the NIT on the part of the NCAA.
But they're looking at this and they're saying right now we control essentially almost all of the postseason revenue. They don't control the CB. I I don't think the CIT even exists anymore, and that was minuscule anyway. But they're controlling all the revenue for the top 96 teams basically in college basketball, peeling away even a part of
that. And showing power conference schools and the power conferences themselves that, hey, you don't have to have 40% of the revenue that your teams are generating going to like Montclair State or or Hanover or, you know, whatever small college that you know is part of the NCAA but isn't. Division One like that is not to be that way. Instead, what we can do is set up a deal directly with you pay the conferences that are
participating the money. You keep more of the money and we can probably generate more because we can leverage our assets from a commercial perspective to bring additional revenue in that the NCAA can't do by subcontracting at all to ESPN. You know, the way that they're doing it right now. It really is a flank right.
It's a way that you can kind of get outside the current purview of the in state of life governance structure and all the finances you just touched on. And that's why I think it is concerning if not the immediacy of it. But is it forecasting what lies ahead. And we've seen with the current summer realignment, the power that Fox and especially ESPN have been really dictating. Who are you going to pay for? What schools, what brands, who
draws eyeballs? And this is sort of a corollary to that of a new tournament that's Fox controlled. Based on their their inventory, what schools are part of that? And I don't know who's going to wash it outside of some really sicko betters, but it's kind of the forecasting of how concerning is this for the future of this whole entity. Yeah, well, it is. And and look, I think the, the larger item that the NCAA should really be worried about is what
you just said. I mean, we always hear like college basketball not as not as valuable as college football, and it probably never will be because football is just so much more popular as a sport. But I also think there's a real argument to be made from a market perspective that the NCAA's management of the NCAA tournament and the overall lack of leadership around college basketball has to some degree artificially lowered the current market value of the product.
The product is loved by a lot of people. Lot of people really love college basketball.
But because there's nobody in charge of the sport and because the tournament is still organized in essentially the exact same way it was organized in 1979, that, you know, quite frankly, there's there's, you know it, it it serves a different purpose than what a lot of the conferences and the schools are interested in. And in an era, as we're seeing in college football, where you're likely to see maybe about half of the FBS subdivision dropped to a lower tier from a
revenue generation perspective because the top schools are like, hey, why are we just spreading this money around? Why aren't we consolidating it and keeping it ourselves? There's a real good chance a similar thing might happen in college basketball. And I know fans don't want to see that, but that's what schools and conferences want to see. And that's ultimately who's
making a lot of these decisions. I don't know if it's too much of A stretch compare this to like the live Golf Tumor or some sort of like true horse, but we've seen for I feel like a year, year and a half now Galen that there's been for this trial balloon of would have expanded by tournament to 96 or to the high 80s. And a lot of traditionalists and purists, which I think will be the overall majority of fans and observers, seem pretty against that.
I don't know what the practical implications would be of an expanded bracket, but. 64 and then 65. Now 68 feels like a pretty good number, fits perfectly. And 8 1/2 by 11 sheet of paper. People love the bracket. Is that. I do wonder, is this some sort of sacrificial lamb? If you know what, we're going to float this, if they have to, to kill that to maybe increase the size of the tournament, increase the field size.
Because you think about conferences, It will now be 18 teams and potentially more in the future. If you're one of these bigger conferences, you're the Big 10 and you want now. 12/13/14 schools, to get a bid, something has to give, right? Because it is 6018 tournament you're showing probably is what, 10 bids, I'd say.
But now if you're going to be a really solid, I don't know, UCL squad in five years and you're going to finish 10th or 11th and you're in the bubble, the Big 10 doesn't want that. So is this some way to actually create some leverage artificially by saying, you know what, we'll have this new tournament? But OK, if you expand the field maybe we'll we'll kill this off or change the format. I I don't know if that's the new, but that did cross my mind
as well. Well, the other one other thing I'll note in this and this will will end on this note, in the original reporting, there's only three conferences involved in this. It's not all the power conferences, it's the Big 10. It's the Big 12 and it's the Big East. And what do all those have in common? They have a direct tie in with FOX. This is a FOX sponsored tournament. You know who's not involved in
this is the ACC. And and that that's a huge thing to keep in mind because we've already seen these fault lines drawn when it comes to college football and who's tied in with what. And a lot of these items that we're seeing in college football are predicated on Fox and to a lesser extent CBS and NBC chipping away at the ESPN hegemony that has existed for years around college football.
And they're succeeding because ESPN, to some degree has allowed themselves to get outflanked by connecting themselves so closely with the SEC and the ACC. And so for Fox, not just to, you know, design this, but basically say, hey, if you're a close partner of ours, if you're Big 12, Big 10, a Big East, you're going to be not only invited, but you're going to get to share in this extra revenue that the SEC&ACC schools aren't.
Now you're getting an even greater bifurcation existing in college sports where it's not just about power versus non power, but it's about who did what horse did you bet on 10 years ago, 15 years ago in terms of your media partners and your overall revenue structure. That's why I think this proposal might be the best maybe for those second, third conferences, the Big 12 in the Big East, because the Big 10, as we know, will have no shortage of revenue.
They'll always want more, but they'll have no shortage relatively SEC and the rest of the conferences. But when the Big 12 is positioning itself for. 3rd place, if you will, in the Big East. Where does that factor in? In the basketball landscape? Where does an extra, you know, I don't know, 5 or 10 million go for those conferences in the schools.
That might mean more for the Big 12 and Big East than this new bloated Big 10. Especially going back to Bret, your remark, the love of basketball and looking for new opportunities there. If that's you know Big 12 versus ACC and the people know has this tie in and the ACC does not and they still have the infighting with Clemson and Florida State and North Carolina. That might go a long way around the edges, especially as far as the messaging and how aggressive
the Big 12 has been. I do think that's certainly an angle to watch. Yeah. And I'll I'll end on this. Maybe this is the actual strategic alliance that the Big 10, Big 12, Big East, not the Big 10, ACC, PAC 12, one that got floated 2 years ago and then immediately got destroyed. So, Andy, some fascinating stuff is always here. And any final thoughts from you,
I guess, before we wrap up? I would say unlike the actual alliance from 2 summers ago, there would be an actual contract, presumably not just a bunch of grown men making eye contact and shaking hands. Presumably you'd think there would be an actual, you know, pen to paper agreement to keep these people in line, unlike Jim Phillips, George Cliff Cough and Kevin Warren. Yep, that's.
I think you're probably right because I'm guessing this is being drawn up at the network level, not necessarily at the conference level. So you can be sure that they'll be some actual ink on paper with this. Anyway, as always, great to have our friend Andy Whittree joining us. We'll hopefully have him on more throughout the course of the fall.
Because Andy, I got a sense that college sports business not going anywhere for a while, probably going to have some stories coming out of this on a regular basis. So. So thank you for joining us and thanks all you folks for listening in. Thanks to our partners at the Back Home Network. Thanks to our presenting sponsor, Home Field Apparel. We'll be back later on this week. We got a big I U Louisville football preview, keep an eye out for that. Until then.
I'm Galen Clavio for Crimson Cast. We'll catch you folks on the flip side. Bring back the Bison. So long, everybody.