I appreciate all comments, but I cannot respond to any on this one since I am on vacation today through the end of the week. Happy Spring Break, Charlotteans.
Tony Barnhart reported on Monday that the Big Ten is seriously thinking about expanding to 16 teams. Rumors to that effect have been thrown around for a while, but this is the first time I can think of where a credible reporter has attempted to lend credible weight behind it.
Any expansion is predicated on making more money, of course, and there are two general ways for an organization to make more money than it currently does: grow or optimize.
The increasing money available for college athletics in the past two decade has been all about growth. If the Big Ten goes up to 16 teams, that's obviously about growth as well. In fact, it's a rather big bet on growth since that would give the conference five more
mouths budgets to feed.
Now as economists go, I'm but an amateur. I am fairly good at pattern recognition though, and I've noticed one when it involved people losing their minds over money. The point at which robust expansion turns into irrational exuberance is often marked by exponential growth of some sort. When that exponential growth is paired with an absurdity or two, then it's even stronger. That was the case with the dot-com bubble (Webvan delivers $0.48 rolls of LifeSavers for free?) and with the recent housing bubble (a $720,00 loan to a guy making $14,000 a year?).
The money in college football has been rising dramatically in recent years. I don't have a nice exponential chart I can show you, but if the growth of the last 10-20 years isn't exponential, it's fairly close. The SEC's TV contract is enormous. Some coordinators make more than head coaches did 15 years ago. The money pot has been swelling up faster than ever.
We are not without absurdities though. The average value of Division I-A football coaching contracts at public institutions rose 46 percent between 2006 and 2009. That happened despite there being the worst economic climate since the Great Depression setting in. Last year, roughly $1.8 billion of university funds from things like tuition and student fees went towards filling in athletics department shortfalls among Division I alone according to a USA Today analysis. Heck, Les Miles is technically guaranteed to be the highest paid head coach in the SEC according to the letter of his contract.
I don't know when the explosive growth of college football will stop, but it will end. Nothing can grow exponentially forever. I'm not predicting a crash of some sort; that will only come if a judge somewhere rules that colleges must pay salaries to student-athletes. It will level off though, and I'd bet that it'll happen sooner than later.
So if things are going to level off soon, that means that a big expansion by the Big Ten will only be worth it if the league can get a rich, long term contract with ESPN like the SEC did. Some sort of rich, long-term deal will be available, but it will not be as big as the SEC's since the Big Ten won't be ordering up an SEC Network-style regional syndication package to be run by ESPN. Also, the Big Ten's ability to maximize its revenue with ESPN is limited since the SEC has locked up many of the preferred positions on ESPN's slate and the Big 12 and especially Pac-10 would love to trade their substandard deals with Fox Sports Net for a better slice of the Disney owned pie.
Those realities place a huge burden on the ability of the Big Ten Network to generate money. It's working out very well right now, but can it cover an extra five schools' worth of needs even with a larger reach? Most of the expansion targets either bring little to the table due to apathy about college football (New Jersey, Connecticut, New York) or already being covered in whole or in part by the BTN (Indiana, Pennsylvania).
That's just the growth angle though. What about optimization? Optimization is very important once aggressive expansion is over. It's how a business gets the most out of what it has. The catch though is that historically, optimization has been a foreign concept to college sports. It's always been about growth.
What happens if the Big Ten expands to 16 and some of the new schools end up as dead weight? Rutgers would be an obvious candidate for that, as would UConn if the basketball program goes south after Jim Calhoun is done in Storrs. Forget the new teams for a second though. Indiana is in danger of being there if the basketball program can't turn around, and Northwestern probably is closer to being dead weight than a real contributor too.
Once a conference expands, it becomes very difficult to contract it back down nicely. So far, the only precedent along those lines is the Big East evicting Temple, but it was a football-only member anyway. If this thing doesn't end up working, what's the backout plan? Would several schools leave a conference if they knew they could be sent right back out by the existing Big Ten members if the new arrangement fails, especially if they're reasonably sure their old conference (i.e. the Big East) would bite the dust?
The only way optimization really happens is probably once we get to the point when the 40 or so biggest programs leave the NCAA entirely or at least strongarm their way to making their own division above everyone else. Aside from that, there would probably be an extremely messy situation like what happened to the old 16-team WAC where a bunch of teams broke off to make a new conference. You better believe Jim Delaney wants anything but that to happen to his baby.
Either way you look at it, a 16-team league doesn't make sense. I have a feeling Delaney knows that, because of all the things he is, stupid is not one of them. The only question left is just what kind of a smokescreen is it for? I've been assuming all along that the Big Ten is expanding with Notre Dame or not at all, and Notre Dame is the one program the Big Ten can't really expand without. What part of this 16-team league talk is going to entice the recalcitrant Irish to finally join up?
Anyway, if this does come to pass, grab some popcorn. The explosion at the end would be epic.