This time it’s for real.

Okay, no surprise:  your average P5 AD is… well, average.  He/She operates in a world where it’s expected that all the money rolling in will be spent on something.  And since that something isn’t labor-related expense, outsized amounts are going to flow to people like Bobby Petrino and Charlie Weis.  It’s the nature of the beast.

The funny part is how these folks expect to be perceived as shrewd business people.

That’s not the funniest part, though.  Now they want you to believe that the coronavirus has taught them a lesson and that, going forward, it’s not going to be business as usual.  Cross their hearts and hope to die ($$).

“For now, the days of buying out coaches’ contracts like drunken sailors are gone,” one Division I athletic director said on the condition of anonymity in order to speak freely.

Something that won’t happen this fall that did last fall: a school paying a $20 million buyout to get rid of a head coach before the end of his second full season, as Florida State did with Willie Taggart, then hiring a new staff. There’s no way to justify something like that in this financial climate.

“No,” Castiglione said. “There’s not.”

One senior administrator referred to it as “course-correction.” Another used the term “recalibration.” Either way, it could be one area of college athletics that faces something of a reckoning in the coming months and years. And after years of skyrocketing salaries for head football and head men’s basketball coaches with leverage largely in their agents’ hands, it comes as welcome news to those in athletic departments.

I’m sure Jimmy Sexton went to bed last night with the cold sweats thinking about how much harder it’s going to be negotiating with an athletic director who would only talk tough anonymously.

Here’s what “recalibration” actually looks like.

But on the other side of the pandemic — once we reach the middle of the decade — two expanded revenue streams suggest a bright outlook for budgets:

1) As Navigate explained in December, the (seemingly inevitable) expansion of the College Football Playoff would be highly lucrative:

“Based on the average payout by ESPN on a per-TV-viewer basis, we estimate that an expansion to eight teams would bring in at least another $420 million per year, and expansion to 16 teams would add another $560 million annually.

“That’s tens of millions of dollars in additional revenue for the conferences — and millions for the individual schools.

“Combine that with the current payout for the four-team event, $467 million per year from ESPN, and the total for eight teams would be $887 million per year. A 16-team event would generate up to $1.45 billion per year.”

2) The next round of media rights deals will bring massive cash to the Power Five, as well.

Navigate’s latest projections call for an increase in value of 50-to-100 percent.

“The next set of TV deals, we believe, will be enriched, not harmed, by what’s happening right now — that shift toward home (viewing),’’ Maestas said.

“We’re about to release projections, and it’s roughly a 50-to-100 percent jump in TV money for all the conferences other than the ACC; they’re just stuck in a very long deal.

“This return to a new normal (after Covid-19) — these universities won’t be down for long. All those deals come up in the next four or five years. That means every major Power Five will take another significant step forward in their budgets.”

Yeah, that’s some day of reckoning coming.  Be afraid, Jimmy.  Be very, very afraid.

9 Comments

Filed under It's All Just Made Up And Flagellant, It's Just Bidness

9 responses to “This time it’s for real.

  1. This post is a perfect example of why I enjoy this blog so much. Thanks, Senator.

    Liked by 1 person

  2. Cynical Dawg

    The folks in the sports media industrial complex are delusional. The dumbest phrase I’ve ever heard is, “If you build it, they will come”. Every day that goes by is a day that Americans realize that organized sports are the most overrated and most expendable activity in our society.

    Liked by 1 person

    • PTC DAWG

      Until you realize what they generate for the economy…

      Like

      • Cynical Dawg

        They generate a ton of money for owners and shareholders. Not so much for the rank and file. Think about this…all sports worldwide shut down indefinitely and no one protested. The sun keeps coming up every morning without sports and no one has gone off the deep end. The truth is that sports are NOT THAT IMPORTANT to the majority of people around the world. As the days go by, more and more people will find other ways to occupy their time and games will become less and less important.

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  3. Russ

    It will crash eventually, though. I guess the huge hit Disney is taking through this time will be a big impetus for expanding the playoffs, but not sure how much extra money that will mean.

    I agree with you on the lack of negotiating skills by the ADs.

    Like

  4. 123fakest

    How soon before College Football departments who need/want to renovate or build a new stadium will start building 25-40,000 seat stadiums?

    The demand to see these events in person shrink every year, including the big boys. Personally, I dgas about watching the game in person. It’s more for the “experience”, and boy has that experience been a PITA over the last 5-10 years.

    Let it all crumble. I dgas.

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    • ATL Dawg

      If they thought they had attendance problems before this, the next few years are going to be very painful.

      Unless this virus disappears in the next 2-3 months (and the experts say that it won’t), ticket demand is about to go in the toilet for a while.

      Like

  5. Corporate Welfare Donor

    To be fair, and not to defend ADs by any stretch, many American corporations are also staggering amid the Covid-19 shocks.

    In fact, quite a few of them have gobbled up corporate welfare in the relief packages (in addition to the subsidies some receive and the tax avoidance strategies many already employ). Dodge US taxes while receiving taxpayer bailout money? The American Way! Hopefully everyone will forget about this (spoiler alert: they will) before it’s time to resume share buyback plans to boost my 401k and equity holdings. Sorry, workers!

    Like the ADs, CEOs will also proclaim to have learned difficult lessons. ADs are not alone in being mistaken for shrewd business people.

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  6. Mayor

    Time for the P5 to withdraw from the NCAA and form their own organization.

    Like