Finance Media Uncategorized

Louisville likely would have cost ACC $6 million by beating Florida State

College football teams have a lot more to lose than a playoff spot in the College Football Playoff system.

(Andrew Weber-USA TODAY Sports)
(Andrew Weber-USA TODAY Sports)

Given the inaugural College Football Playoff rankings release and the near upset of No. 2 Florida State this week, it’s a good time to examine financial implications of the season’s remaining games.

Exhibit A: Louisville would have cost the ACC $6 million had the Cardinals held on to defeat Florida State on Thursday.

The College Football Playoff distributes $6 million to the conference of each of its semifinals participants, and Florida State likely would have slipped out of the top 4 with a loss. That money is generated largely from the mammoth $600 million per year television deal with ESPN for the rights to broadcast the playoff and four contract bowl games. There are also myriad corporate sponsors supporting the College Football Playoff, including Dr. Pepper, the presenting sponsor of the National Championship Trophy.

(Photo by Kevin C. Cox/Getty Images)
(Photo by Kevin C. Cox/Getty Images)

In addition to the payments for playoff participants, the ACC, Big 12, Big Ten, Pac-12 and SEC each will earn approximately $50 million from the College Football Playoff. The other five non-Power 5 conferences split $75 million. Conferences may distribute these payments as they please, yet the cash is typically dispersed evenly among member institutions. That means a conference bottom-dweller such as Vanderbilt gets the same cut as what Mississippi State or another SEC team might earn by making the playoff. An additional $2 million goes to the conference of a playoff and championship game participant and is distributed for expenses.

Things are going to get interesting within the first week, especially if the loser of the Auburn (No. 3) versus Ole Miss (No. 4) game is replaced by Oregon, which currently lingers at No. 5 in the rankings. This would give the Pac-12 an entry into the playoff and set up its conference schools for a bonus payment if Oregon holds on to that spot until December’s final playoff rankings.

(AP Photo/Brynn Anderson)
(AP Photo/Brynn Anderson)

One other critical factor is the impact on the non-Power 5 conference that’s able to land a team in one of the contract bowl games. East Carolina, for example, is in the driver’s seat based on having the highest ranking (No. 23) of a non-Power 5 team. AAC athletic departments would share $4 million if ECU wins out, remains the highest-ranked non-Power 5 team and gains entry to a contract bowl. With only conference games remaining, an AAC foe would cost its conference schools a payday by knocking off ECU. And a shared $4 million means more to non-Power 5 conference schools that don’t generate enormous athletics revenue.

A lot can happen on the field in the remaining six weeks to dictate which teams end up slotted in the College Football Playoff and remaining contract bowls. But with the big money committed by ESPN and other corporate sponsors, we’ll be keeping our eye on the matchups that determine which conferences get the biggest piece of the pie.

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