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Imagine, for a moment, that Bayern Munich and Borussia Dortmund decided they didn’t like the broadcast revenue opportunities they had within the Bundesliga and formed an agreement to join the English Premier League. Fans of European football would be agog, for such a move would destabilise top-flight German sport.
While no such thing has happened in German football, the scenario is an approximate parallel for what has actually taken place this month in US college football (the American kind). Over the past few weeks, five major universities have announced defections from the Pac-12 Conference, the West Coast network of college sports, in effect ending more than a century of sporting tradition.
Conference realignment — as the process of universities swapping one regional network for another is known — is a function of chasing ever-higher broadcast fees. As the broader media landscape is upended by the rise of streaming and direct-to-consumer platforms, and ongoing labour strikes in Hollywood affecting scripted programming, live sports are still considered a safe bet for traditional media companies. Even Amazon, Google’s YouTube, Apple and Facebook owner Meta have each recently begun or committed to airing live sports.
This is why the dynamics in college sports are worth paying attention to: they are the second most-watched live programming in the US, after the National Football League. Currently, the two largest beneficiaries of college musical chairs, the Big Ten Conference and the Southeastern Conference, have media rights packages worth $7.5bn and $3bn respectively.
The collapse of the Pac-12 is the result of a confluence of factors, according to network programming executives, university presidents, and media agency insiders who help negotiate deals. Among them: dissatisfaction with a tentative offer from Apple which would pay at least $23mn per year per school, which some universities felt wasn’t enough to be competitive with other conferences.
Media companies, on the other hand, have different considerations. Disney is in the midst of a rethink of its television business, including ABC and sports behemoth ESPN. Fox, Comcast’s NBC and Paramount’s CBS have a plethora of live sports commitments, including the record deal with the Big Ten and a broad portfolio of other programming, from the NFL to the Olympics to pro golf.
“I’m a believer that beachfront real estate will always command premium dollars”, Jon Miller, president of acquisitions and partnerships at NBC Sports, tells me. Those “beachfront” properties in live sports include, by his measure, the NFL, Big Ten college sports, the Olympics (all of which the network has rights to), as well as some others NBC doesn’t currently have, such as SEC college sports and the NBA, which is currently in the early stages of discussing its next media rights deal.
But Miller and other programming executives suggest there isn’t a limitless appetite for all live sports programming. “There’s only four broadcast networks”, Miller says. “And obviously that broadcast premium that goes to 125mn households becomes even more valuable.”
One agent I spoke to says there has been an overestimation on the part of some rights holders — sports leagues, conferences, or tours — on just how much media companies have to spend on broadcast fees. “Every Tom Dick and Harry thinks they can just go and get an increase on deals,” the person says.
The competition schedule for college sports has long been devolved to regional conferences, but some market consolidation might now be in the offing. “If you want the NBA, there’s only one place to buy the NBA. If you want college [sports], you can go to 10 or 11 different places”, the agent says
That may be a lesson for other leagues. Professional tennis has long flirted with combining the men’s and women’s tours, in part to increase media rights opportunities. The future of golf is an open question, amid a proposed tie-up between the PGA Tour and Saudi Arabia-backed LIV Golf, which itself was founded to challenge the hegemony of the US-based organisation on the global sport.
The impact of the retrenchment in live sports rights could be devastating for some colleges and for American students, millions of whom seek admission through athletic scholarships.
Another network programmer tells me that “the day is . . . coming” when colleges will have to decide whether they still want to “participate in the bigger business of sports”.
