Expanded College Football Playoff Could Triple Payout

Projected numbers released late last week by consulting firm Navigate Research values an 11-game College Football Playoff at $1.9 billion a year — a 212 percent increase over payouts realized using the current three-game format.

As reported by Stewart Mandel of The Athletic, college football’s national championship is typically the most watched non-NFL-related sporting event of the year, and ESPN will be heavily incentivized to pay whatever it takes to retain its CFP rights. If all parties can agree to terms on a new contract that replaces the current one (which runs through the 2026 season) and implements a new model sooner (likely 2023), the network would avoid losing some or all of the event if it goes up for bid on an open market.

Matt Balvanz, Navigate’s senior vice president for analytics and research, said the projections are based on observing a roughly 50 percent increase in per-viewer revenue in recent deals for the NFL, NHL and other leagues; an anticipated 25 percent round-over-round increase in viewers, as has historically been the case with the CFP semifinals and championship; and an average 8 percent annual bump in advertising fees charged by the networks, The Athletic reported.

“In layman’s terms, the market has basically doubled from one deal to the next, and you’re seeing it in all these other deals that are getting done,” Balvanz said. “Just the three (current CFP) games, that’s going to be worth twice as much in the next deal round, and that was always to be expected. Part of the growth is you’re getting more per viewer from the New Year’s Six bowls. And now you’re adding four new (first-round) games that weren’t there before.

“I’ve seen articles mention (the value) could ‘double or triple. I would side more with the tripling. All the evidence is there, given how bullish it appears media companies are on live sports rights.”

Navigate applied the CFP’s current revenue distribution formula to a possible new deal and found that future paydays for Power 5 schools could be enough to cover an entire athletic department’s annual coaches’ salaries. In 2019-20, the most recent season for which the CFP publicized its data, each Power 5 league got a flat fee of $67 million. A conference could net an additional $4 million for each team that qualified for a New Year’s Six bowl and $6 million for reaching a Playoff semifinal. Power 5 conferences also net extra payments for their contracts with the Rose (average $40 million per team), Sugar ($40 million) and Orange ($27.5 million) bowls. With all those contracts folded into one, the expected average CFP revenue for each Power 5 conference jumps to just north of $320 million, according to The Athletic.

Group of 5 conferences, meanwhile, share a CFP cut that in 2019-20 was $92 million — about 16 percent of the Power 5’s combined take. Were that same formula replicated under the new projections, that payout would jump to $254 million, or about $4.2 million per school, up from $1.5 million, Mandel reported.

“This proposal at its heart was created to provide more participation for more players and more schools,” CFP executive director Bill Hancock said. “In a nutshell, that is the working group’s message: more participation."