Story by
Possible CFP expansion could increase revenue to more than $2 billion
- Story by
- Possible CFP expansion could increase revenue to more than $2 billion
The prospective expansion of the College Football Playoff to 12 teams from its current four could increase the average annual value of the event from about $600 million to more than $2 billion, according to a projection provided to USA TODAY Sports by a firm specializing in college and professional sports rights valuations.
The figures, from Chicago-based Navigate, are based on a set of assumptions that begin with recent increases in media rights deals negotiated by the NFL, NHL and the Southeastern Conference. Those increases, on a per-TV-viewer basis, have been running at a little more than 50%, said Matt Balvanz, Navigate's senior vice president for analytics and innovation.
Advertisement
Because of the many unknowns in how revenue from an expanded CFP would be divided, it is difficult to estimate how much more money the participating conferences – and, thus, their respective schools — would end up with.
For the 2019-20 season, which was not affected by the COVID-19 pandemic, the Power Five conferences each received base amounts of about $67 million, according to figures on the CFP's website. Those conferences got an additional $6 million for each team selected to play in a semifinal.
The Group of Five conferences shared a combined base amount of $92 million.
Balvanz said that even though traditional TV audience numbers, as measured by the Nielsen ratings, have been declining as viewers drop cable and satellite packages, content providers have been able to reach consumers in different ways that have been able to "make up for any TV decline."
Advertisement
Navigate bases its figures primarily on its assessment of the CFP's per-viewer value to its current media partner ESPN — that is, the amount per viewer that Navigate calculates ESPN is able to generate in advertising and sponsorship revenue and subscriber fees from carrying the games across its various platforms.
EVEN DOZEN: Group recommends CFP expansion to 12 teams
OPINION: CFP expansion long time coming, but still controversial, writes Dan Wolken
ANALYSIS: How CFP would have looked last year with 12 teams
'CASH GRAB': Two senators criticize proposed CFP expansion
Navigate's current calculation of this is $6.75 per viewer. When multiplied by the total audience for the three current CFP games of about 70 million, that's $470 million.
Advertisement
Using a projected future value of $10.40 per viewer and an expected total combined audience of 183 million for 11 games that would exist under the format recommended Thursday by a CFP subcommittee, that's about $1.9 billion.
Factor in likely increases in other revenue streams, such as ticket sales, sponsorships and merchandising — which Navigate estimates as accounting for about 10% to 15% of the CFP's revenue — and the total average annual value of the event moves above $2 billion.
And depending on how aggressive the CFP's management is in its efforts with marketing and sponsorship programs, the number could be even greater.
"There is room for them to be more creative," Balvanz said. "The Super Bowl is the only thing that is more popular than this in the United States."
Follow colleges reporter Steve Berkowitz on Twitter @ByBerkowitz
This article originally appeared on USA TODAY: College Football Playoff potential expansion could push revenue to $2B
