2023 has been marked by a whirlwind of conference changes among the NCAA’s “Power 5” (P5) athletic conferences. These include the Atlantic Coast Conference (ACC), the Big Ten (Midwest), the Big 12 (Great Plains + Texas), the Pacific Coast Conference (PAC 10, 12, or 2, depending on when you asked), and the Southeastern Conference (SEC). Originally, these conferences were structured around geographical considerations to accommodate the nation’s most prestigious athletic programs. While this geographical orientation remains relevant for most collegiate sports, the dominant driving force behind these changes are the financial incentives of having a football program that is a legitimate national championship contender. Few things exemplify this “cash is king” mindset better than the cause-and-effect relationship between the industry’s market capitalization and the continuous inter-conference activity.
Currently, each conference negotiates the broadcasting rights to their competitions as a coordinated body. The annual revenue from these contracts increases tremendously from contract to contract, due to the growing cap of media and broadcast markets. As the amount of revenue grows so does the unwieldiness of the conferences. Conference realignments, like those that have sent the University of Oklahoma and the University Texas to the Southeastern Conference, UCLA and USC to the midwestern BIG10, have also changed the PAC-12 to the PAC-2. The orientation of the conferences and the geographic location of members always changes dramatically as the competition for broadcasting contracts and advertising dollars intensifies.
In fact, in 1984 a landmark legal battle, NCAA v. Board of Regents of the University of Oklahoma, brings a precedent that emphasizes the legal and economic factors at play into sharp focus. The backdrop for this lawsuit was the rapid expansion of the telecommunications industry in the early 80s, when only 8% of homes had access to basic cable, a number that continued to grow throughout the decade. Up to that point, the NCAA had maintained a hands-off approach to regulating the televising of athletic events, except for football. In 1981, the NCAA struck separate deals with ABC and CBS, allowing them to televise games and pay participating member institutions. Concurrently, the College Football Association (CFA), established in 1977 by 63 major college football programs not participating in the PAC and Big Ten, sought to advocate for their interests in TV network negotiations. The CFA’s bold move to secure a deal with NBC raised the ire of the NCAA, which then threatened disciplinary action against CFA members.
Ultimately, the NCAA was found guilty under the Sherman (1890) and Clayton (1914) Antitrust Acts for fixing telecast prices, employing the threat of sanctions as a boycott against potential competitors, and artificially limiting televised production of college football. This verdict was upheld in The Court of Appeals, which deemed these activities as “illegal per se price-fixing” with no justifications sufficient to save the plan in terms of promoting competition.
The consequences of this legal decision were swift. Over the next 8 years the CFA, PAC and Big Ten inked multiple deals totaling a value upward of $350 million for the exclusive broadcast rights to their college football games. Then in 1992, the Bowl Coalition emerged, a system in which two teams were selected to compete for a national championship. This was in response to two consecutive years of co-national champions that were decided using the National Poll system, which was determined by the opinions of various polls. It was at this point that teams began to exit the CFA for a variety of reasons and subsequently, fault lines in the college football landscape grew more pronounced.
As demand for broadcasting rights increased, so did the available revenue. By 1995, the CFA was disintegrating, and by 1997, it was formally dissolved. During this same period, championship procedures underwent further changes, leading to the Bowl Alliance system (1995-1997), which offered an $8.5 million boost in ad revenue for championship game participants. By this point any hope for a centralized College Football publishing agreement had been fully extinguished.
In 1998, the stakes increased again as the championship series underwent another transformation, becoming the Bowl Championship Series (BCS). This integrated the existing bowl games from the “Alliance” and “Coalition” and lead to a selection committee that determined placements for the top 8-10 teams. It also ensured that all participating institutions recognized the BCS Bowl winner as the “National Champion.” Television partnerships shifted from ABC to Fox in 2006 and then to ESPN in 2009.
During this period, market capitalization and actors within the industry underwent considerable change. In 2007 the Big Ten developed their own exclusive TV networks capturing a massive share (50%+) of the college football market. Inevitably each conference followed suit and by 2012 the competition came back closer to equilibrium.
This system persisted until 2014 when the current College Football Playoff (CFP), a system that endures to today, was established. Between 2023 and 2025, broadcasting licenses expire, and new, massive deals are set to begin for the ACC, Big Ten, Big 12 and SEC. In a situation similar to the CFA’s in the 90s, the PAC is dissolving. During the negotiation process for new broadcast contracts, the PAC failed to secure a deal. This leaves all but two of the former conference members scattered among the other four conferences. Because the PAC was the only conference geographically centered on the west coast, its former members will travel extended distances to play their new intra-conference opponents. Additionally, the playoff expands from 4 to 12 teams in 2024, which will inevitably inflate the value of the contracts.
The economic repercussions of these moves can be substantial, as the absence of major events like Power 5 college football games not only impacts sports but also takes away jobs and draws spenders from far and wide. A recent Perryman Group study estimated that the University of Texas alone contributes approximately 30% of the total economic activity in the Big 12. The implications of such a significant presence by its movement to the SEC, will impact employment, consumerism, tourism, and general industry on a massive scale. It is worth asking whether the impacts of these lost economic engines are offset by the increase in revenue that is brought in to support these institutions and the communities around them that they anchor.
As the market for college football continues to grow, the media will continue to expand, and the value of teams and players will follow. Will the traditions of college football hold strong or be completely uprooted by the dollars that are at stake? In 2021 Texas lawmakers filled a bill to block the University of Texas from leaving the Big 12, setting a precedent for legal actions that are sure to continue.
Scroll through the images below to see conference realignments throughout the years and the participants’ relative proportion of the college football market cap. Hover over each image to learn more.
Justin Hill is an Analyst at ESI. He graduated from Columbia University with a B.S. in Political Science and has experience in data visualization and management, as well as in the legal and real estate industries.