The Joel Klatt Show: A College Football Podcast - The Future of Conference Realignment and how NIL has created a Golden Age for CFB

Episode Date: May 22, 2023

With realignment back in the news, FOX Sports’ lead college football analyst Joel Klatt explains how the business model in the sport has changed over time and led to CFB becoming Game of Thrones. He also provides his solutions for keeping realignment from being a constant going forward. Next, Joel reacts to the news that players will have their names and likeness in the next release of the EA Sports College Football video game. He states why he believes the NIL era has created a golden age for college football before also acknowledging that the pendulum of power has swung too far in favor of the players. Finally, Joel shares a special announcement about the show’s conversation series with the biggest and most influential names in the sport that will be released beginning June 12th. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hello everyone and welcome into the program. This is the Joel Klatt show. I am Joel Klatt. Thank you as always for tuning in. Remember to follow the program, subscribe to the program so you know when all the new episodes drop. You can follow us on social media. Any of the social media is at Joel Klatt show. You can follow me personally at Joel Klat on Twitter at Joel underscore Klat on Instagram. All of our stuff is going to be out there. And I'm really excited for this show. Very excited for this show. Because I just feel like it's been a busier offseason in college football than we've ever had before. We're obviously dealing with new subjects, more important subjects, you could argue, than maybe we've ever dealt with before in college football. Therefore, I just don't ever feel like there's a week where I'm like, whoa, this is kind of light on content. We've got a great show ready for you for this week. I'm going to talk a little bit about the conference realignment.

more specifically kind of the news out of the ACC recently about rumblings with their schools trying to create kind of a power block of seven. I wanted to touch on the EA sports NCAA football announcement that they will have player names and then a couple of announcements that you're going to want to stick around for at the end of the show. So some news at the end of the show both for the fall and for the rest of the summer. So let's get into it. And I'm going to start with this conference realignment talk.

And I don't want to get specifically into exactly what's going on with the ACC. Because to be quite honest with you, they have a grant of rights in the ACC and it's really long. Okay. So it goes into the mid-2030s, 2025, I believe. And, you know, there's this report about, oh, they're going to form a power block and force their way out, blah, blah, blah, blah. I believe that this brings up a bigger subject and a more important subject when it comes to our sport. And that's this. The instability in college football surrounding conferences is not stopping.

So as much as people want to say that, okay, let's just get through this round of realignment. Let's get Oklahoma and Texas to the SEC and let's get USC and UCLA to the Big Ten. And then like everyone, we can just take a deep breath and everything will be better. Everything will be better. And the Big 12 will have their new conference and then we'll see what happens in the PAC 12 slash 10, whatever they want to call themselves. And everything will be better. And then the ACC's grant a rights deal doesn't last until the mid, you know,

or does last until, you know, 2035. And everything will be fine. But that's a lie. That's a lie. This is never going to stop. it's never going to stop. And I want to talk about the reasons why. And I know that some of them are obvious, but I want to be more specific with you and kind of let you peek under the hood a little bit about what goes on in college football and what's wrong with the business model. Because I do think

that the overall structure and overall business model in college football is somewhat broken. And we'll go over that here as we start. So this is not going to stop. That's the first truth. And you have to understand that it's not going to stop because there's not an unlimited source of money. These networks that basically fund all of sports, but certainly college football, there's not a blank check. And I think the PAC 12 is realizing right now, and maybe even some other people, even the NFL to a certain degree, there was this sense a few years ago that, like, hey, the streamers are going to come in and just save us and like bump us up exponentially as far. as value and revenue. But that's not the case. It's not the case because their business model is changing. And it's changing faster, by the way, than the linear business model has ever changed. So let's take a snapshot right now. Let's actually talk about what's going on. Why is this not

going to stop? Well, first, number one is there's not an unlimited source of money. So because of that, the money has to get smarter. Okay. So when 10 years, years ago, when a lot of these deals were signed, right? When the Big 12 signed their deal and the Pact 12 signed their deal, Colorado moved, and Nebraska moved, and Maryland and Rutgers moved. And like, our last iteration of conference realignment was really born out of volume. And conferences needed more teams. They needed more markets. And that's because the, the business model was born out of linear television and more specifically cable television. And cable television was about subscriber fees. And so you just needed bigger, better, more. And you needed those markets to get

more subscriber fees in order to drive your value up. It wasn't necessarily about the quality as it was about the quantity. Well, that's totally changed now. Just in a short decade now, what's going on is that it's not about quantity and it's all about quality. Because the halves are really separating themselves out as far as the number of eyeballs you have. So as a conference, no one cares anymore how many subscribers you have. They care how many eyeballs you have. And those are two different things. Very different things. Okay. It's not about the bundle anymore. It's about who can you get to your game and how long can you keep them there. And when you look at it through that lens, you start to see exactly why this disparity in terms of value is starting to approach in college

football, where we've got the halves, Big Ten and the SEC, and the have-nots, everybody else. And here are the numbers to bear that out. I'm going to give you the most watched game featuring conference teams in every conference. Okay, so this is apples to apples. It's conference matchups, and it's the biggest one of the year. The Big Ten, it's obvious.

It's Michigan or Ohio State. It's the top rated game in all of college football. 17.14 million people watch that. 17.14 million viewers. That's enormous. That's enormous. The SEC, no big surprise, they were next. Tennessee at Georgia, 13.06 million viewers.

That's enormous. That's a great number. And then you start getting into the other three conferences, and it takes a massive dip, massive dip, to the tune of 8 million viewers. Okay, so the Big 12, their most watch conference game was TCU at Texas, 5.03 million viewers. The ACC's most watch game was North Carolina State at Clemson.

That was 4.98 million viewers. And the Pac-12's most watch game in conference was USC and UCLA, 4.53 million viewers. It's not even in the same hemisphere. And so when you see that the money has to get smarter and they're not chasing subscribers, but they're chasing eyeballs, then clearly you're going to see where the money is going and the money is going to the SEC and the Big Ten. I know everyone kind of knew that already, but that puts it in a better context for you. Think of it as quality and quantity, and right now we are in an era where quality matters. These dollars chasing these conferences, by the way, they're going to continue for the SEC and the Big Ten. Those deals are very big, and as long as those numbers stay where they are, those numbers will continue to be big and maybe even get bigger.

Which brings up the next truth. You know what's next for us in college football? I told you this is never going to stop, right? I wasn't lying. This is never going to stop. Because as it's been, it's been about who can we add to increase value so that we all make more money. Well, pretty soon, it's going to start being about who can we drop. I know people think I'm crazy and look at me kind of sideways.

That's absolutely coming. Because, again, there's not an unlimited source of money in the money. money then has to get smarter. And I know I said a lot of college football fans don't like this conversation because I've said the word money too much. But the bottom line is, is like that's relevant in this model. And I'm going to get to a place where I think that there are some fixes that will make the sport better. But for right now, you have to understand that there are what is going to be entering into college football is really poor economies of scale. Think about it now. You've got all these members, only a few of them are actually driving the overarching value, almost like taxpayers, right?

You know, only a certain number of taxpayers actually pay all the taxes. Well, only a certain number of teams in every one of these conferences are actually driving the valuation for the entire conference. Well, pretty soon, those teams are going to be like, hey, we can't handle the dead weight. And at this point, having X, Y, or Z school in our conference is just diluting the conference. It's diluting it in two ways. One, we've got to chop up the pie in more pieces. And then the other is we've got to enter them into the schedule. So we don't even get all the big boys facing each other as often as they should

because we've got to dilute the schedule with that other team that really doesn't derive any value. So at some point in the next 10 years, you're going to hear a conversation about like, hey, is this a good fit for this school or this program within this conference? That feels like Game of Thrones, but you think we're not in Game of Thrones? College football is Game of Thrones. Look at it. So it begs the question. What do we do?

If you're telling me it's all doom and gloom, all this stuff, what do we do? Well, you know what? There are some things that we can do. And this is another, you know, I get cross-way looks, if that's how you even say it, cross-eyed looks from people in college football when I bring this up. But there's a reason. that this isn't a problem in the NFL. And the reason that this is not a problem in the NFL is because everybody is rowing in the

same direction. Everyone's pulling in the same direction in the NFL. Broadcast partners, programs, divisions, the NFL, everybody. Everybody involved is pulling in the same direction. Where in college football, that's not the case. Everybody is competing. Everybody is in a silo, whether it's broadcast partners or conferences or programs, and everybody's just watching out for themselves.

So let's make an analogy. If the NFL is like watching an Olympic crew race rowing where they're all going in the same direction, everybody is in a skull, is that what they call it? I don't even know. And they're rowing in the skeleton. And they're rowing in the same direction. It's all like really uniform.

And it's like, wow, look how fast they're going. They're all going really fast. It's really good. If that's the NFL, you know what college football is? It's like go out on a Saturday. in New York and like go look at the Hudson or something. Like go try to look at the Statue of Liberty and there's just boats going every different direction.

It's a madhouse. That's college football. NFL, everyone's pulling in the same direction. College football, everyone's pulling in a different direction. So what do we need to do? Well, we've got to start creating systems that allow us to pull in the same direction. I believe that one of the ways that we do that is we create a centralized body for college football. I've been on this for a long time. You've heard me talk about this on this podcast for a long time.

Let's just put it to you this way. If the NFC East could do their own television deal, do you think it would be bigger than the AFC South's? Absolutely. And it would be substantially bigger. And every team the AFC South would be clamoring. If they could get any value, if they could get any leverage, they would be like, please, NFC East, take us. Take us. That's what we're at in college football. But you don't have that in the NFL. Why? because everybody's pulling in the same direction. And they're pulling in the same direction because there is a centralized body over that sport. And that centralized body, whether it's governance or any other type of issue,

is looking out for the best interest of the whole. And that's what we need in college football. I think that we are in desperate need of that. And by the way, I'm not talking about a centralized, governing body for like athletics at a certain level. I said football. I think part of the reason that we're in this situation is that the most powerful people or influential people in our sport are generally commissioners and those commissioners are responsible for their entire conference, including non-revenue sports. That's madness.

That's madness. We've got to stop with this whole like notion that we're going to govern and put under the same umbrella the 16 to 20 non-revenue sports per school just like we're going to govern and put under an umbrella college football. It is so different now. It's so this is not 1952. So we need to get with the times. Right. It's 2023. We see what's going on. There's clearly a problem. Everyone's pulling in a different direction. We need a centralized body over college football. Not the 16 to 20 non-revenue sports, but college football. And someone that's just looking out for our sport all the time, 365 days a year, 24 hours a day. That's what we need. That body desperately needs two things. Okay. So if you were to ask me like, Joel, what would that body need? What would it do?

How would you fix it? Okay. You can't just say like, hey, look, you know, we got a commissioner or we got a body or whatever it is, a board of directors, whatever it is, whatever you want to call it. Board of Regents, if you want to, although that kind of made me throw up in my mouth a little bit. That body would need two things. Only two.

They would need leverage over legacy and purse. Legacy and purse. Once you started getting leverage or power over legacy and purse, then you can start to effectuate change. Because if you don't have power over those things, then what's the motivation for any schools to fall under your jurisdiction? Well, there's not. There's not. So you need power over legacy. When I say legacy, I obviously mean championships. You don't develop a legacy without championships. So you need power over the legacy or the championship and you need power over the purse. Well, the purse is really hard because it's like you need inventory to have control over the purse or revenue. So it's my belief. And I've said this for a long time and I've given this idea. on this show for a long time. I believe that that body already exists. The body is the college football playoff. However you want to do it, whoever you want to put on that board, the playoff is the body

that is the pathway forward for college football, not only for the postseason, but also for the overarching fix for a lot of the problems that we have right now, because that's the only body that has power or leverage over those two things, legacy and purse. And by the way, I think that they need to increase their leverage over purse or inventory or revenue, whatever you want to call it, by clawing back non-league revenue, non-league games, non-league inventory. If we were to give the college football playoff, the ability to go sell and have rights over every non-league game in college football and every postseason game, any non-league game, playoff has it. Guess what? They could go sell that, have power over that, draw more value, create more

value, even hold that leverage over potential broadcast partners. And as you distribute that revenue, you can distribute it a lot more evenly throughout college football than what is being done currently. And when you distribute that revenue more evenly than what it's happening right now, guess what you get? More stability. That's what you get. You get more stability. So it's a long road to say there's an inherent issue that's going to continue unless we do something drastic. If we do something drastic, I think that it's got to be all the way. And we got to really dive in. And guess what? Guess what? It's not just about solving conference realignment or the instability surrounding conference realignment.

A centralized body for football would help with that issue. It would help with NIL guidelines. It would help with portal structure. It would help with the calendar in college football, postseason structure, it would help with governance, it would help with rules and officiating. Think about all the things that we need a centralized body over, and this is just one of them. You see, every one of these problems is more of a symptom than they are an actual cause. And because of that, I think that we need something that can look after and in all reality fix a lot of the issues. I think that if you do that and you put an umbrella over the sport via a centralized body, you can fix a lot of different things.

I know that was a long dissertation. And you might have gotten lost a little bit in there. I think I might have lost myself a couple of times. But you kind of get the idea. All right, I want to move on. Let's go into this really good news for those of us who have been around for a long time. And I know I've seen it on social media. Everyone is celebrating.

And rightly so. EA Sports is coming back. NCAA football is coming back, and they will feature player names and rejoice because I think that this is awesome. This is awesome. Now, it brings up a much bigger conversation that I'd love to have here over the next few moments, but first and foremost, this is great. And I think it's great for the players.

I think it's great for the fans. It's great for everybody involved. Hopefully it's great for EA sports as well. Now, it does bring up what I believe to be two truths, not Utes, but truths, truths. I believe two things can be simultaneously true about this era of, let's just call it like the NIL era. Let me start with the first one, and I think it's the most obvious, but NIL has, I believe, created a golden age of college football. and I believe that we are at the dawn of that golden age. College football has never been better.

Interest has never been higher. All the problems that we have in college football are champagne problems, which is amazing, right? Like other sports would be dying to have the problems that college football have. We don't have a lessening popularity. We don't have to fight for viewership, right? Like, it's there. People are interested. People love the sport. And because of that, there are some things that need to be tweaked. Well, listen, NIL is creating like the dawn of the golden age of college football, which is amazing,

partly because I think we're going to have a deeper class of athlete in college basketball and college football more specifically. And we're starting to see that bear out. Next year, we're going to see the fruits of the NIL golden age. I believe next year we're going to have as good of a college football season as we've had in a long time, in part because we've got more depth of talent in college football. Why do we have that? Well, let me tell you. Because we have players that no longer have to go to the NFL.

You see, prior, if you could get a third round grade or a fourth round grade, even a fifth round grade, it was like, I got to go. I got to go and I've got to capitalize on that value right now because who knows what happen i got to start my clock there was all these reasons for it and guess what nobody at least in my estimation knocked the players for that it was like we all got it yes absolutely you have to go coaches would tell players you got to go you got to get out of here well now it's just a little bit different blake corum's a great example of this and i know jim harbaugh told him hey you need to go but blake quorum is a is a prototypical example about what i'm about to talk about if you have a third

through fifth round grade, and that's probably where you're going to get drafted. And you are a star on your team, like a Blake Corum or a Michael Pinnock's or a Boe Nix out at Oregon. Well, guess what? You're likely going to make as much or more money staying in school than you would in your rookie season in the National Football League. So you don't automatically have to go anymore because the NIL deals are really good and rightly so. And because of that, we're getting players that I think previously would have absolutely gone to the NFL that are staying in college football. Again, the dawn of the golden age because of the depth of talent in our sport. And I think that that's a really great thing.

I brought up those players right there. There's another one, Olu Faschenoo. The lineman from Penn State, he probably would have been a first round draft pick. But guess what? In his mind, he doesn't have to go anymore. Why? Because he can make a good chunk of change staying at Penn State, being a star at Penn State. And it's not like he's foregoing every last penny by not going to the NFL.

I think that that's a really good thing. There's one other piece of this that I think is important to note is that in the NFL, you're seeing a lot of those team options declined for players in their first contract. And I think college athletes see that. And they say to themselves, okay, well, guess what? If I got a fourth round grade, not only can I stay in school and make as much money as I would if I went to the NFL next year. But I also have then that year to increase my value, excuse me, to try to get to the second round or the first round where there's actual

life-changing money even in the first contract. Okay. So those are really good problems to have if you're a player. And if you've got that choice, well, then now you've got to make an actual decision. So again, there you go. A little bit of a golden age of NIL. Now, that's the first truth. The second truth is that I think that the pendulum has swung too far towards the players. Again, they're going to sound like their contradictions, but they're not. They're not. We are entering into a golden age of college football because of NIL. And yet, the parameters surrounding NIL have swung way too far towards the player.

I think that, and I'm not going to, this is not an argument about like, I'm a player and you're not. That's not what I'm doing. But I think my perspective is interesting because I played in the early 2000s and now I've covered the sport my entire adult life. So I've seen how much better the environment is and the overall life is for a player even outside of NIL from the early 2000s until now, 2023. The increase in stipend money, the increase in meal plan money, the increase in the investment into mental health and nutrition and development and all of those things. And that's even before NIL. Now you put NIL on top of that and you can actually go out and make really good money, really good money. And then you can also transfer anytime you want. And so now the portal is open.

And so college football players have never had more power than they do right now. And I'm here to tell you, I think that the pendulum has swung too far. There's got to be some parameters because in every contract worth its salt, and in every relationship worth its salt, there's got to be equal benefits as well as equal responsibility. There's got to be some recourse. Listen, Fox has recourse over me, right? Like, I enter into a contract with Fox Sports.

Guess what? It's really beneficial to me. I love it. It's an amazing deal. And guess what? They have some recourse. I can't go do whatever I want. I've got non-competes and I've got exclusives.

There is language in there that holds me responsible for certain behaviors, performances, exclusivity, all of those things. And there's none of that for players in college football. So is it great that they're getting these things? Yes. Does there need to be some parameters? Absolutely. because every good contract has both benefit and responsibility. There's benefit and recourse.

If you even go, like, throw in a biblical reference, there's got to be some element of being equally yoked in that contract and in that relationship. So until that happens, schools are going to have to take a hard look at like, well, where are we investing the money? How is our NIL collective working? How much are we giving to them in the form of cash? Now, how much are we investing into the nutrition or into the weight room development or into whatever it is, the classroom development? Because right now it's one-sided and it can't continue that way. When I talk with coaches around the country and I talked with like really high-level coaches that have been doing this for a long time and guys that have been doing this for a very short time and they all say the same thing. It's like, listen, this is unsustainable.

And it's unsustainable because there's no recourse. As soon as there's some responsibility for the player or some recourse for the school, then those contracts are going to start to even out. Those relationships will start to even out. So as we are in the golden era and age, and at the dawn of that age, because of NIL and a great point and champagne problems for college football, yes, there does need to be some guidelines. We need to rein this in a little bit because you cannot have one-way contracts.

It will not work. It will not work in the long term. All right, a couple of announcements, some news here before we get out of here. First and foremost, big noon kickoff and big noon Saturday, opening the season in Fort Worth at TCU for Coach Prime and the University of Colorado's first game against TCU. TCU obviously had that great run last year, went to the national championship game.

We'll be back there covering Sunny Dikes and Coach Prime in his first game as the head coach for the Colorado Buffalo's. I can't wait. That place is going to be electric. I had TCU people texting me. I had Colorado people texting me. That's going to be fantastic. And then of course, we'll be in the big house for the game. I've done five Ohio State Michigan games. This will be my sixth. Last year, they were both undefeated. I didn't think it could get bigger than that. And yet, I've got this sense sitting here that I'm like, oh, wow, Michigan just won two two in a row. They're going to probably be ranked number two in the country to start.

They've got a great team. Ryan Day's lost two in a row to Michigan. This could be even bigger. This could be even bigger. And I can't wait for that. And then last announcement. And this one, I've been teasing for a while right here on the podcast. And you know it.

You're excited about it. I hope you're as excited as I am. Starting on June 12th, we are bringing. in you something one we've been working really hard on traveling around talking with the biggest names in all of college football for our new series the offseason summer interview series big noon conversations that drops june 12th right here on the joel clad show joel clad show big noon conversations june 12th the first episode is going to be me sitting down with coach prime Dion Sanders and I sat down for close to a little over half an hour just this last week.

And so that interview will be dropping June 12th, talked about everything from his Louis Comet to the team to the transfer portal, everything in there. And I can't wait for you to see that episode. Then we've got episodes following that up with Nick Saban, Ryan Day. We'll have Chip Kelly, Greg Sanky, among others. It's going to be a phenomenal series as we build towards the college football season. Again, Joel Clatchell, Big Noon Conversations, that debuts, June 12th. And I could not be more excited about that. I think that you're going to love it.

I really do. So make sure to mark your calendars for June 12th. In other news, just a quick announcement, tomorrow, or not tomorrow. Next week is Memorial Day. We will be dark. There will not be a show next week. So next Monday, enjoy the day with your family and friends and loved ones. Hopefully you have a barbecue, do something.

fun and enjoy the day and we'll be back with you after that. Thanks for listening, as always. Remember, you can follow the show on social media at Joel Clatt show. You can follow me individually at Joel Clad on Twitter, at Joel underscore Clat on Instagram. Thank you for listening, as always. And again, June 12th, Big Noon Conversations. That's coming up this summer.