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How Much Is A Four-Team Playoff Worth?

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Television bidding on the right to air college football’s playoff is going to hit the stratosphere this year. Expect for ESPN, Fox, Comcast/NBC and potentially a Turner/CBS pairing — the same pairing that hosts the NCAA Tournament — to all place competitive bids. 

How high could yearly rights fees go for a four team playoff?

Five hundred million or more a year.

That compares with $160 million currently paid for the five BCS games.

So, yeah, if college football’s leaders don’t screw it up they stand to make a killing on television rights for a four-team playoff.   

This doesn’t even consider the amount of money that could be made if college football’s leaders decided to bid out both national semifinal games and the BCS title game to the biggest cities in the nation as well.

That’s potentially worth tens of millions more.  

Let’s put a context for the value in the world of football, the nation’s new past time. 

From 2014 to 2021 the NFL will receive $4.95 billion a year for television rights fees. Starting in 2014 ESPN will pay $1.9 billion a year just for Monday Night Football games. 

Think about that for a minute. 

That’s around $110 million per Monday Night Football game on cable. (There are 17 games included in the 2012 slate, which features two games on the opening Monday and also 500 hours of studio programming). 

Clearly ESPN is willing to pay massive rights fees to keep top games on cable and away from its competitors. 

What’s more, ESPN has already established itself as the home of college football. With the exception of CBS’s weekly SEC game and Notre Dame’s deal with NBC, just about every major college football game of significant consequence happens on an ESPN network.

Indeed, the 2011 BCS title game between Oregon and Auburn was the most watched broadcast in the history of cable, with 27.7 million viewers.

So how valuable would three college football playoff games be to a network, ESPN, that has never aired an NFL playoff game?

Really damn valuable. The second best event behind the NFL playoffs in the American sports calendar.  

So what’s a college football playoff for the next eight to ten years worth on your network? 

In today’s television environment they would be invaluable to the right network.

If ESPN is willing to pay $110 million per regular season Monday Night Football game, the value for being able to promote its station as the continuing destination point for a college football playoff is at least as valuable. So the absolute floor for college football’s televised playoff would be a doubling of the existing rights fees to around $330 million, or the same amount that ESPN currently pays for a regular season Monday Night Football game for all three college football playoff games. 

But $330 million isn’t close to enough to grab these rights.

Why?

Because it isn’t just about a unique first of its kind property right — an 8 or 10 year auction of a four-team playoff — it’s about how many bidders are interested in the property. 

And after decades of dickering college football is hitting the market with a playoff at the absolutely perfect time. 

Comcast/NBC, Fox, ESPN and maybe CBS/Turner would all bid $330 million a year — a doubling — in a heartbeat. 

Why do I think this?

CBS/Turner pays $740 million each year for the NCAA tournament.   

Rights fees for sports are exploding and competitive bidders are climbing all over each other to challenge ESPN’s sporting hegemony. Moreover, it’s not just about how many bidders are interested in the property either. Remember that it’s also about forcing your competitor to bid so much for the rights that they aren’t able to spend as much for other rights that you’ll also be competing for in coming years. What other rights? In college football each bowl also has the ability to sell its television rights.

For instance, might another network, after forcing ESPN to bid through the roof for the college football playoff, be willing to make a solid, but not outlandish bid for the existing BCS bowl games if these are shunted off to the side in favor of a three-game playoff? In fact, rather than detract for the value of the bowl games, the top bowl games could stand to make more television money in their upcoming contracts even if they aren’t included in the playoff.

The Rose, Sugar, Fiesta, Orange and Cotton, in particular, would stand to put together even better television match-ups if they could pick their top teams outside of the playoff and would still have television value as a group.  

Of course that would be nowhere near what a three team playoff would be worth. (And it’s possible the top bowls could still be included in a three-team playoff package that was auctioned. Althought, this seems unlikely as it’s more difficult and less lucrative).

But for now just put this number in your head and leave it percolating there — $500 million a year. 

That’s $166 million per college football playoff game and I think that’s the bare mininum that a playoff will sell for in this market. If I was taking this to ESPN, I’d start with a number twice as valuable as a weekly Monday Night Football game or $220 million.

That would run the tally all the way up to $660 million.  

Would ESPN bite on that figure to keep the rights from going to market? Probably not. But would the network pay $500 million.

I bet it would.

And ESPN might not be alone.  

We’re talking about blockbuster money for college sports.  

So which networks are the favorites to land college football’s playoff:

1. ESPN

ESPN knows the value of a college football playoff more than any other network. And it has the current rights. How galling would it be for ESPN if it allowed those rights to leap away just as they exploded on the national scene?

I don’t believe ESPN will let that happen.

Plus, it’s not just the games, it’s the penumbra of the games.

Selection specials, analysis, debate, on site programming, ESPN is able to build hundreds of hours of programming around this event.

A college football playoff would immediately become the second biggest sporting event in the country after the NFL playoffs and Super Bowl. 

Every year these games would be the most watched event on cable, must see ESPN television. As much time as ESPN has spent building up its college football industry there’s no way it can allow this property to go to a competitor.

The college football braintrust knows all this as well, particularly its TV negotiating duo of Chuck Gerber and Dean Jordan.

ESPN will pay more per game than it paid for Monday Night Football to keep these games.  

2. Comcast/NBC

Eventually NBC is going to have to get rolling with college sports properties if it truly hopes to compete with ESPN. Expectations are that the network will be a competitive bidder for the Big East television rights and Notre Dame is on the network already.

But that pales in comparison to ESPN and CBS’s big college football games.

Plus, Comcast and ESPN are amidst their own cold war over cable rate fees.

What better way to establish yourself as a bona fide college sports player than to snag the first ever playoff. Think this tentpole strategy doesn’t work? Look at what NBC’s Sunday Night Football package has done for the network’s legitimacy there. So much that NBC now pays $950 million a year for the Sunday evening games. (Which, by the way, looks like a damn steal compared to what ESPN pays for Monday Night Football).

With the new NBC Sports Network up and running what would owning the entire month of December look like?

Could you put one of the semi-final games on the NBC Sports Network? 

Here’s an even more interesting strategic play, could you at least drive up ESPN’s cost for the college football playoff and then swoop in and buy up a ton of the other bowl games to put on your network for programming’s sake?

The Rose, Sugar, Fiesta, and Orange and one more BCS title game are currently under contract for around $160 million. 

Could you offer that same $160 million for these four bowl games and bring them to your network to pair with other smaller bowls?

All of a sudden you become a primary destination for college football’s postseason for a fraction of the cost of the actual playoff. All thanks to driving up the playoff cost for ESPN. 

It’s an idea. 

3. Fox

When ESPN bid $160 million a year Fox was furious at the increased cost of the BCS.

Then it’s watched as ESPN has exploited those rights and received hardly any blame for moving the games off network TV.

Just about every sports fan has cable.

Fox partnered with ESPN to grab the Pac 12 TV rights. And it has the right to some Big 12 games. But if Fox really wants to be a focal point for the sports — and potentially launch its own national sports network — then it needs to compete for big properties.

But unlike ESPN and NBC, does Fox really have the intrastructure around college football to build hours and hours of programming around big events?

Not really.

That’s why I think they’re the third most likely bidder.  

4. CBS/Turner 

The problem here is that there’s no real way to monetize this partnership. CBS/Turner makes a ton of sense for the NCAA tournament because there is an overflow of content. You actually need multiple networks to handle all the games.

But what’s the play here?

I suppose CBS and Turner could alternate hosting the game, a couple of years on network television then a couple of years on cable, but that’s just too confusing.  

Written by Clay Travis

OutKick founder, host and author. He's presently banned from appearing on both CNN and ESPN because he’s too honest for both.