Conference Realignment Thread v. 2016

[Bill Marsh]

Until UCONN drops to FCS this isn't even a debate

I don't care if their buyout is 1B to leave

This does not make sense to me. The WORST case scenario with UConn joining us (obviously if they do they will have to agree to a massive exit fee) is making tons of money and going back to the 10 we have now that we have succeeded with. So how again is this bad? The worst case is we get richer and they leave. How could you not take that? If they join us and we assume they leave in 8 years (or whenever), what is the downside? Recruiting? Lavin did just fine recruiting with SJ in the old Big East with UConn present. Having a public institution? So what? They play football? So? They either park it elsewhere, lower to FCS, or abandon it. They leave if P5 wants them? So what? We get tons of exit fee money and we are back where we started...which was great to begin with.

It seems to me the only reason Big East fans wouldn't want UConn is out of spite not logic. Who knows? Maybe they NEVER get accepted to the B1G in 8 yrs...maybe they never get into a P5 conference and drop football eventually. That would mean they stay long-term in the Big East. Much crazier things have happened. There is zero interest in college football in the Northeast unless it's a front-running fan i.e. Michigan, Notre Dame, Ohio State and even then it's rare to see huge college football fans at all in the tri-state. You have to understand that these Texas schools do not want UConn football either.

UConn would not have a long term future with the BE. They're competitor. So, how would it be in the interests of the BE to provide a safe harbor for a competitor to get them through a rough patch. The BE doesn't need UConn, so what problem would be solved by adding them?

[cu blujs]

I have no spite for UConn. I simply believe that their interest and the interests of their boosters are not in line with the other members of the Big East.

[Bluejay]

XU Dash, I'd appreciate any insights you might have on why states like CT are experiencing the budget crises they are. I know that NJ is going through the same thing.declines

I know that the problem is almost entirely on the revenue side. A major factor is the decline in gas prices with an accompanying loss of state gas tax revenues. I think there have also been losses on investments due to Wall Street declines. Beyond that, I'm at a loss.

Thoughts?

Its pretty simple really - the state keeps spending a whole lot more than it brings in. The problems are not on the revenue side as much as they are on the spending side. You can keep increasing taxes, but spending increases really have to stop. The issue is lack of economic discipline most of the time.

Illinois is in a huge fiscal crisis almost entirely due to spending recklessly.

As to UConn, I can't see the situation going on indefinitely. The losses are simply not sustainable. When the Big East payout monies dry up, the athletic department will have to replace $5million a year just to be in the same place that they are now (i.e., only losing $20million a year). The state can call those losses "investment" if it helps them feel better about it, but the fact of the matter is that the money is gone. If the "investment" does not lead to revenues, I'd suggest that it was really more like "gambling" than "investment." At this point UConn is continuing to gamble in the hopes that a P5 will want them and rescue them from the financial woes like the Big 10 did to Maryland. The problem with this line of thought is that there is nothing to justify the belief that any P5 conference even has a passing interest in UConn. The geography just doesn't work - too far from the Big 12 & Pac 12, Big 10 took care of the east coast exposure with Rutgers and Maryland, too far from the SEC (and way too crappy of a football program) and the ACC has no interest and plenty of schools with a grudge against UConn.

[Xudash]

I agree that it will be a bumpy ride. They will have to pursue the same path as Louisville did for 22 years, the same path that TCU and Utah did for many years. You're certainly right that this is the choice they face.

My only point is that this can't be analyzed as though we're talking about a minor league sports franchise. UConn thinks of itself as a public Ivy and has been referred to as such in a number of publications. To continue to pursue that path of excellence they want to affiliate with other top tier public research universities. Those schools are almost entirely committed to excellence in major college athletics - including football. The B1G is the most explicit about how integral this is to their larger mission as a University. If you join the B1G, you're also admitted to its research arm, the CIC.

All of the analysis in this thread portraying The Big East as the best option focuses exclusively on the athletic and revenue side of the equation. But to understand where the university is headed, you have to think like a University president, not like an AD. The president is not concerned exclusively about athletics. She is concerned about the larger institution and how athletics fits into that picture, how athletics can help or hinder the accomplishment of institutional goals.

One more point about the state's fiscal health. I invite anyone here to read up on how Pittsburgh went from being a deteriorated mill town after losing steel jobs in the '70's and '80's to becoming one of the most livable and economically successful cities in America. They didn't just cut spending. They looked to the future, figured out what would be the jobs of the future, and planned how to bring those jobs to the city. The University of Pittsburgh played a big role in turning the city around. Pittsburgh rebuilt the local economy by investing in high tech and health care research and innovation. CT is looking to do the same thing for its economy with UConn and the Human Genome Project. UConn is an asset, not a drain. They must invest in UConn if it is going to lead the way out of their current fiscal problems. It would not be wise for them to let such an asset decline. And they know that at the Governor's office just as well as they do at the UConn president's office.

You're preaching to the choir when it comes to Pittsburgh. I lived there, too (was with Mellon for a number of years and then a Merrill Lynch sub, living in Upper St. Clair). What Pittsburgh did was extraordinary, as you pointed out, having been so heavily dependent on heavy industry/steel.

Connecticut has the luxury of having Yale fit into that development picture as well, I would think, but I certainly see where the state would point to its public flagship university to be a major economic driver for the future. With all that mentioned, and admitting that I haven't been close to it in a while now, the state otherwise seems to be making very bad decisions when it comes to economic policy that is focused on business retention and formation. They have to get ALL OF IT RIGHT in order to retain some of the neat new stuff they want to develop out of Storrs, or it will develop and then potentially drain out elsewhere.

p.s. I imagine a drive down or up the Merritt Parkway with the top down would be pretty nice right about now. I loved experiencing the fall season in New England, and the holiday season that followed it.

XU Dash, I'd appreciate any insights you might have on why states like CT are experiencing the budget crises they are. I know that NJ is going through the same thing.declines

I know that the problem is almost entirely on the revenue side. A major factor is the decline in gas prices with an accompanying loss of state gas tax revenues. I think there have also been losses on investments due to Wall Street declines. Beyond that, I'm at a loss.

Thoughts?

Bill,

The state certainly seems to have a spending problem, but it clearly has an issue on the revenue side, and without a seemingly clear path for rectifying that soon.

The quick answer focuses on how hospitable or not the state is to business formation or business retention. Look what GE did in announcing its move out of F County to Boston. They cited Connecticut's budget deal that raised corporate taxes. They literally went on record describing Connecticut as having an inhospitable business climate. And what had been beautiful and state-of-the-art in the 80's and 90's when it comes to work environments is now viewed as being antiquated by the millennials and the kids coming up behind them. Cases in point: GE Corp's move to a nifty waterfront location in Boston; GE also recently stepped into its own dedicated major building development in The Banks in Cincinnati on the Ohio.

That's at the corporate level. At the individual level, I can't think of a prettier area in which to live, other than perhaps Laguna Nigel or Carmel, CA or something along those lines, but it is an absolute fact that you pay for that privilege. Fairfield County up and down MetroNorth is just flat out nice, but very expensive as compared to most areas. Land cost and those taxes simply help to run up all other costs of living there. Your state income tax and sales tax structures make it tough to live their comfortably. Any reasonable corporate headhunter is going to take that under consideration as well.

There are other factors at play (e.g. migration patterns (thank you air conditioning)), but when you look at the overall cyclicality of industries and couple that with where new businesses are and have been forming - imagine Atlanta, GA now versus what it was in 1970; imagine Charlotte, NC now and what it was probably as recently as 1990. Hell, when I started my banking career, Bank of America was North Carolina National Bank (i.e. the one that grew to become NationsBank that then merged with BOFA (San Francisco)).

Probably all the more reason to ensure that UCONN remains strong, so that the kids going through there will come out and become incentivized to remain in the Nutmeg State.

[David G]

And then I see this:

http://www.courant.com/sports/uconn-football/hc-uconn-big-12-expansion-1016-20161013-story.html

And we find a key answer to one question: how much Big East exit fee money do they have left coming to them:

The seven non-football schools from the conference were allowed to keep the Big East name and inherit Madison Square Garden as the host of their postseason men's basketball tournament. But the cost was profound. The schools left their former conference partners — UConn, South Florida and Cincinnati — with more than $100 million to share, but that money is drying up soon. UConn gets $5 million this year and next year before the payout ends.

True, but while the payouts from the American aren't likely to be $5 million per team, they're not going to be zero either. UConn did win a national championship, and that's in the cohort for three more years. (Remember, payouts are spread out over six years). So, by the time the AAC gets to its sixth year of existence, the payouts per school will likely be in the millions every year. It's just that right now they're not getting money from the previous six years because they've only existed for three years. It won't be as much as they got in the Big East, but won't be a $5 million dollar difference either.

[gtmoBlue]

The powers that be in Storrs, Connecticut only need do one thing to "save their heineys". Get accepted by the AAU. UConn is already in the R1 level (Top Tier) of research universities...

Universities classified as "R1: Doctoral Universities – Highest Research Activity"[edit]
There are 115 institutions that are classified as "R1: Research Universities (Highest research activity)" in the Carnegie Classification of Institutions of Higher Education.[2]

https://en.wikipedia.org/wiki/List_of_research_universities_in_the_United_States

While not a Top 50 Research organization/school, they are still where they need to be status wise (top tier). Gaining AAU accreditation will be the crowning credential and open the now locked door to F5dom. C'mon UConn...get AAU accredited...and stop this "back to the BE" madness.

They guarantee their stock by AAU accreditation for joining the "big boys" club. The B1G would definitely scoop them up to strengthen Delany's quest for eastern domination. UConn, while not a player football-wise (like Rutgers) would further solidify the B1G's push into and quest for control of the NE coastal region.

And by most accounts they (UConn) have a 8 year window to get'er done.

[HoosierPal]

http://www.si.com/college-football/2016/10/14/big-12-expansion-unlikely

According to this SI article, Fox and ESPN might be paying the Big 12 NOT to expand. Wow. What a CF. The anticipated presser on Monday or Tuesday should be interesting.

[DeltaV]

http://www.si.com/college-football/2016/10/14/big-12-expansion-unlikely

According to this SI article, Fox and ESPN might be paying the Big 12 NOT to expand. Wow. What a CF. The anticipated presser on Monday or Tuesday should be interesting.

Think we could get paid to not expand?

We're kinda in the same boat. There could be benefits to expansion, but no candidates strong enough to overpower the negatives.

[Xudash]

http://www.si.com/college-football/2016/10/14/big-12-expansion-unlikely

According to this SI article, Fox and ESPN might be paying the Big 12 NOT to expand. Wow. What a CF. The anticipated presser on Monday or Tuesday should be interesting.

May have been their end game all along.

It's no different with us not wanting to expand by drawing from the A10 well. They don't want to pull from the G5 well.

And they otherwise took advantage of a negotiating loophole.

The clock probably begins ticking on the Big 12 Conference beginning at 5PM Central on Monday.

[David G]

http://www.si.com/college-football/2016/10/14/big-12-expansion-unlikely

According to this SI article, Fox and ESPN might be paying the Big 12 NOT to expand. Wow. What a CF. The anticipated presser on Monday or Tuesday should be interesting.

May have been their end game all along.

It's no different with us not wanting to expand by drawing from the A10 well. They don't want to pull from the G5 well.

And they otherwise took advantage of a negotiating loophole.

The clock probably begins ticking on the Big 12 Conference beginning at 5PM Central on Monday.

I heard about this yesterday and spent the rest of the day laughing about it.

To be specific about what is happening as I understand it, ESPN (and Fox, but ESPN kind of spearheaded this from what I understand) is basically opting to buy itself out of the deal where they have to pay more money per school if the league expands. They're not paying the league not to expand. The league can still expand. But, if they do, they won't get more money. The thinking is that this will quash any desire to expand. In other words, it gets the networks off the hook from having to pay the conference more money if it chooses to expand. Now that there is no more money in it for the league if they do expand, then....what's the point?

I don't think this is what they foresaw happening all along. The guys at the Big Twelve aren't smart enough and don't work together well enough to successfully conspire toward something like this. I think they just got lucky at how things appear to be ending up.