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You Don’t Need the NCAA to Invite Cinderella to the Ball

Today’s guest columnist is Andy Schwarz, an economist and partner at OSKR LLC.

There’s nothing I hate more than common knowledge that is wrong. Here’s a timely example: Everyone knows what the glue is that holds the power conferences and the rest of the NCAA together—postseason basketball. There’s no way, the conventional wisdom says, that 60-something football schools could break away and stage a men’s basketball playoff with anywhere near the excitement of the NCAA’s trademarked (literally) March Madness tournament.

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Every sports radio host across the country will tell you that without Cinderellas from the one-bid conferences, the excitement of the early rounds will vanish, and the money will just not be there for the football powers holding a basketball tournament.

Incorrect.

This is actually such an easy problem for the power schools to solve that it pains me to have to be the one to explain it, but here we go. Let’s imagine the ACC, SEC, Big XII and Big Ten were to leave the NCAA’s overlordship at the end of the current academic year and set up a four-conference football league, while also competing against each other in other sports.  And let’s say they want to stage a postseason basketball tournament featuring schools like Duke and North Carolina, Kentucky and Tennessee, Houston and Kansas, and Purdue and Illinois, just to pick two highly rated teams from each of these four conferences.

Do you think TV executives might drool over the possibility of having these rights? Might CBS be a little bit worried about the ratings of their men’s college basketball tournament (you know, March Sadness that most of the good teams just left) if it had to compete with this new thing? Would it suck that all the Cinderellas got invited to a different ball than all the Princes Charming?

Well, see, they wouldn’t have to. The breakaway schools can set up any format they want for their tournament. They could make it an invitational, and invite teams from the conferences that got left behind.  And those schools will say yes.

Let’s assume the new tournament decides to go with a 64-team format, because that’s what fans are used to, especially if they forget to watch those Dayton games. So, imagine they create a qualification system for 40 of their own teams, maybe even giving each of the four conferences six automatic bids and then doling out the rest by some committee of basketball savants like they do now. Maybe Joe Lunardi just gets to pick them and cut out the middleman.

Then, for the remaining 24 schools, the new tournament—or its TV partner—sends a $10 million offer to every school title-winning school from the 24 Division I conferences not included in the big conference breakaway.  This is just about what they get now, so that typically, a school in a one-bid conference gets about $1 million per year, because they share with the other schools in the conference. The rump D-I tournament is not going to be anywhere near as valuable once the big dogs all leave, so $10mm per year for the whole conference is going to look mighty good compared to whatever the NCAA is paying out once the “wait, you don’t have Duke anymore?” effect kicks in.

So the breakaway four pay $10mm x 24 schools =  $240mm. And you’ve replicated the $1 billion March Madness system, except that now the four conferences (and conference commissioners), control the other $760mm.

OK, radio show host blowhard, I know what you’re thinking. The NCAA has a rule that says if you get invited to their tournament, you have to go. OK, sure, but who votes on those rules?  The conferences and their members.

As soon as March Madness can’t offer nearly as much as the P4 Invitational, do you really think those conferences are going to enforce a rule that impoverishes them all, just to keep some bureaucrats in Indianapolis in charge?  As the ever-astute Bobbi Flekman explained, “Money talks and bullshit walks” and that B.S. rule will be walking straight into the rubbish bin once the value to every school of ignoring it exceeds the value of compliance.

I suppose it’s possible the remaining NCAA schools could go out of their way to shoot themselves in the face in an effort to “fight back” for dominance of March. The moment CBS figures out a way to claim force majeure and stop paying for the equivalent of Destiny’s Child once Beyoncé went solo or, at the latest, when the current contract runs out, that fight will be lost. The only question in my mind is whether the D-I left-behinds would figure this out fast enough to make money right away from the switch, or would they do the usual NCAA thing and fight reality until it was inevitable and lose money along the way.

Dumber things have happened, so I cannot promise the schools would be smart about it.  They may not be ready for this jelly. But I can promise that there would be enough money for the breakaway schools to make inviting Cinderella to the ball a thing, even in the absence of Charlie Baker and those crazy rules against off-brand drinking cups.

And yes, I’ve yet again given away a simple but effective business idea (my last one was that athletes should get paid for NIL and people would still love sports). For a consultant, I make some pretty bad business decisions. But if somehow this explanation doesn’t make sense, I do work by the hour so, you know, call me for a good postseason time.

Andy Schwarz is an economist specializing in antitrust, class actions and damages analysis. He has served as an economic expert in a variety of state and federal litigation, and was case manager for the plaintiffs’ experts in O’Bannon v. NCAA and Alston v. NCAA. In addition to his consulting work with OSKR, Schwarz is proudly hawking his board game, Envelopes of Cash, purchasable in limited quantities here.

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