Friday, May 27, 2011

The College Football Stock Bubble

I think we've seen this before:

The Big East is now officially on the clock. The league has until September 2012 to determine its football membership because that's when ESPN's 60-day exclusive media rights renegotiating window with the league begins. 
So what schools will the Big East add? Numerous candidates have been mentioned including Villanova, Central Florida, East Carolina and Houston. However, college industry sources told the league is also considering the possibility of pursuing Army and Navy as football members to get to 12 teams
"I believe the league will approach the academies first and if they turn the Big East down, then they'll approach the other candidates," a college football industry source said. "There are a lot of hurdles to overcome. The Big East would have to convince them that's where they want to be."
The league would be attracted to Army and Navy because of their national appeal and also because the schools could join as football-only members. If they joined, along with another member, to get the Big East to 12 schools, a championship game would be on the table.
The only real difference between the housing bubble and this is that, when television networks realize how much money they are paying for Army vs. USF and have to recoup that money somehow, it's not going to wipe out vital sectors of the American economy. But minor distinctions like that aside, this is lunacy. With all due respect to the service academies, whose fine young men not only entertain us but risk their lives for us, no one cares about their teams except for when they play Notre Dame or each other. And, they usually stink, though the past few years have been a welcome respite from that.

Someone here is wrong, and you get three options. If I'm wrong, college conferences can shuffle and repackage leagues into tranches that everyone will love and the amount television networks will pay for these games will keep going up until the sun goes supernova. If the Big East is wrong, ESPN isn't going to care a whit about the infinitesimal fraction  of the New York market Army brings. If ESPN is wrong, they're going to have an awfully funny-looking television contract in 2016 when people don't suddenly start caring about Navy football just because they might end up in the Orange Bowl at season's end and because their presence is necessary for a Big East Championship Game. It's a shame that ESPN is a fully-owned subsidiary, because if it's the third option, I'd love to be able to short that stock before people realize that all the Bud Light commercials in the world can't eternally finance multi-million dollar deals for the Flotsam-Jetsam conference.