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The original was posted on /r/cfb by /u/ksuwildkat on 2023-08-12 17:13:06.

I dont think there is any question that the future of College Football programing is streaming and subscriptions. I dont think we are at the linear tipping point but I think we can see it from here. 2030 is right round the corner. Ive spent the majority of my professional life in the military and right now my friends still on active duty are getting ready for the [FY 2029 POM build](acqnotes.com/…/program-objective-memorandum-pom#:…. Its safe to assume that any large business is not far behind in their planning.

With that as background, the PAC just presented a roadmap for what streaming contracts are and what the most important benchmark is - subscriber count. That might seem self evident but it is a subtle change from the current model of viewers.

  • Current model: Viewership drives ad dollars, ad dollars drive channel value, channel value drives cable carriage fees. So ESPN wants to show Alabama vs Georgia because it can charge $100K+ for 100+ ads during the game and because the game is on ESPN people will want ESPN on their cable package and ESPN can college carriage fees for everyone in that entire cable system.
  • Streaming Model: Pay for your subscription.

That is not to say that streamers are not going to sell ads, they are. But there is going to be a much smaller range of ad pricing for those ads with a much lower floor and a much lower ceiling (at least for now).

Assuming the details we are getting on the Apple deal, we have a pretty good guide to what the magic number is - 5 million subscribers. We can probably break it down a little further:

  • $25m was the base for a 10 team conference. This was apparently good for a 12 team conference too. That tells me that there is $25m a school in advertising available any time.
  • 2.5m subscribers was worth an additional $5m to $30m each.
  • 3.7m subscribers was $50m. This number has varied a little with some saying it was more, some less. Lets go consecrative and say 4m. That would put a value of $20m on 1.5m subscribers.
  • 5m subscribers was more than $50m but less than $70m. I put it in that range because if it hit $70m someone would have talked about that. Lets call it $60m. Thats $10m for 1m subscribers.

I want to take a minute to actually praise the PAC presidents for not taking the bait on the Apple package. Assuming the PAC9 added SDSU to get to 10, the total living alumni base for every PAC school would have been less than 5m. Hitting even 2.5m would have required a huge number of people with no connection to any PAC school to be willing to fork over $100 a year to watch PAC football.

Moving forward, conferences need to do two things - get big and get engaged.

  • Get big: I have been opposed to even going to 16 let alone 20. I was wrong.
  • Get Big part 2: Sorry small enrollment schools, the future is not good. The B1G has always known this and the Big12 has clearly prioritized it. The next round of realignment will likely be driven by enrollment.
  • Get engaged: If you cant be UCF (66K students) you better be connected to the alumni you have. If you have 250K alumni, you better get half of them to sign up.

20 school, 300K living alumni average, 6m living alumni. Sign up half, get 2m more people to want to see your teams enough, hit 5m.

Apple knows how to make money. If they were willing to pay $60m for 5m subscribers, you know they were making serious bank on that. Other companies less adept at building money printers are going to look at that and spend the next 6 year figuring out how to make money on 5m subscribers.

The PAC has shown the remaining conferences what the future looks like. Its up to them to act on it.