The politics behind college sports

Pete Thamel, Yahoo Sports Reporter joins the Yahoo Finance Live panel to discuss the latest in college sports.

Video Transcript

JARED BLIKRE: Welcome back to Yahoo Finance. I'm Jared Blikre. And it is now time to follow the money. And for this, we're going to be talking about college football playoff, so we're going to bring in our colleague here, Pete Thamel of Yahoo Sports. So we were just chatting over the break. The face of college, the end of the season has changed quite a bit from the old BCS days. Why don't you walk us through it?

PETE THAMEL: Sure. So yesterday, Jared, a formal recommendation by a cabinet of college athletics officials who spent two years studying the postseason-- we're now 7 years through a 12-year contract with the current four-team college football playoffs-- and the recommendation that'll be studied at a series of meetings over the next couple of weeks is that this will become a 12-team playoff. So obviously, it is going to triple in size.

And how we got here is a really good example of the politics internally that drive college sports. The conventional thought was four would go to eight. But the problem with eight was that there are now four at-large bids, the four teams that get chosen by the college football playoff committee. If they went to eight, there would be a necessity or a preference by a majority for automatic qualifiers.

Well the high end leagues, including the SCC, saw all of a sudden the four at-large bids shrinking. So there would be five or even six aqS in two or only three at-large bids. And the SCC saw that as a way to diminish its chances to have a champion. So wanting everyone involved, wanting the so-called group of five, the other five leagues, to have a chance at a bid, and wanting the Pac-12, which has been shut out of the playoff in numerous occasions to have a chance, the compromise was to actually grow. Usually compromises you meet in the middle. In college athletics, they grew, and they came up with 12.

AKIKO FUJITA: So Pete, two questions. Number one, the big revenue driver, these TV contracts, what does that look like right now? And then I'm thinking back to the back and forth around playoffs. When you look over the last several years, a lot of coaches have raised concerns about extending the season. How do you think this is going to affect the regular season? Are there going to be fewer games?

PETE THAMEL: So it's funny. As always, the answer to first question is money and a lot more money. And that's going to answer the second question in some ways, Akiko. So we are now finished up with year seven of a deal with ESPN exclusive contract with the college football playoff that pays $470 million a year. We are going to be in this system for at least the next two seasons. They've been explicit about that. So we will have a four-team playoff in '21 and '22. The earliest this can go is '23.

At that time, ESPN still has rights, and they would have exclusive negotiating rights for the window until the contract closes. And the interesting thing here will be when we've seen these big TV contracts-- we saw them in the NHL, we've seen them in college football-- the blockbuster ones have either two networks, like Fox and ESPN. The Pac-12 was kind of the first to do this. Or some of the bigger numbers we've seen lately have come from streaming services, be it Amazon or a Paramount Plus or a Peacock. Those have driven numbers up. If they stay conventional with ESPN, neither of those drivers is really available. ESPN is not going to put playoff games on ESPN Plus.

So it will be interesting to see in a more traditional format how much the college football playoff can get moving forward. There's obviously three times the number of playoff games, but the current contract, the $460 million average one, is really for seven games because it includes the New Year's six bowl games, which is like the Cotton Bowl this year, for example, which wasn't part of the college football playoff. So it's really 7 games to 11 contractually, but all those games have a lot more meaning.

And there's one thing at this stage, and through the stages at the end of June, we really won't know much about TV. They're just talking purely about a model, and then they're going to go to their television partners. So there'll still be some drama. And the biggest overlying tension is going to come probably in September when this gets finalized. So there's still some golf left to play here, if you will, to mix horribly sports metaphors.

JARED BLIKRE: And I've got to tell you, you're making me feel nostalgic. I had the privilege of going to many, many Orange Bowl games when I was a kid living in Miami. That was an incredible stadium. But I want to shift gears and talk about the players a little bit and the efforts to allow them to be compensated, to get endorsement deals. It's been, I think, kind of sticky, lots of moving parts here. Where do we stand on that?

PETE THAMEL: Well, sticky is a good way to put it. It's a complete disaster when you come down to it. We've just had our fifth, I believe, congressional hearing this week about it. July 1 is when some of these laws are going to go into effect. And there is no answers. There's no clarity. There's no uniformity. It is a classic free-for-all. The NCAA has basically abdicated responsibility.

In different states now there's almost 20 of them have passed their own laws to go along with this. So the entire market of college sports is going to be completely changed. At the end of this month the NCAA is expected to potentially pass some sort of uniform legislation, but they're really looking for a bailout congressionally. So there are, like you said, a lot of moving parts. There's no clarity, and there's a ton of uncertainty. And it's really starting to cost athletes money, because the political mess is now getting in the way of progress.

JARED BLIKRE: Yeah. And I'll tell you what, if we have to wait for Congress, I'm just going to hold my breath on that one. Pete Thamel of Yahoo Sports, thank you for joining us.