Sources: College Football Playoff agrees to new contract with ESPN

By | March 16, 2024

College leaders have reached a deal on a new College Football Playoff contract.

Executives from the 10 FBS conferences and Notre Dame agreed Friday to a new contract with ESPN starting in 2026, agreeing on a new revenue-sharing model and protections regarding a future playoff format. The news was expected after the presidents of the Big 12 and the ACC voted Wednesday to authorize their commissioners to adopt the new framework. The two conferences were seen as the most reluctant to agree to a framework that puts them at a financial disadvantage.

Conference commissioners and Notre Dame leaders signed memoranda of understanding on the drafts previously reported by Yahoo Sports as they relate to revenue and format, as well as the new deal with ESPN.

The new television contract with ESPN will extend for six years through the 2031 playoffs and will pay the CFP $1.3 billion annually — about three times the amount the network shelled out for the four-team version. Those numbers were reported by ESPN itself in a story in January.

It is expected that a play-off format will not be finalized until a later date, although protections and guarantees regarding a 12- or 14-team format are part of the agreement. The champions of the four major conferences and the highest-ranked champion from the Group of Five automatically earn a qualifying spot for each playoff.

Notre Dame is expected to have its own safeties regarding a format. The Irish can earn a guaranteed spot in the major market based on their CFP rankings. However, that guarantee depends on the number of automatic qualifiers in a final format.

How to distribute the money has been an intense and sometimes contentious process among the conference’s commissioners — a debate that began in earnest about six months ago.

As detailed in a Yahoo Sports story last Friday, the new revenue distribution model is heavily weighted toward the Big Ten and SEC. Under the previous structure, the five major conferences largely split 80% of the CFP’s $460 million in revenue evenly.

The College Football Playoff will look different after the 2025 season.  (Brian Rothmuller/Icon Sportswire via Getty Images)

The College Football Playoff will look different after the 2025 season. (Brian Rothmuller/Icon Sportswire via Getty Images)

The Big Ten and SEC together will earn about 58% of the CFP’s base payout (29% each). This figure would far exceed the combined distribution figure of the ACC and the Big 12, which is expected to be around 32%. The ACC receives 17.1%, while the Big 12 receives 14.7%. The remaining amount (approximately 10%) will be distributed among Notre Dame and the 64 teams of the Group of Five.

The difference in split between the two sets of conferences – SEC/Big Ten and ACC/Big 12 – could be more than $300 million. The Power Two will earn a combined amount that should exceed $700 million, far more than the ACC and Big 12’s figure of around $400 million. Approximately $115 million has been earmarked for the Group of Five.

With the increase in ESPN distribution, no school’s revenue will decrease. Major conference schools currently receive approximately $6 million in distribution from the CFP. The SEC and Big Ten schools will see their annual payout triple, if not quadruple, to the low $20 million range. ACC and Big 12 schools are expected to see a more than doubling of their previous amounts. Independents UConn, Washington State and Oregon State will get a small share.

Notre Dame, one of the sport’s historic powers that will retain its seat on the CFP’s governance structure, will see its payout double to $12.5 million a year – with the caveat that it will include a financial bonus. The four independents are eligible for a performance payment. If Notre Dame or other independents qualify for the playoffs, they will each receive a lump sum of $6 million.

Notre Dame is also the only major conference school that won’t be able to absorb the financial impact of losing millions of dollars from bowl contracts. The SEC, Big Ten, Big 12 and ACC all leave behind lucrative bowl tie-in contracts, specifically with the Rose, Orange and Sugar Bowls.

Aside from the provision around independent players, the performance sharing structure, which historically applied to all teams, has been eliminated in this contract.

The CFP revenue distribution model was largely based on historical playoff success over the past decade. Considering future realignments, the SEC and Big Ten account for 72.5% of CFP participants. The SEC leads all conferences with 17 in the four-team field, considering Oklahoma and Texas. The Big Ten is next at 12, taking into account the four new schools. The ACC (7 teams) and Big 12 (2) follow.

The contract was expected to include a final “look-in” provision in 2028, during which revenue distribution and format could be reevaluated. The look-in facility can be activated earlier by any conference rescheduling.

An official format may not come until the coming weeks or months.

For 2024 and 2025, the format is set as a 5+7 12-team model, which automatically awards qualifying spots to the five highest-ranked champions and seven overall spots to the next highest-ranked teams. The revenue model for the next two years will also be determined based on the previous formula. There are increases from the original four-team playoff. The expansion from four to twelve teams automatically increased distributions totaling $460 million in 2024 and 2025.

Like their large revenue share, the SEC and Big Ten are expected to carry significant weight in determining a format that begins in 2026. A variety of 14-team formats continue to circulate in the industry.

One being considered is a 5+9 model that mirrors the current 5+7 12-team format but features two extra-large spots. There is still the possibility of multiple automatic qualifiers for individual leagues, including a format that awards three automatic qualifiers each to the SEC and Big Ten, two each to the ACC and Big 12 and one to the top-ranked Group of Five program, with three in large spots – a 3-3-2-2-1+3 model.

A 2-2-1-1-1+7 model is also being considered. It awards two automatic berths each to the SEC and Big Ten, one to the ACC and Big 12, one to the top-ranked Group of Five, with seven at-large spots.

The concept of the Big Ten and the SEC having exclusive rights to the two first-round byes has attracted enough resistance that it has been tabled, at least for now, as Yahoo Sports reported last Friday.

The money is the most important issue.

Income is more important than ever. The major conferences and their members are gearing up for a future compensation model for athletes. The concept – whether employment, revenue sharing or collective bargaining – requires additional cash flow to be set aside for players.

The leagues are also in danger of being owed billions of dollars in retroactive NIL payment and television distribution due to several ongoing antitrust cases.

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