Casagrande: What the new $7.8 billion CFP deal means for you

This is an opinion column.

A taste of the future was delivered Tuesday with the next round of College Football Playoff revelations.

For weeks it’s been teased and leaked with carefully crafted messaging. There was the whole thing about automatic bids for the SEC and Big Ten that was quickly punted or just a distraction from the real negotiation.

Because on Tuesday, this was about the money.

It always was.

ESPN and the CFP formally and officially announced they’d remain married through the 2031-32 season. It’ll only cost the network $7.8 billion for the additional six seasons — roughly tripling what it currently pays for the four-team playoff and other New Year’s Six bowl games.

More on that to come.

What Tuesday’s announcement didn’t include was anything about the format, the number of teams involved or how they’d be selected. This was just the money.

It always was.

And there’s plenty of that to go around, especially for the Big 2 of the SEC and Big Ten. They’ll combine to make 58% of the revenue from this new contract, as has been reported for a few weeks now.

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All of this comes at an interesting time for college athletics and cable television. How does all of this work and what will it mean for you, the viewer?

Under a 12-game playoff format, they effectively added four games and tripled the money. All of this comes amid the broadcasting revolution of cord-cutting and shifting consumer habits.

ESPN lost 3 million subscribers from 2022 to 2023, according to Disney’s 10-K filings with the Securities and Exchange Commission (the other SEC). The 2023 annual report states $9.2 billion in affiliate fees (the portion of a cable/streaming service bill that goes to ESPN).

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According to an August 2023 report from Sportico, the estimated monthly fee viewers paid for ESPN was $9.42 — more than three times the rate of the second-highest chuck of the cable bill ($3 for TNT).

ESPN brought in $9.3 billion in those affiliate fees in 2023, according to its SEC filing — down 2% from the previous year. The explanation directly from Page 43 of its SEC filing:

“The decrease in domestic ESPN affiliate fees was due to decreases of 7% from fewer subscribers and 1% from the temporary suspension of carriage with an affiliate, partially offset by an increase of 5% from higher contractual rates.”

You see that last part?

Then there are the streaming subscriptions from ESPN+. They were up 7% last year to 26 million subscribers who pay on average $5.49 a month. That was up from $4.80 a month “due to an increase in retail pricing.”

What would further drive those subscriptions?

Maybe make a few CFP games ESPN+ exclusives just like Peacock did with last year’s wildly popular NFL playoff game between the Dolphins and Chiefs. That was actually addressed in the ESPN.com story published Tuesday after the news was announced.

“There is a right and flexibility to do early-round games on direct-to-consumer streaming services, but as of now, no decision has been made on our side to even activate that right,” said Nick Dawson, ESPN senior vice president, of college sports programming and acquisitions. “A lot of this is future-proofing where the world goes over essentially eight years, and we feel really good about the flexibility we have, but in the near term, I don’t think fans would expect to see much difference in terms of how the games are distributed broadly across traditional linear television.”

Of course, ESPN is teaming up with Fox and Warner Brothers to launch a new streaming joint venture this fall that’ll further shake up the marketplace.

Bottom line: It’s probably not going to get any cheaper to watch College Football Playoff games or anything on ESPN’s family of networks.

This, of course, wouldn’t be the only factor trickling down to make prices go up, but these additional billions in payouts don’t come from charity or goodwill.

It’s all part of the machine that drives the college sports money machine — one that’ll continue to churn and evolve. There’s certainly more to come in the future of the CFP as the march to 14 teams continues before they even take next year’s 12 out for a spin.

And there’s room to grow.

ESPN’s Dawson was quoted in the ESPN.com report Tuesday as saying the TV deal has “a mechanism to address if they expand beyond 14 teams.”

Sounds like a tasty future, but like with any menu, someone ultimately has to pay the bill.

Michael Casagrande is a reporter for the Alabama Media Group. Follow him on Twitter @ByCasagrande or on Facebook.