College sports are changing rapidly. From the soon to be instituted college football playoff to the potential changes the Ed O’Bannon lawsuit forces on schools, we are clearly in a time of change. The subject of today’s post is another example of these changes, as our focus is on conference realignment. The cynic, who in this case would be correct, would say that the realignment activity of the past few years has been driven by money. It has been the quest for new television markets (Rutgers to the Big Ten) and powerful brands (Nebraska, also to the Big Ten) that has led some conferences to grow, and for many teams to make moves.
The topic of realignment is top of mind today because it is the first day of the American Athletic Conference. This new AAC is largely comprised of refugees from the Big East and Conference USA. Today’s analysis looks at how the shuffling across conferences has increased the overall brand equity of each league. For this analysis we use the results of our previous college basketball brand equity analysis. The one significant change is that for this analysis we do not separate out the conference effects when computing team-level brand equity. Each league’s rank is then the sum of its teams. We perform the analysis for both 2012 and 2014.
The analysis yields some expected and surprising results. The Big Ten leads the way both in 2012 and 2014, with the ACC following behind in both years. However, while the Big Ten has a large lead in cumulative brand equity in 2012, the gap is almost negligible in 2014 (In terms of percentages the brand equity of the ACC basketball programs was 81.7% of the Big Ten’s in 2012, but with the changes scheduled to occur, the ACC will have 97.2% of the Big Ten’s equity in 2014).
Of course, the most interesting part of the table concerns the new Big East (Catholic 7) and the new American Athletic Conference. The Big East drops from being the 3rd ranked conference to being the 6th best conference in 2014. However, it should be noted that this drop is primarily due to the reduction in the league size. In terms of average equity the remaining Big East schools still have the 3rd highest average score.
For the new American Athletic Conference the story is not very hopeful. The new American Athletic Conference is projected to rank 9th behind the power 5 conferences, the Big East, the Mountain West and the Atlantic Ten. This was a somewhat surprising finding given that the American Athletic Conference will still contain schools like Cincinnati, Memphis, and UCONN. But the numbers suggest that Dayton, UNLV and New Mexico have sufficient fan equity to move their leagues past the American Athletic Conference.
The other big story is the positions of the PAC 12 and the Big Twelve. In 2012, the Big Twelve had a 22% advantage in terms of brand equity, but we forecast that in 2014 it will trail the PAC 12 by 7%. These types of changes are important as there is a bit of a game that occurs within conferences. Schools in weaker conferences are likely to have a greater incentive to jump to stronger leagues because they fear being left in a dying league without great options. The Big Twelve has recently lost Colorado, Texas A&M and Missouri. If Texas were to leave, the conference would likely disintegrate.
We would also like to make a couple of notes regarding some assumptions implicit in the model. Our use of revenue premium based brand equity as of 2012 means that each school’s brand equity can be viewed as partially a product of their affiliation in that year. This is important if a league’s value is more than just the sum of its teams. For example, the Big Ten pursued Rutgers largely to secure entry into the NY television market. The logic behind this move would seem to be an assumption that competition with Big Ten teams will improve Rutgers’ attractiveness within the market. Our analyses do not (as of now) include this type of potential synergy. The new ACC has at least partially adopted a television based strategy as the members are widely distributed across the nation. The hope has to be that this cross country coverage creates synergies that simultaneously create interest in the teams and the league. However, given the current lack of brand equity and the aggressiveness of stronger leagues to form lucrative television networks, this will be a tough haul.