As many of you may know, I follow the conference and CFP expansion subject closely. For some reason, it intrigues me. This is a way to long post about why FSU's and Clemson's chances of getting into the P2 took a big blow with the way the CFP money is distributed.
;TLDR - because CFP money is distributed by percentage and not based on participation, FSU and Clemson can't come close to driving enough revenue to earn a full share from either conference.
I've written a couple of detailed articles here about what drives money in CFB. While it used to be grabbing markets for linear cable money - see, Rutgers, Maryland, ATM, and Missouri - that source of revenue is drying up. Revenue is primarily driven by (1) TV Viewership - the number of people watching games, and hence advertisements; (2) CFP revenue, now up to $1.3 billion per year; and (3) linear cable deals which, again, is a shrinking revenue source. In determining whether a P2 conference would want you in the conference, you better be able to drive enough revenue to earn your share or the teams in those conferences won't be willing to take a pay cut to let you in.
The TV money has been set with new contracts written for the SEC, B1G, and B12. The ACC is stuck in an outdated agreement that favors ESPN. And after 100 years of existence, the PAC collapsed because they couldn't get a TV deal.
Because the CFP contract was coming up for re-negotiation in 2026, that was the next big source of revenue. While there is a TV revenue gap between the B1G/SEC and the ACC/B12, the CFP contract was what was really going to blow open the difference between the P2 and the lower-P2. With OU/TX/USC/UO/UW moving to the P2, it was clear they were going to get even more teams into the CFP and therefore get more money, increasing the revenue gap.
I was thinking the other day that it was really weird that they didn't follow the March Madness (MM) method of splitting revenue - splitting based on shares a team gets for getting into MM, and then more shares as they win. That made a ton of sense as it rewards merit. If we had a CFP-12 instead of a CFP-4, the B1G would have had 39 teams get in, the SEC would have had 35, and the ACC and B1G would have had less than 10 each. It made sense to give out shares to each conference for each team that got in and each team that advanced. The result would have been roughly the same ... the B1G and SEC would have gotten the lion's share of money with the SEC getting the most due to winning more often, then the B1G for getting more teams in, the ACC next, and the B12 in 4th. But they didn't do it that way. Instead, there are no participation/results rewards. The P2 each gets a certain percentage no matter how many or who gets in. The ACC next, then the B12.
That was a long way to get to my point - giving out CFP shares in that manner is a deal breaker for FSU and Clemson getting into the SEC or the B1G. If we start with the proposition that P2 teams aren't going to take less per team each year to let FSU and Clemson in, then each of those schools needs to be able to generate $65 million in TV dollars, and another $25 million or so of CFP dollars. Let's say their viewership is such that they can generate enough value to earn a TV dollar share. They would have argued that they would get into the CFP often enough to generate additional shares and more revenue. But, that's not how the money is distributed. The SEC and the B1G will get the percentage of CFP money with or without Clemson and FSU. They provide no incremental value to those two conferences because they get their money whether they put 2 teams or 5 teams in. They will put in an average of 4 teams each year, and both conferences already have plenty of good teams to fill those slots. No one cares if the 4th SEC team is Ole Miss or Clemson, Wisconsin or FSU.
Because they provide no incremental revenue from the CFP pool, FSU and Clemson lost a major bargaining chip in trying to convince the SEC or B1G that they should get into the P2 for a full share. Aside from the likelihood of straight up losing their litigation, even if the win there is a serious question as to whether they have a landing spot in the P2.
;TLDR - because CFP money is distributed by percentage and not based on participation, FSU and Clemson can't come close to driving enough revenue to earn a full share from either conference.
I've written a couple of detailed articles here about what drives money in CFB. While it used to be grabbing markets for linear cable money - see, Rutgers, Maryland, ATM, and Missouri - that source of revenue is drying up. Revenue is primarily driven by (1) TV Viewership - the number of people watching games, and hence advertisements; (2) CFP revenue, now up to $1.3 billion per year; and (3) linear cable deals which, again, is a shrinking revenue source. In determining whether a P2 conference would want you in the conference, you better be able to drive enough revenue to earn your share or the teams in those conferences won't be willing to take a pay cut to let you in.
The TV money has been set with new contracts written for the SEC, B1G, and B12. The ACC is stuck in an outdated agreement that favors ESPN. And after 100 years of existence, the PAC collapsed because they couldn't get a TV deal.
Because the CFP contract was coming up for re-negotiation in 2026, that was the next big source of revenue. While there is a TV revenue gap between the B1G/SEC and the ACC/B12, the CFP contract was what was really going to blow open the difference between the P2 and the lower-P2. With OU/TX/USC/UO/UW moving to the P2, it was clear they were going to get even more teams into the CFP and therefore get more money, increasing the revenue gap.
I was thinking the other day that it was really weird that they didn't follow the March Madness (MM) method of splitting revenue - splitting based on shares a team gets for getting into MM, and then more shares as they win. That made a ton of sense as it rewards merit. If we had a CFP-12 instead of a CFP-4, the B1G would have had 39 teams get in, the SEC would have had 35, and the ACC and B1G would have had less than 10 each. It made sense to give out shares to each conference for each team that got in and each team that advanced. The result would have been roughly the same ... the B1G and SEC would have gotten the lion's share of money with the SEC getting the most due to winning more often, then the B1G for getting more teams in, the ACC next, and the B12 in 4th. But they didn't do it that way. Instead, there are no participation/results rewards. The P2 each gets a certain percentage no matter how many or who gets in. The ACC next, then the B12.
That was a long way to get to my point - giving out CFP shares in that manner is a deal breaker for FSU and Clemson getting into the SEC or the B1G. If we start with the proposition that P2 teams aren't going to take less per team each year to let FSU and Clemson in, then each of those schools needs to be able to generate $65 million in TV dollars, and another $25 million or so of CFP dollars. Let's say their viewership is such that they can generate enough value to earn a TV dollar share. They would have argued that they would get into the CFP often enough to generate additional shares and more revenue. But, that's not how the money is distributed. The SEC and the B1G will get the percentage of CFP money with or without Clemson and FSU. They provide no incremental value to those two conferences because they get their money whether they put 2 teams or 5 teams in. They will put in an average of 4 teams each year, and both conferences already have plenty of good teams to fill those slots. No one cares if the 4th SEC team is Ole Miss or Clemson, Wisconsin or FSU.
Because they provide no incremental revenue from the CFP pool, FSU and Clemson lost a major bargaining chip in trying to convince the SEC or B1G that they should get into the P2 for a full share. Aside from the likelihood of straight up losing their litigation, even if the win there is a serious question as to whether they have a landing spot in the P2.
