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Sports, even collegiate sports, is a business. A business with history, pageantry, and tradition, but a business nonetheless. Institutions capable of winning on and off the field will inspire new generations of tradition and rivalries. Those that can’t will end up like Sewanee, which once had the most powerful football program in the South. This isn’t new to the modern era, it’s a reality inherent to competition.

https://mises.org/wire/greed-didnt-kill-pac-12-entrepreneurial-failure-did

Tho Bishop

For college football fans, it’s already been a wild August week before the first kickoff.

Reminiscent of the Europe of old, and, hopefully, the America of the future, the collegiate athletic landscape in the last several years has witnessed a massive redrawing conference kingdom borders. The most powerful empires are the SEC and the Big Ten, with the former adding the Universities of Texas and Oklahoma and the latter pursuing manifest destiny in the West with the addition of Southern California and UCLA in 2022, and Oregon and Washington this past week.

This shift in borders coincided with a negotiation of television rights. Disney (which owns ESPN and ABC) secured a monopoly on the SEC by adding full broadcast rights to their games to a preexisting arrangement with ESPN that included streaming rights for $3 billion over ten years. The Big Ten was able to package both broadcast and streaming rights with Fox, CBS, and NBC for $7 billion over seven years. Factoring in other revenue sources, industry analysts expect Big Ten and SEC schools to pull in $70 million per school starting in 2024.

The Big 12 responded with its own additions after losing two of its founding members, adding Colorado, Arizona, Arizona State, and Utah this past week. These acquisitions were the result of a successful television deal of their own with ESPN and Fox that is expected to net the Big 12’s programs over $30 million a year.

The loser of this zero-sum game for territory is the Pac-12, the self-named “Conference of Champions,” which now finds itself with four remaining members. It now seems inevitable that the Pac-12 will go the way of the once-proud Southwest Conference, and the less proud Western Athletic Conference, into the dustbin of pigskin history.

Understandably, these major disruptions to a sport fueled by the dynamics of hate-filled rivalries and proud tradition have resulted in a cascade of digital denunciations about the damaging costs of blind greed, the reliable boogeyman for anyone unhappy with particular economic outcomes.

But what does an alternative universe where greed does not exist in the future of sports look like? The boom in sports television-programming rights is a market response to a radical transformation in entertainment consumption. The rise of streaming services has turned sports programming into premium real estate for advertisement as one of the few entertainment options that is watched live. Sports leagues have leverage while Hollywood actors and writers are on strike. While sports channels are laying off analyst-driven content in an age of podcasts and other independent digital content, networks like Fox are investing in the creation of new sports leagues to help fill their time slots.

In The Anti-Capitalistic Mentality, Ludwig von Mises wrote at length about the extent to which capitalism and the pursuit of profit rile the prejudices of various interest groups upset at the ways changing consumer tastes create new challenges. As Mises explains, conservative anticapitalists lament that legacy powers can be ruined if they fail to meet the changing demands of consumers, while progressives condemn the riches that are awarded to those that triumph.

The Pac-12 is a perfect illustration of this dynamic at work.

While it is easy to portray Big Ten and SEC officials as the villains of conference realignment, a look at history paints a picture in which the death of the Conference of Champions resulted from its own entrepreneurial failure.

As Stewart Mandel documented for The Athletic, the seeds for the now Pac-4 were planted over a decade ago.

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