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Ohio State wins national title, ESPN & NCAA cash-in

As confetti rained down on the national champion Ohio State Buckeyes last night, money was pouring into ESPN and the NCAA. The Buckeyes defeated the University of Oregon 42-20 to capture College Football’s inaugural playoff title. The early returns seem to indicate ESPN made a great deal acquiring the broadcast rights. Last night's game delivered the largest audience in cable history with 33.3 million viewers tuning in.

ESPN paid a reported $7.3 billion for the rights to air the college playoffs over the next 12 years. There are also reports that ESPN received up to $1 million per ad that aired during the championship game. The semi-final games leading up to the national title game both brought in record-breaking ratings. Oregon’s victory over Florida State and Ohio State’s win over Alabama were both watched by more than 28 million people each.

In an age of watch-when-you-want programming, advertisers and networks are constantly looking to find opportunities for live viewers. Yahoo Finance’s senior columnist Michael Santoli says sports delivers. “The semi-final games were the most watched cable program ever. It resonates out there. It’s a good demographic. You’re getting to younger people who don’t actually watch TV. It’s really cliché now. We all know sports is the only appointment viewing anymore.”

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The success of the new tournament format could prompt the NCAA to add more games and teams to the playoffs. There’s already talk about expanding from four teams to eight. Santoli thinks stations will see the upside. “The networks never do under-kill. They do overkill. If they can stretch it out and the schools go along with it, I do think there’s a possibility. I do think they say, 'Look, it’s manageable and logistically possible.'”

More games will mean more money coming into the networks and the NCAA. Bigger revenues will also bring attention to the complicated issue of student athlete compensation. Athletes on scholarship receive tuition, room and board and some compensation for miscellaneous things like laundry and transportation. These scholarship packages lag far behind the billions of dollars the broadcast networks and the NCAA profit from the games.

Santoli thinks it’s only a matter of time before the arrangement is amended. “This system has to bend or break at some point. Whether it’s just extended health coverage-- that’s kind of minimum with all the health risks-- or some kind of compensation that goes beyond a scholarship."

Santoli feels the current system appears a bit one-sided. “Right now, these guys are basically being kicked out of college if they have pro prospects. They are going early and not waiting around four years. The system starts to look like a feeder system for the NFL.”

Former NCAA basketball player Ed O’Bannon filed and won a class action lawsuit against the NCAA over athlete compensation last year. The ruling judge said the NCAA’s current rules that limit compensation to college athletes are unfair and “unreasonably restrain trade”. The NCAA is currently appealing the decision.

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