View Full Version : Breaking down cusa mwc discussions

04-19-2012, 10:40 AM
If you’ve been following the developments between Conference USA and Mountain West on this site and other sources, it’s easy to be confused.

At first, there was a bold statement about the two conferences formally deciding to work together to form some sort of conference alliance or merger. And the idea made sense: since both conferences have and are losing members (CUSA losing UCF, Houston, SMU and Memphis, while the MWC is losing TCU, Boise St. and Dan Diego State. The MWC also just lost Utah and BYU this past season), they were opting to work together.

In combining the 8 remaining CUSA members and the 7 MWC all-sports members along with an 8th football only member, Hawaii, the goal was for the 2 conferences to broaden their national appeal by creating some form of coast to coast conference, to maximize their television revenue potential.

This first step was simply an agreement to work together to explore the best possible options. And there were many options on the table right away.

At the top of the list, was to form a football-only alliance. This alliance would be formed to fulfill the most basic goal: to create a single entity to negotiate a better television deal for the total of 16 members. As part of that simple alliance plan, there were additional options whereby the two separate conferences would expand to add members to replace their departing ones within their general regional footprint, creating an even larger football alliance. The most likely scenario from day one was for CUSA to add FIU to replace the lost Florida market and to add North Texas to replace the loss of SMU in the Dallas market. The Mountain West conference would then likely add two members they have given long looks at over the past two years: Utah St., to replace the lost Salt Lake City and Utah market, once the nucleus of the MWC with Utah and BYU, and to add San Jose St., to bring the Bay Area TV market into the MWC mix.

The then 20 schools, split 10 and 10 between CUSA and MWC, would operate as two separate conferences for all sports except football. For football, the conferences would likely have 9 game schedules, whereby all CUSA members would play football against each other, same as each MWC member. The football alliance would then petition the NCAA to allow each of these winners to participate in a Football Alliance extra game, similar to a traditional conference championship game, where the two division winners face off each year in conferences such as Pac-12, SEC, Big Ten and ACC.

And this leads to the key aspect of what is going on with the CUSA/MWC alliance or merger discussions: operating within the current NCAA guidelines.

As with any proposed business merger or alliance, both parties work together to explore every option to best serve it’s members, in this case the individual schools.

So in addition to an alliance, CUSA and MWC have indeed explored a full merger.

Their goal of a full merger would be to gain all the same advantages for new television negotiations, but they also hoped that at 16 to 24 members, specifically if expanding to 20-24 schools, that they would be able to keep their current system of having the 2 NCAA basketball tournament bids. They also hoped that in merging both conferences into something new or dissolving one to be absorbed into the other, that they would be permitted to retain all the NCAA basketball tournament shares both conferences have earned, and to fully collect all the exit fee money the two conferences will be getting with the departures of the 7 total schools (4 from CUSA, 3 from MWC).

The NCAA alerted the joint CUSA/MWC group that:

1) if they folded both conferences to form a new conference, both conferences would forfeit their NCAA basketball tournament shares
2) if they folded both conferences to form a new conference, both conferences would forfeit their incoming exit fees back to the departing schools
3) if they folded both conferences to form a new conference, the new conference would only get 1 NCAA basketball tournament bid
4) if they folded ONE conference into the other, the new conference would only get 1 NCAA basketball tournament bid
5) if they folded ONE conference into the other, ONE of the conferences would forfeit their NCAA basketball tournament share revenue
6) if they folded ONE conference into the other, ONE of the conferences would forfeit their incoming exit fees to the departing schools

So once the NCAA made their stance clear with just these issues, the idea of a merger was pushed very far down the list of options.

Why? The large loss of revenue.

Even if CUSA and MWC went with the most conservative of the merger ideas, it would still mean that one conference would lose a large amount of money. Let’s assume it was the MWC folding into CUSA: the MWC would lose their tournament shares, including any earned by BYU and Utah that haven’t been paid out yet, as well as San Diego St., UNLV, New Mexico, Colorado St. who have all made the tourney in recent years. The MWC would also have to forfeit the exit fee money they are getting from TCU, San Diego St., and Boise St.

But even with the financial loss cut in half, it’s still a sizable revenue drop.

So at that point, yes, CUSA and the MWC continued to explore all merger options, looking to see if the long term benefit of a merger would outweigh the initial financial loss.

But the idea of a football-only alliance was still the top option.

So when CBSSports Brett McMurphy reported that the CUSA/MWC merger was dead, or “unlikely“, we was relaying the same sentiment that we’ve known since late March when the NCAA ruled on the issues pointed out above.

What this means, today, April 18th, is that nothing has changed.

CUSA and MWC are still exploring all options, trying to maximize their profitability.

And there are still a number of different options on the table:

1) A simple 16 team football alliance, where CUSA remains at 8, while MWC adds an 8th member for all non-football sports to offset Hawaii as a football-only.
2) An 18-20 school alliance, where CUSA adds new members such as FIU and North Texas while the MWC adds Utah St. and San Jose St.

#2 is the most likely scenario

3) There are other options where CUSA could add FIU, North Texas and UTSA, where UTEP leaves for the MWC to be joined with Utah St.

In any of the 3 scenarios, the key is still for the NCAA to permit the 8-10 school conference winners to compete in a game similar to the traditional conference championship games.

4) CUSA could expand to 12, with two (6) school divisions (candidates for the 4 spots would include FIU, FAU, Charlotte, Appalachian St., MTSU, LA Tech, UTSA and North Texas),
while the MWC expands to 12 with the additions of schools such as Utah St., San Jose St., UTEP, North Texas, UTSA, New Mexico St., and perhaps even Idaho.

For #4, CUSA and MWC would establish a joint television deal for all 24 members as a single business entity, while operating as 2 separate conferences by NCAA statues.

As a result, they would sponsor the first even “Championship Semi-Finals” by their business entity standards, while these games would actually only be traditional conference championship games by the NCAA standards. The winners of both “semi-final” games would then face off in a traditional bowl game, featuring CUSA #1 vs MWC #1. This would be similar to the old Liberty Bowl which featured CUSA #1 vs MWC #1 in the only bowl featuring two conference winners.

The key here is that what the CUSA/MWC group decides to do is dependent on what they can do WITHIN the NCAA guidelines, while operating as a separate entity from solely a business perspective.

So no matter what you read elsewhere, remember, this is a semantics game. Yes, a merger is unlikely…it has been for over a month. But an alliance for football is still very much on the table. CUSA and MWC members will be meeting at the end of April to further discuss their plans, with a June announcement expected. Other additions are also expected to be announced in June as well, to ensure that any incoming schools have the time needed to join before the July deadline to be eligible for July 2013.

That said, it seems quite probable that FIU and North Texas will be joining CUSA, with Utah St. and San Jose St. joining the MWC, with an announcement before July