From 1999 to 2014, the Bowl Championship Series (better now as the BCS) administered a series of season-ending bowl games in an effort to determine the National Champion of Division I College Football. Rankings for these games, which would ultimately determine who would participate in the National Championship game, was done by fusing results of the AP Rankings, Coaches Poll rankings, and six different computer ranking systems.
This system, while well-intentioned, was ultimately doomed to a lifetime of controversy. Fusing the results of the different ranking systems created perpetual debate around the subjectivity of the results, and hosting just a single National Championship game made it difficult to compare a number of highly qualified teams against each other.
As a replacement for the BCS system, the College Football Playoff (CFP) was created for the 2015 title season. Stealing from Division II football and other leagues, the CFP instituted a four-team playoff tournament to determine the National Champion, and replaced the fusion of rankings systems with a single expert panel. This system has been operating since 2015, and has crowned six National Champions to date.
Concentration of Power
The most interesting trend we can see in the CFP since its inception, which mirrors a greater societal trend in America, is an increasing concentration of power and success into fewer and fewer hands.
Since 2015, Clemson and Alabama have each won two CFP titles, meaning that 4/6 of the CFP titles were secured by just these two teams. Furthermore, if we just look at appearances in the Playoff itself, we see 20 of 28 Playoff slots (71%) secured by those same two teams, plus Oklahoma and Ohio State. Reminder - there are over a hundred different D1 football programs!
Visualizing CFP Outcomes
This stranglehold on Playoff slots is particularly interesting if we think about it as analogous to a concentration ratio in economics. Here’s an interesting quote from Investopedia
A rule of thumb is that an oligopoly exists when the top five firms in the market account for more than 60% of total market sales. If the concentration ratio of one company is equal to 100%, this indicates that the industry is a monopoly.
With this in mind, it’s hard to deny that college football itself has taken the shape of an economic oligopoly, with a small number of teams obtaining the most advantageous outcomes. If this oligopoly continues to exist and evolve, it may very well turn into an oligarchy, with long-term stratification of success more or less pre-determined to only a handful of schools.
Observations and Musings
While this knowledge isn’t likely to be much of a surprise to avid football fans, I wanted to write a brief article to highlight how significant this concentration trend is, and offer a few thoughts of my own on the whole environment.
- There is a natural virtuous cycle between championship success and recruiting, which makes it more likely that successful teams today will be successful tomorrow
- Financial success (verboten for the athletes themselves, but hotly desired by both the schools and conferences in play) fits into this cycle as well - the best teams have the most money to invest in their programs and facilities, which increases their attractiveness to recruits, and makes it more likely that they will win future champions, and secure accordingly greater future financial success….
- Because the athletes themselves are amateurs, and unable to be compensated financially, the market for their services is weak, and the only real differentiators in selecting a school are academic quality, football prestige, and playing time
- A natural escape valve from this type of situation is allowing schools to schools to pay workers. This would allow less-successful schools to be able to offer a differentiating factor ($) from more historically-successful programs, thereby leveling the playing field to some degree
- A salary cap would also mean that all teams would have to optimize their rosters subject to the same cost function, and that the perpetual cycle of financial success would be limited
- Hypothetically, a school like Southern Mississippi could offer a “contract” to a 5-start recruit worth 2% of their salary cap (call it $500k), but to whom Alabama could only offer 1% of their salary cap ($250k), creating a benefit that could theoretically outweigh Alabama’s advantages in facilities, academic prestige, and so on
- Over time, this competitive market would naturally deconcentrate the degree to which historically elite programs attract the best recruits - certain programs would still have an edge based on different noteworthy characteristics that are hard to price into the market (such as Stanford academics, family connections, teammate relationships, etc.) - but the playing field would be more level on aggregate
- Notably, this is the structure the NFL uses, and it is the American professional sports league with the greatest degree of parity