News of Conference USA's reduced TV money came out this week and it was worse than expected. It sparked an interest from other Group of Five leagues about what will happen once their current TV contracts expire.
One league that should absolutely take note is the American Athletic. Even though their TV contract doesn't expire until 2020 and nets each school $2 million per year, there's other factors to worry about.
When the Catholic Seven split from the Big East effective summer 2013 and took the name and history of the conference, they left the future American Athletic members the entire $100 million plus war chest the conference earned in tournament units. Plus with exit fees from West Virginia, Syracuse, Pitt, Rutgers, Louisville and Notre Dame numbering untold millions more (WVU paid over $10 million while Syracuse and Pitt paid around $7.5 million for example), the American had solid footing to build upon.
More footing came after the split was announced when Louisville won the NCAA National Championship, Syracuse made the Final Four and Marquette made the Elite Eight. All schools were in their final year of the old Big East and due to their moves, would forfeit all their tournament units to the future American Athletic. The following year, 2014, UConn won the National Championship, netting the conference another $10 million plus in units through 2020.
Those monies somewhat offset the losses the league suffered in football when the Power Six became the Power Five, dropping league revenues by 45%.
Right now, the conference is the class of the Group of Five. Houston got the coveted Access Bowl spot, another financial boom to the league, Memphis, Navy and Temple had great seasons while programs like UCF, Tulane and ECU made coaching changes in effort to keep up in the arms race.
But those exit fees and tournament units will go away. The American didn't have a single team in the 2015 or 2016 Sweet Sixteen and while the Access Bowl spot is nice, it's not the money the league got in the old BCS.
Michael Aresco, current AAC Commisioner, has said his goal is to make the league a power conference. The only way that happens is if the College Football Playoff, which is set through 2025, renegotiates their deal to more than four teams and the American keeps on beating power conference teams and have a stranglehold on the Access Bowl spot. Making deep March Madness runs will also help the conference stay flush with cash and help prevent belt-tightening.
But how long can the American keep up their arms race? If nothing happens by 2025, it will be too late for the American and the balloon will have lose most its helium.