Game Theory and the Coming ACC Split
A framework for considering each school's moves as the conference realignment dominoes begin to fall
The Pac-12 conference imploded, one move at a time, over the course of approximately one year.
The precipitating event was the announcement that USC and UCLA would leave to join the Big Ten.
The entire process was a real world example of an extensive-form game. And it was a nightmare.
The result is that two-thirds of the current Pac-12 members will be in a worse position when the 2024 season kicks off than they were this season.
The ACC presidents were watching, and surely they took notes. They will not repeat the mistakes of their West Coast brethren.
Strategy games administrators play
Simultaneous game theory is a concept in the broader field of game theory, which is a mathematical framework for modeling scenarios where players (in this case schools) make decisions that affect the outcomes for all involved.
In a simultaneous game, each player makes their decisions or chooses their strategies at the same time, without knowledge of the other players' choices. The most classic example of this is the Prisoner's Dilemma, but many other games and real-world scenarios fit this model.
Key Concepts
Players: Individuals or entities making decisions in the game. In simultaneous games, all players are making their choices without definitive knowledge of the others' choices.
Strategies: The possible actions available to each player. In a simultaneous game, players must choose their strategy without knowing the strategies that other players will choose.
Payoffs: The outcomes resulting from the combination of strategies chosen by the players. Each player's payoff depends not only on their own strategy but also on the strategies chosen by other players.
Nash Equilibrium: A key concept in simultaneous games where players are in a state in which no one can benefit by changing their strategy while the other players keep theirs unchanged. It represents a stable state of the game where everyone has made their best possible decision, considering the decisions of others.
Types of Simultaneous Games:
Zero-Sum Games: Where one player's gain is exactly balanced by the losses of other players. In other words, the total payoff for all players is zero.
Non-Zero-Sum Games: Where the total payoff can vary, and players might have the potential to all be better or worse off.
Analysis Tools
Payoff Matrix: A table that shows the payoffs for every possible combination of strategies by the players. It's especially useful in simultaneous games to visualize outcomes and strategize.
Best Response: The strategy that will give a player the highest payoff given the strategies chosen by other players.
Real-World Applications
Economics: Understanding market strategies where organizations must make decisions about pricing, product launches, etc., without knowing what their competitors will do.
Political Science: Analyzing how countries or political groups might react to policy changes or treaties without knowing the actions other groups will take.
Biology: Examining how different species might evolve strategies for survival without knowing the strategies of other species in their ecosystem.
In summary, simultaneous game theory is a way to mathematically analyze situations in which multiple parties make decisions at the same time, without knowing what the others will decide.
It is used to predict outcomes, understand strategic interactions, and identify the best courses of action in various scenarios ranging from economics to biology.
Administrative exercises
As you read this, we are in the early stages of the non-zero-sum simultaneous game that will determine the fates of the 17 schools that are slated to play football in the ACC in 2024.
Last year, the so called Magnificent Seven schools announced their openness to pursuing more lucrative options than are present within the status quo. Those schools were:
Virginia Tech
Virginia
North Carolina
NC State
Clemson
Florida St.
Miami
Currently, there are 15 voting members in the ACC (Notre Dame gets a vote). Stanford, Cal, and SMU have not formally joined the conference yet, and therefore do not get a vote at the present time. However, once they are official members, they would almost certainly vote against any changes.
If the Florida St. lawsuit fails, then this entire article will be moot. But that lawsuit is likely to succeed enough to enable FSU to leave the league.
For anyone who missed it, I presented a detailed review of the formal complaint in a recent podcast episode.
EP 16: The Florida St. Lawsuit and How it Impacts Virginia Tech's Conference Affiliation
In the end of December Florida St. sued the ACC in its latest and boldest attempt to get out of the conference’s media Grant of Rights. If successful, the Seminoles will leave the ACC, likely prompting an exodus of many, if not all, of the so-called
So, assuming Florida St. is able to leave, and that is surely the assumption the other university presidents are working under, then the Seminoles, as well as every other school, will have to choose one of the following options:
Remain in the ACC
Pursue the creation of a new conference
Pursue admission to an existing conference
Go independent
Independence is, practically speaking, not feasible for the vast majority, if not all, of the current conference members. For that reason, I will focus on the other three options.
Through the use of payoff matrices, each school can game out it best option(s) vis-a-vis every other school. For example, Virginia Tech matches up with Florida St. as follows:
All numbers (shown in millions of dollars in annual revenue from media rights compared to the status quo) are hypothetical, but proportional to current market expectations.
The baseline option, stay in the ACC, assumes no change in the current media revenue that goes to each school. Under that assumption, if the league dropped below 15 teams, it would simply poach schools from other leagues to get back to the contractually required 15.
Other options have potential gains (and maybe losses) approximated via an annual value in millions of dollars in media revenue.
In this game, we see that the best strategic option for both teams is to pursue the creation of a new league.
While FSU is more valuable on the open market, neither is likely to see a lucrative offer from an existing conference.
If we run the exercise between Tech and Wake Forest, we see different results:
For the Hokies, the best strategy remains the same: start a new league. However, in this case, the numbers are lower because the game does not involve another football power opposite the Hokies.
In contrast, Wake Forest can only lose money in this game because it holds little media value. Therefore, the best move for the Demon Deacons is to remain in the ACC.
The problem is, they may not have that option. Eight Schools can vote to dissolve the league, and we can infer from the machinations of last spring that there were already seven “yes” votes before the FSU lawsuit was filed.
The likeliest result
Current ACC members could wait and see how the lawsuit turns out before making a move, but the odds favor, at the minimum, FSU winning a much lower exit fee, sufficient to allow the Seminoles to depart in time to play the 2025 season elsewhere.
So, if one assumes FSU is gone, then one must assume others will leave as well. That means those plans are likely being drawn up in real-time.
If we play the simultaneous game to its logical conclusion, the results would be the following:
Eight (possibly nine) teams will vote to dissolve the conference before the final ruling in the FSU case.
Those teams will then form a new league, perhaps poaching one other school in the process.
The seven schools that voted against dissolving the league (plus Cal, Stanford, and SMU) will scramble to find homes in existing leagues, all at a major loss in revenue and prestige.
Who will be the eighth team?
Remember, this is all about television money. The two teams likely to be in contention are Louisville and Pitt.
Which would drive the best television viewer numbers when added to the current group of seven?
My guess would be Pitt, and the deciding point would be rivalries.
Louisville’s only rival is Kentucky, and the Wildcats will not leave the SEC. Pitt’s biggest rival is West Virginia, and I suspect the Mountaineers would leave the Big 12 to join the proposed new conference featuring the Magnificent Seven plus Pitt.
If WVU decides to stand pat, Louisville and Pitt would probably both be welcomed into the new conference.
The new conference would fit in a tighter geographic footprint and be chalk full of primary and secondary rivalries.
The conference slate would feature eight games (four at home and four on the road), with each team playing every other team once.
In keeping with the NCAA rules updated in 2016, the new conference championship would be played “between the top two teams in the conference standings following full round-robin, regular-season competition between all members of the conference”.
Would the new conference net the same media revenue on a per school basis as the SEC and Big Ten? It’s hard to say, but the one thing it would be devoid of would be completely interest-less games (think Minnesota vs. Illinois). That would increase the chance of splitting league games between multiple networks (e.g., ESPN and Fox).
My guess would be that the new conference will generate a little bit less, on average, in per school revenue than the P2, but its members will come out well ahead of the status quo. Depending on the revenue sharing agreement, top performing schools may be on par with, or perhaps ahead of (in some years), their SEC and Big Ten counterparts.
That, and the promise of a more exciting conference schedule, leaves me hopeful that the Hokies will come out a winner in this latest round of conference realignment.