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Jun
29
2016

Explaining BREXIT through Conference Expansion and Realignment

Brexit

By now you have most likely heard of the BREXIT (Britain Exit) movement.  If not, here is a short summary of events.

The UK held a referendum on their status in the European Union and voted to leave by a narrow margin (52% to 48%).  There was a large turnout for the vote (71.8%).  This move has far reaching implications for the entire globe.    The reasons for leaving are complicated and best left to economists, but centered on immigration issues (UK was required to allow unlimited immigrants from the other EU countries) as well as economic issues.

Portions of the UK that wanted to stay (primarily Scotland and Northern Ireland) may decide to succeed and petition the EU for membership.  The vote was also sharply divided by age with the majority of the younger Britons wanting to stay in the EU and the aging baby boomers preferring to leave.

After the voting results were announced, searches for “What is the EU?” trended highly.   If you are unsure what this really means, don’t fear All Sports Discussion has you covered.

 

What is the EU?  The EU is a partnership of 28 countries that was started after WWII with the hope that countries that trade together will not go to war with each other.  It has grown into a market where people can freely move through the countries without excessive paperwork or visas.  It could almost be considered something like the United States of Europe.

You can also think of the EU as a conference like the ACC.

 

Sovereign countries in the EU can be thought of as individual schools within the conference.

The conference is responsible for looking out for the benefit of its members with regard to television contracts and other major issues.  Together the conference can negotiate better contracts than individual schools can negotiate on their own.  The schools also gain scheduling efficiencies by staying in a conference because they have set opponents for all of their sports.  A conference also provides a championship game which has proven very important when considering who will make the football playoffs.

So why would anyone decide that they don’t need a conference?

I can do better by myself!  Some schools feel that they don’t need the security of a conference (most notably Notre Dame and BYU football).  Their brand is so highly valued and well known that a conference would actually not be a benefit (in their mind).  They can schedule their own opponents and negotiate their own contracts to their satisfaction. Notre Dame football still clings to their independence, but with scheduling agreement with the ACC, while BYU would take a Power 5 invite in a heartbeat.

The  number one export trading partner for the UK is the US, which is not a member of the EU.  The UK may feel that they do not need the security of the EU to negotiate trade with the US. There is no current US/UK trade deal because the UK was a member of the EU.

However; Obama said that the UK would “go to the back of the queue” for  trade deals if they leave the EU.  Obama would like to keep the UK in the EU to make sure that our closest ally in the war on terrorism has a good working relationship with the other European Nations.

FYI – Any deal with the UK would most likely not be with Obama – Article 50 of the Lisbon treaty (exit plan) could take two years to execute.

I want to leave!  During the conference expansion heyday a few years ago, many schools saw greener grass in other pastures.   Some conferences were seen as “weak” and schools wanted to make sure that they were in a “strong” conference.    Sometimes one member leaving can cause many dominoes to fall.

Teams

When Maryland left the ACC for the Big Ten, it was rumored that the ACC would fall apart.  Football heavy schools like Florida State and Clemson worried that they would not have a conference with an automatic qualifier for the playoffs.

Clemson managed to keep the panic to a minimum when Dabo reiterated that the ACC was Clemson’s future.  This calm voice in a very chaotic storm helped everyone make more rational decisions.

“I think Clemson was there the whole time,” he said. “Clemson always has been very solid within the ACC. It’s home to us and the right place for us to be. Now that we are all together and in lockstep, it’s great for the conference.” – Dabo Swinney

There were also issues with inequitable distributions of the Television Revenue which nearly tore apart the Big 12 in the early 2010s.  Nebraska, Colorado, and Texas A&M bolted for other conferences and the Big 12 almost fell apart. The Texas Longhorns Longhorn network (which actually showed footage of BEVO eating grass on Christmas for 5 hours) was still a source of discussion in the Big 12 as recently as this past spring.

The exit of the UK could lead to other countries like Germany or France to consider leaving as well.  Just like we had chaos during the conference expansion days, some amount of nail biting is in the future for the EU as well.

Please Stay!  In all conferences there are some weaker members that count on the stronger members to prop their program up.

There is no better example of this phenomenon than the 2015 3-9 football team South Carolina Gamecocks.  These are actual “Go Conference” Tweets from @GamecockFB.

Of course they are proud to be in the financially well off SEC. I’m sure Purdue feels the same as the Big 10.

These weaker members can be a financial drag on the stronger more stable members.  According to ESPN, the SEC pays 31M to each member school, so the Gamecocks better keep Alabama and LSU happy. ☺

Greece may want to do the same with Germany and France.

This same issue was also happening in the UK.  As part of the requirements of being in the EU, the UK was required to take an unlimited amount of immigrants from the poorer nations.  There is some debate on if this was an actual drain on the UK economy, but it was perceived by the voters as a major issue that needed to be resolved.

What will happen in the future?  If I had to look into my crystal ball, I would predict a lot of short term chaos, much like the initial days of conference expansion.     The EU may seek to punish the UK for leaving, much like Maryland  leaving required an exit fee of $31.3M.  Ultimately the world is very interconnected, making it in everyone’s best interest to negotiate fair trade treaties with the UK.

The silver lining could be the opportunity to take advantage of the low value of the pound/euro vs the dollar.  Travel should be fairly cheap for those in the US if the dollar stays strong.

One great opportunity for travel is the Georgia Tech Boston College game in Ireland this year.  Anyone going?

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