The first 12-team College Football Playoff (CFP) is officially here. College football’s postseason structure, once viewed as a complicated process involving mathematical equations and much disagreement, has changed significantly over the past three decades.

It began in 1997 when the six major college football conferences joined together to create the Bowl Championship Series (BCS). This system used a complex equation to pit the top two teams against each other and evaluate the teams based on three criteria:

1. The average of human polls (like the AP Poll and Coaches Poll)

2. A compilation of computer rankings

3. A factor in the strength of the schedule

The problem with this process was that it was constantly changing and intentionally opaque. Over the years, alternative categories such as quality wins and margin of victory have been added or removed. Many fans had no idea how it worked and claimed it was rigged for the sport’s bluebloods. Worst of all, the coaches’ poll and the AP poll didn’t always agree on the national champion, even though there was a title game.

Therefore, the College Football Playoff was created in 2014. Instead of leaving the national championship fight to a computer, a 13-member committee would now vote to determine the top four teams in the country. These four teams were then invited to a knockout tournament to crown that year’s national champions.

Some people say that a 13-member committee that votes on the best teams in the country inherently carries more bias than a computer algorithm — hello, Florida State! However, almost everyone agrees that more games are better, and given the financial success of the four-team format, the playoff has now been expanded to 12 teams.

The new format is simple: conference champions from the ACC, Big Ten, Big 12, SEC and the top-ranked Group of Five school automatically receive playoff spots. The four highest-ranked league champions receive a bye into the quarterfinals, while the lowest-ranked champion plays in the first round with the other seven major teams.

The first round games take place on university campuses and are hosted by the highest seeded player. The quarterfinals and semifinals are played by the more prestigious bowls – Cotton Bowl, Fiesta Bowl, Orange Bowl, Peach Bowl, Rose Bowl and Sugar Bowl – and the national championship is held at a neutral site selected by the committee.

There is a little something special about Notre Dame. Even if the Irish are the top-seeded team before the playoffs begin, they will never get a top-four spot (and a first-round bye) because they don’t belong to a conference. But overall, the 12-team format leads to more exciting matchups while generating significantly more money for these schools.

With the expansion of the College Football Playoff from four to 12 teams this season, there are now 11 games with national championship implications instead of three. That additional inventory allowed the CFP committee to sign a massive media rights extension with ESPN last year worth $7.8 billion over six years, or $1.3 billion per year.

In fact, there is so much additional inventory now compared to years past that ESPN has actually sublicensed some of the first round games to TNT. ESPN will continue to produce the games and utilize its own broadcast talent. However, TNT pays ESPN about $25 million per game to display the TNT logo and benefit from advertising revenue.

The individual teams and conferences also benefit from this TV money, because each conference receives a percentage of the annual turnover, which is based on its previous success.

For example, starting in 2026, when the new ESPN expansion goes into effect, SEC and Big Ten schools will each receive about $21 million, while each ACC and Big 12 school will receive $13 and $12 million, respectively .

Payouts for Group of Five schools will be lower at about $1.8 million each, and Notre Dame’s payout as an independent school will average about $12 million per year.

But these payments are only a floor. For this year’s playoffs, conferences will also receive $4 million for each school that makes the 12-team field. Conferences receive an additional $4 million if one of their teams reaches the quarterfinals. They will receive a $6 million check if one of these teams reaches the semifinals and another $6 million payout if that team reaches the national championship game.

Take the Big Ten for example. Ohio State, Indiana and Penn State will receive $4 million to construct the field. Oregon will automatically receive $8 million because it is already in the quarterfinals with a first-round bye. These payments do not include the $3 million fee the conference receives for each team (per round) to cover costs, and total payouts could reach $50 million if a Big Ten School wins everything.

TV money plays a big role, but there are other factors.

For example, first-round hosts cannot generate the expected seven-figure ticket revenue from home games. The College Football Playoff will redistribute ticket revenue to each participating conference after the tournament ends.

Home teams in the first round can retain on-field sponsorships, making these deals more lucrative if a team consistently makes the playoffs.

But while the color scheme will reflect the appearance of a stadium during the regular season, the CFP logo will be visible on every field. The CFP will also cover the goalposts and inspect all digital signage. Schools are required to cover all lower court advertising shown on television so that it can be replaced with CFP sponsors.

There is some uncertainty about what home field advantage teams will have given this is a unique time of year with winter break and families traveling for the holidays. But the CFP did its best to keep ticket prices low before the secondary market took over, requiring all schools to sell student tickets for $25 and primary market general admission tickets between $100 and $250 Except for clubs and suites.

The CFP also signed 90 contracts with hotels in each of the 134 FBS college cities to ensure hotels would be available for first-round games. And home teams must provide visiting teams with 3,500 tickets, including 1,500 in the lower bowl.

The College Football Playoff Committee has made it clear that it doesn’t know how the first year will go. Expectations are high and the addition of eight additional teams appeared to add even more drama to the conclusion of the 2024 college football regular season.

This entire structure may change in a few years. Several conference commissioners are already discussing expanding the playoffs from 12 to 14 teams when the new CFP contract takes effect in 2026. But whether that happens, the outcome is clear.

College football is big business. The expanded playoffs have made it even bigger. And with NIL budgets increasing every year, the commercialization of the sport won’t stop there.