P5 schools don’t lose money on bowls because there is a split of all payouts among the conference teams. I read a Forbes article from about 6-7 years ago that said maybe 10-20 schools lose money in the bottom tier bowls.
BUT, they may consider it money well spent to get the prolonged exposure, and ESPECIALLY the additional practice days. It is possible that more schools would prefer the ability to have the same number of practices bowl participants do without going. I don't know why they need to keep that practice in place. Give everybody practice days bowl or not. One less set of differential rules to enforce.
I would like to think we may push some of the lower tier bowl eligible down and the lowest out by expanding the playoffs to 16 teams and using 8 early bowls to get to elite 8 and 4 lower bowls to get to the current final 4 format, reseeding or lottery as necessary to avoid rematches, minimize travel or whatever. Have to believe every bowl gets better teams all the way down the line. Let everybody practice. Who needs it more than non bowl eligible teams? If the playoff makes the money I think it would, distribute the money to eligible teams not selected or every team.... once again whatever works for the masses. There is of course an 8 team format that uses 4 bowls only to get back to final 4. That would for sure allow a rotation of the New Years 6 bowls , Rose, Orange, Sugar, Cotton, Fiesta, Peach and add one more, either fixed or rotational in either plan. Bidding would go up for the next tiers down. have to think the quality of games goes up down stream.