My cousin & I were just discussing this very thing. I can't see two teams from the same conference making it into the playoffs. I'd be willing to bet the Committee would pick a 2 loss team over a 1 loss team if that 1 loss team were in the same conference as a team already in the playoffs. The reason being is that there is the potential that the championship game may come down to two teams who've already played each other. I don't see that happening. I could be wrong, tho.
As for who's playing in the B1G championship, if OSU & PSU win out, and UM goes 2-1, OSU goes to the B1G championship. The reason is explained by Purdue's student newspaper:
...if all three teams won the rest of their games excepting a Michigan loss to Ohio State, all three teams would be tied with an 8-1 conference record. According to the Big Ten’s website, in the event of a three-team tiebreaker for a division title, the division’s representative in the Big Ten title game is determined by the following steps:
1. The records of the three tied teams will be compared against each other.
Since Michigan beat Penn State, who beat Ohio State, who would have beaten Michigan, the tie would continue.
2. The records of the three tied teams will be compared within their division.
All three teams would have just one loss within the division, so this wouldn’t determine a winner.
3. The records of the three teams will be compared against the next highest placed teams in their division in order of finish (4, 5, 6 and 7).
Again, all three teams would have beaten numbers 4, 5, 6 and 7 in the division.
4. The records of the three teams will be compared against all common conference opponents.
Since all three teams would have only one loss against each other, they would have the same record against all conference opponents.
5. The team with the best overall winning percentage (excluding exempted games) shall be the representative.
Because Penn State lost a nonconference game against Pittsburgh on Sept. 10 and both Ohio State and Michigan were undefeated outside the conference, Penn State would have two losses and would be eliminated from the tiebreaker. After one team is eliminated, the tiebreaker would be reduced to just Ohio State and Michigan, with Ohio State winning because of its head-to-head victory over the Wolverines.
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