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Its simple. Bowls select in order and we are seventh in pecking order. The no. 7 bowl is Pinstripe. However, if PSU or Wiscy get into Cotton Bowl then an extra spot opens up and we move up to Gator Bowl which is 6th.
There is no screw job or input on administrations part at all. Just unfortunate the bottom of Big Ten was so bad at that 8 wins made us 7th best Big Ten team.
Illinois is going to Redbox vs. Cal seems to already have been leaked as no.8 bowl. NYC is not ideal but better than Santa Clara or Detroit which are alternatives if only Two Big Ten teams make New Years 6 or a Big Ten team is in Orange Bowl (in this case Big Ten loses Citrus and we are back to no. 7 in Pinstripe).
This whole scenario seems to have been made clear. Not sure why everyone cannot grasp it.
Update: Zach Osterman who has been the most on top of this whole bowl thing just said for PSU to go to Cotton so IU can get Gator they need to jump Utah but stay behind Florida and Georgia (and Wisconsin to still get Rose). Definitely possible but we will see.