A New Angle on Beating a Dead Horse: We have 5 and need to get to 4 Conferences
Let's treat this like the corporate takeover game that it is. ESPN holds the ACC and SEC properties. That's half of the college football and basketball property roughly speaking. The better half of the football property and at least an equal half of the basketball property. They also have options on Texas and Kansas through tier three contract deals. For the time being that is good enough. The fight will be for the Big 12 properties that are commercially viable. Those would be in order Texas, Oklahoma, Kansas, Oklahoma State, and West Virginia.
While Fox has the tier 3 deal of the Sooners, the Sooners cover the overhead on that 7 million dollar contract. The overhead is between 2 and 3 million. That's not enough to hold the Sooners to a FOX contract. The net buyout would be between 4 to 5 million per year for the duration of the contract and more likely than not negotiated down from that position in exchange for secondary games that FOX could broadcast from the Southeast area on sublet from ESPN.
So what does the Mouse do? Nothing for now. They will be in negotiations with the Big 10 seeking to keep their Tier 1 rights for Saturday mornings in the Fall and for hoops in the Winter and Spring. If the Big 10 cooperates I think a Kansas deal to the Big 10 might happen. The SEC would be looking for Oklahoma and West Virginia, and perhaps Texas would go to the ACC with an N.D. deal as many have speculated.
If the Big 10 does not play ball with ESPN for tier 1 rights and FOX ups the ante, I look for ESPN to shelter their access to the best products of the Big 12. In that case Kansas and Oklahoma/Oklahoma State to the SEC becomes a possibility. Texas could move to the ACC, or could then be used by ESPN as leverage for a greater percentage of the PAC product, leaving West Virginia to be placed in the ACC. Texas, Oklahoma State/Oklahoma, Texas Tech, and Kansas State then become a possible package for the PAC.
If the PAC refuses a higher percentage and the Big 10 gives Tier 1 to FOX then Oklahoma, Kansas, and Texas to the SEC and ACC would make more sense near the end of the Big 12's GOR.
We've talked about this a lot, but think about the strategy involved from a corporate viewpoint. Since the SEC and ACC are locked down until 2025, ESPN by moving Texas, Oklahoma, and Kansas to the SEC and ACC not only take the three most valuable properties in the Big 12, but they essentially punish the Big 10 by cutting an uncooperative Jim Delany out of the best remaining expansion candidates in entirety. After the Maryland and Rutgers additions that would essentially leave Connecticut and Iowa State as the only viable alternatives for the Big 10 unless they did go the Canadian or Buffalo route. Such a move by ESPN would hamstring the FOX football product in the Big 10 and eliminate the prize pieces from any PAC attempt to move into the Central Time Zone.
We've spoken of how the conferences might have to work together to accomplish this, but if the contracts for the Big 10 and PAC don't fall ESPN's way it will be another matter entirely. Another way of putting this is that the most valuable basketball and football brands for FOX would be reduced to: Basketball PAC (Stanford, Cal, UCLA, Oregon, Arizona, and sometimes Washington) Basketball Big 10 (Michigan State, Michigan, Indiana, Ohio State, sometimes Wisconsin, Purdue, Maryland). That's 13 properties. Football PAC (Stanford, UCLA, USC, Arizona State, Oregon, Washington, sometimes Arizona, Utah, Oregon State). Big 10 Football (Ohio State, Michigan, Penn State, Wisconsin, Nebraska, Michigan State and sometimes Northwestern and Iowa) That's 17 properties. So to put it another way, just under 1 conference worth of basketball teams and just over one conference worth of football teams.
That's not much to run a network on.
Add to that the fact that Kansas and Oklahoma and Texas would all be much more valuable content wise in either the SEC or ACC and that ESPN would be free of the other conference properties and you can see the financial incentive for the move. Pay for 3 and multiply their appeal many fold. If Oklahoma State and West Virginia have to be accommodated as well that could be worked out.
That's why I've said all along that what the networks want will likely govern the end game moves involving Big 12 schools. Face it, ESPN doesn't want to lose the basketball teams they have sheltered in the ACC and they don't want to lose that footprint. Therefore they will do what is necessary to develop that region (up to and including a much much more close relationship between the SEC and ACC). They don't want to lose the most watched football product in the nation either and will do what is necessary to insure the SEC's interests moving forward. Adding Paul Finebaum, Matt Stinchcomb, David Pollock, and Jessie Palmer are a huge shift toward trying to appeal to an SEC audience and away from Kirk Herbstreet and Desmond Howard who were Big 10 personalities (although I like them both and expect both of them to stay). Nevertheless it shows a decided shift in focus. Danny Kennel is another such shift with ACC roots.
While I don't read too much into these decisions on personalities at this time it could be an indicator of broader future shifts to come in representation of product. Since most of these kinds of moves happen 5 years out in the corporate world the timing is also about right.
If that is to be the case I look for movement in about 5 years after the GOR has moved closer to expiration. If ESPN wants to lock it down sooner with the playoffs looming in the immediate future then a move of 3 to the ACC and 4 to the SEC might well be possible with either the PAC or Big 10 offered incentive to take another or the rest.
Either way what conferences would like will be taken into consideration, but not necessarily the determining factor. If FOX and ESPN become a bit more polarized over these kinds of property issues I do think it will happen sooner, if they agree to disagree they will wait for the end of the GOR and bid for the prizes. If they cooperate I don't think it will change the outcome to a large degree, but might affect which games are sublet to an opposing network or might determine whether or not a Kansas or even an Oklahoma move North. We'll see. Thoughts? Discussion?
(This post was last modified: 12-01-2013 10:39 PM by JRsec.)
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