Hello There, Guest! (LoginRegister)

Post Reply 
Big 12 expansion confirmation
Author Message
solohawks Offline
Hall of Famer
*

Posts: 20,806
Joined: May 2008
Reputation: 810
I Root For: UNCW
Location: Wilmington, NC
Post: #21
RE: Big 12 expansion confirmation
(08-27-2021 11:26 AM)quo vadis Wrote:  
(08-27-2021 08:04 AM)GTFletch Wrote:  One thing to remember is that the BIG12 has data from the 2016 deep dive they took. The only reason they did not expand then is becuase both FOX and ESPN chucked a mental and threaten them. Why? Lets go back five years ago....

ESPN and Fox staged an extraordinary intervention in Big 12 expansion, going public with their displeasure over the potential addition of teams in the conference. It was a calculated Monday morning public attack on the Big 12’s plans to expand, the likes of which we have never before seen. ESPN and Fox both chose the Sports Business Journal, a widely respected high end publication for industry sources, to fire a shot across the Big 12’s bow on Monday morning, a time perfectly designed to attract wide media attention. This wasn’t just private disagreement, this was a public threat of war designed to send a clear message to the Big 12: expand at your own risk.

Most people already knew that the Big 12’s decision to expand was a naked cash grab designed to extort potential new members and take advantage of an existing clause in the TV contracts that guaranteed equal payment in the event of expansion. This represented a new, more desperate, move in college realignment. Whereas the SEC, Big Ten, ACC and Pac 12 all expanded to further conference network ambitions and strengthen the overall conference — that is, every team, new members and old members alike, would make more money through expansion — the Big 12’s expansion rationale is simple — sell Big 12 membership to desperate schools and have the ten existing schools pocket the added TV money owed under the contract. That’s a desperate strategy because a newly formatted Big 12 with 12, 14 or even more members isn’t worth any more money to the TV partners. Fox and ESPN’s ratings won’t increase, there’s no TV network lurking here to unlock new value, this is just an attempt to pocket more money between now and 2024-25, when the Big 12’s existing TV contract ends.

This is an extraordinary dispute because up until now we’ve never had a public fight between TV networks and a conference. Sure, there have been private disagreements — the SEC remains furious with CBS over the network’s refusal to increase its payments over the addition of Missouri and Texas A&M, an embittered posture that likely means the SEC won’t reup with CBS when its contract expires with the company — but those disagreements never went public before a new deal was reached. (NOTE: the SEC recently signed with ESPN leaving CBS over the dispute)

Here, Fox and ESPN, the two most powerful networks in college sports, are expressing their joint dismay, in public, with the Big 12’s plans for expansion. This just never happens. Why are Fox and ESPN so upset?

Because let’s say the Big 12 adds four teams: Houston, Cincinnati, Memphis and BYU. Each of these teams is worth either $20 million more a year right now and up to $25 million more a year at the end of the contract. Let’s round that up and say if all four of these schools come that eventually ends up costing Fox and ESPN an extra $100 million more a year.

What would these four schools, Houston, Cincinnati, Memphis, and BYU — sell their TV rights for on the open market right now if they were a standalone conference? Maybe $5 million total? At the absolute peak, they’d be worth $10 million a year, and that’s honestly way too much given present market conditions. (Ask Conference USA if you doubt me.) So this means the Big 12 is forcing Fox and ESPN to pay $90 million more a year than than these four schools would sell for on the open market. (That’s why I said the Big 12 wasn’t just exploiting the TV sports rights fee bubble, they were lighting it on fire.)

Over the life of the Big 12’s television deal that’s up to $800 million in total additional payments that Fox and ESPN would owe the Big 12. And, remarkably, that’s $700 million over the market rate those four schools would command, all based on an expansion clause in the Big 12’s contract.

So what happens now that this disagreement has gone public? We just saw it during CFP Expansion meeting swith SEC, TEXAS AD, ESPN and others Texas adn OU bolt... Not sure we can ever prove that ESPN wanted BIG12 L8 in AAC..

That's a great point I hadn't considered:

If that clause is still in the contracts that obligates FOX and ESPN to fork over $40m per year more for any school the B12 expands with, even if those schools aren't really worth nearly that much, then the B12 can expand right now "cost free" to itself, so to speak, for the next four years.

And since they stand to take a big haircut in 2025 anyway, their attitude might be "well who cares if this pisses off FOX and ESPN, they are going to sink us with low money then anyway".

With that in mind, this makes me think the B12 could very well vote to expand in the next coming weeks.

Great point!

Get as much as you can now
08-27-2021 11:28 AM
Find all posts by this user Quote this message in a reply
Wedge Offline
Hall of Famer
*

Posts: 19,862
Joined: May 2010
Reputation: 964
I Root For: California
Location: IV, V, VI, IX
Post: #22
RE: Big 12 expansion confirmation
(08-27-2021 11:14 AM)Stugray2 Wrote:  The schools of the Big 12 have no interest in breaking the American. That is just some parlor game played on the internet fans play.

It's true that the ADs and university presidents are "in the industry", and they have friends and colleagues working at other schools, and (unlike many fans on the internet) they are not going to make these decisions out of spite or malice.

OTOH, the complicating factor for the Big 12 is that we don't know if the 6+6 football playoff proposal will be implemented. If 6+6 becomes the new format, then having a conference that is comfortably among the top six in football is important. If the format stays the way it is now, then it's not as important to create that perception gap between the Big 12 and the AAC.
(This post was last modified: 08-27-2021 11:31 AM by Wedge.)
08-27-2021 11:30 AM
Find all posts by this user Quote this message in a reply
quo vadis Offline
Legend
*

Posts: 50,155
Joined: Aug 2008
Reputation: 2419
I Root For: USF/Georgetown
Location: New Orleans
Post: #23
RE: Big 12 expansion confirmation
(08-27-2021 11:28 AM)solohawks Wrote:  
(08-27-2021 11:26 AM)quo vadis Wrote:  
(08-27-2021 08:04 AM)GTFletch Wrote:  One thing to remember is that the BIG12 has data from the 2016 deep dive they took. The only reason they did not expand then is becuase both FOX and ESPN chucked a mental and threaten them. Why? Lets go back five years ago....

ESPN and Fox staged an extraordinary intervention in Big 12 expansion, going public with their displeasure over the potential addition of teams in the conference. It was a calculated Monday morning public attack on the Big 12’s plans to expand, the likes of which we have never before seen. ESPN and Fox both chose the Sports Business Journal, a widely respected high end publication for industry sources, to fire a shot across the Big 12’s bow on Monday morning, a time perfectly designed to attract wide media attention. This wasn’t just private disagreement, this was a public threat of war designed to send a clear message to the Big 12: expand at your own risk.

Most people already knew that the Big 12’s decision to expand was a naked cash grab designed to extort potential new members and take advantage of an existing clause in the TV contracts that guaranteed equal payment in the event of expansion. This represented a new, more desperate, move in college realignment. Whereas the SEC, Big Ten, ACC and Pac 12 all expanded to further conference network ambitions and strengthen the overall conference — that is, every team, new members and old members alike, would make more money through expansion — the Big 12’s expansion rationale is simple — sell Big 12 membership to desperate schools and have the ten existing schools pocket the added TV money owed under the contract. That’s a desperate strategy because a newly formatted Big 12 with 12, 14 or even more members isn’t worth any more money to the TV partners. Fox and ESPN’s ratings won’t increase, there’s no TV network lurking here to unlock new value, this is just an attempt to pocket more money between now and 2024-25, when the Big 12’s existing TV contract ends.

This is an extraordinary dispute because up until now we’ve never had a public fight between TV networks and a conference. Sure, there have been private disagreements — the SEC remains furious with CBS over the network’s refusal to increase its payments over the addition of Missouri and Texas A&M, an embittered posture that likely means the SEC won’t reup with CBS when its contract expires with the company — but those disagreements never went public before a new deal was reached. (NOTE: the SEC recently signed with ESPN leaving CBS over the dispute)

Here, Fox and ESPN, the two most powerful networks in college sports, are expressing their joint dismay, in public, with the Big 12’s plans for expansion. This just never happens. Why are Fox and ESPN so upset?

Because let’s say the Big 12 adds four teams: Houston, Cincinnati, Memphis and BYU. Each of these teams is worth either $20 million more a year right now and up to $25 million more a year at the end of the contract. Let’s round that up and say if all four of these schools come that eventually ends up costing Fox and ESPN an extra $100 million more a year.

What would these four schools, Houston, Cincinnati, Memphis, and BYU — sell their TV rights for on the open market right now if they were a standalone conference? Maybe $5 million total? At the absolute peak, they’d be worth $10 million a year, and that’s honestly way too much given present market conditions. (Ask Conference USA if you doubt me.) So this means the Big 12 is forcing Fox and ESPN to pay $90 million more a year than than these four schools would sell for on the open market. (That’s why I said the Big 12 wasn’t just exploiting the TV sports rights fee bubble, they were lighting it on fire.)

Over the life of the Big 12’s television deal that’s up to $800 million in total additional payments that Fox and ESPN would owe the Big 12. And, remarkably, that’s $700 million over the market rate those four schools would command, all based on an expansion clause in the Big 12’s contract.

So what happens now that this disagreement has gone public? We just saw it during CFP Expansion meeting swith SEC, TEXAS AD, ESPN and others Texas adn OU bolt... Not sure we can ever prove that ESPN wanted BIG12 L8 in AAC..

That's a great point I hadn't considered:

If that clause is still in the contracts that obligates FOX and ESPN to fork over $40m per year more for any school the B12 expands with, even if those schools aren't really worth nearly that much, then the B12 can expand right now "cost free" to itself, so to speak, for the next four years.

And since they stand to take a big haircut in 2025 anyway, their attitude might be "well who cares if this pisses off FOX and ESPN, they are going to sink us with low money then anyway".

With that in mind, this makes me think the B12 could very well vote to expand in the next coming weeks.

Great point!

Get as much as you can now

Yes, and the L8 could pocket extra money by "phasing in" any expandees B1G style, say pay them a half-rate for those four years, with the rest spread amongst the L8.

Anyone on the expansion list would still say "yes" in a minute, as that would still be a huge boost in pay for them.
(This post was last modified: 08-27-2021 11:31 AM by quo vadis.)
08-27-2021 11:30 AM
Find all posts by this user Quote this message in a reply
solohawks Offline
Hall of Famer
*

Posts: 20,806
Joined: May 2008
Reputation: 810
I Root For: UNCW
Location: Wilmington, NC
Post: #24
RE: Big 12 expansion confirmation
(08-27-2021 11:30 AM)quo vadis Wrote:  
(08-27-2021 11:28 AM)solohawks Wrote:  
(08-27-2021 11:26 AM)quo vadis Wrote:  
(08-27-2021 08:04 AM)GTFletch Wrote:  One thing to remember is that the BIG12 has data from the 2016 deep dive they took. The only reason they did not expand then is becuase both FOX and ESPN chucked a mental and threaten them. Why? Lets go back five years ago....

ESPN and Fox staged an extraordinary intervention in Big 12 expansion, going public with their displeasure over the potential addition of teams in the conference. It was a calculated Monday morning public attack on the Big 12’s plans to expand, the likes of which we have never before seen. ESPN and Fox both chose the Sports Business Journal, a widely respected high end publication for industry sources, to fire a shot across the Big 12’s bow on Monday morning, a time perfectly designed to attract wide media attention. This wasn’t just private disagreement, this was a public threat of war designed to send a clear message to the Big 12: expand at your own risk.

Most people already knew that the Big 12’s decision to expand was a naked cash grab designed to extort potential new members and take advantage of an existing clause in the TV contracts that guaranteed equal payment in the event of expansion. This represented a new, more desperate, move in college realignment. Whereas the SEC, Big Ten, ACC and Pac 12 all expanded to further conference network ambitions and strengthen the overall conference — that is, every team, new members and old members alike, would make more money through expansion — the Big 12’s expansion rationale is simple — sell Big 12 membership to desperate schools and have the ten existing schools pocket the added TV money owed under the contract. That’s a desperate strategy because a newly formatted Big 12 with 12, 14 or even more members isn’t worth any more money to the TV partners. Fox and ESPN’s ratings won’t increase, there’s no TV network lurking here to unlock new value, this is just an attempt to pocket more money between now and 2024-25, when the Big 12’s existing TV contract ends.

This is an extraordinary dispute because up until now we’ve never had a public fight between TV networks and a conference. Sure, there have been private disagreements — the SEC remains furious with CBS over the network’s refusal to increase its payments over the addition of Missouri and Texas A&M, an embittered posture that likely means the SEC won’t reup with CBS when its contract expires with the company — but those disagreements never went public before a new deal was reached. (NOTE: the SEC recently signed with ESPN leaving CBS over the dispute)

Here, Fox and ESPN, the two most powerful networks in college sports, are expressing their joint dismay, in public, with the Big 12’s plans for expansion. This just never happens. Why are Fox and ESPN so upset?

Because let’s say the Big 12 adds four teams: Houston, Cincinnati, Memphis and BYU. Each of these teams is worth either $20 million more a year right now and up to $25 million more a year at the end of the contract. Let’s round that up and say if all four of these schools come that eventually ends up costing Fox and ESPN an extra $100 million more a year.

What would these four schools, Houston, Cincinnati, Memphis, and BYU — sell their TV rights for on the open market right now if they were a standalone conference? Maybe $5 million total? At the absolute peak, they’d be worth $10 million a year, and that’s honestly way too much given present market conditions. (Ask Conference USA if you doubt me.) So this means the Big 12 is forcing Fox and ESPN to pay $90 million more a year than than these four schools would sell for on the open market. (That’s why I said the Big 12 wasn’t just exploiting the TV sports rights fee bubble, they were lighting it on fire.)

Over the life of the Big 12’s television deal that’s up to $800 million in total additional payments that Fox and ESPN would owe the Big 12. And, remarkably, that’s $700 million over the market rate those four schools would command, all based on an expansion clause in the Big 12’s contract.

So what happens now that this disagreement has gone public? We just saw it during CFP Expansion meeting swith SEC, TEXAS AD, ESPN and others Texas adn OU bolt... Not sure we can ever prove that ESPN wanted BIG12 L8 in AAC..

That's a great point I hadn't considered:

If that clause is still in the contracts that obligates FOX and ESPN to fork over $40m per year more for any school the B12 expands with, even if those schools aren't really worth nearly that much, then the B12 can expand right now "cost free" to itself, so to speak, for the next four years.

And since they stand to take a big haircut in 2025 anyway, their attitude might be "well who cares if this pisses off FOX and ESPN, they are going to sink us with low money then anyway".

With that in mind, this makes me think the B12 could very well vote to expand in the next coming weeks.

Great point!

Get as much as you can now

Yes, and the L8 could pocket extra money by "phasing in" any expandees B1G style, say pay them a half-rate for those four years, with the rest spread amongst the L8.

Anyone on the expansion list would still say "yes" in a minute, as that would still be a huge boost in pay for them.

Yup!

Plus you are joining an Autonomous conference

That in of itself with no pay raise is a big deal
08-27-2021 11:32 AM
Find all posts by this user Quote this message in a reply
Claw Online
Hall of Famer
*

Posts: 24,963
Joined: Feb 2004
Reputation: 1225
I Root For: Memphis
Location: Orangeville HELP!
Post: #25
RE: Big 12 expansion confirmation
I have that nagging feeling something we don't expect is going to happen.
08-27-2021 11:32 AM
Find all posts by this user Quote this message in a reply
ArmoredUpKnight Online
Heisman
*

Posts: 9,874
Joined: Dec 2009
Reputation: 688
I Root For: UCF Knights
Location: Fort Lauderdale, FL
Post: #26
RE: Big 12 expansion confirmation
(08-27-2021 10:50 AM)RUScarlets Wrote:  
(08-27-2021 10:45 AM)ArmoredUpKnight Wrote:  The number of teams is the big concern right now.

I feel like the L8 is too conservative and will likely add 4 teams. They should really try to become the first mega conference.

Might as well have merged with the AAC in that case... we know that isn't going to happen. ESPN would never pay the bottom rung schools equal share.

Bottom rung schools like Kansas and Baylor have been in the Big12 too long to kick them out now. Yea, I wish we could just take the top cut of the AAC and the L8 but both conference have their own deadweight.
08-27-2021 11:34 AM
Find all posts by this user Quote this message in a reply
JHS55 Offline
All American
*

Posts: 4,407
Joined: Jan 2016
Reputation: 173
I Root For: Houston
Location:
Post: #27
RE: Big 12 expansion confirmation
(08-27-2021 11:32 AM)Claw Wrote:  I have that nagging feeling something we don't expect is going to happen.
yeah i have that feeling too
08-27-2021 11:39 AM
Find all posts by this user Quote this message in a reply
solohawks Offline
Hall of Famer
*

Posts: 20,806
Joined: May 2008
Reputation: 810
I Root For: UNCW
Location: Wilmington, NC
Post: #28
RE: Big 12 expansion confirmation
(08-27-2021 11:39 AM)JHS55 Wrote:  
(08-27-2021 11:32 AM)Claw Wrote:  I have that nagging feeling something we don't expect is going to happen.
yeah i have that feeling too

Does the Big 12 contract get cut if Texas and Oklahoma leave early?

Looking at how the Remaining 8 can maximize their revenue before end of contract
1. Work out a hefty settlement for Texas and Oklahoma so they can leave early
2. If the contract doesn't get cut, split the extra money 8 ways
3. With the guaranteed expansion $$ increase under the current contract, add new members with a buy in process with the extra money split 8 ways

This way your getting a nice chunk for Texas and OU without taking a hit under the current deal plus taking advantage of the extra income the current deal will provide with expansion
08-27-2021 11:43 AM
Find all posts by this user Quote this message in a reply
jrj84105 Offline
All American
*

Posts: 2,706
Joined: Jan 2013
Reputation: 252
I Root For: Utes
Location:
Post: #29
RE: Big 12 expansion confirmation
That’s because the alliance deal feels like shaking hands over the table and pistols drawn below.
08-27-2021 11:44 AM
Find all posts by this user Quote this message in a reply
ArmoredUpKnight Online
Heisman
*

Posts: 9,874
Joined: Dec 2009
Reputation: 688
I Root For: UCF Knights
Location: Fort Lauderdale, FL
Post: #30
RE: Big 12 expansion confirmation
(08-27-2021 11:39 AM)JHS55 Wrote:  
(08-27-2021 11:32 AM)Claw Wrote:  I have that nagging feeling something we don't expect is going to happen.
yeah i have that feeling too

ESPN has been a little too quiet recently. What does the puppet-master want to do?
08-27-2021 11:44 AM
Find all posts by this user Quote this message in a reply
Claw Online
Hall of Famer
*

Posts: 24,963
Joined: Feb 2004
Reputation: 1225
I Root For: Memphis
Location: Orangeville HELP!
Post: #31
RE: Big 12 expansion confirmation
(08-27-2021 11:44 AM)ArmoredUpKnight Wrote:  
(08-27-2021 11:39 AM)JHS55 Wrote:  
(08-27-2021 11:32 AM)Claw Wrote:  I have that nagging feeling something we don't expect is going to happen.
yeah i have that feeling too

ESPN has been a little too quiet recently. What does the puppet-master want to do?

Good point.

I admittedly suffer from battered conference expansion school fan syndrome.

I have for a few decades now.

This time I'm not sure it works out well for anyone.
08-27-2021 11:50 AM
Find all posts by this user Quote this message in a reply
Scoochpooch1 Offline
All American
*

Posts: 3,352
Joined: May 2017
Reputation: 124
I Root For: P4
Location:
Post: #32
RE: Big 12 expansion confirmation
(08-27-2021 11:14 AM)Stugray2 Wrote:  Some of you guys seem to have some serious reading comprehension problems. The Big 12 post Texas and Oklahoma have a serious revenue problem. FOX and ESPN told then bluntly that none of the schools in the 2016 was worth anything near the per school contract value the Big 12 had. (*) That has not changed. Any expansion by the Big 12 will be of the absolute minimum required to get the best contract possible. Full stop.

The schools of the Big 12 have no interest in breaking the American. That is just some parlor game played on the internet fans play. It has no basis in reality. That is not how schools think. In fact if reports are true that perhaps 15 schools have contacted the Big 12 interested in future membership (exploratory folks), then most of the American schools (my guess is 8 or 9 of the 15) would logically be among the ones inquiring. Thus at school on school level there isn't animosity.

The Big 12 has not acted irrationally, not thrown Texas and Oklahoma out early to get it over with. Quite the contrary, they seem to have decided to sleep with their exes for the money and the higher profile. They are not going to act irrationally in expansion and add a bunch of schools that lower the per school value for the next contract (probably running 2025-33).

Bottom line, they will expand on to where the money is best for them. If that is none, then they'll stand at 8, if the money is better at 9 they'll add one, and if it's better at 10 they'll add two. Boren is gone, so the issue of psychologically disadvantaged is not part of the equation any more.

All good points as is usually the case.
People here don't understand that Big 8 are being fiscally responsible and not making emotional judgments like kicking out Sooner and Horn immediately.
08-27-2021 11:50 AM
Find all posts by this user Quote this message in a reply
mvcfan76 Offline
Bench Warmer
*

Posts: 177
Joined: Apr 2021
Reputation: 15
I Root For: MVC
Location:
Post: #33
RE: Big 12 expansion confirmation
(08-27-2021 11:34 AM)ArmoredUpKnight Wrote:  
(08-27-2021 10:50 AM)RUScarlets Wrote:  
(08-27-2021 10:45 AM)ArmoredUpKnight Wrote:  The number of teams is the big concern right now.

I feel like the L8 is too conservative and will likely add 4 teams. They should really try to become the first mega conference.

Might as well have merged with the AAC in that case... we know that isn't going to happen. ESPN would never pay the bottom rung schools equal share.

Bottom rung schools like Kansas and Baylor have been in the Big12 too long to kick them out now. Yea, I wish we could just take the top cut of the AAC and the L8 but both conference have their own deadweight.

Kansas is the most valuable brand of the whole big 8 and aac. Their football sucks but money wise everyone else is deadweight to them.
08-27-2021 11:57 AM
Find all posts by this user Quote this message in a reply
BcatMatt13 Offline
Hall of Famer
*

Posts: 11,300
Joined: Apr 2007
Reputation: 204
I Root For: The Bearcats
Location:
Post: #34
RE: Big 12 expansion confirmation
4 makes sense. BYU, Cincinnati, UCF, Houston.

BYU football only. Gets the team to two 6 teams divisions in football and a nice 20 game round robin schedule for basketball.
08-27-2021 12:00 PM
Find all posts by this user Quote this message in a reply
bluesox Offline
Heisman
*

Posts: 5,308
Joined: Jan 2006
Reputation: 84
I Root For:
Location:
Post: #35
RE: Big 12 expansion confirmation
Next Black swan = Kansas and Nebraska to the sec? It would make for 3x6 pods
(This post was last modified: 08-27-2021 12:03 PM by bluesox.)
08-27-2021 12:03 PM
Find all posts by this user Quote this message in a reply
Claw Online
Hall of Famer
*

Posts: 24,963
Joined: Feb 2004
Reputation: 1225
I Root For: Memphis
Location: Orangeville HELP!
Post: #36
RE: Big 12 expansion confirmation
Texas and Oklahoma just moved east. Most of the college football fans and schools are in the east.

I don't see some big westward expansion happening. The Big XII needs eastern eyes. BYU looks good on paper, but there is no synergy effect like there would be with Cincy and West Virginia.

We'll see.
08-27-2021 12:04 PM
Find all posts by this user Quote this message in a reply
Just Joe Offline
Special Teams
*

Posts: 762
Joined: Oct 2020
Reputation: 101
I Root For: Bama
Location:
Post: #37
RE: Big 12 expansion confirmation
(08-27-2021 11:26 AM)quo vadis Wrote:  
(08-27-2021 08:04 AM)GTFletch Wrote:  One thing to remember is that the BIG12 has data from the 2016 deep dive they took. The only reason they did not expand then is becuase both FOX and ESPN chucked a mental and threaten them. Why? Lets go back five years ago....

ESPN and Fox staged an extraordinary intervention in Big 12 expansion, going public with their displeasure over the potential addition of teams in the conference. It was a calculated Monday morning public attack on the Big 12’s plans to expand, the likes of which we have never before seen. ESPN and Fox both chose the Sports Business Journal, a widely respected high end publication for industry sources, to fire a shot across the Big 12’s bow on Monday morning, a time perfectly designed to attract wide media attention. This wasn’t just private disagreement, this was a public threat of war designed to send a clear message to the Big 12: expand at your own risk.

Most people already knew that the Big 12’s decision to expand was a naked cash grab designed to extort potential new members and take advantage of an existing clause in the TV contracts that guaranteed equal payment in the event of expansion. This represented a new, more desperate, move in college realignment. Whereas the SEC, Big Ten, ACC and Pac 12 all expanded to further conference network ambitions and strengthen the overall conference — that is, every team, new members and old members alike, would make more money through expansion — the Big 12’s expansion rationale is simple — sell Big 12 membership to desperate schools and have the ten existing schools pocket the added TV money owed under the contract. That’s a desperate strategy because a newly formatted Big 12 with 12, 14 or even more members isn’t worth any more money to the TV partners. Fox and ESPN’s ratings won’t increase, there’s no TV network lurking here to unlock new value, this is just an attempt to pocket more money between now and 2024-25, when the Big 12’s existing TV contract ends.

This is an extraordinary dispute because up until now we’ve never had a public fight between TV networks and a conference. Sure, there have been private disagreements — the SEC remains furious with CBS over the network’s refusal to increase its payments over the addition of Missouri and Texas A&M, an embittered posture that likely means the SEC won’t reup with CBS when its contract expires with the company — but those disagreements never went public before a new deal was reached. (NOTE: the SEC recently signed with ESPN leaving CBS over the dispute)

Here, Fox and ESPN, the two most powerful networks in college sports, are expressing their joint dismay, in public, with the Big 12’s plans for expansion. This just never happens. Why are Fox and ESPN so upset?

Because let’s say the Big 12 adds four teams: Houston, Cincinnati, Memphis and BYU. Each of these teams is worth either $20 million more a year right now and up to $25 million more a year at the end of the contract. Let’s round that up and say if all four of these schools come that eventually ends up costing Fox and ESPN an extra $100 million more a year.

What would these four schools, Houston, Cincinnati, Memphis, and BYU — sell their TV rights for on the open market right now if they were a standalone conference? Maybe $5 million total? At the absolute peak, they’d be worth $10 million a year, and that’s honestly way too much given present market conditions. (Ask Conference USA if you doubt me.) So this means the Big 12 is forcing Fox and ESPN to pay $90 million more a year than than these four schools would sell for on the open market. (That’s why I said the Big 12 wasn’t just exploiting the TV sports rights fee bubble, they were lighting it on fire.)

Over the life of the Big 12’s television deal that’s up to $800 million in total additional payments that Fox and ESPN would owe the Big 12. And, remarkably, that’s $700 million over the market rate those four schools would command, all based on an expansion clause in the Big 12’s contract.

So what happens now that this disagreement has gone public? We just saw it during CFP Expansion meeting swith SEC, TEXAS AD, ESPN and others Texas adn OU bolt... Not sure we can ever prove that ESPN wanted BIG12 L8 in AAC..

That's a great point I hadn't considered:

If that clause is still in the contracts that obligates FOX and ESPN to fork over $40m per year more for any school the B12 expands with, even if those schools aren't really worth nearly that much, then the B12 can expand right now "cost free" to itself, so to speak, for the next four years.

And since they stand to take a big haircut in 2025 anyway, their attitude might be "well who cares if this pisses off FOX and ESPN, they are going to sink us with low money then anyway".

With that in mind, this makes me think the B12 could very well vote to expand in the next coming weeks.

Pretty sure when ESPN/Fox agreed to resurrect the Big 12 title game (that Fox has since turned over entirely to ESPN) one condition was the elimination of the automatic escalator. If so, the conference would have to negotiate any amount to pay new members during this contract.
08-27-2021 12:04 PM
Find all posts by this user Quote this message in a reply
RUScarlets Offline
Heisman
*

Posts: 7,198
Joined: May 2012
Reputation: 176
I Root For: Rutgers
Location:
Post: #38
RE: Big 12 expansion confirmation
(08-27-2021 12:03 PM)bluesox Wrote:  Next Black swan = Kansas and Nebraska to the sec? It would make for 3x6 pods

It's possible next cycle, but I have to imagine SEC wants to grab UNC and UVa before those two. It depends on how they want to set up the conference.

10 vs 10 with those schools:

West: KU, OU, UN, UT, A&M, Mizzou, Ark, LSU, Ole Miss, MSU

Then send UVA/Va Tech or NC State UNC out east if they are able to land them. Otherwise it could be FSU CLemson.

I still don't think conferences over 20 teams make the slightest bit of sense. It's basically two separate conferences. Maybe a 5+5+5+5 model would be viable.
08-27-2021 12:17 PM
Find all posts by this user Quote this message in a reply
IWokeUpLikeThis Offline
Hall of Famer
*

Posts: 13,841
Joined: Jul 2014
Reputation: 1469
I Root For: NIU, Chicago St
Location:
Post: #39
RE: Big 12 expansion confirmation
(08-27-2021 11:57 AM)mvcfan76 Wrote:  
(08-27-2021 11:34 AM)ArmoredUpKnight Wrote:  
(08-27-2021 10:50 AM)RUScarlets Wrote:  
(08-27-2021 10:45 AM)ArmoredUpKnight Wrote:  The number of teams is the big concern right now.

I feel like the L8 is too conservative and will likely add 4 teams. They should really try to become the first mega conference.

Might as well have merged with the AAC in that case... we know that isn't going to happen. ESPN would never pay the bottom rung schools equal share.

Bottom rung schools like Kansas and Baylor have been in the Big12 too long to kick them out now. Yea, I wish we could just take the top cut of the AAC and the L8 but both conference have their own deadweight.

Kansas is the most valuable brand of the whole big 8 and aac. Their football sucks but money wise everyone else is deadweight to them.

Yes, Kansas is more than likely the most powerful school in the XII.
08-27-2021 12:21 PM
Find all posts by this user Quote this message in a reply
Wedge Offline
Hall of Famer
*

Posts: 19,862
Joined: May 2010
Reputation: 964
I Root For: California
Location: IV, V, VI, IX
Post: #40
RE: Big 12 expansion confirmation
(08-27-2021 12:03 PM)bluesox Wrote:  Next Black swan = Kansas and Nebraska to the sec? It would make for 3x6 pods

Nah. By adding Texas and Oklahoma, the SEC has put its per-school TV value on a level where Kansas and Nebraska don't increase the SEC's average value.

Only thing that could possibly make economic sense for the SEC would be cracking the ACC's grant of rights agreement, and even that's questionable because there might not be any team there that would raise the average TV value of the SEC-16, and because there is bound to be resistance among some SEC members to increasing the conference size above 16.
08-27-2021 12:30 PM
Find all posts by this user Quote this message in a reply
Post Reply 




User(s) browsing this thread: 1 Guest(s)


Copyright © 2002-2024 Collegiate Sports Nation Bulletin Board System (CSNbbs), All Rights Reserved.
CSNbbs is an independent fan site and is in no way affiliated to the NCAA or any of the schools and conferences it represents.
This site monetizes links. FTC Disclosure.
We allow third-party companies to serve ads and/or collect certain anonymous information when you visit our web site. These companies may use non-personally identifiable information (e.g., click stream information, browser type, time and date, subject of advertisements clicked or scrolled over) during your visits to this and other Web sites in order to provide advertisements about goods and services likely to be of greater interest to you. These companies typically use a cookie or third party web beacon to collect this information. To learn more about this behavioral advertising practice or to opt-out of this type of advertising, you can visit http://www.networkadvertising.org.
Powered By MyBB, © 2002-2024 MyBB Group.