Geez, what a mess.
The Big 12’s TV partners are pushing back on the conference’s plans to expand.
ESPN and Fox Sports believe that expansion with schools from outside the power five conferences will water down the Big 12 and make it less valuable, not more, sources said. But the Big 12 is financially motivated to add more teams. A clause in the conference’s media deals stipulate that if the Big 12 expands, it would receive pro rata increases in its rights fees.
The original deals pay $2.6 billion over 13 years, or about $20 million per school annually. Expansion by two schools, theoretically, would force ESPN and Fox combined to pay an additional $40 million per year in rights fees. Expansion by four teams could mean another $80 million per year.
Both networks, according to sources, are digging their heels in against paying those kinds of increases based on expansion with schools outside the power five.
In other words, the networks just aren’t that into your conference, Bob. (Not that you’re commenting publicly about it.) Especially when expansion boils down to nothing more than short-term greed.
The drive to expand is fueled by the opportunity to almost immediately generate more money for its schools. The conference’s TV deals run through 2024-25 and the Big 12 already trails the rest of the power five conferences in revenue, so expansion stands out as the only way for the Big 12 to increase revenue.
Any newcomers to the league wouldn’t be expected to receive a full share of TV revenue for multiple years, meaning more money for the 10 existing members…
… The conference already has announced plans to start a football championship game next year, which could mean another $25 million to $30 million in revenue. Absent a conference channel, the only other way for the Big 12 to significantly grow revenue in the near term is to add schools and activate that pro rata clause in its media contracts.
That kind of cash grab, sources say, is rubbing ESPN and Fox the wrong way because any new schools would not carry the profile of most power five schools, which is what the networks are paying for.
But think of all the cachet Cincinnati as a card-carrying member of the Big 12 would carry, guys.
The best part of this is that the networks previously displayed an unusual altruism towards the conference.
There’s also some history here. Executives at ESPN and Fox remember 2010 when they helped hold the conference together against the Pac-12’s raid by keeping rights fees at the 12-team level, even though the Big 12 was reduced to 10 teams — Nebraska left for the Big Ten, while Colorado departed for the Pac-12. That was under the previous Big 12 administration led by former Commissioner Dan Beebe.
Maybe Bob and his presidents see that as a sign of weakness. In any event, pissing off the hands that write the checks may work in the short run — both ESPN and Fox are stuck with the language they negotiated — but one thing about all contracts is that they eventually expire. And when that happens…
Another option would be to go along with the increases now and not support the Big 12 in 2025, when the grant of rights and the TV deals expire.
Should that turn out to be the case, it won’t just be the TV deals that expire.