Has the Big 12(-2) Found the Blueprint to Survive?
Late yesterday, Street & Smith's Sports Business Journal, broke a story about the Big 12 Conference potentially solving their television contract revenue problems.
In reading this story, I'm completely blown away at the amount of money the new 10-team Big 12 can potentially generate.
The Big 12 and Fox are close to finalizing a long-term deal that will pay the 10-team league more than $60 million a year, well up from the $20 million it now receives from its cable contract, industry sources say.
Fox, meanwhile, has been in discussions with eight of the league’s schools about establishing a conference-specific channel for a handful of football games, up to 60 basketball games and Olympic sports. The channel would not include programming from the University of Texas, which has partnered with ESPN on a new Longhorns channel, or the University of Oklahoma, which is planning its own channel, as well.
The first thing that jumps out at me is that FOX is willing to triple its annual payment to the conference. What is FOX going to get for that investment?
In 2010 there were 49 conference football games played (48 regular season, plus Conference Championship Game). Next season, with the conference going to 10 teams & 9 conference games per team, there will only be 45 conference football games, with no Conference Championship Game and ESPN/ABC will take at least 10 of the 45 games. There is a similar shake-out for the basketball schedule too. In the just completed 2010-2011 season, there was a total of 107 conference games played (96 regular season, plus 11 games at the conference tournament) for each the Men and Women. Next season, there will be 90 regular season games, with an undetermined amount of conference tournament games. So, I ask again, what is FOX going to get for its investment?
The other major part of the story is that Texas Tech, Texas A&M and the rest of the Big 12, minus UT & OU, will share a cable channel. I guess that's the best case scenario for Texas Tech since the Big 12 wasn't able to create a conference cable channel.
However, the cable channel appears to be the brainchild of one company trying to leverage their third-tier rights.
The other eight schools, however, have been engaged with Fox about a college sports channel that would carry their events. Fox’s talks, led by the co-president of Fox Sports, Randy Freer, primarily have gone through Learfield Sports, which is the multimedia rights holder for Kansas State, Iowa State, Missouri, Oklahoma State, Texas A&M and Texas Tech. IMG College owns the rights at Baylor and Kansas.
Talks have centered on having Fox flip one of its three Fox College Sports national channels, which are carried on cable sports tiers.
The main question I have concerning the cable channel, is can all of the schools involved 'play nice'? It's one thing for the unified Big 10 to all share in the wealth and bask of a conference cable channel, but some pride will have to be swallowed for a fractured Big 12 to do the same.
The final part of the SBJ's story to digest is the overall dollar figure being thrown around for conference television revenue.
The network and cable deals combined will bring an average of close to $130 million a year into the conference to share with the 10 teams, putting the Big 12 only slightly behind the ACC, which recently struck a deal for $155 million a year with ESPN.
Will the $130 million per year be enough to spread around to the conference members? Remember, during last year's conference meltdown the forgotten 5; Iowa State, Baylor, Missouri, Kansas and
Kansas State; all pledged that starting in 2012-2013 Texas, Oklahoma and Texas A&M would be guaranteed $20 million per year in conference television revenue. Let's do the math: $130 million minus $60 million ($20 million times 3 teams) equals $70 million dollars for the other seven schools in Big 12. That means the seven have-nots in the Big 12 get $10 million dollars per year, if the money is divided equally. Back in 2009, Texas Tech received $8.23 million in conference television money. So, you're telling me that Texas Tech only gets an additional $1.8 million per year, while Texas, Texas A&M and Oklahoma get to "rob" the other members of the conference and exponentially increase their revenue every year at the expense of the other members of the conference? Yeah, that's going to work.
I am still in agreement with Ryan Hyatt that a 10-team Big 12 Conference is not a viable longterm option for most of the teams involved. Also, the class system created last summer to prop up UT, OU & A&M at the expense of the rest of the conference is incredibly short-sighted. All it will take is for one school to say 'that's enough' and to bolt to another conference to crash the Big 12's house of cards.
Let me know what you think in the comments below