Monday, June 14, 2010

The Big 12 is still kickin'

So ... I guess we won't be seeing a Pac-16. Texas has decided to save the Big 12 -- and about half the teams in it -- by choosing the status quo and the promise of $25 million or more per season in TV revenue.

This obviously takes care of any talk about superconferences, at least for now. The Pac-10 will likely stop at 12 teams and the Big 12 is probably stuck at 10, so until the Big Ten makes another move, there probably won't be a conference with more than 12 teams. Not exactly what we were expecting a few days ago, right?

But if you've looked at the details of Big 12 commissioner Dan Beebe's sales pitch, you might have noticed something:
Texas stands to earn between $20 million and $25 million annually in television revenue in the reworked deal, including money from its own network, according to

The Longhorns' network figures to generate between $3 million and $5 million, according to the report. Because the Big 12 has unequal revenue sharing, the deal will mean more money for Texas, Texas A&M and Oklahoma, who all would receive at least $20 million annually from the new deal.

The other seven schools in the Big 12 would make between $14 million and $17 million, doubling what they currently receive in TV revenue.

OK, let's figure this out. The Big Ten distributed between $20 million and $22 million in TV money to each team last year, part of which came from the ABC/ESPN contract and part of which came from the Big Ten Network. The SEC distributed about $17 million to each school from its contract with ESPN. The Big 12?

1. Texas: $10.2 million
2. Oklahoma: $9.8 million
3. Kansas: $9.24 million
4. Texas A&M: $9.22 million
5. Nebraska: $9.1 million
6. Missouri: $8.4 million
7. Texas Tech: $8.23 million
8. Kansas State: $8.21 million
9. Oklahoma State: $8.1 million
10. Colorado: $8.0 million
11. Iowa State: $7.4 million
12. Baylor: $7.1 million

Granted, the Big 12's TV deal was outdated and was set for a significant boost this offseason. But I highly doubt that it would've surpassed the SEC deal, and there's no way it would've gone past the Big Ten's total revenue package. And that's WITH Nebraska and Colorado. Yet according to Beebe, the revenue-sharing payouts will now look something like this:

1. Texas: $22 million
2. Oklahoma: $20 million
3. Texas A&M: $20 million
4. Everyone else: $15 million

Add it all up and that's a total of $167 million a year, or $16.7 million a team. Keep in mind that the second- or third-most valuable program (Nebraska) is gone along with the third-biggest market (Denver) the conference owned. Is the Big 12 run by the underpants gnomes? Because the new plan looks something like this:

1. Lose two valuable schools
2. ?
3. Profit

There must be something I'm missing. Fox Sports will be expected to pay the same amount for what's basically Texas, Oklahoma and Conference USA as ESPN is paying for the SEC? Yeah, I don't get it. Maybe the Big 12 can get that amount, but if so, Fox is flat-out stupid.

The more likely scenario: Beebe is pulling numbers out of his ass in a desperate bid to keep his conference alive. Not that I can blame him; it was his only chance to avoid what would have been the complete and utter collapse of the Big 12. But why would anyone more than double the value of a TV contract for a conference that now has one nationally relevant game (Texas-Oklahoma) a year? I could go on, but I think you get the idea. I'll be pretty surprised if the actual payouts end up close to what's being promised.

The other thing that's weird is that the whole cause of the unrest in the Big 12 was the uneven revenue sharing. Texas got just over 10% of the conference's total TV money (a little over $10 million), so teams like Baylor and Iowa State were left with a much smaller portion (around $7 million). Nebraska, Missouri and the middle-of-the-pack schools got about $8.5 million or $9 million. So how's that new deal look, Missouri? Texas will now be raking in roughly 13% of the overall TV package, while the bottom seven schools will each be pulling in about 60-75% of that. Everyone besides Texas, Oklahoma and Texas A&M is now in even worse shape than before in terms of percentages. And the sad part is that they all need Texas so badly that they'd have signed off on just about anything.

At the end of the day, it was all about power for Texas. If it was about money, UT could have had about $30 million in TV money from the Big Ten and $500 million from the CIC for research. If it was about academics, UT could have gone to the Pac-10 and given the school a reputation boost. Doing neither of those things made a pretty clear statement. If you condensed the entire negotiation process into one conversation, it would have gone something like this:

Missouri: This sucks. I can't believe how unfairly you treat me, Texas. I'm outta here as soon as the Big Ten breaks up with Notre Dame.
Texas: Fine. Good luck with that. I'll go hang out with my other friends and laugh while lighting my Cuban cigars with $100 bills.
Missouri: Shit. You're right. Hey, wait a minute -- maybe we can work something out.
Texas: I'm listening ...

This all has a downside, of course. If/when another conference comes calling at some point in the future (if the Big Ten decides it wants Missouri, for example), what will stop anyone from bailing? Going to the Big Ten or Pac-10 would still represent a huge financial boost AND equal revenue sharing. If you're not Texas, Oklahoma or A&M, you have no reason to be loyal. And if Missouri or Kansas (or both) were to be pulled away, what's already a thin conference would become a complete joke. I'd think Texas would have to leave at that point.

A friend actually pointed that out and made a simple suggestion: Why doesn't the Pac-10 just invite Kansas, who would definitely accept? That'd probably weaken the Big 12 to the point where Texas would say, "Screw it, let's just get out of here and find somewhere stable where we can still make a ton of money." And if that happened, Oklahoma and Oklahoma State would come along too. They'll go where Texas goes. The other spot would be Texas A&M's (if they want it) or Texas Tech's (if A&M were to pick the SEC). Makes sense, right?

And eventually, that might be the Big 12's downfall. There are too many unhappy/mistreated partners that will be willing to leave at the drop of a hat. But it might not happen for a while (maybe never if the Big Ten doesn't want Missouri), and for Kansas, Kansas State, Missouri, Baylor and Iowa State, that must be an overwhelming relief.

As for the Pac-10, it sounds like Utah is likely next on the list. There's little value in expanding to 11 teams (not enough for a conference championship game); it's just a matter of which school will get the 12th ticket.

Side note: Adding Utah and Colorado is fine, but it's gotta be a little bit of a letdown after barely missing out on the Texas-Texas A&M-Oklahoma-Oklahoma State conglomerate. The Pac-10 Network (or whatever it'll be called) suddenly seems a little less interesting. The Big Ten, meanwhile, has to be feeling pretty good about itself. Think about it: The Big 12 is still alive but significantly weaker, the Pac-10 is pretty much the same as it was before but with two more teams ... the Big Ten is the only conference that's definitely stronger than it was last week.

I still think there's almost no chance that the Big Ten stops short of 14 teams, but Jim Delany said the other day that the conference will now revert to its original 12-to-18-month timeline, meaning we probably won't know anything (officially, anyway) until next offseason.

Unofficially, I don't think it's any secret that Notre Dame is still at the top of the list. And the more I hear, the more I think Notre Dame will eventually be one of those 14 (or 16) teams. It'll just be too easy for the Big Ten to split up the Big East. I see one of these two things happening:

1. The Big Ten will invite two schools -- probably Rutgers and Syracuse -- which is guaranteed to cause the Big East to implode and force Notre Dame to find a home for all its sports.
2. The Big Ten will tell the Big East that it intends to invite Rutgers and Syracuse, and this threat will force the Big East to give Notre Dame an ultimatum: join for football (and save the conference) or GTFO. Notre Dame obviously won't be joining the Big East for football, so they'll be in the same situation as in the previous scenario.

Either way, Notre Dame will need a home and the Big Ten will be happy to oblige. My guess is that the second scenario is a lot more likely, because I don't think the Big Ten wants to go to 16 teams unless it absolutely has to. Getting Notre Dame and one of Rutgers/Syracuse/Pitt/Maryland is preferable to getting Notre Dame and three of those schools, because those schools just don't provide enough in revenue to make up for their addition. The fewer schools added beyond Notre Dame, the more money everyone's sharing.

There's a rumor going around (I've heard this from more than one knowledgeable person) that Notre Dame has been offered a stepped invitation, basically ramping up the number of Big Ten games each season and becoming a full conference member the year after the NBC contract expires in 2015. That would be a pretty generous concession by the Big Ten, but I'm on board with whatever it takes. Notre Dame is still wildly valuable and extremely popular throughout the country; getting ND in the conference would have more financial impact than any move any other conference could make. And let's face it: Notre Dame belongs in the Big Ten.

So ... where were we? Oh yeah. Once the Pac-10 adds Utah, we'll probably be done with expansion for a while. Unless the Big Ten gets Notre Dame to sign up (I'm pretty sure Delany would accelerate his timeline for that), at which point everyone will go crazy again.

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