Estimated read time: 5-6 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SALT LAKE CITY — Big 12 expansion remains on the forefront of the minds of college football fans around the country. Rumors about the top group of five teams and BYU continue to swirl regarding their candidacy for what once seemed like a surefire bid to expand.
Houston appeared to be the front-runner early, earning the support of the University of Texas and fellow Big 12 member Texas Tech. BYU’s fit seems most natural, having the easiest exit requirements to join the conference, with a long string of successful seasons and better than average historical relevance. Recently, Cincinnati and UConn have heard their names among the most viable expansion candidates.
Though while the expansion candidates continue to market themselves as the best option for the Big 12, is it possible that the conference may opt to remain at 10 teams?
The reason for expansion is simple, it provides the conference with more money.
When Fox and ESPN signed an agreement with the Big 12 to keep the conference afloat in 2010, they also agreed to provide pro rata to the conference in the amount equal to the current share of the existing conference members. However, that extra money isn’t required to be doled out to the new members of the conference. It can be disbursed to the existing conference members however the Big 12 sees fit.
According to the Sports Business Journal, each Big 12 team was due to receive an average of $20 million per season over the length of the 13-year contract. At that rate, expanding by four teams would require ESPN and Fox to split the $80 million bill per season for the next eight seasons to accommodate the newest conference members. If the contract is back loaded, the bill could be even higher.
Related:
Can BYU make a statement with Big 12 in difficult scheduling?
As soon as Big 12 commissioner Bob Bowlsby and Oklahoma president David Boren announced the league had received complete approval to consider expansion, schools from across the country clamored for an invitation into the short-staffed Power-5 conference.It appears that neither ESPN nor Fox is thrilled at the idea of extra expenses for carrying Big 12 football. The SBJ indicated that the television providers don’t see expansion candidates carrying the same profile of existing conference schools.
Could a compromise be reached between the Big 12 and the television providers that would both increase the revenue distribution of the current conference members and provide a more reasonable bill for ESPN and Fox?
Looking at the Pac-12, when the University of Utah was added from the Mountain West Conference, it agreed to take a lesser share of the conference’s revenue distribution before becoming a full revenue partner. Athletic director Chris HIll accepted a four-year plan that gave the Utes a zero revenue share in year one, 50 percent in year two and 75 percent in year three, before becoming a full revenue member in 2014.
Using this tiered system as an example, if the Big 12 were to institute a similar revenue distribution model for four new teams with a $20 million valuation, the existing conference teams would split $140 million over a three-year acclimation period. The current Big 12 teams would split $80 million the first season, $40 million in year two and $20 million in year three. Meanwhile, over the remaining eight years of the Big 12’s television deal with ESPN and Fox, the television providers would have to provide the conference with $80 million per season, totalling $640 million. Again, that could be a low estimate if the television deal is back-loaded.
Essentially, if the Big 12 is looking to line the pockets of its current teams, it is asking ESPN and Fox to spend $640 million, only to see $140 million go to existing members.
If more money is the ultimate goal, which is usually the case in college football, would the Big 12 be open to the idea of renegotiating the price of their final eight years of coverage from ESPN and Fox to increase the $140 million that could be gained with conference expansion, while at the same time saving the television providers the exorbitant cost of adding teams?
If ESPN and Fox were to be willing to add an additional $300 million to their current Big 12 deal, the existing 10 conference teams could see an increase of $30 million over the final eight years of the contract, versus the $14 million they’d earn in the previous revenue distribution model. All the while, the television providers would save $340 million over the next eight seasons.
While the financial issues could be solved under this scenario, it would fail to address the concerns that the Big 12 might disband at the end of its current television deal. With a centrally located footprint, and the fewest teams of any Power 5 conference, the Big 12 appears vulnerable to being poached by bigger conferences over the next decade. Even if it makes financial sense, remaining at 10 teams might fail to address one of the conference's biggest needs, future viability.
Once again, if ESPN and Fox are uneasy with the high cost of conference expansion, and the Big 12 is simply looking for a way to be more financially competitive, there appears to be a massive amount of middle ground to compromise to save the television providers money while growing the bank accounts of the current conference members. However, if conference sustainability is at the forefront of the Big 12, expansion is still the way to go.
