Thursday, 14 April 2011 15:41

Big 12 Inks New TV Contract

Written by Jay Beck

As it turns out, the rumors regarding the Big 12's new TV contract that started swirling in mid-March were true and came to fruition on Wednesday.  During a conference call with Fox television executive, Randy Freer, Big 12 commissioner Dan Beebe announced an agreement between the partners on a new 13 year agreement.

The financial details weren't released, but it's been widely reported that the contract will pay the conference $90 million per year starting with the 2012 season.  The agreement also allows Fox to televise 40 games a year, doubling the number of games in the current agreement.

There's been some speculation as to why Fox would be willing to pay so much for a conference with two fewer teams, a subject  I touched on back in March, and for the most part, I still think those reasons remain.  More games, more control of games, previous contracts being undervalued (Beebe talked about this during the conference call) and the length of the contract locks in the Big 12 with Fox for 13 seasons.  It may appear they're overpaying now, but with the value of those rights only going up, they likely won't be when the contract is up in 2025.

After hearing the discussions on the conference call yesterday,  you can probably add to those reasons competition, (potentially from NBC/Comcast) and the desire for Fox to position itself for the first-tier rights that come up after the 2015-16 season.  So all those reasons tied in with what Texas Tech's new athletic director, Kirby Hocutt added, "I think the popularity of the game is stronger than it's ever been," are the most likely reasons Fox committed what it did.  Outside of the NFL, there isn't a more watched sport on TV.

All-in-all,  it's a good deal for the league and a next step that had to happen.  Had there been some sort of snag in the negotiations, some panic from the member schools likely would have set in.  But that wasn't going to happen.  The league knew it and the member institutions knew it.  Along with the promises made by Fox last summer, all they had to do was look around the landscape of college football at the other TV deals that were being struck to know they were going to get more, even with less.  But to have it become official is also good reason to let out a collective sigh of relief if you're one of the 10 remaining members.

A couple other thoughts on the contract:

Does this solidify the long term viability of the Big 12?

I'd say you'd have to answer that with a yes.  But it does so for one reason, money.  This is from the Big 12's official release "Most importantly, the agreement signifies the long-term commitment of the member institutions to one another."  While this is true, let's not get carried away.  The schools made the commitment because they're getting paid.

dollar_signsJust to play devil's advocate for a second:  If a school wants to leave the Big 12 for whatever reason over the course of the contract, it's going to leave.  There was talk yesterday of big penalties for leaving and lots of conversation about commitment and solidarity which are words that all sound nice when you say them, but really don't mean a heck of a lot.  If a school wants to leave, it'll find a way.  Colorado is a perfect example.  There were a cash-strapped athletic department, but they wanted to leave and found a way to pay the penalty and are now in the Pac-12.

Now that being said, with a nice TV contract, and a another big one most likely on the way after the ABC/ESPN deal expires in five years, schools will have less reason to look around with wandering eyes.  And other conferences will have a harder time offering a sweetheart type of deal when expansion comes up again.

Will the conference look to expand?

The Big 12 has continued to say no and you have to believe them for the time being.  "We carefully considered all options, and I believe in the long term, we're going to be in the situation we're in right now," Beebe said.

I wouldn't say the book is officially closed on the matter, however.  The Big 12 will see how this plays out over the next year or two and most likely revisit the discussion in my opinion.  Why wouldn't they?  There's really nothing to lose by doing so.  Texas Tech coach Tommy Tuberville guessed last week the league would look to expand to get the championship game back so there are obviously others that don't think the discussion is closed, either.

Which brings up another point Beebe raised yesterday, the championship game.  "The football championship game has always been somewhat controversial, and in fact, our teams were prevented from playing in the national championship three times when we've already tied for the most number of appearances in the national championship."  Yes, that happened.  But it also happened with an eight game conference schedule and not every team playing each other.

That changes now with the nine game conference schedule.  One more conference game means every team in the league has one more chance to lose.   And as Tuberville said last week, "Playing a nine game conference schedule is tougher than anybody else's." So I wouldn't necessarily jump to the conclusion that not having a championship game is easier, although there are strong arguments on both sides.

What about the uneven TV revenue distribution the remains in place in the Big 12?

I'm going to cover this in its own post in the next day or so.  I won't go as far to say it's irrelevant, but it's just not as big as factor as some make it out to be.  The bottom line is with this contract and others in the future, everyone in the Big 12 is going to be making a lot more money than they were before.

What about the third-tier viewing rights that allow schools to like Texas to form their own network?

I think it's too early yet to answer that question with any degree of certainty.  The Longhorn Network is official and going to happen.  The Sooner Network is most likely going to be right behind it.  The unknown element is how, or if, the rumored Big 12 Network comes together (with the eight remaining schools).  Until more is known about all three, really, it's tough to say.

ESPN analyst Ivan Maisel wrote in his blog, "In other words, the Big 12 will be more unbalanced than ever," in referring to the Big 12 monetizing its third tier rights.  There's some truth to that, but there are much bigger reasons for the unbalance than just TV contracts.  Start with the Longhorns selling 107,000 tickets per game at $65 a pop, six times a year.  Compare that with Kansas State selling 50,000 tickets at $50 a pop six times a year. (Just ball parking the numbers, that's $26 million more in revenue for Texas compared with KSU on ticket revenue alone).  The gap widens, sure, but it was already like the Grand Canyon to begin with.

And you know what? The other schools probably don't mind much: 1. Because there's not much they can do about it, and 2. Because this type of TV contract never happens without Texas and Oklahoma in the picture.  In the end, everyone is better off.

So overall it was a good day for the Big 12.  If the conference was going to stay together long term, there were a couple obstacles that had to be overcome and one fell by the wayside on Wednesday.  While there are still some questions which remain, the important thing is that everyone is getting paid. Fox made sure of that.

Last modified on Friday, 22 April 2011 13:34
Jay Beck

Jay Beck

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1 comment

  • Comment Link Roger Saturday, 16 April 2011 00:52 posted by Roger

    This should make some people feel better especially in Ames and Manhattan. Ride the Horns' coattails, there's nothing wrong with that.

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