But what if the league has an ulterior motive?
It seems the Big 12 intends to hold ESPN and Fox to the letter of that cumbersome pro rata clause in their contract, the one that continues to pay each Big 12 member the same $20 million or so whether the league has 10 teams or 14.
But what if the bold statements by commissioner Bob Bowlsby and board chairman David Boren are really more of a power play?
What if all this talk of Big 12 expansion is just subterfuge?
How else to account for the Big 12’s sudden change of heart?
At the league’s annual spring business meetings back on June 3, Boren and Bowlsby said television partners assured them there was no market for a new conference network — certainly not one that stretches from the coal hills of West Virginia to the dusty plains of West Texas.
“When the consultants tell you and the marketplace tells you, ‘Look, everything’s changed,’ ” Boren said, “if you were the CEO of ESPN or Fox or one of the traditional networks right now, with all this change and disruptive technology, would you be want to put millions of dollars into a partnership with a new traditional network? I think you’d say, ‘Not now.’ ”
Then, just ahead of Big 12 media days two weeks ago, it was revealed that ESPN and the ACC had come to terms on an ACC Network, a deal that has been estimated will bring in as much as $200 million a year, though it’s probably closer to $100 million.
See, no market for a new network and $100 million for a new network — that’s two different things.
Back in June, remember, Boren practically pounded his fist to emphasize the league’s stance on expansion.
“It does give some marginal gain,” Boren said. “But you have weight that against reputational impacts. In other words, our fans want to see our teams play against great teams. They don’t want to see them play mediocre teams.”
That’s a pretty strong argument against expansion.
But just six weeks later, there sat Boren and Bowlsby, talking to national media on a conference call, about the virtues of expansion.
That, too, is incongruent.
Let’s revisit that conference call on July 19.
In the context of TV networks flagging financially as consumers cut cords, adding a Big 12 championship game for upwards of $30 million a year and the forthcoming compensation to the ACC, the question was asked: what money is going to be left without antagonizing those (TV) partners to expand?
Bowlsby figuratively rolled up his sleeves and clenched his fists.
“Well, you know, we have provisions in our existing contracts that were negotiated along with the 12-year agreements that we made,” Bowlsby said. “And those stipulations were put in the contracts in anticipation of the possibility of fluctuations. … So the contract was anticipatory of the change that is present in college athletics.
“ … So we expect to exercise the full prerogatives of what we negotiated.”
Translation: They’ll pay us what the contract says they’ll pay us.
“The provisions, of course, as you know, do protect us so that current member shares will not be diluted if we were to add two or four more teams,” Boren added. “There’s a contractual obligation to pay that additional amount pro rata that we’re already receiving if there is an expansion, a hypothetical expansion of the conference. It’s already covered in our contracts, does not require additional negotiation of the contracts.”
Yeah, but aren’t you concerned that holding their feet to the fire will agitate TV execs when it comes time to renegotiate in 2024?
“In both the case of the championship game and in the case of the pro rata adjustments, you know, we’re in complete compliance with the contract,” Bowlsby said. “And it’s a mutually binding contract that we put in place 4 ½ years ago. So I don’t think we have to make apologies for activating around stipulations that we both agreed to.”
Full prerogatives and protective provisions and contractual obligations — oh my.
Maybe all this tough talk about expansion and television contract pro rata adjustments is really just a smokescreen for what the Big 12 really wants: a league television network.
Yes, the Big 12 is the only Power 5 conference with 10 teams. But now, the Big 12 is also the only Power 5 conference without a television network.
Ten members actually is a workable model, so long as it’s stable. The Big 12 nearly had two teams in the inaugural College Football Playoff, and last year the Big 12 landed both a playoff football team and a Final Four basketball team. As Bowlsby and Boren reminded us so frequently leading up to July, that indicates a position of strength, not weakness.
But now, being the only Power 5 conference without a TV network, that is a sign of weakness.
Working through federal tax returns, it’s been estimated that the first full year of the SEC Network produced just over $100 million, or about $7 million per school. The Big 12, with only 10 members, might command that kind of cash, but having a network does open up future earning potential. It also tells recruits, ‘Hey, we’re legit.’
Think about it. Does the Big 12 really want to add Cincinnati or Houston or Memphis or Colorado State at the risk of jeopardizing its relationships (and future negotiating leverage) with ESPN and Fox?
Maybe the Big 12’s sudden, unexpected interest in expansion and its unusually hardline stance on pro rata adjustments is really just a big negotiating chip to force ESPN and Fox to give the Big 12 what it really wants: a television network.
And now perhaps the ball is in ESPN and Fox’s court.
Do they want to pay the Big 12 what Sports Business Journal reported as an additional $80 million a year for an inventory that includes Central Florida and Connecticut?
Or would they rather pay the Big 12 something like $80 million a year for a network — and pass the cost onto cable and satellite subscribers?