Conference realignment slows as Big 12, Pac-12 may realize they are worth more together than apart

The conference’s realignment has become an increasingly frustrating attempt to squeeze dollars out of a system that has consolidated resources at the top. The best brands and most money belong to the 32 teams of the Big Ten and SEC – and the networks that own their main television rights (ESPN and Fox).

Everything else has become a mess, to the point that a source within the Big 12 said it would be a worst-case scenario Nothing happened in the league. That would mean staying at 12 teams with BYU, Cincinnati, Houston and UCF after Texas and Oklahoma leave ahead of the 2025 season.

Some Big 12 sports directors are concerned that the conference’s media rights dollars will not go far enough to add more programming without reducing their payouts. Outgoing commissioner Bob Bowlsby testified last summer that Texas and Oklahoma brought 50% of the rights value to the league.

The same reality emerges for the Pac-12. Even with Oregon and Washington — the top two brand names remaining among the 22 schools remaining in Pac-12 and Big 12 — there’s not much for the conference to capitalize on.

Do the math. A consensus appears to be forming among key parties that the Big 12 and Pac-12 would in some way be worth more together than individually.

“Let’s say the bloodletting stops at SC and UCLA. That’s exactly where you can’t get a raise in rights fees because you’ll lose them [L.A.] market,” said Bobby Hacker, a West Coast attorney and sports media consultant who served for 18 years as vice president of business and legal affairs at Fox Sports.

Hacker continued, “Now you have the Pac-12, which had less valuable rights than any Power Five group. They have now lost the LA market. There are no teams here to replace them with. And when you say, “We’re going to get San Diego State,” there’s a backlash in the conference because a San Diego State or a Fresno State doesn’t have the academic cache that the schools had.

“If Oregon and Washington leave, Katy locks the door. The option in my mind’s eye is the Big 12 merger.”

There seems to have been a stand-down mentality… for now.

The Pac-12 is in exclusive negotiations with Fox and ESPN. The Big 12 continue to explore expansion. New Big 12 Commissioner Brett Yormark made this official with his “Open for Business” comment at the media days of his conference last week.

The Big 12 want to be hipper, younger, cooler. There’s not much hip, young, and cool about a game between Iowa State and Cincinnati.

News and notes on the realignment of the conference

SEC presidents don’t want to go beyond 16 teams at this moment. That suggests that any decision Notre Dame makes about the Big Ten will be isolated and not necessarily impact the SEC.

That draws attention back to Oregon and Washington, the two largest “available” pieces. The reason they’re not already at the top of the Big 12 list is because they believe they have Big Ten-focused options. A problem? Multiple sources tell CBS Sports that neither the Ducks, nor the Huskies, nor the pair bring enough value to the Big Ten (in the $80 million to $100 million a year range).

Even if the Big Ten isn’t open for business, why would Oregon or Washington sign a rights grant with the Pac-12 knowing the conference is vulnerable? That’s how the Pac-12 ended up in this predicament: Former Commissioner Larry Scott signed a 12-year deal in 2012 that seemed lucrative at the time, but locked the conference in a below-market valuation.

Some have suggested that wherever schools end up, they should be allowed an “exit” in the rights grant contract in the event of an eventual offer from the Big Ten. But why would a conference knowingly devalue the main source of income?

ESPN and/or Fox don’t necessarily want to overspend on the Pac-12 on property they’ve already decided is far less valuable than the Big Ten and the SEC. It’s also not sure if ESPN will get secondary rights from the Big Ten. If they don’t have the Big Ten, maybe that will open their pockets to expanding the college football playoffs, the next big college rights deal on the agenda (after Pac-12 and Big 12).

“I sort of realigned my thinking. I think we’re not really talking about collegiate sports through the lens of the NCAA, the Power Five anymore,” Hacker said. “College sports is now fully controlled by ESPN and Fox.”

“It’s definitely not iron.” That’s what Kansas City sports attorney Mit Winter had this hold on about the ACC’s grant of rights, given the ongoing fear that this conference’s schools would soon be $50 million annually behind the Big Ten and the SEC could be left behind. He continued: “It would be costly to take legal action and try to come out of it with an uncertain outcome. I don’t think anyone really wants to get involved in this fight. If they got out, they would just agree to some sort of cash settlement, which would be a huge number.”

This number has been estimated at between $100 million and $500 million. Clemson, Florida State, Miami, North Carolina and Virginia are the programs most frequently cited as candidates for other conferences.

“There is definitely no safe gap in rights,” added Winter.

The ACC borrowed heavily from the Big 12 in shaping its rights distribution, according to CBS Sports sources. This agreement will keep Texas and Oklahoma in the league through the 2024 season. Winter said he helped draft this Big 12 document. Here is a PDF of the original Big 12 grant of rights signed in 2012. Note in “Membership Agreement” where members “agree” to stay together for 99 years.

However, this differs from the actual grant of rights, which states that each school leaving the conference must pay the final two years of revenue distribution. In that case, Texas and Oklahoma would both owe about $90 million to go to the SEC early. Now you can get an idea of ​​why both schools have committed to the Big 12 throughout the life of their agreement to date.

If you want to be a conspiracy theorist, consider the possibility that this round of realignment could result in one fewer major conference, potentially meaning one less guaranteed spot in an extended playoff. The original proposal to expand the playoffs to 12 teams, which was rejected in January, included spots for the top six conference champions. A merger of two powers or a collapse of a power creates greater opportunities for big seats for the Big Ten and the SEC.

That was the underestimated aspect when the Big 12 rebuilt last year as to whether it would remain in the Power Five after being reconstituted with Group-of-Five schools. That could be answered in real time. Should the Pac-12 be adopted by the Big 12 in some form, it would help strengthen the case that it is a Power Four league.

With only four major conferences, would there be a temptation to unequal playoff shares among leagues below the Big Ten and SEC? Currently, the Power Five conferences are contractually bound to receive the same money — about $57 million each — during the 12 years of the CFP deal, which expires after the 2025 season. The 65 Group of Five teams shared $83 million.

Another example of this growing gap: With the addition of USC and UCLA, the Big Ten deal’s projected annual value now rises to about $1.2 billion per year. That means the current Pac-12 rights would have to increase nearly 2.5 times ($600 million per year) to reach them half of what the Big Ten will earn. In the recent rights deals, the overall MLB contract is up 19%. The NFL increased its rights by 63%. The Pac-12 would have to inflate its rights by 240% to get halfway through the Big Ten.

“They’re not going to make it,” said one manager of the Pac-12.

This kind of delta between leagues affects the ability to hire the best coaches, academic advisors, mental health experts (Ohio State, for example, has a sports psychologist for each of its 36 sports), nutritionists and strength coaches. For starters.

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