Fox and Big 12 Sign TV Deal...Working on 2nd.

by Redhawk on Mar 15, 2011 1:55 PM CDT

(bumped and a big thank you to our resident expert in this kind of stuff!)

IS THIS MAN SMARTER THAN YOU GAVE HIM CREDIT FOR?

Ding-Dong, the witch ain't dead after all.

This past summer many fans were ready do bury the Big 12 Conference as a relic of the past, like Dodo Birds and 8-track tape players, doomed to a level like the Mountain West Conference (I even read posts that the Big 12 schools should leave the Big 12 for the MWC or the Big East).

The reason for this pessimism was the money that was promised by the TV networks to the conference to keep the schools together would be just as empty of a promise as "the checks in the mail". Turns out...the check really was in the mail.

This week the Big 12 and Fox announced a new TV deal worth $60 million dollars for the leagues "2ndary rights". This is pretty much for the same stuff, that Fox Sports currently puts on and which Fox was paying $20 million previously. This works out to an INCREASE of $4 million per each of the 10 schools.

To put this in perspective, the Big 12 schools made in the past between $14 million to $7 million per year from the Conference on TV deals before. The league was promised that they could get that to between $20 million to $15 million with an average close to $17 million, or roughly they would have to make about $ 7-8 million more PER school, if they stayed together.

This deal ALONE...puts the the league increase at half that number. And the big TV deal with ABC/ESPN is not up until 2015. It would be easy to assume, that the first rights deal would also net a similar per-school increase, and would put the league at it's promised payout totals.

This puts the Big 12 solidly as a league number 3 in payouts per school after the Big 10+ (which makes around $21 million per year per school) and the SEC (around $20 million per year per school) and WAY ahead of the Pac 12, which is actually not getting the money in TV negotiations they thought they would (mostly do to complex cable set up in the LA area)

This is all BEFORE we even get to the other big news, and that is Fox Sports is negotiating to signing a deal with the 8 schools for their 3rd level rights and possibly a conference (or regional) channel (minus OU and Texas).

I should note the truly big news is Texas A&M is joining the other 7 schools. This gives the new channel, a bigger Texas presence. A&M was looking at having their own TV channel like UT and OU as well. This was first hinted at when the A&M Board of Regents gave their AD power to negotiate and sign a TV deal (makes it easier than having to wait on a board meeting and vote)

These tirchiary rights is what UT signed over to ESPN for their deal. It's all the extra stuff, that isn't picked up by ABC, ESPN, or Fox Sports. It's the games you currently don't see at all, or on local out lets like on Cox Cable/SoonerSports.com in Oklahoma. In the past these rights didn't amount to much value. NOW however, it turns out people would rather watch a school play Softball, than watch a news highlight or reruns of Golden Girls. ANY first run live sporting event has an audience.

Now, all schools make some money off of these 3rd level sports broadcast rights now. It's a line item. These rights are signed over to the Big 10 Conference, and the Pac 12 conference. But in the Big 12..the schools keep them. This is the MAIN reason OU and UT didn't leave for the Pac 12. Now, with this potential deal, will mean the other 8 schools will get paid too. Not as much as UT, or OU but they will get paid. In fact you can look at this cable network, as an ADDITIONAL income stream for those 8 schools. (same as UT's ESPN deal and OU's up coming deal)

The scary part of all this for me...is OU deal isn't completed for their own cable channel. How much can they make on their own vs combining it with the other 8 schools in the Big 12? Does OU have enough local/regional and national interest to float it's own channel? That's the big question and big risk.

I'll assume that Joe C, and David Boren know that answer already.

UPDATED: 3-15 at about 5pm Central

Just read this from former Daily Oklahoman and current ESPN writer David Ubben He runs his numbers a little differently than I did, but this is still a nice pay increase. Ubben's take away is this isn't the $20 million per year that was promised...but it's good. I never understood the money promised to be on this ONE single TV contract, but rather on all the deals including ESPN/ABC's in 2015.

The real take away is additional quotes from Big 12 Commissioner Dan Bebee.

"What I talk about with my colleagues is that the whole exploration this summer led everybody to believe that -- well, not everybody, because I think Larry Scott has a different view in the Pac-10 -- but the rest of us who have been around collegiate athletics for our whole careers think that if you get past 12, it really gets unwieldy and you run into all sorts of other problems,"

Which means the Super-Conference idea looks dead at least for the moment.

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Do you really think that means the super-conference idea is dead or is Beebe just posturing?

by SoonerDutch on Mar 17, 2011 11:19 PM CDT reply actions

dead

I’ve been saying it for a long time, and few seem to believe it.

It will only happen if some one pays for it…and ESPN is paying for it to NOT happen (or promising money to the Big 12) and Fox hasn’t seem to step up to make it happen, and with these 2 deals, are actually keeping the Big 12 fat and happy too.

Super-Conferences…mean supply (TV football programing) becomes under control of less conferences…which mean tighter supply….smaller supply…means higher prices for the networks…and they are already over paying.

There is only one conference that can change that…and that is the Big 10+2. They really play on a different level when it comes to money then the other conference. But even if they go to 16….I don’t think the other conferences go to 16.

When I write: Rockies Reporter (www.rockiesreporter.wordpress.com)
"Suck it monkeys, the Rockies will win this year"

by Redhawk on Mar 18, 2011 11:18 AM CDT up reply actions

Nice post Redhawk....

So let me get this straight, you believe the money will be there after renegotiating the ESPN/ABC contract in 2015? If so that’s what I concluded initially after the Pac16 fell apart.

However I do disagree with you, the super conferences will happen if the Big Ten or SEC expand first, I doubt the SEC wants to shake up the conference world that they have all but dominated over the last decade, but the Big Ten has the means and incentive (with a large stake in their network unlike Texas) to go to 16, and I expect if they do then the SEC and the ACC will also bite the bullet too, after that its just a waiting game either 16 with be the new 12 or the 16s will fall apart like the SuperWAC did.

by TowerPower on Mar 21, 2011 8:53 PM CDT up reply actions

See...the Big 10+ can go to 16

as it works for them. But the same rules don’t really fit the SEC or the ACC. They don’t have the successful cable deal, and they don’t have the research consortium.

So the Big 10 might go to 16….but I don’t think the others do.

The main reason is each additional team added has to be worth more money to the TV networks than the last one…or the pie gets smaller for the other teams. Again…who’s going to pay for it? Not ESPN…and if they don’t….I don’t see Fox especially after they are pay BIG TIME for the Big 12 to live.

When I write: Rockies Reporter (www.rockiesreporter.wordpress.com)
"Suck it monkeys, the Rockies will win this year"

by Redhawk on Mar 22, 2011 9:52 AM CDT up reply actions

if it happens....

it’ll happen around 2014-17 when many contracts are renewing, do you think FOX won’t put in a bid for SEC football? Mark Cuban’s HDNet is interested in getting a few games and CBS and NBC are both rebranding their sports channels, Versus and CBSCS to NBC sports and CBS sports in order to get a hand in the college football pot too…with all this new blood at the negotiating tables I don’t think a lack of funds will hinder any future moves. I think I it could happen but it all hinges on the Big Ten…

by TowerPower on Mar 22, 2011 10:42 AM CDT up reply actions

so you are saying..there will be more groups bidding….but they will want less product (conferences)?

See…..this doesn’t make sense to me at all. I can see the extra bidders, but putting together bigger conferences isn’t a correlation.

Why would a school already getting paid move conferences? They wouldn’t. Would OU and OSU move to the Pac 10 or the SEC for the same money? NO Would a TV give the SEC FAR more money with OU and OSU in it? NO

See…i think the answers to all these are no. The Super-Conference idea doesn’t add up.

And again if the Big 10 goes to 14 or 16…that doesn’t mean the others follow suit. Some reshuffling may happen between the Big Least and the ACC who would be the conferences losing teams to the Big 10…but that’s about it.

When I write: Rockies Reporter (www.rockiesreporter.wordpress.com)
"Suck it monkeys, the Rockies will win this year"

by Redhawk on Mar 22, 2011 11:10 AM CDT up reply actions

good points....but the contract expire/renew at different times

The ACC just signed a big one with ESPN, whats to stop Fox for bidding a butt load of money on a new 16 teams SEC with Florida St, Clemson, Miami, and Georgia Tech (just an example use any teams you want). They could steal the SEC from ESPN and also the big dogs from the ACC (and ESPN), why would they not? This could force the Big East/ACC to merge and ESPN just went form 3 major conferences to 1, so they would pay more for a new Big Ten or Pac16 thus driving up the price. SImple supply and demand, more bidders less conferences means more money for all (including conferences like the MWC).

You are correct it makes no sense for ESPN who has the SEC ACC and Big East to pay more for less but another competing interest could set this thing in motion. Unless all the major players ESPN/CBS/NBC/FOX have a gentleman’s agreement not to pay for the super conferences someone will make a move to get an advantage and I bet the Big Ten and SEC could very easily be convinced to expand again assuming the price is right.

I agree withy your statement about OU and OSU, ironically with the new TV money coming in the Big 12 is more stable now than it was before expansion, knowing UT and OU are staying since noone else would allow a network and Kansas is tied to K State, the only remaining flight risks are A&M (SEC longshot) and Mizzou (Big Ten if it expands to 16 grabbing 2 East coast schools and ND) who are now far less likely to jump ship with this big payday.

I agree the Big Ten is the most likely but the SEC may follow suit (maybe not right away but if there’s money they’ll take their cut), I could see a merger of the ACC/Big East too, the Big 12 and Pac12 may wait the longest and see how it goes for the eastern boys.

by TowerPower on Mar 22, 2011 11:46 AM CDT up reply actions

I can tell you this and you can bank on it: The Big 12 isn’t going anywhere, and OU/OSU is not joining the SEC or the Pac-12.

I don’t see any TV network going to the SEC…and saying we will pay you X…BUT if you take A&M or Florida St…we will pay you X + where + is enough money to make the original 12 teams more money too.

That’s the exponential factor for the money that goes over everyone’s head. it means the additional schools have to be worth MORE than the other 12. Or…a pie cut 10 ways gives you bigger pieces then the same pie divided 12 ways…which is bigger than the same pie divided 16 ways.

or…if a conference has each school making 20MM a year…the next school have to increase the TV money 20MM a year per new school, OR the other schools just took a pay cut. And there aren’t that many programs out there not getting paid already that are worth the additional money to the TV networks.

again…I’ll say it again…..and again..the super-conference idea is dead. No one is paying for it now….if the super-conference idea was going to fly..it would have happened this past summer. NOW…it’s even less likely as the Big 12 just got paid.

But…I’m coming to the conclusion….there there are people that want to believe regardless of the facts or the math.

When I write: Rockies Reporter (www.rockiesreporter.wordpress.com)
"Suck it monkeys, the Rockies will win this year"

by Redhawk on Mar 22, 2011 12:12 PM CDT up reply actions