What if AD's value regional rivalires this time around...

[SEIOWA CLONE]

ESPN cares because they want TX/OU to move to the SEC where they own all the rights ASAP. That improves their content improved ratings and makes everyone in the SEC happy.
Causing the instability resulting in the immediate dissolution of the Big12 solves the issue ESPN of paying the rest of the current contract too.
ESPN has a lot of reasons and cash to want the move to happen earlier and I am sure they communicated to TX/OU they could help facilitate the move to help lower or even get rid their exit fees.

ESPN does not take over the rights to the SEC until 2024, so why should they be in a big hurry to get both OU and UT in the conference before then?

The big 12 bylaws require a school leaving the league to give the league 18 month notice it is leaving, which both schools did in July. That gets us to Jan 1st 2023, but no school is going to leave the conference in the middle of the year.
So OU and UT will be here this year and next, leaving in the fall of 2023 at the earliest. But leaving then requires the schools to buyout the final 2 years of the league contract at $75 million for each school, $150 million total at least. By just sticking around one more year, it would cut that number in half, and remember that ESPN does not gain the rights to broadcast the SEC until 2024.

Do the schools want to pay the full buyout, and does ESPN want them too, knowing that it will be CBS not ESPN that will profit from it for the 2023/24 season. ESPN will also be on the hook for the full amount of the Big 12 contract for those final two years, without the showcase schools to broadcast each week if they are in the SEC.

The leagues lawsuit against ESPN pretty much is telling them that, "YOU caused this, and while we cannot stop OU and UT from leaving, you are still going to have to pay out the remaining years of the current contract that runs through 2025."

 

[agrabes]

Yes, espn would need to get at least 6 (maybe more, that would be decided by the lawyers) out of the b12 to make this happen not just 4.

So, 2 are out (ou, tx) need 4 more. Most have argued that this WILL NOT happen because the value of each individual school is less than the per school payouts at the other P4 conf. My first point is that this is not 100% accurate. There is a case to be made that the value of the "Big 8" is on par with the current payouts else where (behind b10, sec, similar to pac, acc). Second, it is not true that this will be based on the value of each of these individual schools. It will be based on what the media companies will pay to for their rights within a new conf.

If the value to ESPN for dissolving the B12 in 2022 is greater than the cost to get 4 more schools into other P4 conferences than espn has motivation to move 4 more teams to p4 conferences.

In terms of whether or not espn makes money or what the value of B12 media rights are... honestly, just look at the numbers.

The B12 has increased payouts 299% over the last 15 yrs. This is not happening because espn loves the B12.... this is in line with the increases seen across all P5 conferences (2nd only to the PAC in terms of % increase). TV is dying. The last thing they have is news and sports - much more valuable LIVE than On-Demand.

So, over the last 15 yrs the B12 has grown in line with the other conferences. If the initial increases are around a 35% raise as reported, it is safe to assume the other conferences will get at least a 25% raise. This was meant to be a conservative estimate. The point is even with this "low" estimate the B12 schools are not that far (if at all) behind 80% of the other schools in P4 leagues. In this case the amount of "over payment" ESPN will need to make will be much less than what people are saying. If the gap is closer to $5M - $15M per school than moving 4 schools costs espn $20M - $60M. Plus they likely save money on anyone left behind (probably in the range of $10M x 4 = $40M savings once B12 is dissolved).

So, net is the total increased cost for ESPN to move 4 more schools to a P4 league could be minimal (maybe as low as $20M in "over payment" costs) and the potential increase in revenue could be pretty high...

Question is what is the cost, what is the value? I don't know. But numbers would suggest there is value there for ESPN.

I've just realized you are not using the major media revenue to make your arguments, which means you're basically talking a different language than everyone else on this topic. The numbers you're using include things like licensing fees for logo T-shirts and jerseys and concession stand sales at stadiums. It's not a good representation of what we're talking about here. To illustrate how far off your numbers are - ISU gets $37M/year from the B12 media deal, while your link reports $52M/year in 2019 from rights/licensing. That's only for ISU. Because your numbers are so unrelated to major media deals, they really can't be used to accurately evaluate the rising price/value of those major media deals. That said, below is a discussion of comparing the major media deals of different conferences, which is the factor driving realignment.

Does ESPN love the B12? No, not necessarily and definitely not now. But ESPN did make decisions that specifically benefitted the B12 in the past, such as paying out the same total dollars for 10 teams as they did for 12 when A&M and Missouri left in the second round of realignment. They did it because at the time that was a financial gain for them. I think you shouldn't assume that the remaining 8 B12 schools would get a pay increase in line with power conferences in the next media deal. Most likely, it would be closer to in line with the MWC or AAC. I doubt they are commanding so much of a pay increase.

I agree with the basic concept - ESPN will do what makes financial sense. But I'm not sure that your specific argument makes sense. The remaining B12 schools (if Bowlsby's 50% number is accurate) are worth around $23M each today. If you assume they get a 25% bump in the next media deal, which I think is highly unlikely due to the reduced interest in the league without OU and Texas, but let's say they do get it, then they're at about $29M. That puts them slightly below the ACC and P12 and significantly below the B1G ($53M/team today) and SEC ($45M/team today, $60M/team future).

Say that 6 go to the P12 and get paid $33M/year like the rest of that league - the best case scenario for ESPN of B12 teams going to a power league. Here's what it looks like on a before/after the new media deals in 2025:

Today- B12 - $370M, P12 - $396M, SEC, $630M - Total $1.43B/year
Future assuming +25%B12 with no OU/UT - $231M, P12 - $396M, SEC - $960M - Total $1.59B/year
Future assuming B12 Dissolved - P18 - $594, SEC $960M - Total $1.55B/year

So if the remaining B12 gets a 25% pay bump on their remaining 50% value despite losing OU & UT (highly unlikely), ESPN saves only $40M/year by landing 6 leftover teams in the cheapest power conference outside the ACC which is probably not an option. More likely, the B12 will not get a pay bump, or will get one less than 25% because they will have a much less appealing product without Texas and OU. And then ESPN loses money by landing the B12 schools in a power conference.

 

[cymonw1980]

I've just realized you are not using the major media revenue to make your arguments, which means you're basically talking a different language than everyone else on this topic. The numbers you're using include things like licensing fees for logo T-shirts and jerseys and concession stand sales at stadiums. It's not a good representation of what we're talking about here. To illustrate how far off your numbers are - ISU gets $37M/year from the B12 media deal, while your link reports $52M/year in 2019 from rights/licensing. That's only for ISU. Because your numbers are so unrelated to major media deals, they really can't be used to accurately evaluate the rising price/value of those major media deals. That said, below is a discussion of comparing the major media deals of different conferences, which is the factor driving realignment.

Does ESPN love the B12? No, not necessarily and definitely not now. But ESPN did make decisions that specifically benefitted the B12 in the past, such as paying out the same total dollars for 10 teams as they did for 12 when A&M and Missouri left in the second round of realignment. They did it because at the time that was a financial gain for them. I think you shouldn't assume that the remaining 8 B12 schools would get a pay increase in line with power conferences in the next media deal. Most likely, it would be closer to in line with the MWC or AAC. I doubt they are commanding so much of a pay increase.

I agree with the basic concept - ESPN will do what makes financial sense. But I'm not sure that your specific argument makes sense. The remaining B12 schools (if Bowlsby's 50% number is accurate) are worth around $23M each today. If you assume they get a 25% bump in the next media deal, which I think is highly unlikely due to the reduced interest in the league without OU and Texas, but let's say they do get it, then they're at about $29M. That puts them slightly below the ACC and P12 and significantly below the B1G ($53M/team today) and SEC ($45M/team today, $60M/team future).

Say that 6 go to the P12 and get paid $33M/year like the rest of that league - the best case scenario for ESPN of B12 teams going to a power league. Here's what it looks like on a before/after the new media deals in 2025:

Today- B12 - $370M, P12 - $396M, SEC, $630M - Total $1.43B/year
Future assuming +25%B12 with no OU/UT - $231M, P12 - $396M, SEC - $960M - Total $1.59B/year
Future assuming B12 Dissolved - P18 - $594, SEC $960M - Total $1.55B/year

So if the remaining B12 gets a 25% pay bump on their remaining 50% value despite losing OU & UT (highly unlikely), ESPN saves only $40M/year by landing 6 leftover teams in the cheapest power conference outside the ACC which is probably not an option. More likely, the B12 will not get a pay bump, or will get one less than 25% because they will have a much less appealing product without Texas and OU. And then ESPN loses money by landing the B12 schools in a power conference.

No... i am not using the $ from the link to show media payouts by conf. I am using it to illustrate how they are growing. I am not using the "52M" form ISU as their media right value to espn.. I am using the conference revenue divided by team to show current average "value"... rounded the B12 to 40M and used the reported "60M" number for the SEC... this is one that has been used in a number of articles (I will find a link if needed).

Point is.. current rev from 2019 (pre-pandemic) was 439M in a 10 team B12. That is an average of 43.9M and does not include revenue from 3rd tier which is minimal for some, others like ou/tx make more (which is part of the value ESPN gets by moving that into the SEC network).

Conf	Total	Per Team
B10	781.5	55.8
SEC	720.6	51.5
B12	439.0	43.9
PAC	530.4	44.2
ACC	455.4	32.5

Power Five conferences had over $2.9 billion in revenue in fiscal 2019, new tax records show

The Big Ten reported more than $780 million in revenue, most of any conference, as Power Five had more than $2.9 billion in revenue in fiscal 2019.

www.usatoday.com

 

[cymonw1980]

I've just realized you are not using the major media revenue to make your arguments, which means you're basically talking a different language than everyone else on this topic. The numbers you're using include things like licensing fees for logo T-shirts and jerseys and concession stand sales at stadiums. It's not a good representation of what we're talking about here. To illustrate how far off your numbers are - ISU gets $37M/year from the B12 media deal, while your link reports $52M/year in 2019 from rights/licensing. That's only for ISU. Because your numbers are so unrelated to major media deals, they really can't be used to accurately evaluate the rising price/value of those major media deals. That said, below is a discussion of comparing the major media deals of different conferences, which is the factor driving realignment.

Does ESPN love the B12? No, not necessarily and definitely not now. But ESPN did make decisions that specifically benefitted the B12 in the past, such as paying out the same total dollars for 10 teams as they did for 12 when A&M and Missouri left in the second round of realignment. They did it because at the time that was a financial gain for them. I think you shouldn't assume that the remaining 8 B12 schools would get a pay increase in line with power conferences in the next media deal. Most likely, it would be closer to in line with the MWC or AAC. I doubt they are commanding so much of a pay increase.

I agree with the basic concept - ESPN will do what makes financial sense. But I'm not sure that your specific argument makes sense. The remaining B12 schools (if Bowlsby's 50% number is accurate) are worth around $23M each today. If you assume they get a 25% bump in the next media deal, which I think is highly unlikely due to the reduced interest in the league without OU and Texas, but let's say they do get it, then they're at about $29M. That puts them slightly below the ACC and P12 and significantly below the B1G ($53M/team today) and SEC ($45M/team today, $60M/team future).

Say that 6 go to the P12 and get paid $33M/year like the rest of that league - the best case scenario for ESPN of B12 teams going to a power league. Here's what it looks like on a before/after the new media deals in 2025:

Today- B12 - $370M, P12 - $396M, SEC, $630M - Total $1.43B/year
Future assuming +25%B12 with no OU/UT - $231M, P12 - $396M, SEC - $960M - Total $1.59B/year
Future assuming B12 Dissolved - P18 - $594, SEC $960M - Total $1.55B/year

So if the remaining B12 gets a 25% pay bump on their remaining 50% value despite losing OU & UT (highly unlikely), ESPN saves only $40M/year by landing 6 leftover teams in the cheapest power conference outside the ACC which is probably not an option. More likely, the B12 will not get a pay bump, or will get one less than 25% because they will have a much less appealing product without Texas and OU. And then ESPN loses money by landing the B12 schools in a power conference.

In terms of the "25%" bump... I am not arguing that the 8 left behind get a 25% bump. But if you are going to compare current B12 revenue of ~40M / school to future SEC revenue (before they added OU/Tx) of ~60M / school that is not accurate.

The point is you need to compare future with future 40M x 1.25 = 50M vs. 60M... that is much more accurate. OR you can simply take current revenue per conf divided by teams:

B12 = 43.9M
SEC = 51.5M

Gap = ~8M

So, there is a 10M to 8M per school value difference in B12 (as constructed) vs. SEC (as constructed) if you compare current v. current or future v. future.

Now, if we can agree the two league are much closer (8M-10M per team) than we can move to the next point....

How much of the value is in Tx / OU? If bowlsby is right and it's around 50%. Than their value is half of the 439M in revenue reported in 2019 or 220M +15M (LHN & Sooner Network, not in B12 distribution) = about $235M IN CURRENT CONTRACT $. This is OU/Tx value in the B12 today (NOT FUTURE).

So, espn shares the ~$235M of value with Fox.... in the future they get it all and only pay $103M for it (remember we are using today's value so we use today's SEC payouts, we can multiply both by whatever you want to inflate them to future dollars but we have to keep them in the same terms not current vs.future).

So, without accounting for likely benefits of increased value of ou/tx playing 9 sec games v. 9 b12 games (more ppl watch sec than b12 on average) you are looking at something like a $130M benefit to ESPN per year (at least).

Now... how much will espn be forced to pay the remaining 8 and how much are they worth... this is more difficult to answer... but if we use the 50% logic it works both ways... either the other 8 B12 schools are worth more and closer to the P4 conf money espn is forced to pay and tx/ou are worth less. Or tx / ou are worth more and 8 are worth less. So, if cost increases, benefit increases. If cost decreases, benefit decreases.

If we use the same logic,50%x439 = 220/8= 27.5M (today's dollars). That makes them 24M less than the 51.5M average value in SEC, 28.3M vs. b10, 16.7M vs. pac, 5M vs. ACC.

Finally, for the AAC the rights are about $8M/school. So, dropping down to the AAC value of 8M vs. current 27.5M means a savings for any school left out of the P4 of about $20M.


Let's say you move 2 to the b10 and 2 to the pac along with ou/tx to sec that would get you to 6. The other 4 go to the AAC:

2 x 28.3M = 56.6M (premium paid for B12 > b10)
2 x 16.7M = 33.4M (premium paid for B12 > pac)
4 x (19.5M) = (78M) (savings for B12 > AAC)

Total premium paid to move the 8 = $12M
Gain from ou/tx = $130M

Benefit to ESPN = 118M/yr

 

[Win5002]

Yeah. I have my problems with the NFL, but at least the various criteria for making the playoffs are without human inference (unless you count a coin flip/RNG in the very rare instances where their tiebreaking procedures exhaust themselves). The league also has features to ensure a modicum of fair competition amid the different franchises, like the salary cap, reverse draft, compensatory picks, and free agency. Everybody receives the same TV money, too, even if some teams do draw more eyeballs. This can be elastic, however, over time. I doubt KC was much of a draw for many years, but now they are a leader for media draw thanks to Mahomes.

What we are seeing develop in college is like if the NFL let the different divisions fight for membership and sign their own independent TV deals, there's no draft or salary cap but you can essentially lure players with facilities and (soon/already/increasingly) with NIL money, and who makes the playoffs is determined by a committee that has demonstrated it favors the franchises with the largest brands (Cowboys, Packers, Steelers, Patriots, Seahawks, etc.) over, say, the Jacksonville Jaguars or Buffalo Bills having a banner season.

It's ridiculous, and nobody would ever run a business like this. Yet here we are.

I agree with this 100%!!!!

I already stopped watching the end of the CFB season because having exhibition bowl games as a conclusion to a season is a horrible ending! Then throw in the human inference in the selection process of the CFP and the whole thing sucks! Its one thing to pick 16 teams but picking 4 out of 64-80 is a whole different travesty. Especially, when you know the networks and selection committee always favors the blue blood hierarchy in CFB.

I hope nobody on here watches any SEC game or even OU & UT game not involving ISU this year. Also, to a lesser extent the B1G. Including bowl games and CFP. The national audience has to decline for the T1 & T2 games for the networks to get the message they have regionalized the sport and destroyed it.

Hopefully, they realize what they did and become inclusive and 72 teams break away and they reorganize divisions/leagues and the new body negotiates tv contracts as one entity. Thats probably wishful thinking but one can hope.

 

[Sigmapolis]

I agree with this 100%!!!!

I already stopped watching the end of the CFB season because having exhibition bowl games as a conclusion to a season is a horrible ending! Then throw in the human inference in the selection process of the CFP and the whole thing sucks! Its one thing to pick 16 teams but picking 4 out of 64-80 is a whole different travesty. Especially, when you know the networks and selection committee always favors the blue blood hierarchy in CFB.

I hope nobody on here watches any SEC game or even OU & UT game not involving ISU this year. Also, to a lesser extent the B1G. Including bowl games and CFP. The national audience has to decline for the T1 & T2 games for the networks to get the message they have regionalized the sport and destroyed it.

Hopefully, they realize what they did and become inclusive and 72 teams break away and they reorganize divisions/leagues and the new body negotiates tv contracts as one entity. Thats probably wishful thinking but one can hope.

That would require the SEC and the Big Ten to take a short-term haircut for the good of the sport in the long term by ensuring fairer competition and helping the popularity of the sport to grow.

Nah. Get theirs now, even if that means more water pours into the ship.

 

[Win5002]

That would require the SEC and the Big Ten to take a short-term haircut for the good of the sport in the long term by ensuring fairer competition and helping the popularity of the sport to grow.

Nah. Get theirs now, even if that means more water pours into the ship.

It seems unlikely, they probably have to see the overall pie get reduced before they would be willing to do that.

Although, OU & UT could have received about the same money in a new B12 contract even if it took unequal revenue sharing and the remaining 8 certainly would have done that to keep the B12 intact. UT & OU would have retained their political status as co-kings and a much easier path to playoffs and success each year.

So what do they really gain by moving? I think exposure in big games and the ability to sell NIL money to their recruits. Even if it wasn't FOX or ESPN someone would have paid the B12 a decent contract and revenues could have been kept at those levels for OU & UT.

 

[surly]

OU and UT's move was never about money but rather hubris and the perceived ability to recruit better defensive players. Defensive linemen are at a premium, and they saw the SEC as the only conference that attracted enough of them to win national championships. That may all be true. I don't know. We'll have to wait and see the outcome.

 

[trajanJ]

OU and UT's move was never about money but rather hubris and the perceived ability to recruit better defensive players. Defensive linemen are at a premium, and they saw the SEC as the only conference that attracted enough of them to win national championships. That may all be true. I don't know. We'll have to wait and see the outcome.

Yes, recruiting was a big reason. The SEC dominates the outdoor sports and they are just going to pull further and further ahead of the others. OU & UT made a move that will benefit them now and in the future, financially and on the recruiting trail.