Tag: Big 12

Conference Realignment: If I Was Richer, I’d Still Be With Ya

On By Frank the TankIn Big East, Big Ten, Sports844 Comments

It’s been a crazy couple of days to say the least.  We saw the SEC vote to conditionally accept Texas A&M, Baylor and a bunch of other Big 12 schools holding up the A&M move by refusing to sign some legal waivers, rumors stating the Pac-12 doesn’t really want to expand but will still add Oklahoma and Oklahoma State, Texas and Notre Dame are heading to the Big Ten, and the Big East may pick up some Big 12 leftovers, and now it may be all for naught with the Big 12 possibly being saved (in part by BYU).  So, by the time you read this post, it might be completely outdated with how fast the news and rumor mill has been churning.  Anyway, I have few thoughts on the latest developments:

1. Can’t blame Baylor (and others) for legal stance – As a lawyer, if I was representing any institution in this scenario, whether it’s Baylor, Iowa State or Texas, there’s NFW that I’d let it sign a blanket waiver of legal rights to the SEC and if such institution wanted to proceed, I’d insist upon some type of considerable payment in return.  A waiver of this nature wouldn’t be enforceable without some type of consideration from SEC, anyway.

In the case of Baylor, there might literally be no amount of consideration outside of the preservation of the Big 12 itself (as long-term AQ status trumps short-term monetary payoffs) that could justify signing that waiver.  Whether Baylor actually has a case with respect to tortious interference against the SEC isn’t really relevant here.  At face value, this type of case is probably a loser.  The Big East attempted to sue the ACC on similar grounds back in 2003 and ultimately settled for $5 million total, which is effectively pocket change that wouldn’t even cover 50% of one year of conference TV revenue for just one Big 12 school.  However, Mike Slive would know that insisting upon a waiver of legal rights would cause an allergic reaction among Big 12 members as a legal principle.  I don’t think much of Dan Ponzi Beebe, but he was correct in his statement that it’s unprecedented for a raiding conference to ask for waivers of legal rights from those left behind in the raided conference.  It doesn’t make sense for the SEC to do this from a practical standpoint unless they have some other motives outside of the legal realm (which we’ll get to in a moment).  That being said…

2. Can’t blame Texas A&M for being volcanically pissed off – As a business man, I have a hard time seeing the value in attempting to keep around a school that clearly doesn’t want to be there.  As long as Texas A&M pays all of the exit fees that it has agreed to with the Big 12 (which by all accounts it plans to do), then the Aggies should be free to go as they please.  Whether Oklahoma or others might leave after the Aggies (thereby dissolving the Big 12) shouldn’t be the problem of Texas A&M or the SEC.  It’s in the best interests of everyone within the Big 12 to move on as quickly as possible.  Now, I believe that Aggies have some misplaced anger toward Baylor in the sense that the SEC is the entity that is requesting something that no other Big 12 school (unless it’s heading out the door for the West Coast) would reasonably sign.  Which gets to the next point…

3. SEC isn’t doing this for purely legal reasons – As I’ve done several times before on this blog, I’ll point to Mr. SEC, who I believe had a spot-on commentary on the SEC’s true motives in asking for these waivers: Mike Slive wants to see if he can cause Larry Scott and the Pac-12 to act first.  Personally, I doubt Slive will win this particular game of chicken since, by all accounts, the Pac-12 is only going to act if A&M moves first.  Still, it doesn’t really hurt the SEC to attempt this tactic, where the conference can just wait awhile and then decide to proceed with expansion without the Big 12 waivers.

4. Big Ten looking to form the “Fuck You, Pay Me” Conference? – The famous Purple Book Cat of the WildcatReport.com resurfaced last night with the following rumor: the Big Ten is looking to add Notre Dame and Texas with a bevy of conditions, including folding the Longhorn Network into a “BTN2”.  The proposed solution to the “LHN problem” actually makes some sense, although I don’t quite understand the issues that the Big Ten would have regarding ESPN supposedly pushing the UT-to-the-Pac-12 angle (as the channel actually has a much closer and wider-ranging relationship with the Big Ten compared to the Pac-12).  Chip Brown of Orangebloods separately stated the following, as well:

An outside the box option would be something like a conference such as the Big Ten allowing Texas to join the league and only make money off of LHN and not share revenue from the Big Ten Network. File that one away.

Should any of us really be giving this idea any credence?  Probably not.  I don’t see how the Big Ten is going to provide special arrangements to Texas when Jim Delany spent a TON of capital in convincing power schools like Michigan and Ohio State to sign up for the Big Ten Network instead of forming their own individual networks.

At the same time, if there’s any truth to the notion of Notre Dame joining a conference, I have faith that it will be smoked out by the school’s alumni base long before a decision is made.  They’re on a 24/7/365 Independence Watch over there, so this isn’t a matter that’s going to get agreed upon in a backroom at least as far as South Bend is concerned.

Regardless, assuming that no one knows what they’re talking about on anything regarding conference realignment (which is true), we can at least play along and put together a B1G 16 Fuck You, Pay Me Conference pod setup with, say, Syracuse and Rutgers (PURELY for discussion purposes – substitute Missouri, Pitt, Maryland, Boston College, or anyone else if it makes you feel better) in addition to UT and ND with each school having a protected cross-division rival (in parentheses):

NORTH
Michigan (Ohio State)
Michigan State (Rutgers)
Notre Dame (Texas)
Purdue (Indiana)

EAST
Ohio State (Michigan)
Penn State (Nebraska)
Rutgers (Michigan State)
Syracuse (Minnesota)

SOUTH
Texas (Notre Dame)
Illinois (Iowa)
Northwestern (Wisconsin)
Indiana (Purdue)

WEST
Nebraska (Penn State)
Iowa (Illinois)
Wisconsin (Northwestern)
Minnesota (Syracuse)

If the Big Ten has an 8-game conference schedule as proposed in the Purple Book Cat scenario, that means each school would play its 3 podmates annually plus 1 cross-division rival and then rotate through the other pods each year on an NFL-style basis.  From a Notre Dame perspective (who is really the one that needs to get pleased even more than Texas), this setup keeps their 3 traditional Big Ten rivals, secures an annual game with Texas, and then allows them to still schedule USC and Navy home-and-home in the non-conference schedule.  That’s about as close as you can get to a national schedule for Notre Dame while preserving the maximum number of rivals within the confines of a conference.  While that’s likely never going to be enough for the independent-minded Notre Dame alums (as independence is really an identity issue for that school as opposed to a financial stance), I doubt the Irish could get much better from a pure scheduling standpoint.

Anyway, this is all a hypothetical… like everything else in conference realignment.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

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In America, You Leave Big 12. In Soviet Texas, Big 12 Leave You!

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Sports900 Comments

Before we get to the latest conference realignment news of Texas A&M sending an effective break-up letter to Dan Beebe and the Big 12, let’s take a moment to pour out some Cris in memory of the Cy-Hawk Trophy Version 2.0.  It lived for less than a week, but it left an indelible image in the minds of Americans the same way that the chick from The Exorcist warms your heart the first time you see her head turn around 180 degrees.  Only this trophy could make the Altoona Senior Bowling League Trophy with a Mold-a-Rama Lion Pasted on the Side (known in some circles as “The Land Grant Trophy”) look like the freaking Stanley Cup by comparison, which was a phenomenal achievement.  It’s a shame that it received a Suge Knight cap in its ass before it even had a chance to explore the world.

As for Texas A&M changing its status to “Single” on its Facebook account, it’s been something that’s been coming down the pike for the last couple of weeks.  What’s interesting is that my questioning of the financial parameters on the SEC side was confirmed by a conference official in the New York Times:

The official acknowledged that because of the length and structure of the SEC’s current television contract, adding Texas A&M and a 14th member would not be financially beneficial from a rights standpoint.

Texas A&M and Team No. 14 are expected to receive a pro rata share equal to what the SEC’s 12 current universities are making: an average of about $18 million in league payouts. (Individual universities can make more money from their separate television deals.)

The SEC deal, which ends in 2025, has a few windows when it can be renegotiated but no one from the SEC or the networks expects any radical change.

So, this move is NOT about the SEC being able to reopen its television deal in order to gain more money than what the United States currently has on hand to pay Social Security checks (as so many people have assumed).  Maybe the SEC sees this as the one opportunity to get A&M in the next couple of decades and that’s why they’re moving now despite not being able to realize much (if any) TV revenue from their addition until after 2024.  Whatever the reasoning might be, it seems that since the SEC can’t just open up its TV contracts again by expansion, such expansion is going to be kept at a minimum for now.  As a result, the obituaries being pre-written for the Big 12 and ACC from the SEC supposedly going into 16-school superconference mode immediately are way too premature.  The SEC will need to find a school #14 fairly soon, but who knows who it will be.  (I do NOT believe for a second that it will be Virginia Tech, but I’ll write about that more extensively in a separate post.)  Right now, appears that either (a) the Big 12 will lose another school to the SEC on top of A&M, such as Missouri or (b) the Big 12 and one of either the ACC or Big East (maybe West Virginia) may lose a school to the SEC, yet in each event those leagues will still continue to live.

This gets to this question: who the hell would join the Big 12 after losing A&M and maybe another school?

Let’s start by putting some asinine “Notre Dame to the Big 12” proposals to rest.  Somehow, a friendship between Jack Swarbrick and DeLoss Dodds with a 4-game football series over the course of 8 years has been transformed by some in Big 12 country to signal Texas and Notre Dame working together to split up the college football universe.  (Examples of this aren’t just in Texas, but the Kool-Aid is spreading all the way to St. Louis, too.)  Putting aside the fact that Notre Dame would effectively throw away, well, ALL of its rivalries in this scenario in order to play Texas Tech, Iowa State, Oklahoma State and friends (as opposed to the more simple solution of just playing the two schools that are of interest them of Texas and Oklahoma as an independent… which ND happens to be already doing), I’ll reiterate what I’ve stated several times on this blog before: independence is a school identity issue for Notre Dame, NOT a TV money issue.  It continues to amaze me how many people think the money that ND is getting from NBC is somehow special when Northwestern and Washington State are absolutely murdering the Irish on that metric in their respective conferences’ equal revenue sharing arrangements.  The point is that ND isn’t independent in order to maintain an NBC contract.  Instead, it’s the other way around: ND has an NBC contract as a means to maintain independence.  In other words, the endgame for ND is independence in and of itself (not the money that is made from being independent, as the school has plenty of money from its alumni base).  Thus, all of the suggestions that the Longhorn Network shows how the Big 12 could offer ND a way to keep its NBC contract are completely irrelevant, as even if that were the threshold issue (and it isn’t), the Big East would gladly take in ND on that basis or, better yet, they could just stay independent.  Now, if we get to a model where there are 4 16-school superconferences and you structurally MUST be a member of one of those 4 leagues in order to have access to the national championship game, then that’s the point where ND would join a conference.  It won’t be a moment before that point, though.

Getting that out of the way, let’s take a look at some realistic candidates to join the Big 12:

1. BYU – This is really the Big 12’s best target that would almost assuredly accept.  I’ve gone over why I believe that BYU would actually be fairly successful as an independent and that translates into being a viable addition to an AQ conference like either the Big East or Big 12.  Based on fan base size and long-term TV value, BYU is clearly the most valuable school available in the non-AQ ranks.

2. Louisville – While conference realignment is all about football, it should be noted that UL was #2 in the country in basketball revenue in its last season in Freedom Hall.  With its new Yum! Center (or as I like to call it, the “KenTacoHut Center”) revenue, the school will almost assuredly be #1 on that list when last year’s figures come out.  At the same time, UL has a solid football fan base that has simply been beaten down by some horrible coaching over the past few years.  If I were Dan Beebe, my plan would be to extend invites to BYU and Louisville immediately after A&M makes it exit.  The issue with Louisville is that they may prefer to stay in the Big East, although that particular league may not come out unscathed if the ACC takes a replacement school or two from there.  I’ve talked to a number of Louisville alums who, at a fan level, do not support a move to the Big 12, but if we’re talking about a league that’s reasonably assured of keeping both Texas and Oklahoma, UL’s leadership might see things differently.

3.  TCU – A Big 12 with both UT and A&M has zero need to add any other Texas-based schools.  With A&M leaving, though, quality becomes more of a concern than markets and it may be more beneficial to go even further into the Texas market compared to some of the other non-BYU non-AQ options out there.  I had been pushing TCU to the Big East for a very long time and was happy to see that marriage happen, yet there’s a chance that they’ll never move in together.  Like Louisville, though, the Big 12 may actually not be that attractive compared to the Big East right now. Adding TCU would be a good football move for the Big 12, but the good (and/or forced) political move would possibly be adding…

4. Houston – There seems to be two schools of thought regarding Houston going to the Big 12.  The first is that this would be a nice move from a political perspective, where the leaving of one Texas-based university from the Big 12 opens up an AQ spot for another school from the state.  If we also believe that UT enjoys tons of control, this is yet another school that it can lean on for the long-term.  The other school of thought, though, is that UT would want nothing to do with Houston.  In essence, it’s almost too easy of a political bailout for A&M while UT ends up being forced to always take care of UH down the line if the Longhorns ever want to explore other options (i.e. heading to a Pac-16).  We’re already seeing some Texas politicians getting into the act on this front.  A year ago, I would’ve put UH near the bottom of the list of any possible Big 12 candidates.  Now, though, they may very well be the most likely next addition.

5.  UNLV – Location, location, location.  This market ought to have a pro franchise yet all of the leagues are still spooked by the tiny bit of gambling that occurs here.  Nevada is also the most populous state that doesn’t have an AQ school.  I’m always surprised that UNLV doesn’t get a little more love in these conference realignment scenarios.  As far as the non-AQ schools go, they have some fairly nice attributes with virtually no local competition (albeit with more value on the basketball side as opposed to football).

6. Air Force – National following and generally performs the best out of the service academies.  From a pure financial perspective, Air Force might be right behind BYU in terms of desirability.  As for actual football, though, there’s a big-time risk that the Falcons will have competitive issues at the AQ level in the way that Army couldn’t even handle C-USA.  There’s simply always going to be a limit to how well Air Force could ever perform (not that this is unjustified, as its students have far more important duties than playing football).

7.  New Mexico – Flagship university of a fast-growing state with an excellent basketball fan base.  The problem: they’re to football what Rebecca Black is to singing.

8.  Memphis – Ditto, only it’s not a flagship.

9/10.  SMU/Rice – All you need to know is here.

Purely throwing crap against the wall right now, I’d say that A&M is the only loss from the Big 12, which will spur DeLoss Doss… er… the conference to invite BYU, Houston and UNLV to get back up to 12.  In other news, we have real football games being played next week.  It can’t come soon enough.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

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The Jump to Conclusions Game: Why Angry Aggies Aren’t Enough to Move Texas A&M to the SEC

On By Frank the TankIn Big East, Big Ten, Sports1,022 Comments

Nature abhors a vacuum and with a month to go until football season starts, conference realignment talk is back at a fever pitch even though there’s nothing really going on. The latest scuttlebutt is that Texas A&M is dancing with the SEC again with the rest of the Big 12 getting all hot and bothered about their high school recruiting targets getting TV time on the Longhorn Network (which has been placated… for now).

Believe me – I loooove conference realignment talk. It’s the reason why 99% of you are reading this blog in the first place. However, the “Texas A&M to the SEC” rumors are driving me up the wall, not necessarily because it would never happen (even though that’s what I personally believe), but that so many commentators on this subject simply argue that “Angry Aggies = SEC Move” without any further analysis. (For the purposes of this blog post, I will focus on Texas A&M, but the same principles can be applied to rumors involving angry Oklahoma and Missouri fans.) I went through a fairly detailed look at why I didn’t believe that A&M could go to the SEC several months ago and think that all of those arguments still hold true.

To be clear, I believe Texas A&M is an extremely valuable school and if the SEC could add them with no conference realignment repercussions elsewhere, then I could see it happening. A&M has a lot more value than the average UT fan would likely admit. The problem is there could be major conference realignment repercussions that the SEC will not want to witness happen (i.e. its main competitors getting even stronger with the Pac-12 adding Texas and/or the Big Ten adding Notre Dame) – the SEC wanting to add A&M as a reactionary move in 2010 is much different than pulling the trigger and causing the dominoes to fall in 2011. At the same time, A&M’s value is exactly why UT won’t just let them walk away.

Regardless, there’s a segment of the college football fan population that’s simply always going to believe that Texas A&M is heading to SEC just because the Aggies are pissed off. (Remember Missouri was pissed off at the Big 12 last year, too. Also look at all those Big East schools that are supposedly pissed that the conference won’t split. Tons of options for all of them, right?) That’s fair enough, but all I ask of this segment of the population is to address the following roadblocks to that ever happening:

1. The SEC can’t just rip up its TV contracts simply because it expands – A decent number of columnists/bloggers have taken SEC Commissioner Mike Slive’s comment that there are periodic “look-ins” for its contracts with CBS and ESPN and came to conclusion that the conference could set fire to those deals in the event of expansion. While the terms of the SEC TV deal are not public (and that’s the case for any conference), this is a dangerous assumption that I would wager is 99.99% incorrect. (The .01% allows for the slight chance that Slive has compromising pictures of various CBS and ESPN executives with Casey Anthony.) ESPN certainly doesn’t believe that the SEC’s “look-ins” can reopen the TV deal:

The agreement with ESPN calls for a “look-in” review after the first five years but can occur sooner, said Burke Magnus, ESPN senior vice pres ident of college sports programming.

“We knew when we made a 15-year deal that time was not going to stand still so we purposely built in these look-ins,” Magnus said. “They don’t reopen the deal. There’s no outs. It’s an opportunity for both of us to really take stock of where we are and see what we could be doing better.”

It is standard operating procedure that these types of contracts have provisions that protect the network, NOT the conference, in the event of membership changes. In a post by the excellent college TV sports blogger mattsarz about the C-USA/ESPN lawsuit, he attached the underlying TV contract that was made public as part of the complaint that was filed. Here’s the language about regarding membership changes:

10. CONFERENCE COMPOSITION

(a) Essential Institutions. The participation and availability for televised play of the following academic institutions shall be deemed to be of the essence of this Agreement: University of Texas El Paso, Rice University, University of Alabama-Birmingham, University of Tulsa, University of Southern Mississippi, Memphis University, Tulane University, University of Houston, Marshall University, University of Central Florida, East Carolina University and Southern Methodist University.

(b) Unavailability. If any Conference team leaves the Conference or is otherwise unavailable for televised play as authorized by this Agreement (in either case, “Unavailable”) for any Season during the Term then ESPN and Conference will negotiate in good faith after such Unavailability comes to ESPN’s attention to determine appropriate adjustments to this Agreement. In such negotiations, the parties shall take into account, among all other relevant factors, any new members that are added to the Conference in replacement of the Unavailable members. If the parties cannot agree on the appropriate adjustments, then ESPN will have the right in its sole discretion to elect by the May 1 prior to the affected Season (unless such Unavailability occurs thereafter, in which case ESPN will have the right to make its election within 30 days after it is notified by Conference of the Unavailability) to reduce the rights fees hereunder in the same proportion as the number of Unavailable teams bears to 12. ESPN will also have the right at any such time to terminate this Agreement if the Conference has in any season fewer than ten member institutions that are NCAA Division I-A members and that are available for televised play as provided above. In addition, if additional institutions join the Conference (i.e., bringing the number of member institutions to 13 or more), then within 30 days after ESPN is notified by the Conference to that effect, ESPN and Conference will engage in good-faith negotiations regarding potential increases to the rights fees due hereunder.

As you can see, ESPN was able to get a concrete reduction in fees or even completely terminate the agreement if C-USA lost enough members, but if C-USA added any members, all that the parties would be obligated to do was to engage in “good-faith negotiations”, which as an attorney I can say is Kumbaya B.S. with no real meaning. ESPN was the only entity with a legitimate stick here. A conference would only have power if it actually had concrete termination rights in the event of an expansion, which wasn’t the case in the C-USA contract.

Even though C-USA is relatively small player, we can deduce that the power conferences also have a similar clause. The Big Ten, for instance, gained a new marquee member in Nebraska last year and even added a brand new conference championship game (which wouldn’t happen in the case of SEC expansion). If the Big Ten had a termination right that some are assuming that the SEC somehow has, then Jim Delany would’ve called ESPN ten seconds after the new Pac-12 monster contract was announced and said “I’m out!” That obviously hasn’t happened – the Big Ten still has to wait until its current TV deals are done in 2016. It’s also instructive that both the ACC in 2003 and the then-Pac-10 in 2010 performed their respective expansions only a few months prior to their respective TV rights going back up for open bid. That shows that those conferences needed to time their expansions to coincide with their new TV deals (as opposed to the other way around, as the A&M-to-the-SEC believers are arguing) because that’s the only way that they could receive the financial benefits from expansion immediately.

Frankly, this all makes sense. Networks would never reasonably agree to tearing up TV contracts based on expansion because they want to know who the conferences are expanding with (not just expansion in and of itself), and even then, it’s almost impossible to assign a value to any prospective expansion candidates ahead of time. In turn, networks can definitely assign a value to a conference as presently constituted, so they have leverage to get out of deals (or receive relief) in the event that such conference loses members.

So, unless Mike Slive can produce some Casey Anthony photos, we should assume that the SEC has terms just like everyone else: the SEC is stuck with its deals until 2024 unless its TV partners willingly give it more money prior to that. This brings us to the next point…

2. ESPN isn’t going to willingly hand the SEC more money for expansion – Let’s take a quick look at where ESPN stands right now. First, ESPN worked extremely hard to keep the Big 12 together last year in order to block the formation of superconferences by going so far as to give that league the same amount of money even though it had just lost its most populous non-Texas state (Colorado), a marquee national name (Nebraska) and a conference championship game. Second, ESPN has just invested a ton of capital in the Longhorn Network, which essentially depends upon the Big 12 surviving as none of the other BCS conferences besides maybe the Big East would let that monstrosity live.

Call me crazy, but when considering those two points, it seems quite far-fetched that ESPN would actually provide an incentive to the SEC to expand with Texas A&M (and/or Oklahoma and/or Missouri and/or whoever else you want to throw in) that would directly kill off the Big 12 that ESPN has every incentive to save. Plus, with the amount that ESPN is paying the Pac-12 now and with the Big Ten contract going up for bid in a couple of years, it doesn’t make any sense that the network would give the SEC any ability to increase its rights fees prior to 2024. If the SEC’s contract was up in a couple of years like the Big Ten’s deal, then maybe I could see ESPN throwing more dollars in order to lock in an extension, but there’s no business logic for the network to re-open a deal that’s locked in for the next 13 years that the SEC can’t do anything about.

3. Objectors to high school games on the Longhorn Network are arguing semantics (and that’s ultimately a losing argument) – There’s a massive public flagship university located in one of the top football recruiting states in the nation that has entered into a multi-year multi-million dollar third tier rights deal with a regional sports network that is wholly-owned by a large multimedia conglomerate. There are some football and basketball games along with coaches’ shows and other promotions showing the university. The RSN also telecasts high school football games that potentially showcase that university’s recruits. Such public flagship university does not own any part of such RSN.

I’ve just described the contract that the University of Florida has with Sun Sports. It also describes the deal between the University of Texas and ESPN for the Longhorn Network. Structurally, the two deals are virtually exactly the same. ESPN completely owns the LHN, and therefore, controls its programming decisions, just like Fox owns and controls Sun Sports. The main difference is branding, where Florida is part of a network that also shows the Miami Cheat (among other teams) while Texas has its Longhorn moniker in the ESPN’s network’s name. So, does the NCAA come down on the LHN for a branding decision but doesn’t care about Sun Sports? If the LHN simply changed its name to “ESPN Austin”, would it make a difference? Is a network that has 10% UF content acceptable, but another with 90% UT content unacceptable?

Note that this is different than the BTN and Pac-12 Network situations, where the schools in the Big Ten and Pac-12 have actual equity interests in those channels. This makes it much easier for the NCAA to regulate those types of setups or, more importantly, regulate them in a way where the NCAA doesn’t lose in a court challenge. The Texas relationship with the LHN, on the other hand, is really just a straight-up traditional rights fees deal that Florida and a whole host of other schools have with various regional sports networks. As a result, the NCAA, the Big 12 and any other challengers to the LHN would largely have to rely on semantics (the name “Longhorn Network”) with subjective benefits as opposed to the ownership structure of the network itself that can objectively measured, and courts hate arguments about semantics. If ESPN thought the fight was worth it (and that’s a business question as to whether it would spend millions of dollars in legal fees in order to show high school games on TV), it would likely flatten the NCAA (quite possibly the most blatant example of an antitrust violation that we currently have in America, which is a subject for another blog post at some point) in court, just as the University of Oklahoma did in its landmark lawsuit where the Supreme Court struck down the NCAA’s control of TV rights (thereby opening up the ability for conferences and schools to freely enter into contracts with TV networks directly as we see today). The NCAA telling a network that isn’t actually owned by a member school what it can and cannot show on TV could be construed as an overstepping of its authority and, considering the inherently collusive nature of the organization (hundreds of schools making collective decisions that affect students, agents and media personnel that aren’t even employed by such schools), it needs to be careful on how it phrases its regulations.

When the LHN deal was first announced, I was initially puzzled when UT didn’t take an equity interest in the channel, but we now see one of the main benefits. Is showing high school games on the LHN shady? Absolutely! Can the NCAA or Big 12 regulate it? It could try, but at face value, I doubt it would withstand a court challenge. The Big 12 athletic directors themselves have put the kabosh on high school games on the Longhorn Network for this year, yet I’m sure we’ll see this issue come up again next summer and the conference could face the same legal scrutiny as the NCAA would. If ESPN believes the fight is worth it, the NCAA is a fairly easy lawsuit target.

4. People that keep ignoring Texas politicians will get fooled again – Fool me once, shame on you. Fool me twice, shame on me. Fool me thrice, I’m in fucking denial. In the three major conference realignments since the 1990s, two have been heavily shaped by the whims of Texas politicians. The third was shaped by the Virginia legislature. I’ll point back to my “You Can’t Always Get What You Want, Aggies” post that goes through why it’s critical to take into account the irrational nature of Texas politicians with respect to anything regarding football. At the very least, it would be nice to see some other commentators on conference realignment that this is a very real impediment to change. Gov. Rick Perry might be a former Aggie Yell Leader, but if he wants to run for president, he’ll need to raise a lot of money from UT alums (and Texas Tech and Baylor alums), which brings us to the next point…

5. UT needs A&M in the same conference together – Many UT alums likely won’t admit it, but as I’ve stated before, Texas A&M is an extremely valuable school. That’s why UT simply isn’t going to let them walk away, and if it means making some financial concessions or telling ESPN to not show high school games on the LHN to keep the peace (along with applying their own political pressure plus the support of Tech and Baylor), then they’ll do it. There were a number of factors that went into play in the Pac-16 deal collapsing last year, but the threat of A&M heading to the SEC at that time was extremely high on the list. It’s instructive that the Pac-16 deal could’ve easily moved forward if UT was fine with only moving with Tech (and maybe having Utah or Kansas replace A&M in the Pac proposal) while A&M went to the SEC, yet it didn’t happen. I’ll always remember one of the first comments from a connected UT alum on this blog when the Big Ten first announced that it was exploring expansion almost 2 years ago and how he described that UT, in no uncertain terms, would not let A&M head off to the SEC as the Longhorns knew that opening up the state of Texas to that conference for TV and recruiting purposes would be a killer for their own program.

At the same time, count me in as someone that will always believe that the prospect of UT going independent is an empty threat. Money is important, but many commentators are ignoring how important institutional culture is in making decisions, too. Ultimately, UT needs an entourage like a Hollywood starlet. The school’s actions time and time again have shown that having power over others is how it gets it rocks off. It wants to have schools like Texas Tech and Baylor dependent upon it and it certainly doesn’t want A&M be in a separate higher profile league. UT doesn’t just want to make the most money – it wants to control college football in the state of Texas completely, and that requires A&M to be in the fold. Notre Dame is a J.D. Salinger-type recluse that doesn’t want any attachments to anyone, which is why they have chosen to be independent as an institution (even though they’d actually make substantially more television money in the Big Ten). UT simply isn’t like that – it has always positioned itself as the proverbial sun for a bunch of other schools.

UT and A&M have come very close to separating two times before over the last two decades, yet the leaders of both schools have never been able to pull the trigger (even if some their respective fans would love to use a machine gun on the relationship). A combination of politics, institutional culture and uniquely shared endowment money that makes football TV revenue look like pocket change (see the Permanent University Fund) has always kept them together.

Could Texas A&M end up in the SEC? I guess anything is possible, but let’s be clear that just because Aggies are angry doesn’t mean that they’ll move to the SEC. Any rational analysis needs to address (1) why the SEC would expand when it has no leverage to renegotiate its current TV contracts (meaning that the current SEC schools would be subsidizing any expansion until 2024), (2) why ESPN would help out the SEC on that front when it has direct interests in keeping the Big 12 alive, (3) how a court challenge to any restrictions on showing high school games on the Longhorn Network would turn out, (4) why Texas politicians would suddenly be wallflowers on conference realignment when history clearly indicates that they are not only not wallflowers, but completely interventionist and (5) why UT would just roll over and let A&M walk away. I would love to entertain arguments that address all of those massive roadblocks. “Aggies are steaming mad”, however, isn’t a valid argument.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

(Image from ThinkGeek)

New Leader of the Pac

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Sports824 Comments

The Pac-12 is ready to announce a massive new television deal with Fox and ESPN worth $250 million annually.  (No one has been covering this story better than Jon Wilner of the San Jose Mercury News.)  I certainly have to give props to Pac-12 Commissioner Larry Scott here.  Up to this point, I’ve thought that he was smart and aggressive but more full of bluster with big ideas without necessarily the ability to implement them.  The amount of the Pac-12 deal, shows that the conference made a smart move in hiring from outside of the college administrator ranks.

Ultimately, the reasoning for a TV rights fee is akin to examining the price of a stock.  A portion of the price is going to be related to the market overall, another portion is connected to the industry sector, and there’s a final part that is based on the fundamentals of the individual company itself.  It wasn’t a surprise that the Pac-12 was able to raise its TV rights fees significantly, as the demand for sports programming in general has been skyrocketing over the past few months.  That’s a market-based factor that all sports entities negotiating new TV deals are benefiting from right now, which I examined in-depth in my last post.  What I didn’t expect was that the Pac-12 would vault itself to a position alongside the Big Ten and SEC in terms of TV revenue so quickly.  The Big Ten has the benefit of having the Big Ten Network that can take advantage of the market trends until its ABC/ESPN ends in 2016, but the SEC is locked into its CBS and ESPN deals until well into the next decade.  That doesn’t mean that the Pac-12 is inherently as valuable as either the Big Ten or SEC.  Indeed, the Big Ten and Pac-12 negotiated for the rights to their respective new conference championship games with Fox at virtually the same time.  Head-to-head, the Big Ten game garnered over $23 million per year, while the Pac-12 game received $14.5 million per year, so that gives you an idea of what the conferences are worth relative to each other when you take timing out of it.  My impression that the SEC championship game would be worth even more.  Still, it’s significant that the Pac-12 seems to have been able to pull away from the ACC and non-Texas/Oklahoma portion of the Big 12.

So, what are the fundamentals specific to the Pac-12 that led to this deal (as opposed to just the overall rising tide of sports fees)?  One important point that I’ve mentioned before but probably underestimated in the scheme of things is that the Pac-12 is the only conference with a BCS monopoly in its own footprint.  In fact, with the additions of Colorado and Utah, it’s the only BCS conference located in the entire Pacific and Rocky Mountain Time Zones.  That’s a pretty massive swath of area to effectively have all to yourself.  In contrast, all of the other BCS conferences compete with at least 2 other BCS conferences in their footprints.  For the the Big East in particular, it has to compete with all of the other BCS conferences in its footprint except for the Pac-12.

Another item to note is that Fox needed to retain the Pac-12 very badly for its owned-and-operated West Coast regional sports networks, especially FS West in the Los Angeles market.  FS West is suffering from the blow of losing its most valuable property of the Lakers next year, who are pouring salt in the wound by creating two competing networks (one English and the other Spanish) with Time Warner Cable.  Losing Pac-12 sports on top of that would have left FSN West to rely on the Clippers… and I don’t care how badass Blake Griffin might be (and he’s about as badass as one can be badass), but if I’m Rupert Murdoch, I’ll be damned if I run any organization that has to rely on the Clippers.  With ownership of FS Arizona and a minority interest Comcast SportsNet Bay Area, Fox had some heavy incentives to protect or expand its Pac-12 programming.

(Note that Fox’s owned-and-operated regional sports networks are heavily concentrated in California, Arizona, Texas, the Great Plains Midwest and the Southeast.  Looking at that lineup, it should come as no surprise why Fox paid up heavily for the Pac-12 and Big 12 TV rights and sent in a large bid for the ACC.  The Northeast markets, on the other hand, are largely the domain of Comcast RSNs with Fox largely being shut out.  This is instructive as to who might be (and not be) looking at the Big East’s TV rights down the road.)

ESPN expanding its relationship with the Pac-12 is a little more difficult to read.  Variety has indicated that the Pac-12 has agreed to provide 4 Thursday night and 4 Friday night football games per year to ESPN, so there seems to be a push from the Worldwide Leader to get more higher quality weeknight college football contests.  The Pac-12 also allows for late night games on Saturdays to compensate for the moves of Hawaii and Fresno State from the WAC to the MWC (which doesn’t show any games on ESPN).  Finally, there could be a return of a 11 pm Central Time Big Monday basketball time slot allocated to the Pac-12, which ESPN used to have for Big West or West Coast Conference games.  Overall, ESPN’s modus operandi may very well have been to ensure that neither Comcast nor Turner Sports would end up with the Pac-12, who could have been used as a cornerstone to really have beefed themselves up as legitimate college sports broadcast competitors.

It’s also a bit of a surprise that a Pac-12 network would be wholly-owned.  This is a good thing if the network can receive basic carriage, but could be a roadblock if there are any carriage disputes.  The Big Ten Network, which is 49% owned by Fox, was able to leverage its basic carriage with DirecTV (which was owned by Fox at the time of the launch of the BTN) to apply pressure on cable operators, while the MLB Network garnered one of the largest basic cable launches of any channel in history by offering minority stakes to several cable companies in exchange for carriage.  Those cable companies also provided capital start-up costs.  On the other end of the spectrum, the NFL Network (wholly-owned by the NFL) is still battling cable operators 8 years after it went on the air.  There seems to be a presumption that the Pac-12 wanted to have 100% ownership of a network, but I’m not so sure that’s the case with the amount of ramp-up costs involved and how critical basic cable carriage is for success.

Regardless, even if a conference network never even gets off the ground, I’m pretty sure the Pac-12 schools are acting like this right now.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

(Image from Lehigh Valley Live)

What American Idol Viewers Show Us About Rising TV Sports Contracts

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Major League Baseball, NBA Basketball, NFL Football, NHL Hockey, Sports529 Comments

The Big 12 lost one of the best national TV draws in college football (Nebraska), the most popular college team in its largest and fastest-growing market outside of the state of Texas (Colorado) and its conference championship… and then signs a contract for a 350% increase for its second tier cable football rights with Fox.  Did Rupert Murdoch suddenly feel the need to go on a shopping free now that he doesn’t have to pay Glenn Beck anymore?  Is Dan Beebe getting a G5 and a pile of money so that Fox can cash in an insurance policy on Iowa State?  What gives?  Well, let’s take a look at some demographic shifts of the overall TV audience, how it has affected Fox’s most important property, American Idol, and how all of this explains why sports TV rights fees are generally going through the roof right now.

There are three massive changes to television over the past 5 years (and such changes are accelerating):

(1) More Old People Watch TV Than Young People – If you know anything about TV advertising, the overall Nielsen rating that a lot of networks like to trump in press releases is completely irrelevant.  The fact that CBS is the #1 watched TV network overall with top overall-rated shows in several categories has little bearing on what they are able to charge in terms of advertising rates.  Instead, the Nielsen number that really matters is what a show draws in the Age 18-49 demographic and, increasingly, the Age 18-34 demographic.  Historically, this emphasis on younger viewers has been justified with notions that older people are less likely to switch brands or purchase high-end products.  However, that really isn’t true anymore, as people over 50 generally have higher incomes and have shown to have more discretionary spending than their younger counterparts.

Now, the reasoning is a bit different: younger viewers are simply scarcer, therefore advertisers pay a premium to reach them.  Even though older viewers actually have more spending power than younger viewers, those older viewers watch more TV overall and can be reached throughout the day by placing ads on less expensive shows.

The difference between what advertisers will pay for a younger audience versus an older audience is massive – more massive than you probably could have ever guessed.  TVbythenumbers recently compared the ad rates for NCIS (which draws the largest overall audience of any scripted show on TV) and Glee.  It found that even though NCIS had 82% more overall viewers, the fact that Glee had 15% more viewers in the Age 18-49 demo and 92% more viewers in the Age 18-34 demo meant that Glee was able to charge 80% more than NCIS for every 30-second commercial spot.  It basically shows that viewers over 50 are effectively worthless from an advertising standpoint (and even viewers over 35 aren’t worth that much).  You can find a lot of shows that draw in the typical viewer of NCIS (even if that particular show brings in the most of them outright), while there are very few shows that bring in the demo that Glee delivers.  (For what it’s worth, I’m the type of person that enjoys dramas with deep and complex themes with subtle acting that doesn’t beat you over the head with blatant messages.  I can’t think of any show that provides less of what I’m looking for than Glee.)

With that type of advertising rate disparity, TV networks (both broadcast and cable) are continuously on the search for programming that attracts those younger viewers.

(2) More Women Watch TV Than Men – Here’s a fairly shocking statistic: out of the 63 prime time shows that were on the 5 major broadcast networks (for the purposes of this discussion, The CW gets counted as a “major network”) during the 2009-10 season, only 6 drew more male viewers than female viewers.  6 out of 63.  Three of those shows (The Simpsons, Family Guy and The Cleveland Show) are part of the Sunday night Fox comedy bloc that gets a lead-in from NFL games for half of the season.  Another one of those shows (24) is no longer on the air, a different one (Fringe) has been moved to a low-rated Friday night time slot and the last one (Chuck) has been on the cancellation watch list for a couple of years.  If you’ve ever wondered why ABC keeps churning out shrill high-budget prime time soap operas from Shonda Rhimes, there’s your answer.

Simply put, the TV networks are badly in need of a sausage fest and can’t seem to create any.

(3) More People Are Using DVRs – Nielsen recently reported that DVRs are in 38% of all U.S. households as of September 2010, exhibiting extremely rapid growth as that number stood at less than 5% in 2006.  Those users of DVRs are also younger and more affluent than the average television viewer.  While Nielsen argues that DVR users still watch commercials in decent numbers, the reality of it is that the attraction of the DVR is to be able to skip those ads (cutting down an hour-long show with commercials into around a 40-minute show without them).  As DVR penetration continues to grow (and frankly, I thought that current 38% number seemed fairly low), more and more people are going to be avoiding commercials like the plague.

These changes in who watches TV and how they watch it has had some fairly interesting implications in pop culture.  For instance, a couple of weeks ago, the American Idol audience shockingly voted off (or more accurately, did not vote enough for) widely-perceived front-runner Pia Toscano, meaning that she placed ninth and had a shorter run on Fox than The Heights.  It was enough to make J-Lo start crying uncontrollably while Steven Tyler rose from his crypt and started bashing America’s passion.  Now, seeing that Pia was clearly the top pure singer while also being the best-looking of the competitors, that typically indicates a Charlie Sheen bi-winning combination.  However, when looking at the demographics for American Idol, it reflects general TV viewing trends: its audience is getting older and skewing much more to the female side.  My impression is that these older women prefer the John Mayer soulful acoustic guitar-types as opposed to the hot young divas, which is the main reason why (1) soulful acoustic guitar-types have won American Idol for the past two seasons, (2)  5 out of the last 6 American Idol winners were male and (3) only 2 American Idol contestants left on this year’s show out of 8 are female (rose jacket Rod Stewart copy Paul McDonald became the first male eliminated since the initial public vote cutdown to the top 13).

What American Idol has going for it, though, is that people still generally watch it live.  In the latest week where figures are available, only 9% of American Idol Wednesday viewers watched it on DVR compared to 29% of the viewers of Modern Family and 28% of the viewers of Grey’s Anatomy.  Add in that it still draws a fairly good percentage of the younger demographics compared to most shows on television and it is a complete ratings cash cow for Fox.  Last year, American Idol was able to charge over three times as much per 30-second ad spot compared to Dancing with the Stars, the latter of which actually draws a higher number of total viewers but a lower number in the Age 18-49 demo.

So, when looking at how the TV audience has shifted, it has become clear what type of program obtains a premium greater than any other: the program that draws the age 18-34 male that watches it live.

Let’s take me as an example of the target demo.  I’m a professional 33-year old male that’s about a loyal to TV shows as Antonio Cromartie, can count on one hand the number of scripted TV shows that I watch regularly, and will purposely watch all of such shows on my DVR in order to avoid a single moment of watching any commercials.  I don’t know about you, but I put my DVR right next to food and water on Maslow’s hierarchy of needs.  The catch, though, is that I watch a lot of sports.  Even better, I actually watch them live with commercials.  There is no better vehicle to draw me, a member of the most valuable demographic of all (the male under 35), than sports… and there are tons of people like me in that respect.

Dennis Dodds, who has his own excellent write-up on theories on why sports TV rights are rising, stated the following:

Sports have become one of the safest and highest-grossing buys for media companies. There are no coked-up, petulant stars to deal with. Well, at least not a lot of them. The only “winning” is done on the field. Sports are somewhat cheap to produce.  Sports are true reality television, almost immune to being DVRed. Advertisers love that. There is a built-in following whose interest doesn’t wane with time. Even the strongest TV series are canceled. Try taking Alabama-Auburn off the air.

The success rate of new scripted TV shows has become abysmal – ABC may end up not renewing any of its new shows from this season.  In contrast, sports programs are considered to have “high floors” – ratings may not necessarily go through the roof for every single game, but there’s always a good base of viewers , that base includes a lot of members of the most valuable demo, and those viewers watch it live.  The Nielsen DVR report linked above stated that sports and news programs are watched on DVRs the least of any TV categories.

Sports programming also skews toward the younger demographic than the average show on TV.  During the week that ended April 10th, the only shows in the top 10 of the overall ratings that had more than 30% of their audiences under the age of 50 were the two editions of American Idol (approximately 40%) and the NCAA Tournament National Championship Game (47%).  This is consistent with the demographics for other major postseason sporting events, where the World Series, NBA Finals, BCS bowls and NFL postseason last year all had more than 40% of their respective audiences in the Age 18-49 demo.  (Note that if you were able to buy stock in a league, you ought to bet on the NBA.  It’s the only major sports property that draws over 50% of its audience from the 18-49 demo as well as being the most popular in the growing minority populations just using last year’s figures.  With the NBA now having legit contending teams in New York, Chicago, Boston and Los Angeles along with the Miami superteam, the viewership numbers have been record-setting this season across all of its platforms of ABC, ESPN and TNT.)

Does this necessarily mean that all sports rights fees will necessarily rise at such dramatic rates?  The Pac-12 is looking for even a better deal than the Big 12 (you can count me in as someone that’s more skeptical that they’ll hit those numbers) and the Big East is looking at a possible tripling of its current rights fees.  One ongoing negotiation that may be a better indicator of where rights fees might go for those two conferences is for the NHL, which is a league whose current deal was signed when it was at rock bottom in terms of popularity, has had a resurgence in a couple of key markets (Chicago and Boston), but still largely has a regional as opposed to a national fan base.  The NHL is looking for a substantial increase of around 2.5 times the current deal with Comcast/NBC most likely being retained as the broadcasting partner.

A rising tide lifts all ships in an outright manner, but where the conferences sit relatively each other will likely remain the same: the SEC and Big Ten at the top, the ACC, Big 12 and Pac-12 in the next tier, the Big East at the next level, and then everyone else.  Similarly at the pro level, the NFL stands alone at the top, NBA and Major League Baseball are in the next tier, and the NHL will be behind them.  Still, the circumstances are good for all sports entities.  While the rise of Internet streaming and mobile devices are going to complicate matters for sports leagues to continue cashing in on cable dollars over the next decade, they’re all getting the benefit of a revenue boom today.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

(Image from Huffington Post)

College Basketball Jones Bi-Winning in the Big Ten Coffers and Big East Expansion

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Illinois Fighting Illini, Sports510 Comments

As America is engrossed with the start of the NCAA Tournament and determining which former Illini coach that this year’s Illinois team will lose to this weekend, let’s turn our attention to the business of college basketball for a few moments.  I’m actually a hoops guy at heart, but as this blog delved into college conference realignment, the focus here turned to football because of that’s really the driving force between the major moves.

Kristi Dosh and Patrick Rishe have been writing a number of posts at the Forbes SportsMoney blog about athletic department and basketball revenue and profits among the major conferences. (h/t to Slant reader Brian.)  What’s interesting to note is that the largest revenue basketball conference on a per school basis isn’t the 11-bid Big East or Dook-UNC-led ACC, but none other than the Big Ten, which an unbiased ESPN SportsCenter anchor lovingly noted this past week was like “watching fat people have sex“.  (The Big East has a larger total basketball revenue number, although that’s skewed because it has 16 members.)  Concrete factors for this are that for all of the bashing of Big Ten basketball and the reputation that it’s made up of football schools, the conference has a rabid hoops fan base where it has led the nation in attendance for the past 34 consecutive years along with revenue from the Big Ten Network.  My personal observation is that most Big Ten football fans follow their basketball teams at a consistently high level, whereas SEC football fans (outside of Kentucky and maybe Arkansas) basically need a Final Four contender to pay attention.

That difference in basketball revenue  between the Big Ten and SEC appears to be a major reason why the Big Ten has more profitable athletic departments overall even though SEC profit in the top revenue sport of football is greater.  (More detailed charts with estimated allocations taking into account the Big Ten Network are here on Dolich’s website.)  Regardless, college conference revenue has essentially created a tier for the Big Ten and SEC with everyone else way behind.  As for the importance of football relative to basketball, the Big Ten (22.2%), SEC (16.3%), Pac-10 (22.9%) and Big 12 (19.1%) are actually all fairly close to each other in terms of basketball revenue as a percentage of total athletic department revenue.  Not surprisingly, the Big East (36.7%) and ACC (31.8%) are the outliers where those conferences receive a lot higher proportion of their revenue from basketball (and therefore seem to emphasize basketball more than football compared to the other BCS leagues).

That high basketball percentage for the Big East has some implications for conference realignment/expansion insofar that the “this is all about football” mantra that applied to the Big Ten and Pac-12 expansions as well the Big 12 situation (where one of the top marquee basketball brands in the nation, Kansas, was almost left for dead) may not completely apply to the Big East.  To be sure, the Big East would love nothing more than to become a football power along the lines of the SEC, but the types of schools that would catapult the Eastern-based league to that status (i.e. Notre Dame and Penn State) aren’t reasonably attainable and no one is going to find them in C-USA.  At the same time, the Big East basketball TV deal (average of $2 million per school per year) is worth more than its football contract (average of $1.67 million per school per year), which means that basketball has to be taken in account.  (Recall my Big East Expansion FAQ back in November.)  With the New York Daily News reporting that a Big East TV network is unlikely (largely because getting basic carriage in the New York City market that’s already overloaded with expensive regional sports networks will be impossible), the “expanding for new markets” argument isn’t very compelling.

That’s why the Big East seems more interested in having Villanova move up to Division I-A than adding any expansion candidates from C-USA.  (Please add re-naming the first round of the NCAA Tournament to now be the “second round” after the First Four to the long list of perplexing, nonsensical, confusing and annoying NCAA changes to names that were easily understood by the average bear before.)   The argument is that none of those schools would add much to the national TV contracts on the football side, so it’s more important to avoid diluting the already more lucrative basketball side.  I wasn’t a big fan of the Big East having Villanova move up when it looked like it was a possibility that the Wildcats would be the only football addition without TCU included.  However, what I now understand is that for the Big East football schools to get the Big East Catholic members to vote for any further all-sports expansion in the first place was predicated on Villanova moving up, so the addition of the Philly-area school has to be looked at in the scheme of the entire Big East expansion in conjunction with TCU as opposed to on its own.  At the same time, much to the chagrin of the various schools that are looking for a Big East invite (i.e. UCF, Houston, East Carolina, Memphis, etc.), the most important fact is that Villanova is already a full member of the Big East.  This isn’t an expansion for the conference – it’s a current member moving up for a sport, which is an incredibly important distinction.

Villanova insiders indicate that it’s increasingly likely that the school’s Board of Trustees will approve the football upgrade.  Frankly, the school has to make the move.  This isn’t a matter of moving up for football to join a non-AQ conference – if the program is guaranteed AQ status, then this shouldn’t be a difficult decision.  The Big East is what it is – an extremely strong basketball conference with revenue in line with that status.  Football may drive the bus in college sports overall, but if a conference is unable to add a major power program (the “kings” and “barons” that Stewart Mandel once wrote about), then it makes no sense to weaken or dilute the nation’s best basketball league for little or no revenue upside for the football league.  Football in and of itself doesn’t make money for conferences; it’s having marquee football programs that matters.  To the extent Villanova provides an extra conference football game on the schedule without having to split the basketball TV contract into an 18th slice, it may very well be most lucrative (or at least revenue neutral) football addition that the Big East can realistically have for now.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

(Image from CBS Chicago)

West Coast Represent: Pac-12 TV Talks and What it Means for Other Conferences

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Sports1,303 Comments

There were a couple of separate articles today regarding Pac-12 television rights that point to some implications for other conferences.  First, Jon Wilner from the San Jose Mercury-News had a fairly in-depth article today regarding the status Pac-12 television contract negotiations.  Second, Percy Allen from the Seattle Times had an interview with Pac-12 commissioner Larry Scott that focused on the conference’s basketball TV rights.  Here are the main points from those articles:

(1) Fox is the most likely long-term TV partner for the Pac-12 with a possibility of some over-the-air football games on the mothership network, while Comcast/NBC is the second option;

(2) ESPN is not willing to pay as much for the Pac-12 as it did for the ACC for a variety of reasons (including lack of time slots and the value of the ACC’s syndicated basketball package);

(3) Larry Scott wants the Pac-12 Network to happen, but Time Warner Cable will be a large obstacle in the Los Angeles market; and

(4) Going forward, all media rights for all Pac-12 members will be controlled by the conference (as opposed to a portion being controlled by the individual schools as it is today).

Let’s examine each of these points from the perspective of the Pac-12 and how they apply to the college sports world at large.

Point #1 about Fox’s involvement isn’t a surprise considering the current relationship that it has with the Pac-12 and the media giant’s increasing focus on obtaining college sports rights over the past several months (including paying $140 million over the next six years solely for the Big Ten Championship Game).  The overarching questions going forward are (a) how serious is Fox about expanding its overall college sports presence and (b) are they willing to use Fox over-the-air for games?  Fox bid on the ACC package last year with an offer that was heavily reliant on FX as the main national platform.  Indeed, David Hill, Chairman of Fox Sports Group, sees an increase in sports programming on FX as a key in making that network competitive with the likes of TNT.  While Fox didn’t win that deal, they did procure a smaller agreement with C-USA plus rights to the Big Ten and Pac-12 championship games.  A hungry Fox can certainly bid up the price of rights for other conferences… as long as ESPN is willing to play, too.  (More on that in a moment.)

As for Comcast/NBC, call me skeptical of them ever becoming a truly major player in college sports.  Comcast-owned Versus certainly is looking for more sports programming, but that’s a fairly unattractive national cable partner compared to ESPN or FX on its face and you’re more likely to see sports move away from NBC as opposed to any events being added.  Sports programs in general are loss leaders for over-the-air networks and the last thing that NBC needs is more losses.  In fact, NBC Universal CEO Steve Burke told Wall Street analysts covering Comcast specifically yesterday that NBC’s current “sports properties lose hundreds of millions of dollars per year.”  NBC lost $220 million on the 2010 Vancouver Winter Olympics and even its gold-plated NFL Sunday Night Football package loses around $100 million per year.  So, it doesn’t exactly sound like the new Comcast ownership is going to be spending very much money on more sports on NBC.  If anything, those quotes from the head of NBCU indicate that they’re preparing to cut back heavily.  Therefore, any conference hoping for Comcast/NBC to come through with some great offer is going to be severely disappointed.

From the Big Ten’s perspective, I see Fox only as a viable option in the conference’s next TV deal if there is essentially a replication of the SEC’s agreement with CBS: the top game of the week gets coast-to-coast over-the-air coverage.  I can’t realistically see the Big Ten considering a deal with Comcast at all.  While much has been made of the Big Ten’s partnership with Fox regarding the Big Ten Network, it must be emphasized that the conference still receives substantially more money from ESPN compared to the BTN.  There are also more Big Ten events on ESPN today than there were prior to the BTN being formed.  From the very beginning, the BTN has always been intended to be a supplement to ESPN coverage as opposed to a replacement.  The Big Ten is smart enough to know that the time slots that it has secured with ABC and ESPN provide incredible exposure and the conference doesn’t want to kill the proverbial long-term golden goose for short-term financial gains.  Any new deal going forward has to provide even more exposure than today’s deal.  Thus, I could see the Big Ten pushing to a movement of the games that are regionalized on ABC right now to national over-the-air Fox coverage.  However, I highly doubt that the Big Ten would ever seriously consider moving ESPN games to FX (and definitely not to the patchwork quilt of Fox Sports Net affiliates).  It’s interesting to note, by the way, that the two conferences that make the most money outside of ESPN (Big Ten with the BTN and SEC with CBS) also make the most money from ESPN. Money certainly talks, but the Big Ten seems to be a property that ESPN will pay up to get them to stay (and the desire to stay on ESPN will be reciprocated by the conference).

That leads to Point #2, where apparently the Pac-12 is a conference that ESPN is not willing to pay up for.  More specifically, ESPN appears to believe that the Pac-12 TV package is worth less than comparable ACC rights.  This doesn’t surprise me at all.  I’ve been fairly consistent on this blog that the ACC is in much better shape than what a lot of sports fans (that have concentrated on the conference’s relative weakness on the football field over the past few years) believe. 

National marquee brand names are extremely important for determining college sports rights and the ACC has 2 big ones for football (Miami and Florida State) and arguably the 2 very biggest ones for basketball (Duke and North Carolina).  The ACC basketball package is also unique in that it draws football-level ratings in several of its markets, which is something that none of the other BCS conferences can claim (even those that might be better on the court in a given year, such as the Big East).  If and when Miami and Florida State get back on track, you’ll see a dramatic turnaround in the football perception (and TV ratings) of the ACC.  In contrast, the Pac-12 is largely reliant on the strength of USC for football and UCLA for basketball in terms of drawing national interest.  Beyond the LA schools and Oregon’s wacky uniforms, the Pac-12 continues to struggle with getting much notoriety in the Eastern 2/3rds of the country.

The Pac-12’s inability to get much of a large bid out of ESPN should be a small warning sign to the Big 12 and a large red flag to the Big East, who are both hoping to receive large TV rights increases from the Worldwide Leader.  Several conferences last summer were under the impression that ESPN paying such a large amount to the ACC meant that the network’s greenback gushers were wide open and they could switch the style up, but if they hate let ’em hate and watch the money pile up.  Instead, it looks like ESPN is going to keep all its money in a big brown bag inside a zoo.  Dan Beebe and the Big 12 members may sweat it out a bit as there were some financial assurances from ABC/ESPN this past summer that aided in keeping the conference from splitting apart.  Personally, I’m a believer that ESPN understands the big picture and seeing that they presently want to avoid the formation of superconferences, they’ll pay enough to the Big 12 so that the conference makes good on its promises to Texas, Oklahoma and Texas A&M.  With ESPN’s investment in the UT network, the Big 12 needs to stay alive and a few extra bucks on the conference contract would be money well-spent.

The Big East is a different matter.  That conference has already bore the brunt of having football games moved by ESPN to Thursday nights initially, and then when the SEC, ACC and Pac-12 saw that Thursday was a great night for exposure, the Big East has been kicked around to several Friday nights and even some Wednesday evenings.  Much of the hope of a Big East TV contract increase rested on leveraging its valuable and massive basketball package into better football exposure.  However, if ESPN isn’t willing to pay the Pac-12 TV rights in line with the ACC, then it stands to reason that they’re going to value the Big East even less.  Unless Fox or Comcast swoop in with competing bids for the Big East, the conference’s schools are going to have a difficult time coaxing the increases that they’re hoping for from ESPN.  I’m sure that you’ll see the Big East get what amounts to an inflationary increase (maybe 150% of what they receive now), but not enough to get on the same tier as the other BCS conferences.

Under Point #3, Larry Scott seems extremely determined to start a Pac-12 network.  However, Jon Wilner pointed out a large potential obstacle: Time Warner Cable.  He noted that TWC is the largest cable provided in the Los Angeles market and they’ve had a habit of getting into carriage fights regarding regional sports networks.  What Wilner neglected to mention (and I find to be even more important) is that TWC just sent a Valentine’s Day present to Jerry Buss of what’s rumored to be around $150 million per year to create two new regional sports networks in the LA market (one English language and the other Spanish language) built around the Lakers.  With 3 Fox Sports networks in that market already, that means that the LA market will be supporting 5 RSNs and making it even more crowded than the New York City market.  This crowded environment in the Pac-12’s most important market has huge implications on whether a conference network can realistically be formed.  The Big Ten Network only had to compete with 1 RSN in each of the markets within its footprint (even in its largest market of Chicago, which only has Comcast SportsNet Chicago).  Thus, it was a more palatable for the cable providers to give in when the BTN was RSN #2 on their systems… and even then, it took over a year of carriage fights for them to get to that point.  It’s a much different value proposition for the Pac-12 attempting to enter into market that already has 5 other RSNs – TWC has a whole lot more leverage to demand lower subscriber rates or refuse basic carriage entirely.  Note that a potential Big East Network would face the same issues in the NYC market with so many RSNs already clogging up cable bills.  This was a factor in the Big Ten ultimately deciding to not go after schools like Rutgers or Syracuse in this last round of expansion, as the BTN absolutely had to get basic carriage in the NYC market in order to financially justify those additions, and they didn’t see that happening anytime soon.

Finally, with respect to Point #4, Larry Scott confirmed that all media rights for all Pac-12 members would be controlled by the conference.  This is important for one massive reason: the University of Texas.  With the Pac-12 taking that position, it has effectively wiped out any reasonable possibility of Texas joining the conference in the future, as the new Longhorn Network would be unable to exist under those conditions (and I don’t see UT giving up in excess of $10 million per year for any reason).  For the fear mongerers (who are all wrong, by the way) that continue to believe that UT’s ultimate goal is to end up independent or in the Pac-12, at the very least, that Pac-12 option is gone.  (I’ve listed a multitude of reasons of why UT wants to stay in the Big 12 in perpetuity and, in fact, needs that league to live, but many people seem to believe what they want to believe on that front.)

Fans of all conferences should keep a close eye on the West Coast since how the Pac-12 proceeds will be a significant indicator of how TV networks will pay for college sports in this next round of contracts.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

You Can’t Always Get What You Want, Aggies

On By Frank the TankIn Big Ten, College Basketball, College Football, Sports572 Comments

It was as predictable as a lackadaisical road game for the Illini basketball team. When the University of Texas signed its network deal with ESPN, the drumbeats from people that aren’t looking at the big picture started: “Well, this means Texas A&M is heading to the SEC sooner rather than later.”  It’s a stance that’s become reflexive among many widely read pundits.  Unfortunately, that stance is absolutely and positively dead wrong.

If there’s one overarching takeaway that you should get from this blog post, it’s that what Texas A&M wants to do means jack.  I’m very certain Aggies all across America (especially the younger ones) would love nothing more than to move to the SEC, yet that’s irrelevant.  What really matters is what Texas A&M is allowed to do, and with a Molotov cocktail of an SEC that doesn’t really want to expand, Texas state politicians that are out to quash any move that will injure Texas Tech and Baylor, and ESPN specifically wanting the Big 12 to live, that leaves with Texas A&M with virtually no options outside of staying right where they are.

THE REACTIONARY SEC

Let’s start out with the most basic rule in conference realignment: it takes two to tango.  In order for Texas A&M to even consider to move, the SEC has to want to add them in the first place.  There’s a widely misguided belief in the blog and message board world that since the SEC reportedly invited Texas A&M and Oklahoma over this past summer, that means there’s an “open invite” for the Aggies and Sooners.  Nothing could be further from the truth.  Everyone is forgetting the circumstances under which the SEC invited those two schools.  OU president David Boren stated that the Pac-16 proposal was researched and planned, while the SEC invitations were “a reaction to the situation”.  The SEC was never proactive in last year’s conference realignment because they didn’t (and still don’t) have any type of vehicle to justify expanding beyond 12 schools.  This is in contrast to the Big Ten, whose Big Ten Network can garner additional revenue from adding more basic cable households, and the Pac-10, who was so far behind in revenue that it was worth it for them to take a huge leap in order to add UT and friends.

The fact of the matter is that the SEC loves the status quo.  They are Wal-Mart to the Big Ten’s Target in college football’s financial hierarchy, with everyone else way behind.  The last thing that the SEC wanted was to see major changes to the conference landscape where a third equal competitor would rise up or, even worse, being sent to a permanent third place position.  So, the only reason why the SEC offered A&M and OU those invites was because they were looking at a world where 2 superconferences were about to be formed – the Pac-16 with UT as the centerpiece and a 16-school Big Ten with Nebraska and Notre Dame as the main additions – and they had to draw a little blood in order to not completely get left behind.

We need to make this clear: the SEC invites to A&M and OU were completely reactionary.  Once the Big 12 was saved and superconferences weren’t formed, the reasoning for the SEC to expand evaporated.  There is only one way that the SEC can lose its dominant position next to the Big Ten at this point: if UT moves from the Big 12 to another conference (because as we’ve explained here before, they’re never going to the SEC themselves).  That’s something the SEC absolutely doesn’t want to see happen.  As a result, the SEC isn’t going to make a proactive move on the Big 12 because it’s not going to risk giving UT a reason to explore the Pac-16 proposal again.  If some other conference makes a move on the Big 12, then the SEC will react in order to pick up the pieces, but they’re not going to attack first.  The only realistic way A&M gets an SEC invite is if someone else raids the Big 12.

ALL CONFERENCE POLITICS ARE LOCAL

Now, let’s say that I’m completely wrong about all that I just said about the SEC and they extend invites to A&M and OU, anyway.  That doesn’t mean that the Aggies (or OU, for that matter) can just move willingly.  Here’s a quick recap of the major conference realignments since the collapse of the Southwestern Conference:

1994 – UT and A&M attempt to move to the Big 8 by themselves to create a 10-team conference.  Texas legislators catch wind of the plan and use political pressure on those 2 schools to force Texas Tech and Baylor into the league, too.

2003 – The ACC invites Miami, Boston College and Syracuse.  Virginia legislators catch wind of the plan and use political pressure on UVA to force Virginia Tech to get an invite in lieu of BC and Syracuse.  BC eventually gets an invite later on, while Syracuse is still in the Big East.

2010 – The Pac-10 invites the entire Big 12 South except for Baylor.  The deal falls apart and Pac-10 commissioner Larry Scott attributes it to the political heat from Texas legislators with Baylor getting left out.

See a pattern here?  State legislators have played a central role in all three major conference realignments in the past 20 years, including Texas legislators specifically in two of them.  Public universities are controlled by a ton of different interest groups, including people whose loyalties lie with competing universities.  Notre Dame, as a private university, can simply listen to its own rabid alumni base in making decisions.  Texas A&M (and other public universities) can’t do the same.  Despite this fact along with recent conference realignment history, virtually every single column that I’ve read suggesting that Texas A&M will eventually head to the SEC either (a) completely ignores Texas politicians altogether or (b) makes unsubstantiated comments that the politicians aren’t obligated protect Tech and Baylor anymore.

What?!  It’s incredulous to me how anyone that observed what occurred this past summer could think for two seconds that Texas politicians won’t get involved.  If anything, it proves that Tech and Baylor have more pull than previously anticipated.  As I’ve admitted previously, I certainly made the grave mistake a year ago in my conference realignment analysis of underestimating how much Texans believe that football matters are of the utmost political importance.  I haven’t seen a single person articulate a legitimate reason why a single thing has changed in the political environment in Texas since this past summer or even 1994.  The Texas legislature has literally done more to shape college conferences over the past 20 years than any other entity.  Besides, even if you assume that Tech and Baylor don’t have a Bob Bullock-type figure to hammer through their interests, UT is going to be right alongside the supporters of the little brothers on this issue.  UT wants nothing to do with A&M in the SEC (for good reason) and the Longhorns know how to play the political game as well as anyone.  I really hope people aren’t naive enough to think that Texas politicians are just going to sit on the sidelines if A&M attempts to move to the SEC by itself. 

IF TEXAS TECH AND BAYLOR AREN’T BETTER OFF WITHOUT A&M THAN WITH THEM, THEN DO NOT PASS GO

The main argument that I see from those that believe that A&M is heading to the SEC is that Texas Tech and Baylor can be “taken care of” in order to placate the politicians.  There is a prevailing belief that as long as the Big 12 survives with UT staying there, then A&M can move alone.  The problem with this line of thinking is that Texas politicians have consistently placed a MUCH higher standard of what it means for Tech and Baylor to be “taken care of”.  Having those schools “taken care of” really means two options:

(1) UT and A&M are in the same conference as Tech and Baylor.  Period.

OR

(2) Tech and Baylor are financially stronger without one of the big brothers in the same conference than with them.

Think of it this way: if I come and take a wrecking ball to your kitchen, you’re probably not going to think you’re “taken care of” if I point out the fact that I left your bedroom intact, so at least you’re not homeless.  Well, Texas A&M can’t just leave the Big 12 and make more money in the SEC while simultaneously reduce the conference revenues for Texas Tech and Baylor (and for that matter, UT) and claim that they’re “taken care of”.  That’s a proactive move by A&M that hurts those in-state little brothers.  So, simply saying that Tech and Baylor are still in an AQ home isn’t good enough for the Texas politicians.  A&M has to find a way to ensure that Tech and Baylor somehow make more money with the Aggies leaving the Big 12, which most reasonable people would conclude simply isn’t realistic.  As noted earlier, the SEC doesn’t really have a financial vehicle to justify expanding in the first place, so every expansion candidate has to pull more than its own weight.  A&M is a very good catch for any conference by itself, but that school isn’t worth SEC having to add any type of financial dead weight (Tech or Baylor) in order to get them.

As for OU, the Sooners are even more tethered to Oklahoma State politically than the Texas-based schools are to each other.  The T. Boone Pickens mafia will destroy that prospect immediately.  There’s absolutely no scenario where OU would move to another conference without Okie State.  None.  Zip.  Nada.  Zilch.

THE PAC-16 PROPOSAL IS THE MINIMUM FOR ANY FUTURE CHANGES

Here’s the bottom line: the Pac-16 proposal is now the bare minimum that politicians will consider.  That proposal protected Texas Tech and Oklahoma State, yet the big brothers of UT, A&M and OU ultimately rejected that deal.  As a result, those big brothers expended pretty much all of their political capital on conference realignment.  There was a massive offer from a major conference that was willing to take Tech and Okie State, which means that the big brothers can’t now look their respective state legislators in the face and say that they’re ditching the little brothers for a better deal elsewhere.  (This includes the prospect of UT going independent.)  From this point forward, there’s absolutely NFW that the politicians in either Texas or Oklahoma are going to let the big brothers move without something that replicates the original Pac-16 proposal at the very least.  If you believe Larry Scott, Baylor has to protected in order to ensure it gets approved, too.

Some OU supporters are already ruing the day that they walked away from the Pac-16 offer.  (Of course, that’s neither here nor there.  OU wasn’t getting a Pac-10 invite without UT also coming along.)  Honestly, A&M’s reluctance to go to the Pac-16 might be what ends up forever binding them to the Big 12 that so many of their alums now hate.  Why would Texas politicians let them go off to the SEC alone when all of UT, A&M and Tech would’ve been taken care of in the Pac-16 deal if A&M didn’t have any reservations to going west?  The answer is that they’re not – A&M is stuck, whether they like it or not.

ESPN ISN’T STUPID – THEY WANT THE BIG 12 TO LIVE

Finally, there’s a pretty basic item that so many people are missing: ESPN paid up last summer specifically to save the Big 12, so they wouldn’t have entered into a deal with UT unless they believed the Big 12 would stay together.  Certainly, ESPN wouldn’t have created the new UT network if it would have the effect of actually breaking apart the conference that it just saved.  ESPN might be annoying from a journalistic standpoint, but their business people aren’t stupid.

(Indeed, in the third quarter of 2010, ESPN provided half of the profit of the entire Disney Company.  Think about that for a second: add up all of Toy Story 3 ticket sales, all of the people visiting Disney World and Disneyland, all of the Mickey Mouse and Winnie the Pooh swag sold, all of the ABC advertising revenue, all of the Disney books and DVDs hawked, all of the High School Musical and Hannah Montana crap, all of the Disney Broadway show tickets, and revenue from thousands of other Disney properties, and they still weren’t as profitable altogether as ESPN was by itself.  That’s power.)

So, ESPN entered into the deal with UT based on assurances that the Big 12 was going to live on, and the cable giant has a ton of control over that.  With the Worldwide Leader holding the purse strings for the Big 12’s next TV contract, they’re going to provide juuuust enough to keep the non-UT members placated to ensure the investment in the Longhorn network was worth it.  ESPN wants nothing to do with paying massive rights fees for superconferences, which is why they intervened when it looked like the Big 12 was going to collapse.  The status quo is what they desire for college conferences and they have the financial capital to pay out accordingly in order to keep it that way.  Make no mistake about it – ESPN knows that UT staying in the Big 12 is ultimately what provides it stability and that’s a big reason why $15 million per year for the Longhorn Network is a relatively inexpensive insurance policy for the Worldwide Leader.

TOO LITTLE, TOO LATE FOR A&M

At the end of the day, if A&M or any other Big 12 school had an issue with UT’s new TV network, the time that they had any leverage was last summer.  They’ve all known for years that UT has been planning for a new TV network, so this wasn’t a surprise.  In fact, it was a key negotiating point of last summer’s realignment discussions.  Now that they agreed to keep the Big 12 together and, more importantly, rejected a Pac-16 deal that would’ve protected Texas Tech and Oklahoma State specifically, A&M in particular doesn’t have any more chips to play.  You can’t always get what you want, Aggies.  Instead, you can only do what you’re allowed to do, which isn’t much at all.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

(Image from Texas A&M to SEC Facebook Page)

ESPN UT: How it Saves the Big 12 and What’s in it for ESPN

On By Frank the TankIn Big Ten, College Basketball, College Football, Sports847 Comments

One of my Texan friends loves to remind me that Texas is the only state that was also a country.  (He’s an Aggie, by the way.)  Well, the University of Texas Athletic Department will soon have enough cash money to buy up a country or two.  As long-rumored, UT and ESPN have entered a deal to create a new Longhorn TV network that will pay the university $247.5 million over the course of 20 years.  An additional $52.5 million is earmarked for IMG, which is UT’s media licensing partner, which adds up to $300 million overall that ESPN is throwing down for this new property.

Believe it or not, this deal is what’s going to keep the Big 12 together.  UT gets to make more TV money than any other school in the country, play its rivals in all sports and keep the Texas state politicians happy.  As a result, UT is in a perfect spot and as long as they want to stay, the Big 12 will live on.  Could UT make a few more TV dollars down the road by becoming independent?  Sure, but that’s ignoring the fact that UT isn’t in complete control of its affairs in the same way as, say, Notre Dame, who only has to answer to its own alums.  UT’s leadership has to deal with state legislators whose loyalties may lie with Texas A&M, Texas Tech or Baylor.  Drawing the ire of those politicians that hold much greater purse strings beyond athletics, much less giving up its rivals and relegating its non-football sports to secondary status (noting that UT isn’t a one-trick football pony with across-the-board strong programs in basketball, baseball, softball, track and field, etc.), simply isn’t worth the extra money that might be there for independence.  UT has exactly what it wants: a conference that it controls with a TV network that it gets to keep all to itself.  It’s the best of both worlds.  Other schools in the Big 12 can complain, but as I noted last month, the conference is safe in a maximum security prison way.  No one’s getting out of there even if they want to very badly.

What’s ESPN getting out of this deal?  On its face, $15 million per year appears to be a whole lot of money for 1 football game per season, a handful of men’s basketball games and a bunch of Olympic sports.  However, we need to look at the big picture beyond Texas.  Think of the old sports adage that the best offense is a great defense.  For ESPN, the creation of the Big Ten Network was a nightmare.  Conference networks, whether real or imagined, created a viable threat for leagues to use in negotiations to drive up TV rights fees for college sports.  As a result, the last thing that ESPN wants to see is for any of the other BCS conferences to form their own channels with competitors such as Fox and Comcast.  (The Mountain West, on the other hand, can go start up 10 channels for all it cares.)  Well, for a mere $15 million per year in payments to UT and IMG, ESPN has completely destroyed any chance of a Big 12 network EVER forming.  Spending $15 million per year now will likely save ESPN tens of millions of dollars more in rights fees for the overall Big 12 package (assuming that it bids on it) in the long term.

At the same time, ESPN has taken the position that superconferences are bad for its business, as they would also drive up rights fees.  That’s why they were willing to step in and aid in saving the Big 12 by paying the same amount for a 10-team conference without a championship game as a 12-team conference with a championship game.  The new UT network effectively ensures that the school will stay in the Big 12 for at least the next 20 years.  With UT off the market, the Big Ten, Pac-10/12 and SEC are going to have a difficult time to financially justify expanding past 12.  So, ESPN’s $15 million per year for the UT network is insurance against having to spend literally hundreds of millions of dollars in extra fees for superconferences.  The ESPN UT network is likely going to profitable by itself (as with only one mouth to feed, it will take a fairly low basic cable subscriber rate across the state of Texas to make money), but preventing other conference networks and superconferences from forming is where ESPN is getting the most value of all.

Finally, this is a landmark deal for ESPN for a separate reason:

(1) ESPN
(2) ESPN2
(3) ESPN3
(4) ESPNU
(5) ESPN News
(6) ESPN Classic
(7) ESPN Deportes
(8 ) ESPN UT

The Ocho has finally arrived.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

(Image from Scream Punch)

The Settling Conference Realignment Landscape

On By Frank the TankIn Big East, Big Ten, Sports757 Comments

There was quite a bit of conference realignment news over the last couple of weeks, so let’s assess the current landscape:

1.  Big Ten Making Out Like a Fox – To the surprise of no one except a handful that believes the Big Ten really wants a superconference, the conference announced that expansion has reached its “natural conclusion”.  Despite my many writings on the Big Ten expansion topic (and the reason why most of you found this blog), I’m very happy about this personally.  Call me old-fashioned, but I actually like it when schools in a conference, you know, actually get to play each other regularly instead of being in some type of massive 16/18/20-team scheduling arrangement.  One of the comments from regular Slant reader allthatyoucantleavebehind from several months ago always stuck with me: It’s a whole lot of fun to talk about superconferences and expanding to different markets, but will you actually have fun watching your team play all of these schools?  Well, Nebraska is one of those schools that everyone has fun playing with a tradition-rich football program and arguably the best fan base in college sports.  Plus, if Bo Pelini thought he hated Big 12 officials, we’re going to witness him murder a Big Ten ref in cold blood in Ann Arbor next season.  The Big Ten is making the right move for its alums and fans by stopping at 12.

Financially, it’s the right move, too.  Fox outbid ABC/ESPN for the rights to the Big Ten Championship Game and the rights fees apparently are astronomical: $140 million for 6 years, which is an average of around $23 million per year.  For comparison’s sake, the SEC title game brings in approximately $14 million per year and the Big East football TV contract with ESPN is worth about $13 million per year for all of that conference’s games.  This single game haul for the Big Ten has paid for the addition of Nebraska by itself and we haven’t even gotten to the additional Big Ten Network rights fees and forthcoming increases in the national TV contracts.

The fact that Fox won the Big Ten title game contract is interesting.  While Fox is the conference’s partner for the Big Ten Network, I personally had a hard time believing that the ESPN juggernaut would let this game get away.  As I’ve pointed out before, as much as we talk about how the Big Ten Network has really changed the TV revenue dynamic in college sports, the Big Ten still gets paid about twice as much more from ABC/ESPN than the BTN.  When the Big Ten’s national TV contract comes up for bidding for the 2016 season, expect the conference to really push for a bifurcated rights deal similar to the SEC: coast-to-coast clearance on a national over-the-air network for the top game of the week and 3 or so games on the next tier on the ESPN networks (with probably a guaranteed weekly prime time game).  The balance of the games would then be on BTN.  If Fox drops or cuts back on Major League Baseball coverage (and as much as I love baseball, any reasonable TV industry observer would recommend that Fox does just that because it’s receiving a horrible ROI for the amount that the network is paying for these regular season ratings), there’s a strong possibility that the network will take over the top Big Ten Game of the Week from ABC.  However, I highly doubt that the Big Ten would let the games that are currently on the ESPN networks move to the patchwork quilt of Fox Sports Net stations.  Much like the NFL, the Big Ten is going to balance providing a critical mass of games to its own network and maximizing revenue with being extremely exposure conscious with its top matchups.  Note that the NFL’s top game of the week package (Sunday Night Football on NBC that has a flex scheduling option to ensure higher-rated matchups later in the season) is actually the league’s least expensive TV contract.  The Big Ten could very well end up with a similar setup starting in 2016.

With the new Fox money and anticipated rights fee increases, if the Big Ten were to expand further at this point, each additional school would essentially have to add $30 million to the conference make it into a compelling case for the university presidents – and that’s without the benefit of a bump of a new conference championship game.  There’s basically two schools that could even come close to bringing that much: Texas and Notre Dame.  For various reasons, the chances of either ever joining the Big Ten in the near future is effectively zero (and we’ll explore them more in-depth later on).  Without either of those two schools involved, there’s no way that the Big Ten can add any other schools without the current members taking a pay cut from the new 12-team setup (and I can guarantee you that no one is voting to ever take a pay cut).

2.  Big East Football Member Number 9… Number 9… Number 9… Number 9 – The expansion action has shifted to the Big East, which smartly added Rose Bowl-bound TCU for all of the right reasons.  At least I got one prediction of a Texas-based school heading to a conference to the east correct.  With the Big East having previously stated that its members had approved expansion up to 10 football members, the outstanding issues are (1) whether Villanova takes up the Big East’s offer to move up from Division I-AA (for the love of all things that are good in this world, such as the removal of Brett Favre from the national consciousness, please go back to logical division names, NCAA) and (2) if Villanova refuses, is it really worth for the Big East to go up to 10 with the realistic expansion candidates.

Big East commissioner John Marinatto has indicated that the conference was “not going to wait for Villanova”.  However, I believe that his quote (which has gotten a lot of Big East blogs and message board over-excited) was under the guise that if a school such as Notre Dame called up and wanted to join the league for football, then of course there would be an immediate expansion.  In practicality with the realistic expansion candidates, the Big East isn’t going to do anything else until it knows for sure about Villanova’s final stance.  I’ve generally heard two extremes regarding Villanova with very little in between.  There’s a segment of the Big East that completely believes that they’re moving up and the main item to accomplish is finalizing a deal to play at PPL Park in Chester (an 18,500-seat Major League Soccer stadium).  The other segment of the Big East absolutely believes that there’s no chance that Villanova will move up because the university’s leadership has a tepid view of it and the financial commitment required is far beyond the school’s reasonable means.

I know what I would do if I were running Villanova: I’d take that invite, ride it like Zorro back to Providence with a big “YES” and figure out the details later.  Why they haven’t already done so is fairly maddening.  It’s incredulous to me that a school could be taking this much time to decide on whether to accept a golden ticket that sixty-plus other university presidents would sacrifice their math departments for.  My impression is that Villanova fancies itself to be more of a Boston College-type than a Holy Cross-type with respect to sports and if Nova wants to protect its basketball team and athletic department overall from future conference realignment earthquakes, the best way to do so is having a BCS football program.

Now, I don’t really believe that adding Villanova for football will do much to help the Big East, although the conference gets a bit more rope to work with after having added TCU.  If extending an invite to Villanova was the political grease to get the Catholic members of the Big East (or at least enough of them) to address the football expansion issue overall, then it was a necessary move.  Villanova is one of the old-line members of the Big East and if it wants to move up for football, everyone has to expect that the school will get to join that pigskin league first even if other programs are supposedly more “deserving”.  I’m just a bit wary that Villanova seems to have been dragged into this kicking and screaming, which I doubt will draw much sympathy from the Boise States of the world.

UCF appears to be the school-in-waiting if Villanova rejects the Big East football invite.  I really didn’t like the thought of UCF getting invited to the Big East over TCU if the conference was choosing only one of them, but the Knights make more sense as part of an expansion on top of the Horned Frogs.  With the sheer size of the school’s student base coupled with the prime recruiting location, the Big East is looking at UCF as a high upside school.  Now, I’ve probably spent more time in Central Florida than any place other than Chicago and Champaign and believe that the area is always going to be Gator country by a wide margin, but the rapid growth of UCF cannot be denied.  A school such as East Carolina has a better pure fan base in terms of actually showing up to games  and Houston offers a larger market, yet UCF seems offer enough of each of those factors that it appears to be the best choice of the rest for the Big East overall.

Of course, this doesn’t mean that the Big East has to go up to 10 football schools immediately (and thereby possibly 18 schools for other sports).  As I noted in the Big East Expansion FAQ post, the Big East still makes more TV money from basketball than football and a school such as UCF likely wouldn’t move the ESPN rights fee meter very much (if at all).  None of the C-USA schools are going anywhere, so the Big East can choose to see if a school such as UMass, which will likely be moving up the Division I-A level, develops into a viable Northeastern-based program that would fit extremely well into the conference.  Now that the Big East has 9 members with the TCU addition and the Big Ten has put its expansion on hold, there’s not the same sense of urgency to add school #10.

I’m personally about 50/50 on this.  Part of me believes that 10 football/18 basketball members in the Big East would be more desirable for the “perception of stability” factor that the league needs more than anyone else while getting a program such as UCF up to speed at the BCS AQ level.  (I’ve also got a way to split up an 18-team Big East basketball league into divisions that I believe will make pretty much all of the schools happy with home-and-home annual games with their top rivals and still playing everyone else frequently enough to maintain some conference unity.  However, I’ll save that for another post.)  On the other hand, there’s no real need to rush and the Big East may be well-served to just concentrate on integrating TCU for the next couple of years.

3.  Knife the WAC and Head for the Mountains – Mountain West Conference commissioner Craig Thompson has been coming after the WAC like Freddy Krueger ever since this past summer when there was a brief moment where the WAC looked like it was going to be the raider instead of the raidee.  Hawaii is all but confirmed as the latest defector from the WAC to the MWC as a football-only member.  I’ll give Thompson a whole lot of credit on this front: the MWC is going to be significantly weaker on an absolute basis with the losses of Utah, BYU and TCU, but it’s stronger on a relative basis compared to the other non-AQ conferences by mortally wounding its top competitor of the WAC.  The national perception of the MWC is that it’s still a desirable league at the non-AQ level, which is a fairly impressive feat considering that any conference losing its three most valuable members would typically be reeling.  Thompson obviously took some notes of what to do (and what not to do) from how the Big East reacted to the ACC raid of 2003 and had a prepared disaster recovery plan on how to react to any defections.  There’s absolutely no chance that the MWC is going to rise up to AQ status in this next bowl cycle (or probably ever), but it’s in a great position to be first in line for any non-AQ BCS bowl bid annually.

4.  The Texas 12 – There are still days where I can’t believe that the Big 12 survived, yet now that it has, it must be emphasized once again that the conference is a whole lot more stable than many pundits give it credit for.  To be sure, the Big 12 isn’t bound together because its members actually want to be with each other.  However, Texas wants this league to survive more than ever with the newly anticipated ESPN-owned Longhorn Network and that’s about 99% of the battle.*  I know that it’s VERY fashionable for college sports fans to believe that Texas eventually wants to become independent and then all hell will break loose in the Big 12, but that’s ignoring the constantly volatile emotions of Texas-based politicians.  The single biggest mistake I made in my early posts regarding Big Ten expansion and UT was completely underestimating the extent to which Texas politicos would get involved in conference realignment.  Even if UT really wants to go independent and/or Texas A&M really wants to go to the SEC, they’re bound together by the threat of mutually assured destruction if one of them makes a first move similar to the US and USSR during the Cold War.  Neither UT nor A&M can be perceived to be the one that killed the Big 12 and then drawing the wrath of Texas Tech and Baylor sympathizers in the legislature.  For all of the school’s financial power on paper, recall how much Texas needed to show that Missouri and Nebraska had wandering eyes first before it could attempt to create the Pac-16.  Pac-10 commissioner Larry Scott himself said that the exclusion of Baylor from the Pac-16 proposal gave rise to a “tsunami effect” in Texas politics that killed the deal as opposed to anything with UT’s TV plans.

(* In what will surely be an interesting case study in testing how strong the Chinese walls are between the business and journalistic sides of ESPN, the Worldwide Leader filed a lawsuit last week against the University of Texas System under the Texas Public Information Act (h/t to duffman) to obtain documents from this past summer’s conference realignment discussions even though the network is right in the middle of negotiations with UT on the formation of the Longhorn cable channel.)

As a result, those 4 Texas-based schools are politically bound together as a group.  Add in the similarly bound Oklahoma and Oklahoma State (with OU being on the record that it is always going to want to be in the same conference as UT) and you have 6 total schools that have to be together no matter what, which severely limits them being anywhere other than in the Big 12.  With 2 of those schools being national marquee brands, any conference that has that group is going to survive just fine and make enough TV money for all of its members even in an unequal revenue distribution system.  The “Little 4” of Kansas, Kansas State, Missouri and Iowa State might be wise to continue to have good relations with the Big East as a fallback option (which KU coach and Illini defector Bill Self said almost happened this past summer), but they’re not going to affirmatively split off from a league where they can still play UT and OU annually in a new round-robin Big 12 schedule unless an inebriated Big Ten suddenly throws invites their way after a Saturday night binge on Rush Street.

While the Big 12 isn’t safe in a warm and fuzzy family way, it looks like it’s safe in a maximum security prison way.  No one’s getting out of there even if they want to very badly.

5.  Notre Dame Network? – Let’s me repeat another item that I didn’t quite fully understand until the last few months:  NOTRE DAME WANTS TO BE INDEPENDENT FOR THE SAKE OF BEING INDEPENDENT.  It isn’t about making the most TV money, or else they’d join the Big Ten.  It isn’t about having the easiest road to BCS bowls, or else they’d join the Big East.  Instead, Notre Dame’s independence is a PRINCIPLE and about SCHOOL IDENTITY.  As a result, ignore the recurring columns suggesting that Notre Dame joining the Big East would somehow provide a nice geographic distribution of opponents while providing easier BCS access.  (Remember that Notre Dame has failed to even play 3 Big East opponents per year that it agreed to back in 2003, much less a full conference slate.  Why the heck would they all of the sudden want to play 5 or more Big East conference games as even a “partial member” when they just signed scheduling deals with Texas, Miami and BYU after the summer’s conference shuffling?  None of that makes any sense.  At the same time, the Irish see a “national” schedule as playing schools such as USC, Michigan, Miami and Texas, not just any random schools that happen to be located in certain states.)  You can also ignore anything from Big 12 country suggesting that UT’s ability to create a TV network within a conference would spur Notre Dame to join, too.  Maybe those strangely delusional Big 12 fans that suddenly believe that they can pick off Notre Dame along with members of the SEC (i.e. Arkansas and LSU) or Pac-10 (i.e. Arizona and Arizona State)* have forgotten that as an independent, the Irish can create a network anytime it freaking wants to.

(* Just because no one can get out of the Big 12 maximum security prison doesn’t mean anyone else actually wants to get in.)

In fact, that’s exactly the latest item on the rumor mill.  You should take the following with a heavy grain of salt, but I’ve heard and seen in a few places is that Comcast/NBC is working on putting together a Notre Dame Network that would be an Irish Catholic-focused cross between the Longhorn Network for sports and the BYU network for religious programming.  The Universal Sports network that’s currently being shown on a number of cable systems and NBC-owned digital subchannels across the country and broadcasts Olympic sports could possibly be converted into this Notre Dame Network.  The main thing that makes this plausible to me is that this sounds like something that Notre Dame would want to do.  The school has been consistent in insisting upon its own branding and independent identity (which kills the prospect of any joint network with the Big East that a lot of that conference’s fans are hoping for other than working with them to procure rights for Notre Dame’s non-football sports).  It doesn’t want a network that’s under the umbrella of the Big East, Big 12, Big Ten or any other conference.  Instead, this is about complete and 100% autonomy for Notre Dame in all respects.

Believe me, I sympathize with all of the fans of conferences that continue to dream about Notre Dame.  Many of us college football fans complain about Notre Dame 364 days per year about their “special treatment”, but when that one day comes with a semi-possible rumor that the Irish are looking to join your conference, you immediately get starry-eyed with thoughts of world domination.  It happened to me based on the logic that the Big Ten actually was (and still is) the one conference with the concrete financial wherewithal to make the Irish richer.  Let me be clear: there is no such thing as logic regarding independence with the Notre Dame alumni base that runs that school.  As a result, I wouldn’t be shocked if the Notre Dame Network comes to your TV within the next year or two and the Irish will be more independent than ever.

With the conference realignment situation settling down, we’ll turn to another favorite topic in my next piece: the annual “How can we make the college football postseason better?” post.  I know every two-bit columnist and blogger in the country covers that topic to the core, but let’s face it: it’s fun to talk about, so that’s all that matters.  Until then, let’s bask in the glow of the Illini football team going to the Texas Bowl even after having predictably Zooked themselves against Fresno State (the biggest positive development of Big Ten expansion is that it takes football scheduling after Thanksgiving completely out of the hands of Ron Guenther), the Illini basketball team gathering steam with big back-to-back wins against North Carolina (I don’t care if they’re down this year) and Gonzaga, both the Bears and Bulls leading their respective divisions (Derrick Rose continues to be my favorite active athlete on Earth right now with Julius Peppers vaulting up to #2), the Blackhawks looking a bit better again (although let’s hope Patrick Kane comes back as soon as possible) and the White Sox actually shelling out money for free agents (adding Adam Dunn AND probably keeping Paul Konerko – I love it as long as Dunn doesn’t spend a single moment in the outfield).  Not a bad holiday sports season in the Frank the Tank household so far.  Not bad at all.

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(Image from Husker Locker)