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LGHL Could Big 12 expansion chase the Big Ten off ESPN?

Matt Brown

Could Big 12 expansion chase the Big Ten off ESPN?
Matt Brown
via our friends at Land-Grant Holy Land
Visit their fantastic blog and read the full article (and so much more) here


Realignment might just be the force that changes the Big Ten's TV deal.

After the Big Ten meetings a few weeks ago, some administrators began to whisper that maybe, just maybe, ESPN wouldn't be a part of the Big Ten's next TV deal at all. Fox has reportedly purchased half of the Big Ten rights for a cool $500 million dollars, but that still leaves the other half on the board.

Big Ten coaches reportedly still want ESPN to be part of the picture, since that exposure is something recruits care about, but there are a variety of reasons why the two parties may decide to go in different directions. Maybe ESPN, driven to cost-cutting thanks to changing consumer behavior, simply can't afford the Big Ten's asking price. Maybe the Big Ten would like to pioneer new distribution methods, or empower a smaller partner.

But one reporter is suggesting another possible reason for a ESPN/Big Ten breakup, at least for the next TV deal. Big 12 expansion. Here's the crux of the argument, from Dennis Dodd of CBS:

The $1 billion non-decision: We know its television partners have to pay the Big 12 as much as $1 billion if it expands by as many as four teams. That's $1 billion ESPN and Fox theoretically won't have at the same time the Big Ten goes to market to finalize the second half of its deal. Fox is reportedly paying $1.5 billion to the Big Ten for the first half of those rights.

But ESPN/Fox has to pay the Big 12 in expansion if it comes to that. They want the rights to the Big Ten. See how the Big 12 could upset a lot of folks by cashing in?

Essentially, if the Big 12 expands, their current TV partners (ESPN and Fox) have to pay new shares for those new programs. So if each Big 12 program is getting $25 million from TV, ESPN and Fox need to also pay $25 million a year for say, BYU, and then another $25 million a year for, say, Cincinnati.

The argument goes, if the Big 12 is able to reach an expansion decision before the Big Ten finalizes their TV deal, they could suck up enough money from ESPN (or Fox) to drive down what the Big Ten could ask for in the second half of their TV negotiating rights. That could either lower the revenue gap between the Big 12 and the Big Ten, or maybe even drive the Big Ten away from ESPN and to say, Turner, or NBC.

The crux of this argument does make some sense. But I personally don't think it's especially likely.

Dodd's eye-popping numbers ($1 billion in new revenue for the Big 12!) seem to be coming from the assumption that the Big 12 expands to 14 teams. Given the pressures to not dilute the on field product, that seems pretty unlikely. There aren't four candidates who are capable of performing at Big 12 average level right now, at least in football. Given how apprehensive Texas reportedly about expanding at all, getting them to accept four new teams feels like like a stretch. Even getting an expansion to 12 could be difficult. A 12 team expansion means we're talking around $500 million. That's a big difference.

There's also the question of timing. Per Dodd's article, the Big Ten is hoping to finalize their TV deals by Big Ten Media Days in late July. Big 12 commissioner Bob Bowlsby would like to reach expansion decisions before football season starts, but with three Big 12 schools working with interim presidents, a quick turnaround time may not be possible. Unless the Big 12 can identify and secure expansion targets very quickly (not a safe bet, considering how long this process has taken), they might not have the ability to really use it as leverage against the Big Ten.

There's also the matter of maintaining a positive relationship with those partners. Sure, the Big 12 could probably screw ESPN and Fox a little bit by forcing them to pay hundreds of millions of dollars over the next several years to broadcast UCF, Colorado State or Memphis football, properties that wouldn't be worth the money. And yes, doing so could maybe jeopardize their ability to secure more valuable contacts with the Big Ten (or other investments). But do you want that hanging over your head when you go back to negotiate with those same partners for your next TV deal?

Dodd's article says "One Big 12 official gave a 'So what?'" shrug to the prospect of upsetting its rights holders". If that Big 12 official was affiliated with Texas or Oklahoma, that seems believable, but that's harder to imagine for somebody with Iowa State, Baylor, Kansas State or West Virginia, all schools who won't have the broadcast options that the heavyweights would. Potentially torpedoing future contracts seems like it should be politically controversial.

ESPN is a massive company. Even with cost-cutting, they can probably afford a deal with the Big Ten, and I personally hope that they do, even if the Big Ten has to take a modest haircut compared to what they might be able to get from other partners. While I don't think it's likely that Big 12 expansion might be the straw the breaks this camel's back, it may be possible.

If the Big 12 somehow comes to a quick resolution on expansion, before the Big Ten's TV deal is announced, these negotiations could get a little more interesting.

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