***Official Big 12 Expansion Thread '16***
- Thread starter cyclones500
- Start date
I think the fundamental struggle is the Big12 TV contract pro rata clauses will pay each existing Big12 school up to $25M annually. Sure the contract with ESPN/FOX will pay the same amount for expansion schools through 2025. However, it doesn't appear any expansion school is worth that. For instance BYU currently receives around $1.2M per game from ESPN for its home games.
When it comes time for the Big12 to negotiate its next contract, the pro rata payment per school could be less than $25M. Long-term (post 2025) any school added today should be accretive vs. dilutive to the pro rata payment.
IMO the idea the Big12 should add schools for the short term financial gain is exaggerated. Using the $25M pro rata payment. If the 2 new schools receive $15M each annually, that means the 10 existing schools would each earn $2M more annually. Hardly chicken feed, but not a gold mine the media portrays as a "money grab". Plus its probably in the long term best interest for the expansion schools to only receive the lower payout for 3-5 years.
As this has played out, I am beginning to feel stronger the Big12 should hold off on expansion unless existing P5 schools can be added. I feel there is a low probability that will happen in 2016/17, but I like that possibility in 2022/23.
When it comes time for the Big12 to negotiate its next contract, the pro rata payment per school could be less than $25M. Long-term (post 2025) any school added today should be accretive vs. dilutive to the pro rata payment.
IMO the idea the Big12 should add schools for the short term financial gain is exaggerated. Using the $25M pro rata payment. If the 2 new schools receive $15M each annually, that means the 10 existing schools would each earn $2M more annually. Hardly chicken feed, but not a gold mine the media portrays as a "money grab". Plus its probably in the long term best interest for the expansion schools to only receive the lower payout for 3-5 years.
As this has played out, I am beginning to feel stronger the Big12 should hold off on expansion unless existing P5 schools can be added. I feel there is a low probability that will happen in 2016/17, but I like that possibility in 2022/23.
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We need to remember he was addressing the Oklahoma BOR. As a public university president he is obligated to keep the board updated and records of what are said is public information. So the best he can do in that forum is a general statement.
I don't get this sentiment. If theyre going through this excersize and it is showing that there aren't any worthy candidates, then why expand? Think of it as a hiring manager. If you take the time to post a job description and take applications, you're still not obligated to hire unless you find someone that'll help your company. Hiring the best of a group of non-qualified candidates is much worse than not hiring at all.
Do not understand Boren's talk about whether it will be good for the networks. The Big 12 needs to do what is best for the Big 12. The networks can take care of themselves. They made contracts with our league. If they are having second thoughts maybe they should be a little more stingy with the Big 10, and ACC. Don't understand why the hens in the chicken house are concerned about the welfare of the fox.
Or get what we are entitled, instead of watch while the networks systematically take our top members for other conferences, and use Big 12 profits to secure the Big 10, SEC and ACC as long term inventory.
"Entitled"?
You think this league is entitled to benefits from the networks? This league will get what the market says they deserve. Entitled? We'll see what we're entitled to when the Big 12 plays hardball and we're trying to make a deal with Twitter or Hulu for rights.
Anger the broadcast partners. I sure hope that's very low on the expansion criteria
In the end, the networks will pony-up more money to existing schools, and there will be no expansion. That's my bet today. BYU has all kinds of associated political correctness issues that will dissuade league's liberal presidents. Houston will not get support from old Big 8 schools due to recruiting concerns. The other candidates add little.
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I can understand the arguement we should take full advantage of the current TV contact, but in 7 years the Big12 could very well be sitting across the table from ESPN/FOX wanting another long term deal. The networks will do what makes financial sense, but I am sure they will have a long memory. So maybe they lower the price.
If the Big12 is going to get what its "entitled", then it better be sure today that there will be new and deep pocketed companies willing to bid on the Big12 TV right package in 2023ish. At this point new carriers like Netflix, Amazon and Apple are just speculation and who know if they will be willing to pay equal or higher rights fees. Up to this point CBS and NBC Sports channels haven't shown a willingness to spend big money, other than NBC on Notre Dame.
As I mentioned in my prior post, adding 2 teams many only result in $2M more annually for ISU if existing Big12 schools take a cut of ESPN/FOXs pro rata rights payment for the new schools. Over the remaining years of the current contract that might total $15M for each existing Big12 school. Not sure any president or AD would be willing to take that risk.
The obligation of the Big 12 members is to maximize revenues and profits, for the benefits of all league members.
Historically radio lost out to network tv, network tv lost out to cable tv. In the future cable tv could well lose out to another computer generated medium. Is it wise for the Big 12 schools to turn down a sure $2,000,000 for what may or may not be sports viewing in the future? The BIg 12 cannot save cable tv if the future for sports viewing is something else.
It is time to see who wants to be a part of this league now, and how much our group of schools can generate in revenues. We control our futures. We can maximize our revenues. The decisions we make now will determine our destiny. Don't be so sure the networks have our best interests at heart. They may be just maximizing their own short term profits. There will be plenty of new faces sitting across the table from each other in 2022 or 2023. Doubt much concerning 2023 will be put in writing today. It probably will be a whole new ballgame based on what things look like in 2023. If we have a desirable product in 2023 the market wants to view, do you think the ancient history of 2016 is going to carry all that much weight? Maybe if old history is so important the networks should be paying restitution to us for what was lost in our four departed members. Doubt we see any of that though.
Historically radio lost out to network tv, network tv lost out to cable tv. In the future cable tv could well lose out to another computer generated medium. Is it wise for the Big 12 schools to turn down a sure $2,000,000 for what may or may not be sports viewing in the future? The BIg 12 cannot save cable tv if the future for sports viewing is something else.
It is time to see who wants to be a part of this league now, and how much our group of schools can generate in revenues. We control our futures. We can maximize our revenues. The decisions we make now will determine our destiny. Don't be so sure the networks have our best interests at heart. They may be just maximizing their own short term profits. There will be plenty of new faces sitting across the table from each other in 2022 or 2023. Doubt much concerning 2023 will be put in writing today. It probably will be a whole new ballgame based on what things look like in 2023. If we have a desirable product in 2023 the market wants to view, do you think the ancient history of 2016 is going to carry all that much weight? Maybe if old history is so important the networks should be paying restitution to us for what was lost in our four departed members. Doubt we see any of that though.
Who's "we"? Texas and Oklahoma control our future. The rest are holding their collective breath.
Entitlement. Restitution. I would rather see a partnership and working relationship.
We have an agreement with Texas and Oklahoma that can truly be considered a "partnership" or "working relationship", whereby we agree to share revenues pro rata The network not so much. Yet you diss UT or OU. Why do you feel we should seek a similar arrangement with the networks?
Diss? It's readily evident that OU and TX are the bedrock of the conference. Lose them and it's over. ISU is attached to their wagon. No one is overly worried about keeping ISU happy and bringing $$ to the pool
What I don't agree with is your scorched earth thinking about the networks. They write the checks. A money grab for funds the league is "entitled" to isn't a wise move to make. The Big East is gone. The networks can make or break this conference now and in the future.
Seems much more wise to work with them and not flip them the bird and let the chips fall for a 2016 money grab
Asking a network to perform on a contract that they signed willingly is not a "scorched earth" policy. It is also not flipping them the bird. It is exercising a clause of a contract as it was previously agreed and formally executed. The networks made this agreement without the Big 12 putting a gun to their heads. We are in full consultation with them as we consider expansion. What happens in 2023 is not now and never has been a part of our past media contract. We do not have any control now nor can we gain control over what the networks may do in 2023.
This is business. It is not some board game where everybody needs to just get along and we should be worried about what the neighbors might think. If ISU and several other teams have a vested interest in Texas and OU staying in this league as you say, the way to help that happen is put more money into everyone's pocket. What our partners want is a check to cash and road to play and win the national championship. You cannot force them to sign a GOR they do not want to willingly sign. The problem with our conference is it has been reactive instead of proactive.
It is long past time we take the initiative and make some positive things happen.
This ^^^ is absolute horse poo. Anyone who has been or is in business at a senior level knows that partnerships work when they benefit both parties. And contracts are often modified to meet the needs of both. If one party uses contract language to beat down the other, then the former best be ready to put up with the long term ramifications. The attitude seldom if ever works for either. It may be taught in business school. But it's seldom practiced.
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If the Big 12 tells Fox and ESPN to go pound sand and adds four Sun Belt teams, then the conference is doomed
The only expansion that works is if something makes sense for everyone. With the BYU issues I think this is only possible if the northern schools are psyched about Cincinnati. I could see UH and UC in order to extend the GOR and that might be just enough for the TV networks to be alright with the pro rata raise.
The only expansion that works is if something makes sense for everyone. With the BYU issues I think this is only possible if the northern schools are psyched about Cincinnati. I could see UH and UC in order to extend the GOR and that might be just enough for the TV networks to be alright with the pro rata raise.
Not to mention the likely possibility that if the Big 12 adds a bunch of crap, and then tries to force the networks to pay a premium for the crap (i.e. much more than the crap is worth), this will probably end up in court. The networks have a good faith and reasonable expectation that the conference will expand with teams that are commensurate with the money that the networks have agreed to pay for expansion.
Poor defenseless Disney. Poor woeful networks. I am sure they are being severely disadvantaged by the Big 12 and will be taken advantage of in our expansion. They are dignified to have expensive law firms negotiate carefully written contracts that they have no intention of ever honoring.
This isn't either parties first rodeo. The networks know exactly what they have agreed to and what they have planned for the future, and what their contractual obligations are. The question is not whether the networks are going to be taken advantage of, or how the Big 12 is being an ungrateful partner. Rather the more important question is the Big 12 going to take a stab at making a future for itself. We have explored our opportunities and are confronting the networks with proposals. Its coming time for our "benevolent partners" to be forthcoming in their intentions toward the Big 12.
This isn't either parties first rodeo. The networks know exactly what they have agreed to and what they have planned for the future, and what their contractual obligations are. The question is not whether the networks are going to be taken advantage of, or how the Big 12 is being an ungrateful partner. Rather the more important question is the Big 12 going to take a stab at making a future for itself. We have explored our opportunities and are confronting the networks with proposals. Its coming time for our "benevolent partners" to be forthcoming in their intentions toward the Big 12.