[College Football] Big Ten, Texas have initial talks

If Bebee can follow through on his promise ($14-$17M/Year + Network opportunity), then UT makes out just fine. A t.v. deal like this would be better than the current Pac 10 deal and would be close to or on par with SEC's. Furthermore, Dodds has made it very well known that he wants to start a Longhorn Sports network, he would get this should this deal go through. Basically, Texas would get everything they want (better t.v. revenue and their own network) without having to move.

But if this information is true, sounds like the ball is in A&M's court. If they leave, we're going to the Pac 10. They've said all along that their first choice is to stay in the Big XII, we'll see if they actually meant it.

 

I don't think tamu looked into changing until texas and a few others thought about going west to be with the wine and cheese crowd. Even if nebraska and colorado wanted to ride the train out, if texas qould've said that we can keep the conference together, i think the aggies would've been cool.

 

agreed...its about making more and getting your own network...making tamu the bad guy works too, but I don't see tamu leaving...

 

You're missing the point though. You're comparing the B12's NEXT contract with other conferences CURRENT contracts. Bebee's proposed contract PLUS the BevoNetwork (UT's high end estimates are $3-$5MM / yr) is still less than what Nebraska will get in the *current* B10, not including millions more in CIC funds. When that next B12 contract kicks in, the other leagues will start negotiating much higher deals. No way Texas should be happy with that - it's less than every single alternative on the table for them.

The ONLY reason to stay is because Texas wants to remain the bully on the block. But it absolutely will be at a significant financial loss compared to the alternatives.

 

Just talking about media dollars alone:

Is the opportunity cost of (let's say, for the sake of talking) even $5 million/year to UT that big a deal given the size and resources of the University of Texas? If TX feels they have a better shot at the title game on an annual basis in the Big 12....would that be worth it to them?? Couple that with political pressures and not wanting to destroy rivalries....

 

I'm hearing...and I don't have a link to show you...that Pac 10 may now be pushing back on Ok St and Tex Tech.

 

There are certainly other factors as well. But, for example, the academic side favors the Pac10 - it fills one of UT's big long term goals in research and connections. UT has wanted to go to the Pac10 for nearly 20 years now for lots of reasons besides the money.

I think the idea of making a decision because it would be easier to make the national title game is extremely shortsighted, and shouldn't at all be a deciding factor. Conferences go through cycles, and trying to make 40 yr decisions based on how good your team is now is not smart management. Just 10 years ago, UT's athletics were a mess and not worth nearly what they are now. This is an opportunity to cash in at peak value in a way that benefits the whole university.

Rivalries can be maintained - that's not a constraining factor. Texas would take OU (and TT) with them, and could always play A&M out of conference if they wanted to. There are no other rivalries to consider. Political pressures could definitely come into play - but that goes with my argument. If they pick the B12 for political reasons, then by definition, they are picking the non-optimal choice.

But FWIW, for your original question, I don't think the difference is going to be $5MM/year. I think you're talking *substantially* more than that. The Pac10 deal would have more than twice as many people and many more games televised. Plus, it has the power of being attractive enough for the east coast to carry it as well. That means the TV deal probably is more than triple whatever the new B12 could come up with. Let's run some hypothetical numbers:

Big 12: $17MM/school = $200MM total. Add in unequal rev share and lets say Texas gets $20MM + a $5MM BevoNetwork = $25MM.

That would put my guestimate for a Pac10 total deal in excess of $600MM. Divided by 16 schools, you're at $37.5MM.

So even with equal revenue share and more schools, you're talking about 50% more money, plus academic benefits and fulfilling one of UT's long-term objectives. That also ignores that the Pac16 would have the fastest growing population in the country, so the discrepencies would only grow over time to favor the Pac16 over a B12. And, you get much more stability than the B12 can ever provide.

 

Well, now it's "MadMax is quoted as saying..."

 

Major:

I know there are tons of factors...more than we're even considering. That's why I just wanted to break it down on media dollars, alone.

I don't know if the Pac 16 guestimates are right....and I don't know what UT decision makers think about those guestimates.

I'd also point out that, while there may be more TV's, that doesn't necessarily translate into ratings, which is all the networks care about. Do we know what Pac 10 football ratings are compared to Big 12? I have a difficult time believing that Oregon and Washington do anything close to what Nebraska, Oklahoma or Texas do in terms of actual ratings. College football isn't religion in that part of the country.

If it's as big a no-brainer as you say it is, then it will happen...no matter what. That's why I can't assume it is as big a no-brainer as you say it is.

Read below:

http://www.cnbc.com/id/37636000/16_Team_Conference_TV_Deal_Not_a_Slam_Dunk

Barry Frank knows more about TV rights money than just about anyone. And the executive vice president for IMG Media who has negotiated a slew of television deals in his years in the business has this to say about adding the 16-team conference that is developing with the Pac-10: The math might not work.

Here's why.

First of all, Frank explains, each team isn't equal in terms of the money they can bring in to the conference. In fact, not many teams—including Colorado, the only one who has thus far accepted a bid to leave the Big XII for the Pac-10—pay for themselves.

"Texas does and that's why they'll get paid a bigger share of the television money if they move, just like they received a bigger share in the Big XII," said Frank, who negotiated the new BCS deal with ESPN in 2008 and the new ACC football and basketball rights deal, a bidding war also won by ESPN.

Then comes the fact that, with more teams, rights fees might not increase enough for a 16-team split to make sense for the conference.

Right now, the Pac-10 TV deal, which expires in two seasons, pays teams $96 million total. The conference has thrown out the idea that, with the new teams, the package will automatically double. But how much bigger can the deal really get?

For comparison's sake, the Big XII is pulling in $72 million a year (though its Fox Sports Net component expires after the 2012 season). The ACC's deal is worth $155 million a year, the SEC brings in $205 million a year and the Big Ten's total coffers are worth about $220 million a year.

"People have to remember that the way the cable channels decide how much they can pay is by determining if they can increase their subscriber fee or advertising," Frank said. "ESPN already has the highest fee out there, so the cable operators aren't paying anymore there and there's probably not much growth in advertising either."

Why? Because if the new teams play in a split conference that is essentially the old Big XII plus Arizona and Arizona State, there aren't that many more games that will draw much bigger ratings than the old Pac-10 did.

With ESPN out of the picture, Frank says Fox—in Fox Sports Net, its current partner, and FX, which is transitioning into a weekend sports channel — is the most likely option to grow fees. Frank says there's a chance that cable operators will pay 25 to 50 cents more per subscriber to those channels that could lead to more money.

Then there's all that buzz about starting a new TV network. The partner is likely to be Fox, which currently is partners with the Big Ten in its network. That means there would be one check being cut to the league for both the outside deal and the network partnership with no competition in the marketplace.

Something also kept out of the public conversations thus far, Frank said, is the fact that starting up a network includes a huge monetary investment by the schools.

"It's great to have a 24-hour network," Frank said. "But you also have to realize, it costs about $25,000 to broadcast that volleyball game or $60,000 to do the track meet."

For the Big XII teams themselves that are considering the jump with Colorado already gone (Texas, Texas Tech, Texas A&M, Oklahoma and Oklahoma State), the deal seems worth it. Even with more to divvy up, they'll likely earn more than what they make in the current Big XII.

It might not work out as well for the the Pac-10's current partners as adding Texas to Colorado and closing up shop might make the most sense for each team to be able to pull in the most money.

Frank said that each team will be paid by the Pac-10 in TV money what the new conference thinks they are worth and that's where this will either turn into being a good or bad deal for the conference. Bottom line is, some teams don't add much value. They'll be paid a smaller percentage of what might be a bigger pie, which also would have to be split in 16 pieces.

"It's getting more technical every day," Frank said. "There's a great deal of math going on and it's very sophisticated."

From a television standpoint, and that's where the money is obviously coming from, Frank seems a little surprised at all the talk of movement, which in the end, might just be fool's gold.

Does Nebraska's likely move to the Big Ten make sense for the conference, considering the fact that there would be another partner to split with?

"Probably not," Frank said.

And how about the talk of the Texas A&M to the SEC?

"That's not worth it to the SEC either," Frank said. "I can't imagine adding a team that would improve on what they already have."

 

no no no!!!

it makes me nervous to share some of this stuff at times, though....because i don't want to get friends in trouble. i've not shared everything from every thing i've heard....and....i was RELIEVED when i mentioned something earlier and found Chip was reporting it within about 10 to 15 minutes of me posting it.

 

They can't decide to only play the Aggie at a location of their choosing. This isn't some 1-1 series. They are in the same conference. Nobody gets to pick and choose. TAMU will do it if they want to. LSU yes, Bama no.

 

i think its too late. the horse is out of the barn.

ut aims to be one of the top public universities (ucla, cal, washington, michigan, ohio st, north carolina, wisconsin, etc.)

pac 10 gives you that opportunity, smaller big 12 or sec doesnt.

 

UT IS one of the top universities already

 

Chip Brown sticking with his story:

http://twitter.com/ChipBrownOB

My sources say Texas is committed to coming to the table with the 10 remaining B12 schools to see if there's consensus for the Beebe plan.
26 minutes ago via TweetDeck

 

not in the same league as cal, ucla, michigan...

 

UT already is all that. They don't need an athletic conference to validate that.

 

maybe not Cal, but I believe they are in the same league as the other two.

 

wow... mistake for ut if true.

 

My guess at new Big 12 (someday):

Texas
A&M
Baylor
KU
ISU
Mizzou
Tech
KSU
OSU
OU
MEMPHIS
ARKANSAS

 

IF (and it's an IF, because i'm not sure) what i'm hearing is right...that there is push-back from the Pac 10 on Tech.....

then I think Texas has a hard sell politically to leave behind Tech, BU and split with A&M all at once. That's a lot to swallow.