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Wednesday, March 14, 2012

Reports: Big 12, ESPN near $1.3 billion TV deal

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The Big 12 and ESPN are close to a nine-year, $1.3 billion extension of the conference’s current television contract, according to reports by SportsBusiness Daily and CBSSports.com.

The extension, when combined with the Big 12’s existing Fox TV deal, would bring the conference’s total TV revenue to $2.5 billion through 2025. By SportsBusiness Daily’s calculations, each school in the 10-team league would make $5 million more per year under the new deal, with total TV revenue pushing close to $20 million a year.

“We have an existing agreement with the Big 12 that has four years remaining,” ESPN vice president of communications Mike Soltys told SBD. “We are in regular conversations with all our partners about future opportunities. There’s nothing beyond that.”

Comments

Randy Bombardier 2 years ago

With all the expansion stuff and shaky conference I have concluded that we need to align ourselves with the state of Texas and its legislature. If SMU and perhaps Rice and Houston are allowed to join into the Big12, then Billion Dollar Bevo or not the idea of UT sitting at the top begins to crumble. Once the power base of UT starts eroding and it is seen less and less as the big dog of the State of Texas, the power will be diffused throughout the conference.

The Legislature of the state of Texas will get behind getting as many of their universities as possible into the conference for what it will do financially for those schools. Eventually, the facilities of the schools will catch up with the rest of the conference and Texas will have to start sharing a whole lot more with its fellow Texas schools. Their stature and power will be moderated while the status and power of the fellow Texas schools increase.

Meanwhile, we stay regional although it blows my mind that Houston is about as far as Morgantown. Add Colorado State, Air Force, and BYU to get us to 16.

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Jayhawk3 2 years, 1 month ago

I don't like the idea of Super conferences, but it looks like they are going to happen. If there is any good that would come from them, it's that Super conferences would likely mean the end of the BCS system. Either that or they would edit the only 2 teams per conference to 3 or more. I can't see 3 or more leagues with 16+ teams and still having the only 2 BCS teams per conference rule. That would mean more mid major teams would get invites, so maybe we could see a playoff system if these Super conferences do happen.

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BPSkelly 2 years, 1 month ago

The reality is this TV is more or less a "holding serve" deal. Not bad, not great.

A friend of mine in the TV industry has stated to me many times that the further West you go, the less TV people watch. For paid TV (cable/sat) channels (ESPN to name the biggest one here) the actual numbers who "watch" isnt nearly as big of deal as how many "subscribers" they have. Thats where ESPN really rakes in the cash.

The over the air does rely on big time ad revenue, obviously. So eastern time zone teams likely have more room for error. Not any old eastern time zone team would do though, obviously. Having a big following would help.

Which is also why I dont see any expansion at all anytime soon. Why? Any expansion that DOES happen is going to have to move the needle enough so that all the existing 10 teams cut of the pie either grows or most certainly doesnt shrink. There are teams out there that fits the bill. But im not sure about a whole lot of them. Question is it viable that any of them would move to the Big 12 for "big bucks".

The talk of 'disgruntled' ACC football schools sick of the "Tobacco Road" schools dictating things doesnt seem to have a whole lot of merit. While there is some disconnect between UNC/Duke/Wake/NCSt. and the rest of them, it doesnt sound like any of it is like the BS we've faced with Texas. Could some of these teams jump ship? Maybe, but I dont see it. FSU, Clemson, Miami, Ga Tech as an "Big 16 South" has a nice ring to it though. But im not holding my breath.

I do think if Jack Swarbick becomes Big 12 commish they'll be a lot of play / run / chat / bs about Notre Dame's possible inclusion. This sounds like pie in the sky now, and I dont see that changing. People think UT doesnt like to be told what to do, Notre Dame has never been told what to do. They may not dictate college football like it once did, but I think unless the BCS stuff forces their hand -- and it may -- I cant envision them joining anyone, much less us. Why do you think they want the BIG EAST? Over the air TV on NBC? Yup. Losing eastern viewer isnt something they'll wanna do.

I still think Louisville is the most viable addition. Question is, where is there a "match" to make it work? I dont view Cincinnati that way, nor do others. And most importantly, the TV folks dont at all. I will tell you that Louisville has a cult like following for hoops that rivals ours though. And having that in the conference would only enhance things. But I dont know what it does for football. Probably not much.

Time will tell. But wouldnt be suprised if we're still at 10 in 3-4 years. ' Or... Big 16 "North" - Notre Dame, West Virgina, Louisville, Iowa State. Big 16 "South" - Clemson, Florida State, Miami, Ga. Tech Big 16 "Midwest" - Kansas, Kansas St., Oklahoma, Oklahoma St. Big 16 "Southwest" - Texas, Texas Tech, Baylor, TCU

Hey, I can dream, cant I ?

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missouricat 2 years, 1 month ago

You better look for a different conference before it's to late and you're left out in the cold. That is a word of advice.

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Sparko 2 years, 1 month ago

Here is a case where Jaybate is basing his arguments on incomplete data and getting everyone worked up. This deal may be the best one available for the time being, allows for expansion, allows for renegotiation, and is comparable with other power conferences school for school pay-out wise. The Big XII can marginalize the SEC by beating them on the field. We need to ensure an intra-conference "National" championship never happens again.

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Alohahawk 2 years, 1 month ago

The headline is misleading, because it leads one to believe that it's a ton of money. However, when you break it down into segments the truth comes out.

Divide $1.3 billion over the nine year contract. Then, break it down further by dividing the pie between 10 schools. And if you really wanted to get technical, divide those amounts by the number of games that are broadcast. Now how much is "each" school being paid by ESPN so it can broadcast "each" of those games?

It's sort of like receiving a keg of beer for a party. It sounds like a lot. But then you find out the whole neighborhood has been invited. And suddenly, you're happy if there's a second cup left for the second go round.

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Robert Brown 2 years, 1 month ago

CalHawk- With the exception of the Tulane comment, I agree with your assessment.

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Travis Clementsmith 2 years, 1 month ago

I would be leary of holding out for a B!G offer. If one pays attention to what the conferences and schools actually say, the B!G said if it does expand it has to look towards where the population is moving, the South and the West. The B!g makes their money on expanded TV networks, a model the SEC wants to copy, which is the main reason Missouri got an invite.

The best case scenario for KU, as mentioned earlier, is expansion east, and largely in SEC territory. Florida State, Clemson, Georiga Tech and Louisville should get highest priority. After that, hold out for Notre Dame to see if they want to join the party and then add a regional school for travel considerations. Pitt, then Cincy. If Notre Dame is still stubborn, then one might take a chance on Miami, but they have had so many troubles lately, I don't know if they are worth it. One could consider a school for academics and TV market like Tulane, but that shouldn't be a first option.

Arkansas is not coming, so everyone should just forget about poaching teams from other dominate conferences other than the ACC and Big East. The revenue streams are locked in there and only getting bigger.

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jayhawkinmullen 2 years, 1 month ago

From what my sources are telling me ESPN will not be around in 5 years. And I do have good sources. (Andy Katz)

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TulsaJayhawk 2 years, 1 month ago

ESPN is part of ABC who is owned by Disney.

Current ESPN executives: John Skipper: President, ESPN, Inc.attended UNC, and Norby Williamson: Executive Vice President, Programming attended Southern Connecticut State University.

Current Disney executives: Robert Iger – President and CEO, Jay Rasulo – Senior Executive Vice President and CFO, Alan N. Braverman – Senior Executive Vice President, General counsel, all attended east coast universities.

East Coast Bias!

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Tony Bandle 2 years, 1 month ago

If the Big Ten knocks on our door, not only should we open it as fast as possible but we shouid carry them over the threshold and marry them on the spot!!!!

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Chris1955 2 years, 1 month ago

I still have the sense that KU is trying to straddle the fence between staying in the Big 12 and moving to the B1G TEN. I think that KU checked in with the B1G TEN and found a generally receptive response that was based on certain conditions for an invitation form the B1G TEN being met over a fixed time element, say 5-6 years. Here's why I think so.

Since surviving the last round of conference realignment, we fired Turner Gill exceptionally early into a 5 year coaching contract (yes, it was warranted), and brought in Charlie Weis. Many KU fans were surprised by the outside the box aggressive nature of the hire, along with the quality resumes of the assistance coaching personnel. I think many would agree that this move was predicated on a very fast turnaround.

Look at the non-conference BB game scheduling discussions with Nebraska. On the surface, does this look like anything that would really financially benefit KU? Is it possible that this is being done with the intent of finding a supportive member who would be inclined to vote in favor of accepting a KU membership into the B1G TEN?

If we are in the process of tightening student admittance criteria at KU, and I don't know if this is occurring, this might also be a sign of things to come.

It's always nice to have options!

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Robert Brown 2 years, 1 month ago

Beware of internet rumors and comments. HOWEVER, I found this posted on a Florida State message board after a blog post about the extended Big 12 TV contract. If true, maybe this isn't so bad. By the way, there is alot of discussion about some of the ACC schools moving to the Big 12.

This was posted by a self proclaimed insider on a UCONN board (so he’s got no clear pro-Big 12 interest). It’s only for the purpose of throwing some information out there when there is precious little.

The guy claims to work in the media, specifically in valuation of teams/conferences. Take it for what it’s worth. They guy comes off as credible, but who knows?

"Everyone likes the 10-team format they have now. However, as I stated in the ACC thread, they will expand if the right teams are receptive to their inquiries. There is no doubt they will reach out to Florida State, Miami, GA Tech, Clemson, NC State, VA Tech, and Arkansas, and possibly Pitt & Maryland (along w/ Louisville, whom they’ve already had discussions with). If the right combination of teams are interested, they’ll make a move. If not, they’ll stand pat with 10.

The Big XII made a number of strategically brilliant moves w/ this latest contract. If they sign at least 2 additional teams (there are restrictions on whom), there is an automatic escalator in the contract that will raise the total payout by $2.05M per team (this based on the added conference championship game). And, they negotiated an opt out clause that will allow them out of the deal to take it to market if they expand to 12 or further, with ESPN/ABC having the right of first refusal on the contract. Once the language of the contract makes its way back to the ACC, I think there will be some nervous presidents & a nervous commissioner, b/c the Big XII essentially just got a license to hunt, with guaranteed ammo.

And, what’s better, the ABC/ESPN/Fox contracts the Big XII has are only for Tier 1 & Tier 2 broadcasts. So, teams are free to shop their Tier 3 rights. So, just like Texas is netting $10M/season, and KU is netting $8M/season from Tier 3, Florida State, Clemson, etc will have the ability to make $20M + millions more on Tier 3, which would put them above the highest paid SEC teams. "

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William Blake 2 years, 1 month ago

It all sounded soooo good... until I read Jaybate's post.

Why don't we put it on hold and see how ESPN deals with the B10 and SEC first.

We would have a better reference point of negotiation after they pen their deals.

The first step in becoming a premiere conference is to start thinking like a premiere conference. Let the others go first and then use their deal to leverage our own.

Thanks, Jaybate!

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Robert Brown 2 years, 1 month ago

The Pac-12 deal was worth $2.7B over 12 years which is $225M/yr or $18.75M per team per year. The numbers quoted in this article are over approximately the same timeframe, provides $2.5B for 12 or 13 years and would pay about $20M per team per year. On paper, these would be comparable deals.

I do not trust the leadership in the Big 12 to make good decisions. I think they need to get back to 12 or more teams, but they need to make a dramatic move. I think they made a bif mistake adding TCU. It was a deperate move. If WV provides a foothold on the east coast that could bring in some of the football powers of the SEC, that would have been a good move.

http://sports.espn.go.com/ncf/news/story?id=6471380

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ejlumus 2 years, 1 month ago

Neinas probably was a key negotiator of contract. Don't fret there are probably agreements for renegotiation if B12 has expansion.

B12 needs to add two teams ND & BYU, B12 will then be covered coast to coast. Key ... ...No ripple effect with other conferences.

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Michael Maris 2 years, 1 month ago

I'm all for expansion (back to 12 teams), but the Big XII Conference needs to work a TV deal that will allow the conference to expand back to 12 teams (if not more) and allow re-negotiations for an expanding conference. If the TV Networks are allowed to negate TV contracts when the conference looses members. Then, the conference needs to be allowed to renegotiate if and when expansion takes place.

I would love to see the Big XII gain Florida State and other disgruntled ACC football schools. This move would truly expand the conference footprint. But, if those schools are unhappy with UNC, Duke, etc..... due to basketball powerschools ruling the roost. What makes them think that they will be happy with Texas and OU, etc.........?

Perhaps, Florida State will be able to bring equal power to the table against Texas and Oklahoma. But, I'm skeptical this kind of conference addition will ever happen.

Adding Louisville and Cincinnati will help WVU (in giving them conference opponents to have as rivals). It will place 2 more schools in the eastern time zone. But, what actual TV revenue do Cincy & Louisville bring to the conference table? Cincy is in Ohio, where Ohio State rules the roost. Louisville in the state of Kentucky, where U of Kentucky rules the roost. Perhaps, Louisville can gain more fans by being in the Big XII conference. But, Kentucky is in the powerful SEC.

I wish I could find the realignment chart that I seen a few years ago, where the conferences were regionally aligned. The power conferences were aligned in a regional manner that made a hell of alot more sense than what is currently going on these past few years.

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Tony Bandle 2 years, 1 month ago

Just say no!!!!! Never, never, never, never take the first offer when you have the product of interest.

Be patient, be casual, give the impression that it's "a beginning negotiation price", a basis for discussion, if you will.

I wonder if our league leaders have ever had to sell a car, a home or even traded baseball cards.

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midwest_muser 2 years, 1 month ago

It's very fluid right now. I think that ESPN can be sold on "what if". Is it Louisville and FSU or L'Ville and Cincy? Or another team? A negotiating dream...

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eastcoasthawk 2 years, 1 month ago

Agree with JayB8 plus who knows what they will be offering in another 4 years? Look at how these payouts have ballooned over the last 2-3 years and do the math. Smart move to make the offer now by ESPN. Bad move to accept it now by the conference.

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STL_Jayhawk 2 years, 1 month ago

Is this the same ESPN that listed the KU-Baylor game on my U-verse guide in St. Louis last weekend and aired the Ole Miss-Tennessee game instead?

Our conference leaders are a joke. I could actually watch the Big 12 womens games on Friday night but could not watch the mens games.

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Robert Brown 2 years, 1 month ago

How does this compare to the deal signed by the Pac12 last year? I will have to look it up. It would seem that if the Big 12 has 3-4 tears left on its current deal, there is no hurry to sgn a extension.

The conference has been its own worst enemy when it comes to money matters. They let A&M and MU leave with low exit fees and used a portion of that money to pay off the Big East to bring n WV. We need to bring in the guy who negotiated the Longhorn Network for UT. UT gets $15m per year and no one can watch the network. In this deal each school gets about $20m for first tier rights.

The conference needs visionary leadership.

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Robert Brown 2 years, 1 month ago

How does this compare to the deal signed by the Pac12 last year? I will have to look it up. It would seem that if the Big 12 has 3-4 tears left on its current deal, there is no hurry to sgn a extension.

The conference has been its own worst enemy when it comes to money matters. They let A&M and MU leave with low exit fees and used a portion of that money to pay off the Big East to bring n WV. We need to bring in the guy who negotiated the Longhorn Network for UT. UT gets $15m per year and no one can watch the network. In this deal each school gets about $20m for first tier rights.

The conference needs visionary leadership.

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wrwlumpy 2 years, 1 month ago

I don't understand Jaybate, you're saying that if we can't play WVU at 6pm, then we shouldn't take the money. I always thought that our time slot on big mondays and other big 12 starting times gave us the whole country with viewers from both coast. I really think the PAC 12 is dying because no one east of the Rockies stays up to see a game, ergo why would a recruit go to a place where 3/4 ths of the country doesn't watch tem play.

I'm misunderstanding why we should turn this down? It is sad that a sports network decides conference alignments/

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Bangkok_Jayhawk 2 years, 1 month ago

5 million extra a year over 9 years... Sounds like enough money to upgrade Memorial Stadium. LETS DO IT!

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LSHawk 2 years, 1 month ago

I hope we do not do this yet. We need to add several more teams before we do a TV deal. I am still hearing rumors about Flordia St. and Louisville wanting to join the Big 12. If so we need to add them first and then go after an even bigger deal.

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Norm Jennings 2 years, 1 month ago

Agree with concern Jaybate...although not entire premise.

Why would ESPN want to limit options to air...ever...equals greater expense as the remaining top tier conference(s) can then claim even higher premium revenues??

What makes B1G and SEC (ACC for that matter) so competitive is indeed partially eastern time zone and media market accessibility, but I'm not at all sure that these are the fundamental elements used to keep down the Big12 (my words not yours). Enrollment, dollars, endowments, history, etc. among B1G and SEC conferences all play a role...oh and backwards, tentative, and individually self-serving attitudes within Big12 conference members and leadership.

Hopefully re-alignment has delivered a brutal lesson in the this area-- adapt or die! However, paranoia and assuming that entrenching against any future deal with the 800-lb gorilla (ESPN) is bad may produce the same outcome. Big12 should evaluate merits, push the envelope wherever possible, and yes maybe this deal should be rejected, or worked on to better it, or maybe even accepted depending upon realities that frankly aren't visible to most of us fans.

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jaybate 2 years, 1 month ago

Don't take this deal!

Not unless there is a clause that allows renegotiation based on eastern time zone expansion of the Big 12 footprint.

Otherwise, this is just ESPN locking the B12 into second rate, one time zone revenue status with a little sweetener now, while the Big Ten and SEC expand to become the super conferences the B12 could have become.

This deal may sound good now, but it will amount to nothing, when ESPN then locks the expanding Big Ten and SEC three time zone super conferences into huge deals that will dwarf this Big 12 deal.

This deal will tie KU basketball to a Central Time Zone footprint and revenue structure that will make it compete at a a disadvantage it will increasingly be unable to overcome.

The Big 12 and KU basketball have to have Eastern time zone foot prints and revenue structures, or their days as majors are numbered.

That future revenue assymetry will then be used to tear down the B12 once and for all.

Don't let the media-gaming complex keep the Big 12 from becoming a super conference for a little sweetener now.

Don't do it, Chancellor Bernie.

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