Now that Texas and Oklahoma have formally stated their intentions to leave the Big 12 Conference, let’s take a first glance at how the next several months (years?) might play out.
And then we’ll do it again and again and again and again. Because it sure doesn’t feel like this train is slowing down any time soon.
But it could be over sooner than later, and the guess here is that that’s exactly why OU and Texas are playing this the way they are.
On the surface, the two Big 12 defectors are saying all the right things.
“We’re just thinking about the future here.”
“We’re happy to honor our commitment and stay in the Big 12 for the next four years.”
“We want this to work out for all parties involved.”
It sounds good. But who’s buying it?
Does anyone — those at Texas and Oklahoma or people associated with the Big 12 — really want those two to stick around for the next four years, knowing they’ve got one foot out the door already and probably can’t be trusted to do what’s in the best interest of the Big 12 during that time?
I sure wouldn’t.
Big 12 bylaws state that members that plan to leave the conference are required to give 18 months notice and pay an exit fee that is equal to two years of revenue distributions.
Last year, the Big 12’s revenue distribution was around $34.5 million per school and there were signs that it was headed toward $40 million prior to the pandemic. So that means a total of somewhere between $75-80 million EACH for OU and Texas to leave.
I’m not exactly sure how that money is absorbed or distributed from there, but if it is spread out equally among the remaining members, you’re looking at an additional $18-20 million — roughly a 50% one-time bonus — for being loyal.
Not bad.
Getting back to OU and UT’s willingness to stick it out for the remainder of the grant of rights agreement (through the 2024-25 seasons) this whole thing, at least to me, sounds like a play on behalf of the Longhorns and Sooners to try to make their exit from the conference a little less costly.
They say they’ll play nice and fulfill their contract. The Big 12 says to heck with that. And then the two sides settle on a buyout agreement that is less than the $75-80 million they’re currently on the hook for, perhaps by a significant amount.
OU and Texas can then say, “Look, we wanted to stay until the end of the contract but they kicked us out so we’re paying less.”
Or, worse yet, “We’re not paying.”
The 18 months part of that equation makes this a little tricky. If the Big 12 allows/encourages those two to leave sooner than that, they’re essentially undercutting their own bylaws. So there is some logic behind allowing them to stay at least the 18 months.
But even that is going to be rough. For one, it would put us right in the middle of the 2022-23 seasons and, for two, it would create issues with future scheduling and planning and the like.
The best guess here is that this break-up will become official following the 2021-22 seasons. It’s far too tough to make a move now. All sides would likely lose money in that case. And doing it next May allows both conferences the 2022 summer to make a smooth(er) transition.
If that’s the way it plays out, it should be at OU and Texas’ request, though.
The Big 12 — for now, at least — is in a position of power in that it can demand that those two to pay the exit fees that they agreed to when the bylaws were written.
Anything less is an even bigger abomination than the one we’re already witnessing.
The biggest challenge in all of this is the uncertainty associated with what becomes of the Big 12.
If the conference destined to go down, the eight remaining members should absolutely take every penny they can get from OU and UT and take joy in doing it.
But if the plan is for a revamped Big 12 to move forward with new members, then perhaps some kind of settlement so all parties can move forward more quickly is actually in the best interest of the Big 12 Conference.
After all, when the existing grant of rights contract expires and it’s time to negotiate new TV deals, stability will be your friend and uncertainty can cost you millions.
And then there’s the question about what happens if other teams follow OU and UT out the door, seeking to ensure their own survival and stable futures somewhere else?
There likely will be penalties to pay there, too. But only if the Big 12, in some form or another, survives.
All of those factors, and more, are absolute musts for athletic and university officials at Kansas to consider. And I’m not sure any amount of research and strategic planning is going to lead to an outcome without some kind of financial downside.
