SBD/Issue 189/Sports Media

Promise Of FSN Extension, ESPN Stability Helps Big 12 Stay Intact

ESPN Not Asking To Reopen Big 12 TV Deal
Despite Departure Of Colorado, Nebraska

The Big 12 was able to stay intact thanks to the promise of an extended media deal from FSN and assurances from ESPN that it would not demand a lower rights fee with two fewer teams. No FSN deal has been signed, and nothing is expected for several weeks at the earliest. But sources say FSN has told Big 12 officials that it would increase its annual payout to as much as $130-$140M per year. It currently pays $19.5M per year for the cable TV rights, a deal that ends following the '11-12 season. As part of its proposed deal, FSN has asked to take control of the conference's third-tier rights that are currently controlled by rights holders IMG, ISP and Learfield, sources said. These rights include radio, local media, third-tier TV rights, corporate sponsorships, and in-stadium and arena signage. It is not known when these rights will be available. Another important component to the Big 12's decision involves ESPN. Big 12 schools were concerned that ESPN would demand a lower license fee, since the conference lost two of its marquee schools -- Colorado and Nebraska. The Big 12 approached ESPN and received assurances that the network would not seek a rebate from its current $60M per year deal that runs through '15-16 (John Ourand, THE DAILY).

PROTECTING WHAT'S YOURS: In Ft. Worth, Jimmy Burch cites sources as indicating that the new Fox deal will "last for 18 years -- well beyond the typical stretch for a TV rights deal" (FT. WORTH STAR-TELEGRAM, 6/15). In Dallas, Chuck Carlton cites sources as saying that FSN and ESPN "reacted with concern to Pac-10 plans to add major schools in Texas and Oklahoma and place them on a conference TV network" (DALLAS MORNING NEWS, 6/15). USA TODAY's Carey & Berkowitz report Big 12 Commissioner Dan Beebe was "apparently able to save his league by convincing members that a 10-school conference could be just as financially lucrative, if not more so, to the institutions as a 16-team Pac-10 would be." Sports media consultant John Mansell believes that Big 12 schools "could see those projections being reached because of ESPN/ABC's and/or Fox's desire to not have to compete with a Big 12 Network." In addition, Texas is "exploring launching its own television network" with the help of multimedia rights partner IMG College. Navigate Marketing President A.J. Maestas said, "IMG is ready to move on a network." Maestas said projections that UT, Texas A&M and Oklahoma could earn $20M annually are "too high, just not realistic" (USA TODAY, 6/15). 

DEFENDING HIS TURF: SI.com's Andy Staples reports Beebe on June 1 sent an e-mail to presidents of the Big 12's member schools, predicting that a "network would pay more to televise Big 12 football games." Beebe in a white paper attached in the e-mail said, "Conversations with Fox indicate their bullishness about competing in the future for our rights, and they have already made overtures about their willingness to pay exponentially higher rights fees than those in our current agreements. A primary driver of higher rights fees are competitors for the rights and all information is that there are more serious bidders about to enter the marketplace." He also warned that the move to "superconferences in a blatant cash-grab would have invited 'more governmental, legal and public scrutiny' and could have resulted in athletic programs losing their tax-exempt status and possibly the payment of athletes for their services" (SI.com, 6/15).

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