ESPN and Fox Sports are "pushing back" on the Big 12's expansion plans, as they "believe that expansion with schools from outside the power five conferences will water down the Big 12 and make it less valuable, not more," according to sources cited by Ourand & Smith of SPORTSBUSINESS JOURNAL. However, the Big 12 is "financially motivated to add more teams," and a clause in the conference's media deals "stipulate that if the Big 12 expands, it would receive pro rata increases in its rights fees." The original deals pay the Big 12 $2.6B over 13 years, or about $20M per school annually. Expansion by two schools "would force ESPN and Fox combined to pay an additional" $40M per year in rights fees, while expansion by four teams could mean another $80M per year. Sources said that both nets are "digging their heels in against paying those kinds of increases based on expansion with schools outside the power five." Ourand & Smith note the Big 12's "drive to expand is fueled by the opportunity to almost immediately generate more money for its schools." The conference's TV deals run through '24-25 and the Big 12 already "trails the rest of the power five conferences in revenue, so expansion stands out as the only way for the Big 12 to increase revenue." Absent a conference channel, the "only other way for the Big 12 to significantly grow revenue in the near term is to add schools and activate that pro rata clause in its media contracts." Sources said that "kind of cash grab" is "rubbing ESPN and Fox the wrong way because any new schools would not carry the profile of most power five schools, which is what the networks are paying for." In this latest round of expansion, net execs said that the Big 12 is "putting the conference's financial gain ahead of its quality" (SPORTSBUSINESS JOURNAL, 8/1 issue).
TEXAS TWO-STEP: HORNS DIGEST's Chip Brown cited sources as saying that Texas is "reluctant to consider adding more than two full members" to the Big 12 and "unlikely to agree to an extension of the league's Tier 1 & 2 TV rights and grant of rights (which grant a school's TV rights back to the conference)" beyond its current '25 expiration. Sources said that if the "majority of Big 12 presidents and chancellors want four [schools] -- and there's no extension of TV rights/GOR -- then Texas officials might be willing to go along." Sources added that if an "extension of TV rights/GOR are mandated by TV partners for adding two or four, everything could fall apart" (HORNSDIGEST.com, 8/1). The DALLAS MORNING NEWS wrote the networks' "options at the end aren't great." They can "try to argue that 'lower-quality' schools deserve lower-quality contracts, and thus it shouldn't have to pay" the full $20M for a new member school. In other words: "more teams means more games but not necessarily better programming, so giving each school $20 million isn't in line with the spirit of the contract." Another possibility is that networks "could extend the Big 12's contract on the condition it doesn't expand or take just two teams." But Texas and Oklahoma "would have to sign off on extension of grant of rights" (DALLASNEWS.com, 8/1).
STRONG TIES: In Salt Lake City, Jay Drew notes BYU AD Tom Holmoe during a regularly scheduled quarterly department meeting yesterday morning "told the coaches and others present precious little about the Big 12 expansion situation." Sources last week said that several top-level leaders from The Church of Jesus Christ Latter-day Saints, the faith that owns and operates BYU, "visited the athletic department offices and met with high-level department heads." BYU is seen by many as the "only candidate that could potentially add value to the conference." BYU officials have continually said that their relationship with ESPN has "been strong since a contract was worked out between the school and network." ESPN officials have "praised the agreement as recently as three months ago and acknowledged BYU as a fairly substantial television draw" (SALT LAKE TRIBUNE, 8/2).
