It was two and a half months ago that ESPN and Fox agreed to a 13-year, $2.6 billion deal with the Big 12 Conference.
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What’s the catch? The agreement with ESPN and Fox is in the lawyers’ hands.
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But as presidents and athletic directors left the Big 12 meetings last week in Kansas City, the deal still hadn’t been signed, and insiders say an announcement could be weeks away, if not longer.
What’s the holdup? Blame the lawyers.
Sources say the contract is now in front of the attorneys and will lead to a signed deal eventually. But the original agreement in March created a level of strife with some in the Big 12 because the conference declined to take the rights to the open market.
The old ESPN deal with the Big 12 was set to run through 2015-16. While the new terms represent sizable increases in revenue for the conference, some league officials wanted to wait and see what the open market would bring in a few more years rather than tie themselves up in a long-term deal. There was a concern within the Big 12 that the conference might have left some money on the table by not waiting to open up the bidding to other networks. In the past few years, other sports rights holders have found that open-market bidding has helped push rights fees higher.
The problem was that the Big 12 couldn’t have gone to the open market with a full rights package. The only package that was expiring was ESPN’s broadcast-only football package. Last spring, Fox tied up the conference’s cable rights through 2024 as part of a long-term deal. The conference would not have been able to take those rights to market.
Sources said a round of new talks never really got off the ground and the three parties are back to hammering out the details of their original agreement — a single contract that outlines the specifics for ESPN and Fox, which have a similar joint arrangement with the Pac-12.
“This is just a radically different kind of deal,” one source said. “What started with maybe 100 issues is down to about a dozen. It’ll get done.”
All this is going down just as the conference looks ahead to the change in commissioner from interim Chuck Neinas to the newly hired Bob Bowlsby, whose first day officially is June 15.
The new television deal will pay the Big 12 schools an average of $20 million per year, making it among the most competitive college sports deals on a per-school basis. Big 12 schools also have the ability to monetize games that are not selected by ESPN or Fox.
Though the total value is not as rich overall as the Pac-12’s $250 million-a-year deal or the ACC’s recently completed contract with ESPN for an average of $240 million, the Big 12 is distributing the revenue to only 10 schools, not 12 like the Pac-12 or 14 like the ACC.
The average of $20 million per school per year is a sizable jump from the $15 million-a-year average the schools had just a year ago when the conference first extended its Fox deal, which at the time was separate from the ESPN deal.
The Big Ten and Pac-12 will distribute a little more than $21 million per school per year as part of their media deals, while the ACC and the SEC are around $17 million per school annually.
The SEC is in the midst of negotiating increases for its media rights agreement with ESPN, which is expected to include a new SEC cable channel. The Big Ten and Pac-12 schools do not have the ability to monetize any of their football and basketball games because they have pooled their rights with the conference to form TV networks. The ACC and SEC, like the Big 12, currently have greater flexibility to monetize games not picked up by the networks, either through pay-per-view, local TV broadcasts or online broadcasts.
Several reports of possible Big 12 expansion have mentioned Florida State and Clemson from the ACC, Louisville from the Big East, and independent BYU as potential targets, but the conference’s leaders have consistently stated their desire to stay at 10 schools for the near future.
TCU and West Virginia were added after the conference lost Texas A&M and Missouri to the SEC, and earlier lost Colorado to the Pac-12 and Nebraska to the Big Ten. TCU and West Virginia begin play in the Big 12 this fall. Missouri and Texas A&M start playing in the SEC this fall as well.
