Conference reset slows as Big 12, Pac-12 may realize they’re worth more together than apart

Restoring the conference has become an increasingly frustrating effort to squeeze dollars out of a system that has consolidated resources at the top. The best brands and most money are among those 32 teams in the Big Ten and SEC — and the networks that own their primary television rights (ESPN and Fox).

Everything else has become a scramble to the point that one source inside the Big 12 said a worst-case scenario would be nothing happens in the league. That would mean staying at 12 teams with BYU, Cincinnati, Houston and UCF in the bracket after Texas and Oklahoma leave before the 2025 season.

Some Big 12 athletic directors are concerned that the conference’s media rights dollars won’t stretch far enough to add more programs without reducing their payouts. Outgoing commissioner Bob Bowlsby testified last summer that Texas and Oklahoma brought 50% of the value of the rights to the league.

The same reality is emerging for the Pac-12. Even with Oregon and Washington — the two top brand names remaining among the 22 schools still in the Pac-12 and Big 12 — there isn’t much the conference can take advantage of.

Do the math. There seems to be a consensus forming among the major parties that the Big 12 and Pac-12 will be worth more together, in some form, than separately.

“Let’s say the blood donation stops at SC and UCLA. Right there, you can’t get an increase in entitlement fees because you lose [L.A.] market,” said Bobby Hacker, a West Coast sports media attorney and consultant who spent 18 years as vice president of business and legal affairs for Fox Sports.

Hacker continued: “Now you have the Pac-12, which had a less valuable rights deal than any Power Five group. They’ve now lost the LA market. There are no teams here to replace it with. And if you say, “We’re going to take San Diego State,” there’s a push in the conference because a San Diego State or Fresno State doesn’t have the academic cache that the schools had.

“If Oregon and Washington go, Katy closes the door. The option in my mind is the Big 12 merger.”

A mindset of isolation seems to have set in … for now.

The Pac-12 is in exclusive negotiations with Fox and ESPN. The Big 12 continues to study expansion. New Big 12 commissioner Brett Yormark made it official with his “open for business” comment at his conference media days last week.

The Big 12 wants to be taller, younger, fresher. There’s not much that’s cool, new, and cool about an Iowa State-Cincinnati game.

Conference reorganization news and notes

SEC chiefs are not keen on moving beyond 16 teams at this moment. That suggests any decision Notre Dame makes about the Big Ten will be isolated and won’t necessarily affect the SEC.

This focuses attention back on Oregon and Washington, the two largest “available” parts. The reason they aren’t already at the top of the Big 12’s list is because they believe they have options centered around the Big Ten. A problem? Neither the Ducks, Huskies nor the pair bring enough value to the Big Ten (in the range of $80 million to $100 million per year), multiple sources tell CBS Sports.

Even if the Big Ten isn’t open for business, why would Oregon or Washington sign a grant of rights with the Pac-12 knowing the conference is vulnerable? That’s how the Pac-12 found itself in this predicament: Former commissioner Larry Scott signed a 12-year deal in 2012 that looked lucrative at the time, but ended the conference at a below-market valuation.

Some have suggested, wherever the schools end up, they are allowed an “out” in the franchise contract if an eventual offer comes from the Big Ten. But why would any conference knowingly devalue its main source of income?

As for the Pac-12, ESPN and/or Fox don’t necessarily want to overspend in a property they’ve already established is far less valuable than the Big Ten and SEC. It’s also not certain that ESPN gets any of the Big Ten’s secondary rights. If they don’t have the Big Ten, maybe that opens their pockets for the expansion of the College Football Playoff, the next big college rights deal on the docket (after the Pac-12 and Big 12).

“I’ve refocused my thinking. I think we’re no longer talking about college sports through the lens of the NCAA, the Power Five,” Hacker said. “College sports are now completely controlled by ESPN and Fox.”

“It’s definitely not iron.” That’s what Kansas City sports attorney Mitt Winter had to say about the ACC franchise as it relates to ongoing anxiety about schools in that conference that will soon be $50 million in year behind the Big Ten and SEC. He continued: “It would be costly to fight back and try to get out of it with an uncertain outcome. I don’t think anybody really wants to be involved in that fight. If they were to get out, they would just accept of some kind of monetary settlement, which would be a large number.”

This figure has been estimated from 100 to 500 million dollars. Clemson, Florida State, Miami, North Carolina and Virginia are the programs most often mentioned as candidates for other conferences.

“There’s obviously no safe loophole in entitlement,” Winter added.

The ACC has borrowed heavily from the Big 12 in shaping its rights grants, sources tell CBS Sports. That deal is keeping Texas and Oklahoma in the league through the 2024 season. Winter said he had input into the drafting of that Big 12 document. Here’s a PDF of the original Big 12 grant of rights signed in 2012. Notice in the “deal for membership” where members “agree” to stay together for 99 years.

However, this is different from the current vesting, which states that any school that leaves the conference must pay back the last two years’ worth of revenue distribution. In that case, Texas and Oklahoma would both owe about $90 million to leave early for the SEC. Now you’re getting an idea why, to date, both schools have committed to the Big 12 during the term of their deal.

If you want to be a conspiracy theorist, consider the possibility that this round of realignment could lead to a less important conference, potentially meaning a less guaranteed spot in an expanded playoff. The original proposal to expand the playoff to 12 teams, rejected in January, included slots for the top six conference champions. A merger of the two powers or the collapse of one creates greater opportunities for at-large berths for the Big Ten and SEC.

That was the underrated angle when the Big 12 was rebuilt last year, whether to remain in the Power Five after reconstituting with the Group of Five schools. This can be answered in real time. If the Pac-12 is absorbed by the Big 12 in some form, it would help strengthen the case for being a Power Four league.

With only four major conferences, would there be a temptation to distribute uneven playoff shares to the leagues below the Big Ten and SEC? Currently, the Power Five conferences are contracted to receive the same money — about $57 million each — through the 12 years of the CFP agreement that expires after the 2025 season. The 65 Group of Five teams split $83 million.

Another example of that growing gap: With the addition of USC and UCLA, the projected annual value of the Big Ten’s deal now goes up to about $1.2 billion annually. That means the Pac-12’s current rights would have to increase almost 2.5 times ($600 million per year) to reach half on what the Big Ten will win. In its most recent rights deals, the total MLB contract increased by 19%. The NFL increased its rights by 63%. The Pac-12 would have to increase its eligibility 240% to reach the Big Ten’s half.

“They’re not going to get there,” one Pac-12 executive said.

This kind of delta between leagues affects the ability to hire the best coaches, academic advisors, mental health experts (Ohio State, for example, has a sports psychologist for each of its 36 sports), nutritionists and strength coaches. For starters.

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