Pundit Roundup: False Equilibrium and the "Culture of Equality"

And, with that potentially confusing headline, Pundit Roundup is back! Y'all musta forgot!  Not that I would blame any readers who forgot about Pundit Roundup.  While the PR Crew had the intention of posting more columns this year, it just hasn't worked out that way.  But, when we started discussing the ideas for the first PR column of the season, the choice became crystal clear.  The budding narrative of Texas as the "evil empire" within college sports has been fascinating, and it deserves more discussion than the typical "haters gonna hate" or "don't hate me cuz you aint me" response.  In other words, it deserves a Pundit Roundup.

This "evil empire" narrative has been building since the start of the Realignment Chronicles, exploded with the launch of the LHN, and continued simmering during the defection of Texas A&M to the SEC and the near-disintegration of the Big 12.  Additionally, this narrative became a bit more pointed as pundits fleshed out the full ramifications of Larry Scott's recent proclamation over the importance of the "culture of equality" within the PAC-12.  It didn't take a rocket scientist (or even David Boren) to realize these comments were intertwined with the issue of the LHN and third-tier media rights. 

In reading most of the columns written about this topic, it is truly striking to see how pundits have latched onto simplistic views of equal versus unequal splits of TV rights.  Equal is good.  Unequal is bad.  Equal creates stability. Unequal creates instability.  Equal is fair and just and right.  Unequal is...Texas.      

After the jump, the PR Crew invites you to join us for a discussion of Texas, the LHN, third-tier media rights, and the false equilibrium within the celebrated "culture of equality" of other conferences. 

Before going any further, Pundit Roundup wants to acknowledge the excellent primers already written over the history of Texas, the LHN, and Realignment.  In the off-chance you haven't read these articles, they are essentially required reading over the topics.

http://longhornnetworkanddelusion.tumblr.com/

http://barkingcarnival.fantake.com/2011/09/22/realignmentality/#more-33693

This column seeks to take a slightly different path.  As always, the goal for Pundit Roundup is to cover the coverage of topical issues.  And, when it comes to Texas and the LHN, the coverage is heavily slanted towards the inherent unfairness caused by the current arrangement within the Big 12.  In a heavily linked SI article from this week, Paul Finebaum went as far as to declare "short of SMU in the ‘80s and the University of Miami since, has anyone done more recently to diminish the integrity of the game than the self-indulgent people who run Texas?"  Naturally, Finebaum was also able to work in an Alabama reference, which was almost immediately followed by a line declaring that the Alamo was "still going down as an ‘L'" for Texans.

While that's just Finebaum being Finebaum, there are plenty of other examples.  Matt Hayes used a terrible  metaphor in an article that told readers to "watch Texas make millions upon millions with its Longhorn Network, and eventually suck the very life out of the league."  Matt Norlander explained that "Texas has so many qualities that any conference should want. But it's got that baggage, too, in the form of the Longhorn Network -- an idea once thought revolutionary but now is an albatross."  John Hoover wrote an article that began by stating that "equal revenue sharing among college football conferences certainly works" and then said:

Just ask the Big Ten Conference or the Southeastern Conference, who split revenue equally among their respective member institutions and are America's richest collegiate affiliations.

Better yet, ask the Pacific-12, which expanded last year with the intent of leveling out lopsided revenue distribution and soon will own the most lucrative college sports contract in history.

Or better still, ask the Big 12 or the Big East, whose inequitable revenue sharing policies have helped lead them to the brink of demise.

However, the article that seems to represent the overriding consensus over the issue was written by Kevin Sherrington.  While not fully castigating Texas for its decision to create the Longhorn Network, Sherrington summarizes the situation as follows:

But unless you want to go it alone as an independent - something Texas isn't willing to do at this time - you've got to work and play well with others. 

The problem is that the more power and riches Texas acquires, the more it wants. The LHN is Exhibit No. 1. No matter what your take on it, you can't be oblivious to the fact that it's viewed by so many as an unfair advantage. Which it is, in its current state. When Dodds said, "Anybody can do one," he was being disingenuous. Not for $300 million, they couldn't. Texas has the program, the history, the alumni base and the TV markets. Only a handful of schools nationwide could match all four criteria.

And the other schools that can aren't members of a conference that would allow them to do so.

The reason I want to pinpoint the Sherrington article is that it seems to closely mirror the general reaction over the Longhorn Network.  Similar to Sherrington's article, most people primarily argue that not every school in a conference will have the juice to get paid for such an individual school network.  Therefore, this arrangement will inevitably lead to such financial iniquities that it will ruin the stability and goodwill within the conference.  Ultimately, the best solution is to create a conference network or series of regional networks that will split all revenues equally.

To be honest, I find this argument a bit puzzling, and not in a "Texas is right and everyone else is wrong" type of way.  I'm a bit perplexed by how far the argument is being taken, despite all the preexisting revenue gaps outside of TV rights.  Until recently, I don't think I've read any articles explicitly stating that all TV revenue MUST be split equally for a conference to survive.   One SBN blogger even adopted the "just kick Texas (and its network) out of the conference and it fixes everything" position.  And it's not just the pundits, either.  Over the last few weeks, Gary Pinkel and David Boren seemingly couldn't do a single interview without expressing their discontent over Texas and the Longhorn Network.     

But does all the "all for one and one for all" bluster over TV revenue really hold up under a larger analysis?  I've been poking around the fascinating "Business of College Sports" blog, and the data is startling.  Even though she provides multiple disclaimers over the total accuracy of the numbers, Krista Dash has done an incredible job marshaling up all the data over the revenues within college football.  Earlier this year, she posted a series of articles analyzing college football revenue from the 2009-2010 season.  Above all else, her website shatters any conception of a "culture of equality" within any specific conference.  Just look at her breakdown of 2009-2010 football revenue within the schools of the SEC,  Big Ten, ACC,  PAC-10, and the Big 12.  Seriously, even with all her caveats over their accuracy, please look at those numbers.  

• In the SEC, Georgia's football profits exceeded the football profits of Ole Miss by $36 million.  The gap with Mississippi State and Vanderbilt was around $50 million.  Equality!   
• In the Big Ten, Penn State's football profits exceeded the football profits of Illinois by $36 million.  The gap with Northwestern and Purdue was around $44 million.  Equality!
• In the PAC-10, the football profits were shockingly low, but Washington still managed to exceed the profits of Washington State and Stanford by over $10 million.  Equality!
• In the Big 12, the football profits of Texas dwarfed everyone else.  Based on the available data, Texas pulled in over $30 million more than Oklahoma.  In fact, they pulled in over $60 million more than the bottom quartet of the conference.  Inequality!

But these numbers only scratch the surface of the financial data.  In perhaps her most fascinating post, Dash looks through the discrepancies related to booster revenue and conference payouts for schools that finished in the Top-25 of the BCS rankings.  The discrepancies in booster revenue are staggering, especially for schools who all finished that highly ranked.  To wit:

• Oregon's booster revenue exceeded Utah's by $68 million.  Equality!
•  LSU's booster revenue exceeded Arkansas' by $25 million.  Equality!
• Ohio State's booster revenue exceeded Nebraska's by $20 million.  Equality!
• Oklahoma State's booster revenue exceeded Missouri's by $38 million.  Inequality!

So, with all this in mind, let me ask the primary questions that seem to be ignored by all the pundits discussing this issue.  Why does the $15 million/year from the LHN--an amount which is actually lower b/c of IMG's cut--create such a firestorm of controversy when Texas has even larger revenue gaps over other schools relating to merchandise sales, ticket sales, alumni donations, advertising, etc?  Put another way, if Texas split the $15 million equally among all the schools in the Big 12, how would an extra $1.5 million in the pockets of Baylor/KSU/Iowa State suddenly make everyone equal?  Along those same lines, how can columnists routinely use the phrase "culture of equality" to discuss certain conferences when every single major conference (including the ACC) has eight figure discrepancies in football profits between their schools. 

I've read many commenters state that the problems with the LHN were never about money.  The problems relate to exposure and branding.  But if that's the case, then I don't understand the argument against the LHN, since any school in the Big 12 could also launch their own network.  Clearly (and I mean clearly), these networks won't be as profitable as the LHN, but they can all contain similar content.  Additionally, no other school seemed to have an issue with the exposure and branding associated with the network before the financial terms were announced.  This was the exact same sentiment expressed by DeLoss Dodds in the excellent Andy Staples article from last month.

The deal with ESPN to run the Longhorn Network wasn't completed until Christmas Eve. That, Dodds believes, is when other schools grew fearful of the network. "The only surprise in this whole thing was the amount of money and that ESPN did it," Dodds said. "Prior to that, it was not an issue with anybody. Once that happened, it became an issue with a lot of different people. Not everybody, but a lot of people don't feel good about it for us."

Conclusion

From my perspective, any reference towards a "culture of equality" within a conference is largely symbolic.  No matter how many times Larry Scott repeats his mantra over equality--or how often it gets repeated by the media--sharing TV revenue in the PAC-12 won't give Utah a share of Phil Knight's money.  It won't give them a share of USC's ticket sales.  It won't give them a share of UCLA's basketball revenue.  But it does give them equal footing on all TV revenue, at the expense of eliminating their ability to create their own network.  Equality! 

Similarly, even if the Big 12 equally shared all tiers of TV revenue, it won't give Iowa State any of the money donated by T. Boone Pickens.  It won't give them a share of OU's ticket sales.  It won't give them a share of KU's basketball revenue.  But it does allow them the opportunity to expand their branding and exposure via their own school network, at the expense of not being subsidized by the more profitable schools in the conference.  Inequality!

In conclusion, writing this column has reminded me of the famous phrase coined by George Orwell in Animal Farm.  When it comes to certain conferences, all schools are equal, but some schools are more equal than others.