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Realignment Roundtable

In which Txtwstr7, Hopkins and LH try to figure out what happened over the last 24 hours, aside from the obvious.

1) Before discussing the merits of the "new" Big 12, I think it's important to look at exactly what Texas turned down.  Before the change-of-heart, why was Texas so interested in joining the PAC-16?  What exactly are they leaving on the table?

Txtwstr7: It's pretty easy to understand why Texas was so interested in joining the proposed PAC-16.  Before A&M went on its torrid weekend affair with the SEC and threw a wrench in the plans, the PAC-16 seemed like an ideal solution for everyone.  In fact, I don't think anyone expected the PAC-10 to make such a strong offer that seemingly fit all of Texas' needs.  On the surface, it's really hard to find anything wrong with the deal that was on the table.

First and foremost, the PAC-16 proposal solved most of the main logistical problems connected with Texas joining a new conference.  In a true masterstroke, the PAC-16 proposal solved the now-infamous "Tech Problem," which plagued the courtship of Texas by the Big Ten.  It solved the "rivalry game" problem by inviting both OU and A&M to join the conference.  It solved the potential "travel cost" problem by creating two divisions that would limit the amount of costly trips to Washington and Oregon.  Additionally, on its own accord, Colorado preemptively solved any potential "Baylor Problem" by snatching up PAC-16 spot that Baylor was coveting. 

As for the athletics aspect-which is what everyone wants to talk about-the PAC-16 once again seemed to provide a solid fit.  In all three of its major sports (football, basketball, and baseball), Texas would be preserving old rivalries while also getting to forge new rivalries against some of the most storied programs in each sport.  It's pretty easy to drool about the idea of watching Texas play USC in football, UCLA in basketball, and Arizona State in baseball. 

I'll leave discussing the academic advantages of the proposed partnership to LH in order to briefly touch on the money issue.  In the last few months, we've all learned the rough formula over how the Big Ten Network became so successful.  We'll get into a discussion of the proposed Big 12 new TV deal a bit later, but, based on what we know about the Big Ten Network and media markets, is there any question that a PAC-16 Network would have been a smashing financial success?  Additionally, what other factors have I left out?

Learned Hand:  California.  We're leaving California on the table.  From a Pac 16 network perspective, Californians and Texans buying the Pac 16 as part of their cable subscription was like swimming in an ocean of doubloons.  Does the average Californian watch as much football as the average Texan?  Doesn't matter, they're paying for it.  The Big 10 Network reaches 45 million subscribers, and it gets 70 cents per subscriber in states where the network is part of the basic cable package (read as states where they have a team).  California had 27 million subscribers in 2005, and probably more now.  Meaning, we probably beat the Big 10 Network going away.  Particularly once we started pushing into markets where alumni have migrated.  The issue would be sharing the revenue of the two largest, most prosperous states with those not so blessed.  Apparently, that won't be an issue now. 

The potential for research collaboration with the California schools is appealing.  As much as I have championed the Big 10 and the CIC, there's a lot of merit to being one of the founding members instead of someone who joined after several decades.  And as I covered over the weekend, I'm not purely sanguine about UT's integration into the CIC, largely for reasons unrelated to the university.  The Pac 10 gave us the opportunity to create an institution like that to suit our own needs, with the biggest hurdle convincing the California schools that they should leave their borders.

Personally I perceive that this was a good time to do that, but we may never know.


(Yes, we may still be able to do this outside of the conference structure, but I wouldn't hold my breath.  In fact, there may be some presidents who don't want to talk to anybody from Texas for a while.)

Hopkins Horn: Before I begin, I would like to thank you for inviting me to still participate in this discussion, despite how wrong I got a lot of things when all was  said and done.  I look forward to my next role as BON's official financial advisor.

I also have the advantage of answering these questions after Txtwstr7 and Learned Hand have proceeded me, which will allow me to mask my laziness in a cloak of brevity, given the thoroughness of their answers.  Both of the above answers summarize all that Texas could have had had it accepted the offer.  I know I initially approached realignment discussions through a prism of the importance of an academic upgrade made possible through an athletic affiliation.  Through the repeated discussions we had on BON and seeing all of the different perspectives so many of us had, I came to appreciate it would be for Texas to balance the various concerns of athletic compatibility, academics, geographic cohesiveness, finances and long-term stability within the reality of the political framework in which Texas had to make its decision.

The stunning offer from the Pac 10 addressed each and every one of these needs.  I just hope something similar will be on the table again in a few years when we inevitably go through this again.

2) If we assume that Texas was willing to drop the A&M Rivalry, then two stated reasons for rejecting the PAC-16 and preserving the Big 12 involve the "new" TV deal and the insistence of Texas of being able to create its own Longhorn network.  What is your reaction to each of these developments?   

Txtwstr7: HopkinsHorn has been all over this today, but I'm absolutely befuddled at the timing of Beebe's last-second proposal that promised a better TV deal for the conference.  Most importantly, why wasn't this put on the table before Nebraska bolted for the Big Ten and Colorado bolted for the PAC-10?  I find it hard to believe that this new TV deal simply fell from the sky after two of the teams in the conference bolted for greener pastures.  Even further, does it really make sense that this conference-in its current state-can snag such an incredible deal, especially when operating in such a position of desperation and weakness?  I mean, 40% of the conference is composed of Baylor/KSU/Texas Tech/Iowa State, none of whom can pull any type of respectable media market.  Am I wrong to be skeptical about this thing?

As for the proposed Longhorn Network, I've always thought it was an intriguing idea.  In fact, I think the consulting reports over the network would be a fascinating read.  But, as I said in another thread, I'm not sold enough on the Longhorn Network to consider it a legitimate deal-breaker for joining the PAC-16.  Outside of simply saying "We're Texas," do either of you guys want to take a crack at explaining why this network is such a guaranteed financial success?  Or, to put it more directly, do either of you want to take a crack at explaining why this network is a legitimate reason to preserve the Big 12 at the expense of the PAC-16?

LH: I'm afraid all I have is more questions.  The biggest problem with these conference networks, as the Big 10 has demonstrated, is convincing cable providers in other states to carry it.  We're Texas, but where is this national subscriber penetration going to come from?  If it's not national, how is it going to have the payback of a network that's spread across the country - even if we're not sharing the profits?  What programming will fill the schedule outside of longhorn athletics?  Personally, I suggest "turning 21 on sixth-street" reality show, so alumni can feel good about getting old...for once.

I have the advantage of writing after Txtwstr7 and so I'm incorporating some of his thoughts with mine here.  We're falling into line with the current line reporting from ESPN's Andy Katz.  I think there was more here than meets the eye.  It's hard to guess what and who may be influencing things from afar, but Andy Staples apparently has some (minimal) insight.  But it meets the sniff test, at least as far as not being any more or less ridiculous as most ideas thrown around in the process.  A lot of boosters and alumni stood to take hits if the music stopped before KU, ISU, Mizzou, Baylor and K. State had found a seat.  The Pac 10's downfall may have come from going after too much, too soon, in order to get Texas.  That said, for all the talk about UT's power on the college landscape, I'm a bit apprehensive with the idea of so much behind-the-scenes power being able to move so quickly to influence my alma mater.

I think Powers expended too much political capital and effort for the "new Big 10" to be plan A and I fail to see how the Pac 16 possibility (or something similar) couldn't sway the network overtures of a similar offer being available months ago.  So I'll use the Katz piece as a working hypothesis until something better comes along. With that in mind, I think this is a great plan B until that something better does come along.  What that will be, given the Pac 10's offer, I can only guess...wildly

Hopkins Horn: I think discussing the potential upside of the proposed Longhorn Sports Network might be above all of our pay grades, especially since no one's seen any projected financials, but I will assume that some pretty smart guys have been crunching the numbers and have come to realize that there's money in them thar hills, and that it was worth sacrificing the other potential benefits of the Pac 10 deal to realize these.

The question for myself, for which I don't know the answer, is just how profitable the LSN has to be for me to accept the fact that this is, in fact, the best long term decision for the school.  If the LSN yields a mere extra $5 million a year, then my disappointment in Texas' rejection of the Pac 10 deal will only intensify over time.  If the LSN brings UT an extra $100 million a year without disturbing an other long-term interests of the university, then I will gladly eat some retroactive crow.  At the end of the day, it's likely to be somewhere in between.  I just don't know what the tipping point would be.

As for the details which emerged on decision day: (1) I get the logic that a television network might have only materialized at the last second, even after Nebraska's departure, to pony up the extra dollars to keep the conference together.  I remain somewhat dubious, but I do understand the argument much better than I did at the beginning of the day.  (2) I get the logic that there might have been a cabal of Stonecutters Freemasons assorted interests who saw the "bigger picture" pitfalls of the implications of the Pac 16 and saw that it would be in everyone's best interests to preserve the status quo to the greatest extent possible.  (3) I can't quite figure out yet how the first point leads to the second point, or vice versa.

3) What are some of the potential pitfalls currently facing the conference?

(NOTE, Txtwstr7 and I answered this before the Powers' press conference, and the apparent notice that this will be a 10 team conference.  I'm leaving our speculation in anyway because it's the offseason.)

Txtwstr7: First and foremost, the conference has to decide whether or not they want to stay at 10 members.  I think the natural reaction is to want to expand back to 12, but, as everyone keeps pointing out, there aren't too many viable expansion options on the table.  Utah would be nice, but I expect the PAC-10 will be reaching out to them shortly.  And, based on the relative stability between the two conferences, I would be stunned if Utah turned down their overtures for the Big 12.  Outside of Utah, it's hard to see who really makes sense.  The schools that would be attractive (Arkansas, LSU, ND) would never join the Big 12, and the schools that would love to join the Big 12 (TCU, Houston) simply don't bring enough to the table. 

If the conference does stay at 10 members, the whole conference is one Jim Delaney phone call to Missouri away from having to go through this whole process all over again.  Can either of you paint a scenario in which the Big 12 can actually exist as a functional long-term conference without constantly having to worry about their stability?  On a side note, will the in-fighting, bickering, and near-dissolution of the conference cause any long-lasting grudges or hard feelings between the remaining members?

LH: Things are unstable now, despite the bandages.  If the numbers being tossed around are right, the gap between the "haves and the haves nots" in the conference is enormous.  Texas could make over 100% more than the poorest teams (I've seen 30+ million total, compared to 14-17 for the lower earning schools), and we saw how much angst 30% caused.  For a time, there will be peace, because so much of the conference didn't have a plan A or plan B, and they feel like UT saved them.  I'm setting the over-under at 18 months before KU and Mizzou start to quietly explore their options.

Also, let's not forget A&M.  For a lot of aggies, leaving the influence of UT seems to be a matter of pride.  They want in the SEC, and the SEC will take them.  This has been true since the SWC dissolved, and I don't think we've seen the last of this long distance relationship.

Expanding to 12 is appealing, at first glance, but there are questions.  Can we renegotiate if we add more teams?  How much does a Championship Game pay under this deal? Who will leave their conference for one that came so close to imploding?

If there is money in the deal for expansion, Utah seems like first choice, as Txtwstr7 said.  After that, the list of candidates who would join an unstable BCS conference are not pretty, and we can reasonably infer, less attractive than the pieces taken by the Pac 10 and Big 10.

My concern in this arena is my belief that UT is best served in a conference with on and off the field peers.  I don't find it likely, but I can't ignore the overlap between academics and athletics in Texas.  It is not inconceivable that the legislature, in its noble goal of creating a new tier one research university, will look at the athletic conference controlled by the State's flagship universities and get ideas.  How would those two spots look with some combination of Rice, UTEP, SMU, UNT and TCU filling the holes?  And more importantly, how does Texas extract itself if that does happen if there's a fantastic opportunity in the Pac 10/Big 10/SEC it wants to seize?

Hopkins Horn: Continued inherent instability in a conference in which the gap between the haves and the have-nots has merely widened.  More television revenue doesn't change the geography of the Big 12, surrounded by three stronger and more stable conferences, all of whom might feel the need to expand in the future.  More television revenue doesn't change the resentment other schools might feel being trapped in a Texas-dominated conference.

From a strictly football-centric view (a view I've tried to avoid as much as possible, to my obvious detriment at the end of the day), sticking at ten schools, at the conference seems inclined to do, and foregoing the conference championship game could leave us in the same position as the Big 10 has been in recent years, when taking the last weekend off has allowed other conferences to make the last impression (Florida over Michigan).  But this isn't a biggie: the CCG is a damned if you do, damned if you don't sort of situation.

4) What aspect of this entire expansion ordeal is being most misunderstood by the fans?

Txtwstr7: For me, this is pretty easy to answer.  I've become put off by the litany of fans who have only analyzed this entire process through the prism of football.  Nearly every thread contains countless analyses of how expansion will affect football recruiting, scheduling, and our chances to get into the BCS.  It was even proposed that Texas was simply "afraid" to test their mettle against the big, bad, scary teams of the SEC.  Football is King, for sure, but this entire process contained a wide multitude of factors, especially once the Legislature got involved on behalf of Texas Tech and Baylor.

LH: Politics, in the distinctly provincial rather than the partisan sense.  It's hard for many people to understand university politics, particularly regarding the back and forth between university athletic and academic departments.  Harder still to fathom state politics and the often strained relationships between University Presidents and State elected officials who have a myriad of biases large and small and the near cloak and dagger means one uses to influence the other in Texas.  Always over-simplified is politics between universities, in the sense of Aggie and Husker ire against Texas athletically but positive relationship academically. The difference between a political body (in the sense of conference governance) that has existed for approximately a hundred years like the Pac 10 or Big 10 and one that isn't even two decades old yet is also hard to grasp.  Perception politics and understanding that when some are saying athletics, they mean money (Baylor), and when others say athletics they mean respect (Aggie) and when still others are saying athletics they mean an on and off the field collaboration for the next hundred years (The Big 10).  And then there's always the politics of those actors we barely know about, like lobbyist and T.V. executives.

Hopkins Horn: I'm going to disagree with Txtwistr7 in the sense that those who saw this through the prism of "football football football" were more likely to foresee the final result more accurately, regardless of how they got to that final result, than those of us who thought that Texas would use the opportunity to make an academic upgrade or seek longer-term stability.  Perhaps those of us who became more obsessed with the issue than others overcomplicated the calculus involved.

In a sense, given the vast universe of What We Don't Know, I think pretty much everyone who followed this was operating from a basis of a general misunderstanding.  One day, in a few years, someone will write the inevitable comprehensive accounting of what was really going on behind the scenes, and I'll be interested to learn the extent to which a number of Texas' decision were out of its own hands, whether because of the Legislature or because of this conspiracy of Freemasons Katz alluded to yesterday.

5) Was this really the result that Texas wanted all along?  Or did we grossly misplay our hand?

Txtwstr7: It's really hard to tell.  I mean, from the beginning we've heard that Texas wanted to preserve the Big 12, but I always assumed that was only if everything remained the status quo.  If Nebraska, Missouri, or Colorado left, I thought Texas would leave for another conference.  From what I can tell, we all did. 

Furthermore, I always assumed that Texas was in complete control of the situation, remained prepared for anything, and was deftly making moves in several directions.  The "we didn't start this, but we're prepared to finish it" quote from Dodds-while it might have been ill-advised-gave me complete faith that we knew what we were doing.  But, now that the dust has settled, it's hard for me to truly believe this is what we wanted.  Then again, maybe it is.

Once he gets done with the magazine, PB is going to drop some heavy-hitting analysis over why this is a smart but risky gamble.  And, once again, maybe it is.  I can definitely see the value in exploring our own network, enjoying our unequal revenue share of the new TV deal, and watching intently at how each of the other major conferences progress over the next few years.  Then, armed with more information and on our own time, we can make a move.  Based on the Gordon Gee e-mail, I'm still not convinced that we aren't still considering the Big Ten as a final destination, perhaps in conjunction with Notre Dame.  Is that such a terrible strategy?  Maybe not, but it sure feels that way considering what a magnificent offer was sitting on the table from the PAC-16?

LH: I've started calling this a tactical victory rather than a strategic win.  Some may disagree, but I tend to think UT will be best served on and off the field in a conference of relative equals and Cal, UCLA, Arizona, USC and in differing ways Stanford, Washington and Oregon met that criteria better than the old Big 12 North or the new-age Big 10. 

I'm inclined to believe that this was the hip pocket play.  We didn't want to use it, but if we encountered sufficient political and public resistance, someone knew a suitable deal could be put together.

I'm not sure I completely agree with PB's position on the political strength of the play, depending on the fallout for Larry Scott and the Pac 10, I think some bridges may be singed.  Not burned, bridges can be rebuilt with enough money, but I doubt we get everything we could reasonably ask without some guarantees ever again.  That could easily mean legislative buy- in earlier in the process, and that means a harder job for the next president tasked with realignment.

I'm also curious about who/what Andy Katz is talking about, and what else is going on behind the scenes.

Do I think UT was in complete control of the situation? At some point yes, because whatever Powers and friends could lay on the table, it was enough to give Larry Scott carte blanche to invite a preselected list into the PAC 10 (and it's unanimous voting requirement) just to attract UT.  I think it went pear-shaped with A&M, and the Higher Ed. Committee meetings and the brakes this put on the process.  That allowed someone, somewhere, maybe unaffiliated with Texas in any way (and almost certainly not Dan Beebe, at least not without herculean assistance) the opportunity to pull the plan B lever.  At that point, it wasn't worth the political capital to join our new west coast friends.  We're Texas, our Plan B is approximately 30 million dollars a year.  There's a certain ring to that.

Hopkins Horn: I know that some are doing a victory lap this morning for foreseeing this brilliant first move in the implementation of a long-term strategic vision.  I view it as a more simplistic punting of the inevitable a few years down the road.  As I discussed above, I think we're sacrificing long-term interests in the name of short-term financial gains and greater control.  Reasonable minds can and will continue to disagree on this issue, though, and I think I'd be beating a dead horse if I drag this discussion out further.

6) Any concluding thoughts?


Txtwstr7: In writing these answers, I've warmed a little-and only a little-towards our current position.  It's an interesting flex position that leaves a lot of doors open down the road.  But, man, I was really pumped about the PAC-16.  In my opinion, we potentially turned down the best possible offer for conference expansion that we were ever going to get.  And that's a pretty scary feeling. 

LH: On a personal level, I'm not pleased.  I like the Big 10 for a lot of reasons, and I was pumped about the Pac 16, in no small part because I have so many friends from UT in the Pac 16 West geography.  The reborn Big 12 has the same UT, A&M, Tech, OU, OSU flavor as the original Pac 16 plan, but we've traded UCLA, USC, Cal, Oregon, Washington, Arizona, Stanford and Arizona State (and Washington St./Oregon St/Colorado) for Kansas State, Iowa State, Baylor, and Missouri.  For my own part, I'll trade the glory of Southern cooking and college town for a combination wide open spaces and gigantic cities. It's not easy for me to be enthusiastic about the new deal yet, except to say UT won a victory.  It may not have been a championship, but I don't think the season is over. 

Unfortunately, I agree with Txtwstr7.  I have reservations that the Pac 10 committed to the most UT-Centric offer any major conference ever will and UT shot it down for something uncertain.

Hopkins Horn: If I ever write again that Texas aspires to be the best public university in the nation and will allow that desire to drive its athletic decisions, shoot me.  As someone who's disparaged the chances of Texas joining the SEC every step of the way for that very reason, I'm hard-pressed to determine what the advantages are of staying in a diminished Big 12 rather than simply move to the east.

Well, there is an obvious one: we get to be in control.  And at the end of the day, I think that's what this might all be about.  Not greater television revenue.  Not preserving traditional rivalries.  Not taking advantage of an opportunity to associate with a better bunch of academic institutions.  Control.  Congratulations Bill Powers.  Let's just hope that you don't wind up being a latter-day version of Edward Smith.