The Big 12 is at a crossroads — once again — and there are several directions in which the 10-team conference could travel over the coming months. For various reasons, each avenue has its own appealing traits with vastly different destinations, but for now, expansion talks are gaining speed with members of the AAC looking to hitch a ride to the Big 12 and the conference hoping to have its answers before the 2016 season begins September 2.
First, let’s consider the big picture and all the current possibilities.
In one lane, the Big 12 expansion plays out and adds between two and four schools to the mix in hopes of potentially bringing new life to a slowly-dying conference.
In another, expansion falls through at the behest of the networks.
But in the fast lane, navigated by the almighty dollar, the often-shortsighted conference may have the its eyes on the end of the tunnel and be looking to gobble up every dollar possible before essentially dismantling.
Sound confusing? That’s because it is and there are what seem like a hundreds of moving parts in place.
At the moment, it appears a short-term fix may be in place, which likely wouldn’t end favorably for the American Athletic Conference. Of the numerous programs with high hopes of joining the Big 12, the majority hail from the AAC, including Houston, Memphis, Cincinnati, Central Florida, South Florida, and UConn.
Though programs like BYU, Boise State, and Colorado State have also been mentioned as potential newcomers, it’s quite likely that at least one addition comes from the AAC if the Big 12 decided to add two new schools. If four is the lucky number, two, three or all four could be taken from the AAC, which is something AAC commissioner Mike Aresco is well aware of, per gridironnow.com:
“I’ve been talking to the (athletic directors) and the president of the schools that might leave, and it looks like some of them will," Aresco said. "We’re talking to each other and trying to figure out the future. We expect everyone who leaves will leave on good terms.”
Aside from the Power Five label and any recruiting boost being in the Big 12 may provide, as opposed to the AAC, money is a critical factor in this entire process, for both the teams hoping to join the Big 12 and the Big 12 itself.
Each team set to leave the AAC will be required to give a 27-month notice and pay an exit fee of $10 million, although, teams wishing to leave sooner can negotiate a larger exit fee. While that may seem like pennies in a pond to Big 12 programs, that’s not exactly the case for AAC schools, but it would be well worth the initial buyout due to television revenue.
The AAC’s current contract with ESPN is worth $126 million over seven years, which is for the entire 12-team conference.
The Big 12’s television revenue through contracts with ESPN and FOX, on the other hand, provides each member with approximately $25 million a year, with that number automatically increasing by that amount for each addition to the conference. Essentially, a single team in the Big 12 would generate approximately $175 million over the same seven-year period, a substantial profit over what the entire AAC generates.
How many schools the Big 12 ultimately elects to bring aboard could speak volumes about the conference’s future — adding four schools instead of two could be a hedge against the possible departures of Oklahoma and Texas when the conference grant of rights expires in 2025.
As Sports Illustrated’s Pete Thamel noted, adding four new schools would bring about $100 million a year to the Big 12, money that the conference could split up among current members by asking newcomers to accept less than a full revenue share. In fact, it’s a virtual certainty that any expansion would play out that way.
This is where the wait-and-see aspect comes into play.
As Thamel noted in his column, adding schools just to add revenue to the conference could have long-term ramifications, especially if the Big 12 opts to add four new members:
Is expansion such a naked money grab—up to $800 million—that it threatens the conference's relationships with FOX and ESPN after their television contract expires in 2024–25?
“In my opinion,” said a television industry source, “you are basically saying eight years from now this is over, and we might as well take the money.”
If the Big 12 speeding up the expansion process pans out, we’ll likely have our answer sometime in the next month, though the networks are now reportedly pushing back against the conference adding teams that don’t provide enough value to justify the expense, even threatening a lawsuit.
If a 2025 exit strategy is in place, the most plausible outcome with the expansion is adding four teams to join the Big 12 in 2017, and at this point, that seems likely unless FOX and ESPN are able to keep it from happening.
For the Big 12, which stands as the only Power Five conference to not have its own network, such an expansion strategy would, as Thamel put it, be “like getting TV network money without adding a TV network.” That’s fairly convenient for the Big 12, considering it’s become a practical impossibility for the conference to be given it’s own television network, in part because of the Longhorn Network.
And with the ACC finally announcing its deal with ESPN recently, the Big 12 needs to add more revenue than the increase provided by the re-institution of a conference championship game or risk falling further behind, with expansion the only option.
So the Big 12 appears poised reap all the profit possible before the grant of rights expires and another round of realignment happens in less than a decade.
What plays out over the course of the next month should be interesting, to say the least, considering the future of the entire Big 12 hangs in the balance. Unsurprisingly, the conference’s bank account balance may be what dictates the outcome, though there is the serious and increasing danger of alienating the networks that provide so much revenue in the first place.