Renegotiation of TV contracts is an option for the Big 12

As the Big 12 mulls over its expansion options and receives pitches from schools hoping to cash in, there seem to be three major options — to expand to 12 teams, to expand to 14 teams, or to remain at 10 schools and maintaining the status quo.

The problem with the last option is money. The ACC now has a network and the Big 12 is increasingly falling behind behemoths like the Big Ten and SEC, which is perhaps the most important factor fueling expansion, even more so than purported concerns about making the College Football Playoffs.

But it’s also possible that the conference could renegotiate the current television contracts with ESPN and FOX as the networks begin to publicly pronounce displeasure with having to pay the pro rata increase that would accompany each addition to the Big 12.

In a candid conversation with a source inside the TCU administration that should be required reading for anyone interested in expansion, Frogs O’ War explains the renegotiation option:

ESPN/Fox could save considerable money by simply changing the terms of the current agreement rather than allowing the pro-rate clauses to be activated. Increasing the current fees by 17.5%, rather than having the Big 12 add two members, would be worth it for ESPN/FOX. That would also give each Big 12 member approximately $5 million more per year in the 2020s, without the hassle of a larger membership and larger conference footprint. This option would also include a contract extension and extension of the conference Grant of Rights through 2030-2031. Many believe the Big 12, thanks to the existing Tier 3 contracts in place, will survive until that point regardless of expansion.

The Sports Business Daily article that broke the news of the networks opposing expansion in the Big 12 also noted that the two sides are currently in negotiations, providing some perspective on how possible it is that the conference ultimately decides not to expand.

Since Texas is one of the schools already on record as being lukewarm about adding more schools just to add more schools and possibly eyeing a post-Big 12 future after the current grant of rights expires, if the conference does renegotiate its current television contracts, the ‘Horns likely wouldn’t support that extension.

And ESPN and FOX may not necessarily hold out for that — the television rights for a Big 12 without Texas and Oklahoma would cost much less, while a Big Ten or SEC or Pac-12 with one or both of those schools would likewise be that much more valuable to the networks and perhaps even preferential from a standpoint of audience appeal and watchability.

So while expansion seemed like a virtual inevitability several weeks ago, that’s no longer the case as the networks scramble to save themselves some money and avoid what they perceive as a dilution of their product.