How little could/should UConn accept from the Big 12?

[amory]

So let's assume the question of who gets an invite will depend fairly heavily on how cheap a payout a school would take from the conference.

How low could/should UConn go? We all acknowledge that if we don't get in this time, we're completely screwed.

Is a spot on the lifeboat worth taking...say...double what the AAC pays? Is it worth taking the same payout as what we get now?

 

[WestHartHusk]

So let's assume the question of who gets an invite will depend fairly heavily on how cheap a payout a school would take from the conference.

How low could/should UConn go? We all acknowledge that if we don't get in this time, we're completely screwed.

Is a spot on the lifeboat worth taking...say...double what the AAC pays? Is it worth taking the same payout as what we get now?

Honestly, if I was negotiating I would take nothing, get my tier 3, sell more tickets and have a provision that on expiration of this deal I am in the conference 100% (knowing it likely dies). We are in investment mode now.

 

[jfuchs91]

Whatever it takes to get in.

If we get our Tier 3 rights back, which we would in the Big 12, we'd likely make more than we make in the AAC now anyway. We could conceivably take a massive haircut and still be making way more overall.

 

[dayooper]

So let's assume the question of who gets an invite will depend fairly heavily on how cheap a payout a school would take from the conference.

How low could/should UConn go? We all acknowledge that if we don't get in this time, we're completely screwed.

Is a spot on the lifeboat worth taking...say...double what the AAC pays? Is it worth taking the same payout as what we get now?

As long as you recoup what your exit fees are, the same or a little higher after the fees might work, imo. Remember, you could sell your tier 3 rights to the highest bidder. That would give a pretty good boast over what you get now.

 

[UC1995]

Within 5 years we should be equal to the other teams, but should revenue streams be developed in Northeast through our inclusion we get bonuses by taking a year off the time it takes to get a full share for each benchmark we hit.

 

[SubbaBub]

Benchmarked against the entry deals of UL, WVU, MD, and RU and then get it done. If you have to give up something make sure you get something for it.

UT will play like they have better options. If they make an offer then they don't. At least nothing worth a couple measly million for the conference. The new schools will add a lot more than they receive in media inventory alone. They may not have the leverage, but they are not complete beggars either. As long as it is done respectfully and humbly, there is no need to give up the farm.

 

[Exit 4]

We really just don't know enough about our financial picture to discuss this.

 

[WestHartHusk]

Benchmarked against the entry deals of UL, WVU, MD, and RU and then get it done. If you have to give up something make sure you get something for it.

UT will play like they have better options. If they make an offer then they don't. At least nothing worth a couple measly million for the conference. The new schools will add a lot more than they receive in media inventory alone. They may not have the leverage, but they are not complete beggars either. As long as it is done respectfully and humbly, there is no need to give up the farm.

Well, gaw-Lee mister, as long as we ax nice Ima sure Texas will be all amenable and such and give us an extra satchel.

The reality is that we are negotiating against schools that will do anything to get it. Houston is essentially auctioning off future students by allowing UT to open a campus in town, Memphis wants to see if it can have FedEx breach fiduciary duties, BYU is talking about giving up a their TV network content and UCF would have Larry theCable guy take up residence in Norman. There is no leverage if there is no network.

 

[CL82]

We really just don't know enough about our financial picture to discuss this.

lol that's never stopped us before.

So here's my initial thought we'd want double the AAC payout, since travel will go marginally up and we have start up costs (new unis for all teams, etc.), plus we need to earn back our buyout, plus early exit fees over a reasonable period (lets say 5 years. and say the buy out + exit fee is $20M)

So $5M + $4M = $9M per year for first 5 as a base figure. Consider that RU is @ $10M in the B1G and that's seems like a reasonable number.

 

[Dooley]

Whatever it takes to get in.

No more needs to be said.

 

[SubbaBub]

Well, gaw-Lee mister, as long as we ax nice Ima sure Texas will be all amenable and such and give us an extra satchel.

The reality is that we are negotiating against schools that will do anything to get it. Houston is essentially auctioning off future students by allowing UT to open a campus in town, Memphis wants to see if it can have FedEx breach fiduciary duties, BYU is talking about giving up a their TV network content and UCF would have Larry theCable guy take up residence in Norman. There is no leverage if there is no network.

It's about motivation:
UT wants money and the UT-H campus.
OU wants money and long term stability if Texas will play along.
The L8 want long term stability and a chance to stay P5 and money.

So you might think that a reverse auction is the likely outcome. And it could be used by the XII to beat up perspective candidates, but that is very short term thinking. The L8 should oppose such a strategy if they have any clue. Say the schools take a half share of $25M, times 4 is about 50M, divided 10 ways is $5M per school. That is close to the benchmark of schools "buying in". How much more do you think they would ask? Another $2.5M from each new school (payout would be 10 of the original 25), times 4 is $10M, divided by 10 is another $1M per school.

No sane person would sell future stability or growth potential for 3% more up front. Remember there is no GOR in the B12 after 2024 and there will not be an extension. Their next rights deal will either break the bank or they will disband. 9 of 10 schools don't really want that to happen. Is skinning an $1M worth not taking the four most valuable schools with the best media, FB, athletics, and academic profiles? Again, no sane person. UConn isn't going in asking for the moon or a full share. They are going in knowing their negotiating partner or at least I hope they are.

If push really came to shove, UConn can concede and not be in a much worse position, but it would spell the doom of the XII if you now have 10 schools sweating the OU-Texit and hurt the relationship from the start.

Yes, I do this for a living.

 

[uconnphil2016]

http://giphy.com/gifs/s-Kerg053G7ZJUQ

 

[B1GEast]

we should be giving reach arounds

 

[Fishy]

Well, if you're telling the Big 12 that you have value and then tell them in the next breath that you're willing to forgo all of it...what's the point?

You need money to operate a competitive athletic department and I'm sure the Big 12 realizes that it doesn't help them to try to cripple newcomers to the point where they are becoming less competitive - so you agree to take a haircut to recognize the value that the current Big 12 members have created, but not a buzz cut that sees you entering the conference at a near permanent disadvantage.

 

[Excalibur]

One dollar less than the next lowest bidder.

 

[SubbaBub]

Why do I get the feeling you guys paid way too much for your last car?

 

[WestHartHusk]

It's about motivation:
UT wants money and the UT-H campus.
OU wants money and long term stability if Texas will play along.
The L8 want long term stability and a chance to stay P5 and money.

So you might think that a reverse auction is the likely outcome. And it could be used by the XII to beat up perspective candidates, but that is very short term thinking. The L8 should oppose such a strategy if they have any clue. Say the schools take a half share of $25M, times 4 is about 50M, divided 10 ways is $5M per school. That is close to the benchmark of schools "buying in". How much more do you think they would ask? Another $2.5M from each new school (payout would be 10 of the original 25), times 4 is $10M, divided by 10 is another $1M per school.

No sane person would sell future stability or growth potential for 3% more up front. Remember there is no GOR in the B12 after 2024 and there will not be an extension. Their next rights deal will either break the bank or they will disband. 9 of 10 schools don't really want that to happen. Is skinning an $1M worth not taking the four most valuable schools with the best media, FB, athletics, and academic profiles? Again, no sane person. UConn isn't going in asking for the moon or a full share. They are going in knowing their negotiating partner or at least I hope they are.

If push really came to shove, UConn can concede and not be in a much worse position, but it would spell the doom of the XII if you now have 10 schools sweating the OU-Texit and hurt the relationship from the start.

Yes, I do this for a living." Quote]

I don't think you fully grasp how disfunctional this league is. Your argument is like saying that Kazakhstan had as much say in the USSR as Russia. KSU will vote with TX and be grateful they are making as much money as they are for as long as the train runs.

 

[whaler11]

Why do I get the feeling you guys paid way too much for your last car?

This is a lot different than buying a car. Last I checked there were more than 4 cars to buy.

First of all it's safe to assume that UConn doesn't have across the board support from the voting members. Whatever value we think exists - rest assured not everyone agrees with us.

Second, the entire reason the league is expanding is to maximize the delta between what the contact calls for and what the new additions will take. It's quite a leap to assume that have any strategic thought beyond gimme gimme gimme. Also, they know that even if you take say a third of the TV money it's still going to be at least $10 million more than where you are now. With tier 3 rights, a better product to market etc.

Third, trying to benchmark the deals against what Nebraska or Rutgers or Maryland received will get you laughed out of the room. They were targeted by a league with strong leadership who was looking at the long term. The Big 12 has zero leadership and can't see past the end of August.

Play hardball with them if you like but I wouldn't be suprised if the offer from multiple schools was AAC money until the next contract. So you better hope if you get cute they think you are worth a lot more than they are....

 

[BlueMAB]

It won't change the false narrative. But FedEx doesn't have to break any fiduciary responsibility. They can say their interested in sponsorship opportunities, which is legit. And then there's Fred Smith, who is worth twice what they guy who gave $235 million to Ok St is worth (T Boone Pickens) can agree to a substantial investment in their program if the Big 12 extends an invite. That's unlikely, because I can't see how that requirement would be worked into a contract this complicated. And do you kick them out if he doesn't comply? Just something I can't see the presidents getting involved with.

However, if he makes a substantial donation before an announcement is made, then I'd be worried he just bought entrance.

I still think Memphis is well below BYU, UConn, UH, and UC

 

[BlueMAB]

As I said last week, I would take AAC money and our tier 3 rights. We get more money and a better product. We can prove our worth and then at the next contract get a full share.

 

[nelsonmuntz]

I am surprised ESPN would structure a contract in a way that would encourage a league to bottom feed for new members to rip off ESPN.

 

[whaler11]

I am surprised ESPN would structure a contract in a way that would encourage a league to bottom feed for new members to rip off ESPN.

Fox did the same thing.

ESPN's ACC contract is just as bad with the $45 million dollar penalty.

It's as though the networks had no idea their revenues were ever going to get squeezed.

 

[B1GEast]

B1G 10 commish Delaney informed Rutgers that even when a new TV deal is struck, they will have to wait till 2020 to get their full share. I believe Maryland got a beter deal and will enjoy a full share much sooner, not sure though

 

[Dooley]

Ok, in all seriousness, we do hold quite a sizable advantage over the other G5s (BYU exception) in that we can pull revenue from other sources to keep us close to "P5 whole".

If we get our Tier 3 rights returned, for example, SNY has shown to be a terrific partner for UConn. With an opportunity to air some Big 12 games, I would say they would be interested in continuing that partnership.

Our Nike deal expires in 2017. At the time it was signed (2010), it was one of the richer deals. Not top 10 rich, but $2.775M/yr in today's dollars more than likely doubles (at least) with Big 12 membership. UCLA can't sell out the Rose Bowl and struggle to penetrate the LA market and look at the apparel deal they just signed. We're not quite at that level, but part of our CR charm is our location. Nike paid fair value at the time and will likely do so again. And for the record, if Under Armour offers us anything similar to UCLA money, then I guess I am buying all new merchandise. But I'm guessing that President Herbst has a crystal ball and put Benedict in place to engineer the best possible deal for UConn in 2017-18 and forward.

The two biggest variables in showing our brand value can give us a significant edge in negotiating an entry deal. Right off the bat, assuming our T3 deals are still in tact and would pick up where they left off, we could be looking at over $12M/yr revenue. Aside from BYU, no other G5 can generate anywhere close to that kind of revenue without outside help from corporate support.

 

[Excalibur]

This is a lot different than buying a car. Last I checked there were more than 4 cars to buy.

First of all it's safe to assume that UConn doesn't have across the board support from the voting members. Whatever value we think exists - rest assured not everyone agrees with us.

Second, the entire reason the league is expanding is to maximize the delta between what the contact calls for and what the new additions will take. It's quite a leap to assume that have any strategic thought beyond gimme gimme gimme. Also, they know that even if you take say a third of the TV money it's still going to be at least $10 million more than where you are now. With tier 3 rights, a better product to market etc.

Third, trying to benchmark the deals against what Nebraska or Rutgers or Maryland received will get you laughed out of the room. They were targeted by a league with strong leadership who was looking at the long term. The Big 12 has zero leadership and can't see past the end of August.

Play hardball with them if you like but I wouldn't be suprised if the offer from multiple schools was AAC money until the next contract. So you better hope if you get cute they think you are worth a lot more than they are....

I don't think that the viable candidates are offering AAC money only, but your premise is sound. Subba's analogy to a one-on-one negotiation is lunacy. There are multiple bidding parties and the alternatives to getting an invite are so unsavory that you can guarantee that the bidding will be aggressive.