The next dominoes

[noeynox]

I think WVU is about to get the UConn treatment. Their only option is the ACC it would seem. They will then get the perpetual "you're next" nod and wink from them. I don't think ESPN is in any hurry to pay them more money.

 

[bobbyinaz]

I think WVU is about to get the UConn treatment. Their only option is the ACC it would seem. They will then get the perpetual "you're next" nod and wink from them. I don't think ESPN is in any hurry to pay them more money.

Exactly. With the ACC locked into a below market contract, ESPN has no reason to increase its payout to them UNLESS by some miracle Notre Dame decides to go all in. And we all know the likelihood of that

 

[Fishy]

This only works if someone not named ESPN steps up for a new media deal. Whose going to do that? FOX?

It doesn’t make much of a difference - someone will want the rights, albeit not for what they are currently getting from their combined ESPN/Fox deals.

You just cannot have an eight-team conference if the plan is to survive.

 

[Exit 4]

It doesn’t make much of a difference - someone will want the rights, albeit not for what they are currently getting from their combined ESPN/Fox deals.

No one will want the rights which means the B12 implodes or some how finagles a media deal at the doggy bowl level of the AAC and MWC. Whatever it is, the remnants have just been passed down to the G5 world.

The only way out of this for the B12 remnants is some crazy new media entrant from Planet 9 who is desperate to build a new media platform. ESPN is out, they have their tier 1 SEC, tier 2 ACC and tier 3 AAC/MWC/CUSA/MAC content. Hard to see who that would be and why that company would pay more than they have too and the have too price is probably 20% over the AAC's last deal on a lucky day.

 

[ScottVib]

The key is getting the right price for the schools in the portfolio. For example the MAC TV deal is around $10M a year (total) or ~833k per team; the C-USA TV deal is around $2M (total) a year or about ~167k per team*. Then you look at the AAC where ECU & Tulas are getting at least a 10x premium on their content with the AAC's $7M a year deal. For the AAC to be able to distribute a flat $7M/team that tells you that the top end teams have a value over that mark.

If you accept that Bowlsby is over-estimating his league's value by about a third, then you land the average Big XII leftover school around $10M per team. There exists a combination of the upper end of the AAC and leftover Big XII that turns a profit at a $8-9M (or even a $10M) per team payout. Where does the money come from? Well the left-over 8 AAC schools wind up in that MAC / C-USA level (particularly after say a Temple jumps out to try to stash their basketball team back in the A-10).

So where a full merger, even at the AAC rate would cost $140M; they could land the teams that actual draw eyeballs and E+ subscriptions for $120M (or less) and the remaining 8 that for the most part, you don't care about are set free or paid commensurate with their true value (figure Navy, Temple probably end up independent) the rest end up costing less than $5M in "added" value to their new conferences (assuming that they goto conference you have a deal with).

At that point you've just cut your costs and potentially increased your profits.

 

[Eavesdrop]

No one will want the rights which means the B12 implodes or some how finagles a media deal at the doggy bowl level of the AAC and MWC. Whatever it is, the remnants have just been passed down to the G5 world.

The only way out of this for the B12 remnants is some crazy new media entrant from Planet 9 who is desperate to build a new media platform. ESPN is out, they have their tier 1 SEC, tier 2 ACC and tier 3 AAC/MWC/CUSA/MAC content. Hard to see who that would be and why that company would pay more than they have too and the have too price is probably 20% over the AAC's last deal on a lucky day.

Despite the perils of putting words in a shark's mouth... I don't believe he's suggesting the Big 12 (-2-2+2-2) would remain a well-paid power conference. I believe he's just opining that they'll probably stay together (because of a lack of better options) and add two to four schools. If so, I also believe that's the most likely outcome.

I see a lot of interesting ideas for coast to coast expansion and mergers. I'm beginning to believe a tighter footprint might make better sense. Too bad the Big 12 cannot trade West Virginia to the AAC for Houston. Then they could add schools like Boise State, BYU and/or Colorado State and have a decent product that makes a semblance of geographic sense.

 

[Kolumbo]

If the B1G had any interest in Kansas or Iowa St they would already be members.

By that logic Texas and Oklahoma would also already be in the SEC. Conference realignment would have all started and stopped in 2004. I just don't see KU getting clotheslined like UCONN and the B1G is certainly an option.

"Texas will never join the SEC." "Oklahoma and Oklahoma State will never separate."

 

[ScottVib]

I think our fan-base overestimates the value derived from Basketball in expansion. Hell if basketball mattered, Memphis and not USF would've been added by the Big East in response to the 2004 raid and UConn would've been a no-brainer value add to the Big XII during the dog and pony show a few years back. Kansas does not have the attraction to either the Pac-12 or Big Ten that we think, despite their status as a long-time blueblood. Could they be added? Sure, but they are far from a no-brainer.

 

[Slasher]

Other than the fact that there is a 0% chance of your scenario playing out, why would the sun belt teams leave for C-USA? The Sun Belt is the growing, up and coming conference. I think the C-USA is basically MAC level now. I think if AAC loses teams, the sun belt is where you look for expansion.

 

[Fishy]

No one will want the rights which means the B12 implodes or some how finagles a media deal at the doggy bowl level of the AAC and MWC. Whatever it is, the remnants have just been passed down to the G5 world.

The only way out of this for the B12 remnants is some crazy new media entrant from Planet 9 who is desperate to build a new media platform. ESPN is out, they have their tier 1 SEC, tier 2 ACC and tier 3 AAC/MWC/CUSA/MAC content. Hard to see who that would be and why that company would pay more than they have too and the have too price is probably 20% over the AAC's last deal on a lucky day.

Why would ESPN be out? Because they have the AAC?

The AAC contract is backloaded and even the AAC can’t expect to live long enough to realize that money. ESPN doesn’t even have the MWC and the MAC/CUSA are probably 10-11M a year combined. These are not significant investments - this is ESPN+ fodder where the conferences are picking up production costs for ESPN+ content.

A league with the eight remaining Big 12 schools, with, say, BYU, Cincy, UCF and whoever, is going to make more than the AAC. They’re not going to make $20M a year, but $10-12 is definitely possible. It’s a vastly more attractive football conference than the American ever was.

By that logic Texas and Oklahoma would also already be in the SEC. Conference realignment would have all started and stopped in 2004. I just don't see KU getting clotheslined like UCONN and the B1G is certainly an option.

"Texas will never join the SEC." "Oklahoma and Oklahoma State will never separate."

That‘s actually an impressively silly way of looking at it. Kudos.

 

[metsfan2323]

The most likely scenario - overwhelmingly - is that the remaining eight Big 12 teams milk the remaining contract and exit fees and then add in two to four schools from the AAC/BYU.

Only questions I have are….

1) Do they invite BYU?
2) Do they take one or two Florida schools?
3) Do they invite Houston? They don’t want to.

A few years ago when the Big12 was considering expansion the Texas politicians were putting a lot of pressure on the Texas B12 schools to add Houston. My guess is Houston will be added if the B12 adds 4 teams.

 

[kingdobbs]

I think our fan-base overestimates the value derived from Basketball in expansion. Hell if basketball mattered, Memphis and not USF would've been added by the Big East in response to the 2004 raid and UConn would've been a no-brainer value add to the Big XII during the dog and pony show a few years back. Kansas does not have the attraction to either the Pac-12 or Big Ten that we think, despite their status as a long-time blueblood. Could they be added? Sure, but they are far from a no-brainer.

Well, to be fair, it’s not like the response to the 2004 raid DIDN’T pull in a significant amount of basketball value to the Big East on its own with Cincy and Louisville.

The response shored up as best it could the leaks in the football dam (and arguably made for a more balanced and competitive conference overall that kept the league in the BCS conversation), and made a dang good hoops league even better. And that’s only considering two of the five adds.

 

[CL82]

hen you look at the AAC where ECU & Tulas are getting at least a 10x premium on their content with the AAC's $7M a year deal

Isn’t the AAC deal is tiered? Are they actually at $7M now? Also keep in mind that the American deal transfers the cost for production of much of the content to the members schools. Initially that means developing production facilities, but because of on our account and office staff is borne by the school.
So even when that $7 million for school is reached that’s a gross figure. The net figure will be substantially lower.

 

[ScottVib]

It's $7M AAV for each school, it may be less now, slightly higher later. The transfer of the production costs isn't ESPN's consideration, it's not an added benefit to them (they transfer those costs to the schools universally for the lower tier events covered on ESPN+). ECU/Tulsa are getting a 10x premium on what they'd realize if they were still in C-USA and what they'll get should the AAC lose the content that ESPN is actually willing to pay for (there are automatic renegotiation points triggered for a certain critical mass of schools departing). There is more value in a deal (even at a higher AAV) involving the Big XII leftovers and the top of the AAC than anything involving a full merger. I'd be shocked we see some bloated merger involving all of the current AAC membership, if only because of the massive premium already being paid out for borderline worthless content involving the bottom of the conference.. you stop paying for those schools and that content (or at least get it at much less than a $7M AAV) and you can turn a profit on the content while cutting your costs.

 

[Exit 4]

Why would ESPN be out? Because they have the AAC?

The AAC contract is backloaded and even the AAC can’t expect to live long enough to realize that money. ESPN doesn’t even have the MWC and the MAC/CUSA are probably 10-11M a year combined. These are not significant investments - this is ESPN+ fodder where the conferences are picking up production costs for ESPN+ content.

A league with the eight remaining Big 12 schools, with, say, BYU, Cincy, UCF and whoever, is going to make more than the AAC. They’re not going to make $20M a year, but $10-12 is definitely possible. It’s a vastly more attractive football conference than the American ever was.



That‘s actually an impressively silly way of looking at it. Kudos.

Dropping the B12 to 10-12 pulls them out of power status. ESPN’s interest will measured by how the cord cutting future really plays out. ESPN already has plenty of B and C grade football.

 

[justgoplay]

The Big12 will stand pat until they max out the OU/UT exit fees...If OU/UT/SEC need to move early and can offer the Big12 a lump some buyout that works, the Big12 will add 4 schools...
UCF/USF/CINCY/HOUSTON
Pair up travel partners like the PAC12 and play Basketball games Thursday-Saturday or Saturday-Monday.
UCF-USF/ WVU-CINCY/ IOWA ST-K STATE/ KU-OK STATE/ TCU-TECH/ BAYLOR- HOUSTON

 

[don356]

The Big12 will stand pat until they max out the OU/UT exit fees...If OU/UT/SEC need to move early and can offer the Big12 a lump some buyout that works, the Big12 will add 4 schools...
UCF/USF/CINCY/HOUSTON
Pair up travel partners like the PAC12 and play Basketball games Thursday-Saturday or Saturday-Monday.
UCF-USF/ WVU-CINCY/ IOWA ST-K STATE/ KU-OK STATE/ TCU-TECH/ BAYLOR- HOUSTON

They can't wait that long. There best bet is that a tv partner negotiates with them for a commitment after the exit now. That's the rub for them and what puts Texas and Oklahoma in the driver's seat to wait it out.

 

[CL82]

It's $7M AAV for each school, it may be less now, slightly higher later. The transfer of the production costs isn't ESPN's consideration, it's not an added benefit to them (they transfer those costs to the schools universally for the lower tier events covered on ESPN+). ECU/Tulsa are getting a 10x premium on what they'd realize if they were still in C-USA and what they'll get should the AAC lose the content that ESPN is actually willing to pay for (there are automatic renegotiation points triggered for a certain critical mass of schools departing). There is more value in a deal (even at a higher AAV) involving the Big XII leftovers and the top of the AAC than anything involving a full merger. I'd be shocked we see some bloated merger involving all of the current AAC membership, if only because of the massive premium already being paid out for borderline worthless content involving the bottom of the conference.. you stop paying for those schools and that content (or at least get it at much less than a $7M AAV) and you can turn a profit on the content while cutting your costs.

The transfer of production costs is material when you’re comparing the the American deal to a different conference that isn’t required to provide production costs. I’d also suggest that while the $7 million average value is a useful placeholder, the actual annual value is a better metric. For example, when you compare the American ESPN deal, net value, to the Big East Fox deal Big East conference schools received more on a net basis without football than American conference schools received for a deal that included football.

 

[ScottVib]

My point was it's standard for ESPN deals to have the schools incur the production costs. So if you're comparing ESPN deals with the MAC or C-USA; and the AAC, it's already baked in. I never was comparing between network providers.

Ultimately my main point, is there is more value in a league that involves the Big XII + a few AAC schools, even over a pro-rata increase at the AAC rate + Big XII schools. That value comes from better matchup and from cutting the Tulsa & ECUs of the world loose.

 

[CL82]

My point was it's standard for ESPN deals to have the schools incur the production costs. So if you're comparing ESPN deals with the MAC or C-USA; and the AAC, it's already baked in. I never was comparing between network providers.

Ultimately my main point, is there is more value in a league that involves the Big XII + a few AAC schools, even over a pro-rata increase at the AAC rate + Big XII schools. That value comes from better matchup and from cutting the Tulsa & ECUs of the world loose.

If you were simply saying that ESPN continually wants to consolidate it’s broadcast product, I agree. That’s what it did with the Big East and what it is doing with the big 12.

 

[PaulMec]

I think that it behooves the 3 Conference Alliance to vote against playoff expansion. In fact, they should modify the rules to say that you must be a Conference champion. The Pac 12 should also take 2 or 4 of the B12 schools. All of these actions would more than likely have the Power 4 champions in the playoffs every year with no additional SEC teams.

 

[Kolumbo]

Why would ESPN be out? Because they have the AAC?

The AAC contract is backloaded and even the AAC can’t expect to live long enough to realize that money. ESPN doesn’t even have the MWC and the MAC/CUSA are probably 10-11M a year combined. These are not significant investments - this is ESPN+ fodder where the conferences are picking up production costs for ESPN+ content.

A league with the eight remaining Big 12 schools, with, say, BYU, Cincy, UCF and whoever, is going to make more than the AAC. They’re not going to make $20M a year, but $10-12 is definitely possible. It’s a vastly more attractive football conference than the American ever was.



That‘s actually an impressively silly way of looking at it. Kudos.

Likewise.

 

[zls44]

It doesn’t make much of a difference - someone will want the rights, albeit not for what they are currently getting from their combined ESPN/Fox deals.

You just cannot have an eight-team conference if the plan is to survive.

Interested to see if CBS/Paramount+ makes a play

 

[zls44]

ESPN doesn’t even have the MWC and the MAC/CUSA are probably 10-11M a year combined.

The MAC deal is absolutely brutal for them. They signed a deal in 2014 that runs through 2026. Really dumb.

CUSA just wanted to consolidate their rights after bouncing between BeIn, NFL Network, InfoWars, etc. They're making even less.

EDIT: MAC actually gets $10m a year, but Id still guess its under $15m total for the two

 

[Vowelguy]

I think that it behooves the 3 Conference Alliance to vote against playoff expansion. In fact, they should modify the rules to say that you must be a Conference champion. The Pac 12 should also take 2 or 4 of the B12 schools. All of these actions would more than likely have the Power 4 champions in the playoffs every year with no additional SEC teams.

turning down expansion would be like saying “I don’t want $1 million if it means my neighbor gets $2 million.” Maybe it won’t happen right away but it’s coming.

also unlikely that any b12 member is valuable enough to raise pac revenue/school.