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Big 12 Expansion: It's Down to BYU, Houston, and Cincinnati

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Get ready for the summer of expansion. If it did anything, last week's Big 12 meetings only further defined what it would take for the Big 12 presidents to authorize expansion, and the criteria seems to paint a path for a few schools.

BYU and Houston? Welcome to the Big 12.
BYU and Houston? Welcome to the Big 12.
Kevin Jairaj-USA TODAY Sports

Tired of reading about Big 12 expansion? Well, it appears you are in luck! Last week's Big 12 meetings appear to have shined a light on the expansion efforts and, yes, it does appear a decision is closer than it has ever been before.

Keep in mind: The decision could be to NOT expand, too.

Reading between the lines, two fairly significant announcements came out of the meetings:

  • Commissioner Bob Bowlsby wants resolution to the expansion question sooner, not later. They are asking consultants (TV) to tell them more about the possible candidates.
  • The league, now that the idea of a Big 12 Network is off the table, is no longer looking for schools that help with a TV footprint; They want competitive football and basketball schools that bring compelling matchups to the conference.

You can read more about this news at Hookem.com but suffice it to say: The Big 12 is moving quickly to a decision point, likely later this summer before the 2016 football season kicks off.

At this point, only two key data points remain:

1. If the Big 12 added one or more schools (let's say, BYU and Houston), would those schools add enough value to the leagues television inventory to necessitate a contract extension and a raise (above the escalators already in place) for the Big 12? Bob Bowlsby has already said that the league's tier 1 inventory is undervalued compared to the premiums paid to the SEC and Big 10. And remember, Tier 1 isn't everything, that's just the leagues top football matchups every season; These big games drive the most value.

2. If invited, how much of a discount would BYU, Houston or Cincinnati, or any other school, accept as the price of admission? TCU and West Virginia accepted a five-year buy in, going from 50% to 100% in relatively equal jumps. Would other schools go even lower?

You may notice that one seemingly important question is not asked above: What schools should the Big 12 invite?

As far as I can tell, that question has already been answered. The ACC isn't going to give up its member institutions until the Grant of Rights is over after the 2026-2027 season and schools like UCONN and UCF no longer have relevance to the Big 12 as their value (TV sets for a network) has been removed from the equation.

Also, goodbye to Memphis, Colorado State, USF, Tulane, ECU, and others... Too little competition, too little relevance, too late to the party.

At this point, the list of things a Big 12 candidate must have is relatively easy to point to (as reported):

  • Large followings nationally (additional value for contracts)
  • Competitive teams on the field and on the court (compelling TV matchups)
  • Large fan base's that show up to big games (I.E., championship game attendance)
  • Relatively close proximity to existing member institutions to hold costs down

I could find a way to make several schools fit here... BYU, Houston, and Cincinnati all seem to fit one way or another. They also appear to miss in some areas. BYU is a bit of a hike for Big 12 schools, Houston's fan base doesn't always show up, and Cincinnati stretches the definition of the word "competitive" in football most years.

So now the work begins.

Question 1: Do these schools offer monetary value to the Big 12, and what kind of deal will they take?

I suspect Big 12 media partners BHV, who presented evidence to the conference that a network was almost certainly not going to happen, have been given a mandate: Go talk to the networks about these schools. If the Big 12 was to ask for an extension to its existing media agreements through 2030-2031 (the current deal goes through 2025), which just so happens to be the same year the Longhorn Network deal is set to expire, would ESPN and Fox be willing to come to the table?

BYU already gets upwards of $6 million a year from ESPN for its football home games alone. Cincinnati has 250k+ living alumni and is located in the 35th largest media market in the US. Houston is a little fish in a big pond, but the idea of a top 10 matchup between OU and Houston in the #10 media market in the US is exciting regardless.

So if, and this is a big if, BHV returns to the Big 12 and reports an extension of the Big 12 media deal is on the table at, say, a 15% increase to the existing TV deal (which is scheduled to hit $40mm per team by 2025), above the 20% escalation clause already in the deal for adding two new members, putting it in much closer competition with the SEC and Big 10 deals and ahead of where the Pac 12 & ACC appear to be headed, will that get the Big 12 presidents to move?

Today TV money accounts for 55% of distributable revenue in the Big 12, but that number is headed higher over the next 10 years. If the league can add approximately net $5mm to each schools payout, I think the league would be fools to not take that deal. The current Big Ten deal, as an example, looks like it will max at $50mm per school over the next 10 years. Once you add in each Big 12 member schools Tier 3 deals, that makes the Big 12 equal on a per school basis to the Big Ten. In some cases, such as the University of Texas, their media revenue would be greater than any Big Ten institution.

Question 2: What kind of deal will BYU/Houston/Cincinnati take?

The price will be pretty steep... a 5 year buy in at 20% per year (20, 40, etc)? That would return tens of millions back to existing conference members, keeping them happy. But could the Big 12 get the deal done with its prospective members? Based on the college landscape, and the relatively non-existent opportunities to make a jump outside of this Big 12 opening, I think any school would jump at any opportunity to join the Big 12. Yes, even BYU. Not playing games on Sunday is fixable, and parking the BYU TV Network in the Big 12 is, well, normal.

I've said it before, expansion in the Big 12 isn't about being #1 today, its all about setting the conference up to be the hunter, not the hunted, once existing grant of rights agreements start running out for the ACC and Pac 12.

And, if BHV finds an appetite for BYU/Cinci/Houston TV inventory, and if those schools are willing to give up a ton to buy their way in, this expansion drama in the Big 12 might be over before you know it.

Actually, I'd argue it's going to be over soon, one way or the other.