The Blue Board

*Read this on another site, not claiming to have any inside info*

http://www.sportsbusinessdaily.com/Special-Content /News/2012/Big-12-ESPN.aspx

The Sports Business Journal broke a story today that the Big XII and ESPN were close to finalizing a new television agreement that would net the conference $1.3 billion over the next 13 years. Combined with the Big XII's agreement with Fox ($1.2 billion over 13 years), the conference stands to earn $2.5 billion over the life of both agreements.

Under the new terms, each Big 12 school will average just under $20 million a year. Schools in the Pac-12, which also partnered with ESPN and Fox to generate its record $3 billion deal over 12 years, will average nearly $21 million per school.

Here is where it gets really interesting

The Big XII made a number of strategically brilliant moves w/ this latest contract. If they sign at least 2 additional teams (there are restrictions on whom), there is an automatic escalator in the contract that will raise the total payout by $2.05M per team (this based on the added conference championship game). And, they negotiated an opt out clause that will allow them out of the deal to take it to market if they expand to 12 or further, with ESPN/ABC having the right of first refusal on the contract. Once the language of the contract makes its way back to the ACC, I think there will be some nervous presidents & a nervous commissioner, b/c the Big XII essentially just got a license to hunt, with guaranteed ammo.

And, what’s better, the ABC/ESPN/Fox contracts the Big XII has are only for Tier 1 & Tier 2 broadcasts. So, teams are free to shop their Tier 3 rights. So, just like Texas is netting $10M/season, and KU is netting $8M/season from Tier 3, Florida State, Clemson, etc will have the ability to make $20M + millions more on Tier 3, which would put them above the highest paid SEC teams.

Big XII, ESPN Nearing Monster New TV Agreement - Crimson And Cream Machine

Thats just the start

BYU is jubilent right now, and I am not just talking about the game last night (I'll admit it -- I bleed gold and blue but I was cheering like crazy by the end. Horrible basketball but tremendous game). The deal being negotiated with ESPN has an escalation clause, whereby the addition of certain teams allows for a mechanical increase in the value of the contract. ESPN has said, in effect, that if you add teams from this list (he called it the "cool kids list" and a "get out of jail free card"), the Big XII is guaranteed an increase of $2.05M per team so long as the final number of teams is 11, 12, 14, or 16. Apparently the 13th or 15th team don't provide $2M in value, but 13+14 or 15+16 provide $4M in value (something to do with inventory management). The list is not long, so every team on it has value to the Big XII and ESPN sufficient to cover their cost + $2.05M.

BYU is on the list. BYU thinks they would have a shot anyway, but they are expecting to be added in order to sweeten the pot for future additions. They think that the Big XII will take them at #11 or #12 to get the per-year deal up to ~$24M, which will help lure the other, bigger schools on the list (and he didn't know who they were, but I am going to use FSU and ND as an example because that is the example he used). Rather than take a potential $20M deal escalating to $24M to FSU and ND, they will add BYU and someone to then take a $24M deal escalating to $28M to FSU and ND.

The mechanics of this deal, as I think about it, are astounding. If that number is legitimate, then a Big XVI would be worth $32.3M even with the existing Fox contract. I can only see that happening if the rest of the teams on list are the FSUs, NDs, Clemsons, Miamis, and so forth. But you would think that with $32.3M per year (plus, if they could renegotiate with Fox) they could make a pretty good pitch for prying some quality teams free.

BYU supposedly negotiated with ESPN directly to be placed on that list, as there was some reluctance on the part of the Big XII to go west. But now that they are on the list, they are extremely confident that they will be part of the Big XII in the near future.