Losing The Right Two Schools Saved The Big XII
CNBC Sports Business Reporter
Pressured perhaps by the heat that Texas legislators might push for Baylor to go to the Pac-10 as a condition of the three other Texas schools making the move, Colorado jumped to the Pac-10 as soon as they got the invitation.
Perhaps believing that the conference was destined to crumble, Nebraska went for greener pastures to the Big Ten.
As hard of it is to believe, the record will show, that the loss of these two teams saved the Big XII.
After the two teams were gone, Big XII commissioner Dan Beebe went to the league’s current TV partners and got the assurance — who knows in what form — that the lack of Colorado and Nebraska didn’t mean that they’d diminish rights fees.
And even though Beebe admitted on Tuesday afternoon that there is no new concrete TV deal, the numbers were now better than what Pac-10 commissioner Larry Scott could offer. How?
Well, there were two fewer schools to split money with, each team could now develop its own network as an additional revenue stream and, perhaps one of the most understated appeals — the promise of some nice penalty cash from Colorado and Nebraska.
Originally speculated as a $10 million penalty, it looks like the Big XII thinks they are entitled to much more. Beebe says that the lawyers have led him to believe that they can withhold 80 percent of the money that Colorado and Nebraska would make in the next two years.
That includes one year in the Big XII, where the two teams combined will earn at least $14 million. And one year in the Pac-10 and the Big Ten, where the money made will depend on exactly how much of a first year share the teams will be getting.
Nebraska has committed to playing in the Big Ten for 2011. I don’t think Nebraska gets a full $20 million share in its first year, so for argument’s sake, let’s say it’s $13 million, since Nebraska was told it wouldn’t earn less than what it made in the Big XII.
I suspect the Big XII is now going to force Colorado to start its Pac-10 schedule in 2011, so it doesn’t have to share money and it can take what Colorado makes with the Pac-10. Let’s say Colorado would then earn about $5 million from the Pac-10 in 2011.
That’s an estimated $32 million in revenues in the next two years that the Big XII says they deserve 80 percent of. That comes out to $25.6 million in new revenues as a bonus for staying. Beebe confirmed on Tuesday that that bonus goes to the conference’s most important schools — Texas, Oklahoma & Texas A&M.
Since Beebe wouldn’t give out any numbers, let’s just have fun doing the possible math on Texas and you can see what this works.
Say Texas got $12 million in revenue from the league as the school getting the largest share of the pie, taking about 18 percent of total league revenues.
If the numbers stay exactly the same for this year and the penalty money is split evenly with the three schools (not confirmed), Texas gets another $4.6 million ($16.6 million total) from Nebraska and Colorado’s money in 2010-11.
The following year, let’s assume Colorado and Nebraska are no longer playing in the conference and let’s also assume that Texas gets 10 percent more than an even split (as they did before when they got 18 percent versus the 8.3 percent that would be from a straight split). Now they don’t have to split money with Colorado and Nebraska, which means on the same deal they get 20 percent of the league cut now (based on the old premium), plus they get the penalty money, which will now increase.
If the money stayed exactly the same for the 2011-12, based on these assumptions, Texas makes $14.4 million from the league and $6 million from Colorado and Nebraska. That puts Texas’ total, all with old money and penalty money at $20.4 million. That’s more than the Big Ten schools are earning and that doesn’t even include their own network.
When Colorado and Nebraska left, it looked like the Big XII was done. But history will now show that, since they were considered expendable members of the league, the fact that they moved first instead of Texas, actually helped save the league.
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