Wednesday, November 6, 2013

Expansion Update

None of what you are hearing on Twitter about Texas or the Big 12 expanding is true. Some of what you are reading has at least a partial basis in fact, but most of the chatter is just recycled rumors recited over and over again until they take on a life of their own.

In early October the Big 12 thought it might be forced to expand in order to have a conference championship game. Their expansion committee reviewed financials submitted by Cincinnati, UCF, USF and UCONN.

Fox and ESPN were part of the appraisal and they decided that none of the candidates offered enough value for consideration without impetus from the playoff committee.

That’s not an insult to the programs mentioned. None of them having been playing FBS football for that long and none of them have the track record of success the Big 12’s unique requirements demand - at least not now.

The Big 12 decided to table the idea of expansion until they know, for certain, the exact formula the playoff committee will use. They have been told their lack of a conference championship game will not hurt them, but until the exact formula is revealed they can’t be sure. They should know sometime over the summer.

Why wait? Isn't money the motivation for everything expansion related?

If the Big XII expands with any AAC school they take a pay cut and none of the Big 12 schools are willing to see their revenues reduced unless they have no other choice.
Again that’s not a slight to Cincinnati, UCF or USF. That’s the reality of the last ten years of television ratings for each school.

I understand the huge demographic market area of Ohio and Florida. I covet the deep recruiting base of both states for the Big XII but the conference doesn’t need untapped television markets.

They don’t have a conference-wide network to monetize additions for market share alone. They can't justify expansion with carriage or affiliation fees. They need big time programs with a history of winning. They need marquee match-ups for primetime that generate Nielsen ratings to justify advertising dollars.

Here’s the problem for the expansion candidates: without using market size as a factor the value of school’s football program is hard to quantify. TV ratings, merchandising, licensing, ticket sales, win-loss percentage and bowl performance become even more important and those factors are quantified over decades not years.

Expansion for the Big XII is only justified if programs with a national reputation that appeal to national television audiences are added. They need name recognition in a program, not demographics, and none of the available candidates has the cachet necessary to punch their ticket into the Big XII.

At least none that are on the East coast. BYU fits the bill on most counts in terms of program prestige, but the Cougars are reluctant to give up their own deal with ESPN especially when it means they can keep Sundays sacred.

The other candidates are all deserving programs but none pass the Big XII’s litmus test.

Add BYU, Cincinnati, UCF, USF, UCONN or Boise State and the revenues go down and that’s a deal-breaker right now for the Big XII.

Expansion is a dead issue… unless the playoff committee decides a conference championship game is weighted in the formula used to select playoff teams. If that happens the Big XII would expand to at least 12 by adding Cincinnati and BYU or UCF.

How likely is that scenario? Not very, according to those in the Big XII. They have been told they will not be penalized for their lack of a championship game.

Is all hope lost  for Cincinnati, UCF, USF, UCONN and BYU? No. The exact formula the playoff committee will use hasn’t been finalized.  If a weighted conference championship game makes it into the formula the Big 12 will move quickly to get to 12.

Remember the review the Big XII did of candidates back in early October I mentioned earlier? A lot of the rumors floating around Twitter and message boards come from those evaluations. People hear that a few schools submitted paperwork and jump to conclusions.

Here's a confession: back when WVU submitted paperwork to the SEC I jumped to conclusions too. I assumed that a school wouldn't submit financial documents to conference unless it had been accepted. 

I didn't have a full understanding of the process then but I know now the submission of financials is just the first step.

 The process is officially called "due diligence" and it's not a rubber-stamp. Factors are included in the submissions like budgets for individual sports and projects on facilities upgrades and such. They also contain information like ticket sales, merchandizing and contributions that are vitally important to the appraisal.

These documents are complex and many people within the schools are needed to compile all the information that's needed. The people who help assemble the packets obviously know what they are for and human nature takes over.

The problem is they only know about the submission.

The fact is that when a school is told no or “not now” it’s kept very quiet. In many cases only the president and athletic director know the outcome.  And the people who helped prepare the documents -- all they know is their school applied to the Big 12 and everyone knows you don't apply unless you know you will be accepted. So they naturally jump to the conclusion that submission means acceptance and that's how rumors are born. 

The other factor is the real unhappiness at Texas. There is a small, but very vocal faction, of Texas boosters who are jealous of the publicity that Texas A&M is receiving. They blame the Big 12 for the Longhorn's recent woes. Fortunately there are those at Texas who understand the real problem is an aging coach who has lost touch with the kids he must recruit.

Yes Texas had discussions with the Big Ten earlier this season. Both evaluated the grant of rights and decided it could not be circumvented and ended their discussions. 

I’m aware of the rumors that Big Ten lawyers think they have found an out for Texas. The Big Ten may have identified a weakness in the Big 12’s grant of rights. That’s unlikely. The grant of rights signed individually by all ten members of the conference is a simple legal instrument that relies on case law for its weight.

The very nature of its simplicity leads to divergent theories on circumventing it, but the undeniable fact is the any legal battle over the grant of rights is almost certain to take longer than 12 years.

The other certainty over any potential legal battle: the court would enforce the rights holder’s claim until complete adjudication.

The risk is just too high for the Big Ten. They could challenge the grant of rights, incur huge legal fees and lose and all the while the Big 12 would retain the rights to broadcast Texas sports and the money derived  from those rights. 

The Big 12 would not settle. Six current members would be fighting for their conference and their seat at the table. They would not disband for the same reason.  Jim Delany knows it would be a fight to the death.

The other rumor about the Big Ten: the one that says the Delany is still watching the outcome of the Maryland suit very closely - keep on eye on that one. I haven’t been able to verify it yet but on the surface that one has teeth.


  1. There is no team available outside BYU that currently passes the litmus test.

    Of those that don't currently, they should be evaluated by potential for growth (as Maryland was to the B1G). In this regard UCF > USF > Cincinnati

  2. Great point. The Big Ten has a watch list. They watch for academics because they believe athletics are the easiest component to ramp up. Why can't the Big 12 project 25 or 50 years down the road like the Big Ten? Poor leadership is my first guess. But maybe its that Texas has dominated the conference and treated the others like step-children including uneven revenue sharing until the new TV deal took effect. Maybe the other members of the Big 12 are suffering from institutional PTSD?

  3. Question: There are some rumors on a UCONN board based off some statement from someone at UL, that MD may be stalling on leaving the ACC, and more to the point has not formally withdrawn from the ACC. If that is all true, big IF, that raises several questions. One that few seem to be consider is the following: For a GOR to be effective, does it require the signatures of all active conference members (or in other words are all members signing on a condition precedent for the GOR to be enforceable against a signee)? If so, and MD continues to be an active member of the ACC who has not signed the GOR once the GOR was set to be in effect, what happens to the GOR as a legally binding document? Just a question to the expansion gurus.