How much money does a new school bring to the conf?

[Denver_sc]

Well, it looks like OU and OSU to the Pac 12 is looking more and more inevitable with each passing day. I thought it would be interesting to think about the benefit to the Pac 12. Assuming that each school gets an equal share of the TV revenue, how much does each school have to bring in value to make it worthwhile for the Pac 12? The current TV deal, running 12 years from the 12-13 season, is worth ~$250M/yr, or about $21M/school/yr. It's also been speculated that third tier rights will run $10M/school/yr.

Stating the obvious, this is $31M/school/yr. or $372M/yr total for the conference. The only benefit to adding teams at this point would be to add value to any subsequent rights negotiations. Any school coming into the conference would need to add >$31M to make it a "good deal" for the Pac 12. Considering UT is getting $25M for all of its rights, including $15M for the LHN and $10M for the Big Tex share of the conference spoils (I believe this is correct, please feel free to correct me if I'm wrong), does it make any sense to add ANY of the teams suggested? Do either UT or OU add >$31M/yr to the TV contracts?

 

[Buffnik]

The answer is obviously "yes" or there wouldn't be interest.

I think the factors that play into it are:

1) Expanded reach of the Pac-12 network
2) Addition of Central time zone to add another time slot for football and basketball games
3) Ability to effect a rules change that adds a semi-final round to conference championship (2 extra big money games)

Those, by themselves, aren't dependent on the relative value of the school. Schools that are in large media markets or generate national interest carry significant value adds with them. This is why the Pac-12 doesn't care too much what 2 schools would come with OU and UT as long as they're in the Central time zone. Ideally, they would want KU and MU but the value of OU and UT is so high that it more than offsets the loss of taking OSU and TTU with them if that's what it takes to make it happen.

 

[SuperD]

I think the PAC likely has a very good idea of what additional schools are worth. It sounds like they negotiated accommodations for expansion, and may very well have agreed to certain automatic bumps based on specific schools joining the conference. That may be the reason why they are willing to add OU/OSU even if they are uncertain to get UT. If they know they get $X for adding OU, they may essentially be playing with house money. The real question is if adding the Okie schools ups the per school payout for the tier 1/2 deal or if the bulk of the additional value is to the PAC 12 network.

If they have specific numbers that they can quote OU, it may also explain why OU seems hellbent on the move now.

 

[Dark Bohner]

Adding OU and to a much lesser extent OSU adds the state of Oklahoma which has a decent population of about 3.5 million and also the DFW TV market from what I can see which would mean a ton of new TVs. Plus OU is kind of like Nebraska in that they are a national brand and will draw more national interest as well which is why the Big 10 decided on NU instead of Mizzou.

 

[Lt.Col.FrankSlade]

The Big 12 currently has TV contracts with ESPN/ABC and Fox. ESPN/ABC currently pay the Big 12 conference $65 million per year. (Note: The ESPN/ABC contract expires in 2014) The new Fox contract is going to pay the Big 12 conference $90 million per year. That's a combined $155 million, which is to be split amongst the 10 teams. With the loss of Texas A&M - that's $155 million to split amongst 9 teams.

Or, roughly $17 million per team.



The Pac-12 just signed a new deal with ESPN/ABC and Fox. The Pac-12 deal is worth $250 million per year. Or, roughly $21 million per team, per year. (I don't believe that figure includes money that would come from a Pac-12 television network)



There are some big questions about all this conference shuffling. If the Big 12 continues to exist (which I still think is possible, even if the league is greatly watered down) then I don't think there is that much money to be made by adding OU and OSU to the Pac 12. However, if the Big 12 folds (which it will, if both UT and OU leave) then I think there is tremendous money to be made by adding OU/UT to the Pac 12. OU/UT are the big values in the current Big 12 television contracts. They are the reason the league landed the $90 million per year contact with Fox. Moving those two teams over to the Pac-12 significantly increases the value of the Pac-12's contract - while at the same time pretty much crashing the value of the Big 12 television contract.