If that isn't the case, all these plans are kind of in trouble, as I think we can all imagine that Texas and OU would use their votes as leverage for their own purposes.
The New Big 12's Revenue Potential; Six Additions Instead Of Four?
The race to expansion for the Big 12 is moving ahead at a fast and furious pace as BYU, Cincinnati, UCF and Houston are all set to apply and eventually join the rebuilt conference. SicEm365 has continued to receive more details and clarification on the expansion process and what could be on the horizon.
Revenue
With the additions of BYU, Cincinnati, UCF and Houston, the annual television network revenue for the league is estimated at approximately $24.8 million gross.
In its current setup, the league administration withholds 10% of each university’s individual shares to cover its own expenses such as but not exclusive to real estate of headquarters, travel, personnel, marketing, advertising and promotion. With that 10% still expected to be withheld, the 12 members would receive an estimated $22.5 million annually for its television rights.
In addition to that estimated $22.5 million, the league would also receive revenue for the Big 12 Football Championship Game, College Football Playoff Revenue distribution and the various ways conferences are able earn revenue through the NCAA Men's Basketball Championship, including units for wins inside the main tournament and the NIT.
The revenue post-expansion would fall short of its current payouts that include Oklahoma and Texas through 2024-2025, but the additions of the four expected programs allows the league to avoid receiving a significantly more drastic cut in revenue. Without the additions, the remaining eight programs could have been dropped down to an estimated $10 million per year.
Without a conference television network, individual programs would still be responsible for its own Tier 3 content. In addition to agreements with platforms such as ESPN+, Tier 3 money also includes a variety of additional revenue including branding of the individual programs, corporate sponsors, ad revenue, radio contracts and logos. Tier 3 revenue is not included within the league distributions.
Tier 3 revenue for Big 12 programs, SicEm365 has been told, is approximately $15 million a year per institution on average. Each of the current universities that utilize the ESPN+ platform currently receive $4 million a year from ESPN+, leaving on average $11.0 million annually in other third tier revenue for those universities.
Tier 3 revenue for Texas and Oklahoma drastically outpaced the other programs within the league as both programs leaned on independent regional networks for Tier 3 television rights.
The chart below reflects the 2020-2021 athletic year payouts for all revenue streams to programs within the Big 12.
- Third tier revenue averages for the league exclude Texas and Oklahoma.
- After conference fees, the Big 12 Championship game and the Sugar Bowl payouts are divided equally amongst the members of the league.
- The chart excludes payouts from the College Football Playoff as well bowl game payouts outside of the Sugar Bowl. In 2020-2021, the CFP distributed $78.3 million to the Big 12.
Big 12 w/ Texas & Oklahoma | 20-21 |
Tier 1-2 | $26.0* |
Tier 3 (ESPN+) | $4.0 |
Tier 3 (Sponsorships, radio, etc.) | $11.0 |
Big 12 Championship ($20mm) | $2.0 |
Sugar Bowl ($30mm) | $3.0** |
NCAA Championship (17-21) | $1.2 |
TOTAL | $47.2 |
The chart below reflects an estimated potential earnings from all revenue streams within an athletic year which includes BYU, Cincinnati, UCF and Houston to programs within the Big 12.
- After conference fees, the Big 12 Championship game and the Sugar Bowl payouts are divided equally amongst the members of the league.
- Lump sum payouts to the league for the Big 12 Championship game and Sugar Bowl are divided by 12 members rather than 10.
- The chart excludes potential payouts from the College Football Playoff as well bowl game payouts outside of the Sugar Bowl. In 2020-2021, the CFP distributed $78.3 million to the Big 12.
Big 12 w/ BYU, UC, UCF & UH | |
Tier 1-2 | $22.0* |
Tier 3 (ESPN+) | $4.0 |
Tier 3 (Sponsorships, radio, etc.) | $11.0 |
Big 12 Championship ($20mm) | $1.67 |
Sugar Bowl ($30mm) | $2.5** |
NCAA Championship (17-21) | $1.2 |
TOTAL | $42.4 |
* Following Big 12 10% reduction
** Sugar Bowl 40mm payout minus team expenses
Not Done at Four?
While the Big 12 currently appears to be set on four programs as the situation stands now, a final decision on the total number of programs the league should add is still fluid.
SicEm365 has learned that there is push from active members of the Big 12 that the final addition total should be six programs and that the league should make the additions immediately.
If the decision is made to add six—with BYU, Cincinnati, UCF and Houston slotted in as the first four additions—Memphis and Boise State look to lead the way as its final two additions. With an eventual departure of both Oklahoma and Texas to the SEC, six new programs added to the league would bring the total membership of the league to 14 with presence in three time zones.
One key piece of criteria for all potential candidates which the Big 12 considered, however, was financial commitment from the universities as well as financial support from boosters affiliated with the individual universities.
Additional Insight
- Big 12 is willing to work with BYU’s Sunday scheduling conflict
- BYU will add all athletic teams
- July 1, 2023 is preferred timeline for additions of BYU, Cincinnati, UCF and Houston
- That date doesn’t have impact on depature of Texas and Oklahoma to SEC
- All votes for the league need to be unanimous; if that includes Texas & Oklahoma is not clear