We are back!
Refreshed after taking a quick break after football season, we are diving head first into the offseason. There’s a bunch of football topics that I’m planning on covering this offseason, such as breaking down the key features of Grubb’s offense and the how it’ll evolve with new personnel, but this week I wanted to hit the Pac-12 media negotiations and CFB realignment.
I joined Andrew & Collin on the UWDP Podcast this past week, and we talked realignment in the second half of the pod (I definitely recommend listening). With all the rumors whirling around regarding the status of the conference’s media deal and its implications on realignment, none of us really know what’s going on, but it was a great conversation that really got me thinking about the situation as a whole. As a college football fan that is interested in the business and structure of the sport as a whole, I’ve been following the shifting realignment landscape as close as an outsider could, and I have a few thoughts from the podcast that I wanted to follow up.
2010’s Realignment: Missed Opportunity
To add context to my take on the situation, lets rewind to the last wave of realignment. In the summer of 2010, then-Pac-10 commissioner and now universally disliked former commissioner, Larry Scott attempted to raid the Big 12 to form the Pac-16. Invitations were sent to Oklahoma, Oklahoma State, Texas, Texas A&M, Texas Tech, and Colorado, who at the time were the top football programs in the Big 12. The hypothetical Pac-16 would’ve created arguably the top football conference in the country, expanded the conference’s geographic footprint into prime football recruiting territory, brought the conference into strategic TV markets, and brought three of the biggest collegiate brands into the fold. The added Texas, Texas A&M, and Oklahoma brands would’ve been a significant addition to a conference that had historically been propped up by “tentpole” programs like USC, UCLA, and UW but lacked strong branding and viewership outside of those three schools.
Unfortunately for the Pac, this deal fell through shortly after its inception once Texas backed out in favor of a sweetheart ESPN deal that later became the Longhorn Network. Without Texas, the other schools, with the exception of Colorado, decided to stay in the Big 12 under a unique conference grant of rights that allowed schools to retain more control over the sale of their media rights (a key hurdle in creating the Longhorn Network). Scott ended up adding Utah to form the Pac-12, and the Big 12 stabilized at 10 teams after TAMU and Mizzou left shortly thereafter for the SEC.
Larry Scott’s bold attempt at expansion and his later creation of the Pac-12 Network we’re great ideas in a vacuum. Similar expansionism has been key to the SEC and Big 10’s consolidation of power in the years since, and every Power 5 conference has their own versions of a conference network. However, it was Scott’s inability to successfully capitalize on these initiatives and execute his vision that ultimately set the stage for our current situation. Instead of being a proactive player in securing a strong standing the CFB landscape, we let others take the momentum.
2020’s Realignment: Shifting Momentum
Fast forward a decade to the summer of 2021, and we in the Pac-12 faced a much different CFB landscape. Since the last wave, structural changes to the post-season, the ebb and flow of key teams across the country, and new priorities at the broadcast and cable networks put the conference in a very difficult spot. The College Football Playoff was introduced in 2014 with the dual purpose of crowning an undisputed national champion and delineating a clear path to the title for teams. However, the byproduct of this was the reduced value placed on other post-season bowl games. There was still money and visibility associated with bowl season success, but media narratives are now driven by playoff appearances.
This shift in the definition of “success” is key here. Instead of 12+ teams getting attention in prestigious bowl games (now known as the NY6 bowls), there is now only 4. This is great if you are in a conference or are a fan of a team that is in that exclusive group of CFP participants, but it also had a negative effect on those who were on the outside looking in. Since the 2014, the SEC has maintained its dominance of the new post-season format with teams like Alabama, Georgia, and LSU all winning championships, but the rise of Clemson and the return of Ohio State and Michigan to the top of college football have created a log jam of teams vying for berths. Each P5 conference has sent a representative to the CFP, but we have also seen instances where multiple conferences have been left out in favor of a second, non-conference champion from the Big Ten or SEC, being given a berth.
In my opinion, the Pac-12’s exclusion from the CFP for multiple years has seriously eroded our teams’ brand value. While there’s a strong argument (that I agree with) that we simply need to improve the on-field/court play of our teams, the TV contracts are expiring in 2024, and the networks aren’t waiting for that rebound in play. As we have all found out, its the networks and their goal of driving TV ratings that are the key driver of realignment. The networks’ strategy in improving these ratings have shifted since the last round of realignment. Instead of seeking broad geographic coverage and access to media markets, the networks have decided to prioritize collecting the strongest collegiate brands under their banners.
That is why in the summer of 2021 Texas and Oklahoma shocked the CFB world by announcing their departure from the Big 12 to accept an invitation to join the SEC. Allegedly, ESPN, the primary media partner of the SEC, made the shrewd business decision to orchestrate their move to the SEC so that ESPN could acquire their strong brands and TV inventory without having to purchase the Big 12’s entire media rights package. What we all have to remember is that this is effectively a zero sum game. These networks don’t have endless money to spend on purchasing college athletics media rights. Having already invested in the SEC and ACC, ESPN had to think strategically about how to enhance their inventory for as little money as possible.
Opposite of ESPN in this market is Fox, whose massive investment in the Big Ten put them in a similar financial position as ESPN. Needing to make a move to counter ESPN’s addition of Texas and Oklahoma media rights in the CFB TV arms race, we all should have anticipated a rebuttal from Fox coming from a mile away. Unfortunately, few of us were anticipating USC & UCLA’s 2022 departure for the Big Ten. Adding Notre Dame and one of the remaining Big 12 schools to the Big Ten would’ve made more sense from a geographic perspective, but that is using outdated logic. If the new emphasis is on collecting the biggest brands, USC and UCLA made a ton of sense. They are two of the strongest brands that are not already controlled by ESPN, and they have the added benefit of bringing a permanent Big Ten presence to the largest media market in the country.
In my opinion, how the two raided conferences responded is very telling. George Kliavkoff began his tenure as the Pac-12 commissioner in July of 2021, right as Texas and Oklahoma were shaking things up and just 2 years away from the expiration of the Pac-12’s TV deal. What have we gotten in the 1.5 years under Kliavkoff? USC & UCLA are on their way out, we have not officially made moves to expand, and we have reportedly stalled out in our media rights negotiations. In short, we’ve gotten nothing.
On the other hand, Brett Yormark joined the Big 12 over a year after Kliavkoff in August of 2022, and his conference has already retaken the momentum. Instead of throwing a band-aid on the problem like Kliavkoff attempted to with the short-lived “Alliance” between the Big Ten, Pac-12, and ACC, Yormark’s predecessor, Bob Bowlsby, went on the offensive by adding Houston, Cincinnati, UCF, and BYU in response to the Texas and Oklahoma departures. While none of the four are anywhere close to being like-for-like replacements for UT and OU, they are the top four G5 teams who will likely be competitive early in their P5 tenures. Their additions take the Pac-12’s most enticing expansion candidates off the table and are a sign to the market that the Big 12’s membership has at least been stabilized enough to negotiate a TV deal with. The latter is the key.
Within his first few months on the job, Yormark was able to leap frog the Pac-12 by negotiating a new TV deal even though their contract was going to expire a year after the Pac-12’s. This allowed them to essentially get the last big bite at the proverbial apple before ESPN and Fox exhausted their budgets for college athletics content. Now its fair to point out that the Big 12’s deal is tens of millions of dollars per year per school behind the SEC and Big Ten, but it was a workable number for the member schools, it aligned with what a fair market price would be for their collection of brands, and it brought financial security.
On the podcast, Andrew thought that while it might bring an added level of security, it also locked in a mediocre price for a conference that might have aspirations of competing with the new Power 2 (Big Ten & SEC). It’s a good argument given the rumors that the ACC is now facing internal discontent with their lengthy under market TV contract. However, my response is that its only a problem if stability is your only goal.
What’s Next in Realignment?
From all of the moves that we’ve seen out of Yormark, it seems like he’s laying the groundwork for offensive moves down the line. Their renegotiated TV deal includes clauses and contingencies for additional members joining the league, and he’s been rumored to be involved in negotiations with both current Pac-12 members (Arizona, Arizona State, Colorado and Utah) and potential non-football membership candidates (Gonzaga). With a secured TV deal in place, Yormark is positioning the conference to be a natural landing spot for discontented or homeless Pac-12 programs (depending on how the Pac-12’s media negotiations shake out) and a good place for Gonzaga to take a step up in competition to what might be end up being the premier college basketball conference.
Outside of the Big 12’s potentially imperial ambitions, there are many other scenarios where this wave of realignment might end up. The Pac may or may be able to come to an acceptable media rights deal, and despite many wishing to retain the league’s historic connections and rivalries, money will likely be the determining factor. UW and Oregon might be compelled to push for unequal revenue sharing as the flagship programs who also wish to not get left behind (similar to Clemson & FSU’s sentiments). However, that might push teams like the aforementioned Four Corner schools to look to the Big 12, thus precipitating the collapse of the conference.
ESPN might also push for a full or partial ACC-Pac12 merger to shore up both conferences. Despite the ACC lagging behind the SEC in ratings, its worth noting that since the ACC’s TV deal is so comparatively cheap, ESPN would likely do everything in their power to keep the conference together for the sake of preserving their ACC deal. A moderate bump in their TV deal for the additions of key Pac members (say UW & UO?) might be enough to placate the disgruntled members and also bring valuable brands and Pacific time zone content into their portfolio.
Personally, I believe that the end game is for Fox & ESPN to somehow create their own respective super conferences that ditch the historic & geographic ties that these conferences were built on. The Big Ten and SEC have already begun cherry picking the most valuable programs from their rivals for the sake of boosting their TV deals. With so much value being tied to specific schools, the old model of equal revenue among conference members starts to make less sense. Why would Clemson agree to make the same cut as Syracuse? Or why should Georgia make the same as Vanderbilt? Either an unequal revenue sharing model will become the norm, or we will start to see stakeholders looking for a way to cut loose their conference’s “dead weight”.
The writing is on the wall.
Where does UW fit into the new landscape?
Congratulations if you got to this part of the article. This is probably the section that most of you folks were most interested in anyways. I think its safe to say that UW fans would either prefer to stick in the Pac-10 2.0 with a Big 12 competitive TV deal or leave for the Big Ten. I would prefer to take the Big Ten pay day, retain historic rivalries via the non-conference schedule, and foster new rivalries with Big Ten opponents who we likely already have existing history with from the Rose Bowl (Michigan anyone?). However, with the departure of Big Ten commissioner Kevin Warren, the invitation to the Big Ten seems to be but a (pipe?) dream.
Looking from a more realistic perspective, I see the following as our more likely scenarios:
- Leave for the Big 12 to secure an adequate TV deal and hope to negotiate a favorable buyout clause if the Big Ten invitation comes.
- ACC/Pac-12 merger or an ACC raid of the Pac-12
- Stay in the Pac-XX where Kliavkoff aggressively expands to drive up the value of the TV deal with new members taking partial shares to offset higher payouts to existing members.
- Stay in the Pac-10 2.0 and manage to secure favorable revenue sharing.
Obviously I’m not basing the order of those scenarios on any new information, but if the TV money is the top priority for UW, then this is where I saw our best opportunities. I don’t get the sense that the administration wants to leave the conference for dead, but the Big 12 option is the clearest path to financial security. After that, its kind of a toss up. There have only been unsubstantiated rumors of the merger idea, but if ESPN can kill 2 birds (mallards?) with 1 stone, then that might be enough for this option to gain momentum.
The last two options really feel like Hail Mary’s by comparison (that’s saying something). I don’t really see a realistic combination of added schools that would both agree to that proposal and would significantly increase our conference’s TV deal. Not to mention, the Pac-12 presidents have long been known for being academic elitists, which would severely restrict the number of potential candidates for expansion unless they were willing to bend their own rules.
As for the last option, it might seem like the most likely, but if we go back to the initial assumption that we are prioritizing the money and need to take the option that makes our athletics department financially viable, we would almost certainly need some amount of unequal revenue sharing for this to pencil out. The unequal revenue sharing has been rumored to be a deal breaker for the Four Corner schools, which would in turn make this option almost impossible to make work.
Unfortunately we may have hitched our wagon to the wrong horse in this era of realignment, and while CFB purists/traditionalists (with whom I identify with) may not like all of the options, at least we have more options than some of our fellow Pac-12 brethren.
Let me know your thoughts in the comments below.