Dennis Dodd of CBS Sports talked to Big 12 Commissioner Bob Bowlsby this week, and Bowlsby sounded like someone who believes expansion is around the corner.
He also made it clear that the Big 12 was losing money by doing nothing.
"If we do nothing, 12 years from now, we'll be $20 million per school behind the SEC and the Big Ten," he said.
So how does the league increase its revenue stream?
Bowlsby thinks if the league put together a package of its third tier properties (10 football games and 60 basketball games) that they could sell that to a media partner. He estimates that each of the football games could we worth $4 million and that the 60 basketball games could be worth $35 million.
I don't buy the figures. The football games are as Dodd described them "mostly body-bag non-conference games," and getting ESPN or Fox to pay $4 million for Iowa State-Toledo or Oklahoma State-Central Arkansas, is a stretch at best. Basketball I can see getting a good number, since the league is so strong top to bottom and since the sheer numbers of games makes getting the figure workable.
Of course for that to work there is the pesky problem of the Longhorn Network.
Dodd points to the report that the LHN lost $48 million in its first five years and that "a source told CBS Sports that the network continues to lose single-digit millions. "
What isn't mentioned is that the same industry research firm that reported the $48 million loss (SNL Kagan), also states that the network will turn a profit beginning in 2016. There are 14 years left on the contract, and there is little incentive for ESPN or Texas to roll the LHN into some form of a Big 12 Network.
ESPN is currently getting 28 cents a month from the 6.5 million subscribers in the state of Texas. Outside of the state, that number goes down to two cents multiplied by 13 million subscribers outside of the footprint. That's a total of about 20 million subscribers for about $25 million a year.
The scenario painted in Dodd's column has a Big 12 Network reaching 50 million homes and getting 10 cents a subscriber.
I would love to know how they came up with those numbers. Currently the Big 12 population footprint is 39,400,000 - with 70% of it in Texas (28,000,000). There is no way you reach 50 million homes with that population base.
And that makes the American Athletic Conference very, very nervous, since the programs seen as prime expansion candidates are from the AAC. South Florida, Central Florida, Houston, Cincinnati even Connecticut are the names most mentioned. Maybe you can wring 10 cents a subscriber out of the carriers in Florida for the 4th and 5th most popular programs in the state, but I doubt it.
But say it happens. That is an extra $35 million for the network to generate $60 million.
Fine. Best-case scenario is that you have $45-$50 million after expenses to distribute to a now numerically correct Big 12. Which is $3.5-$4 million for each school.
So, stay at 10 teams and get Texas (and ESPN) to make the LHN go away and the league sells its third tier rights as a total package.
Or, expand to 12 teams and create a Big 12 Network.
That's asking Texas to take a helluava hit for the league.
The article indicates that the idea of having a conference championship game is basically a coin toss, and that the Big 12 is basing some of its numbers on the idea that that Big 10 will get a big raise when its media contracts are finalized as soon as this fall.
Early in the article Bowlsby stated:
"The last time they went through this [expansion] admittedly it was a fire drill," commissioner Bob Bowlsby said. "They were down to eight members and they were scrambling. But it wasn't a very thorough process."
Making sure you have a thorough process this time around hardly guarantees you come up with anything that creates long-term stability for the Big 12.