by Greg Katz
December 4, 2012
The period between 2010-2012 proved to be a very hectic and monumental three years for the National Collegiate Athletic Association (NCAA). Significant conference realignment included, but was not limited to: TCU joining the Big East from the Mountain West, and then leaving the Big East for the Big 12 before ever playing a game; the Big East losing Syracuse and Pittsburgh to the ACC and then West Virginia to the Big 12; the Big “East” adding San Diego State, Boise State, Houston, SMU and Central Florida; and Texas A&M and Missouri both leaving the Big 12 for the SEC. The constant realignment seemed to conclude with Memphis’s departure from Conference USA to join the Big East in February 2012, but the next eight months would prove to merely be the calm at the eye of the storm.
Big Ten Commissioner James Delany announces Maryland’s move.
AP Photo by Patrick Semansky
Next Wave of Realignment
On back-to-back days last month, the Big Ten entered into agreements with the University of Maryland (November 19) and Rutgers University (November 20), making both universities full-time members, and bringing the “Big Ten” conference’s total to fourteen teams over the next two years. After watching Maryland — one of the conference’s seven charter members — leave for the Big Ten, the ACC quickly responded by voting to add Louisville from the Big East. Despite finding an (arguably) adequate replacement for Maryland, the ACC has already filed suit against the university seeking the full payment of a recently increased exit fee of roughly $53 million.
With the increasing threat of members leaving for greener conferences, the ACC, as well as many other conferences have taken proactive measures to increase their stability. The ACC has increased its exit fee twice in the last two years, first from around $12 million to $20 million, and soon after, by a 10-2 majority vote, to nearly $53 million (the agreed upon exit fee is actually pegged at three times the ACC’s operating budget for the year a school announces its departure). It is not surprising that Maryland was one of the two universities that disapproved of the hefty exit fee. Although it is contested whether Maryland will be forced to pay the fee — Maryland claims the fee represents a penalty, and thus should not be enforced – at first glace it appears difficult to grasp why Maryland, whose athletic department is struggling financially, would leave for the Big Ten with little regard to the ACC’s exit fee. The answer, however, is clear: Big Ten membership equals big time revenues.
TV Revenues: The Gold Rush
The onslaught of FBS conference realignment has undoubtedly been motivated by an effort to increase a university’s athletic program’s financial stability, with the biggest prize being a lucrative television deal.
The Big Ten recently revolutionized the NCAA television market by creating the Big Ten Network, which provides each team an estimated additional $11 million a year. The innovation and success of the Big Ten Network has made it a model that many conferences are looking to emulate. The Pac-12 has already launched their own network, the Pac-12 Network, which, despite being modeled after the Big Ten Network, has the potential for a much greater upside for the Pac-12. Unlike the Big Ten Network, of which the Big Ten only owns 49% (Fox owns the remaining 51%), the Pac-12 is the sole owner of the Pac-12 Network. If the Pac-12 Network generates revenues similar to that of the Big Ten Network, it is estimated that Pac-12 institutions could earn an additional $10-30 million per school, per year in TV revenues alone. Outstandingly, these deals do not even include rights to post season bowl games. Most recently, ESPN reached an agreement with the NCAA for all FBS playoff games. The twelve-year deal is reportedly worth in excess of $7 billion.
The Big East Least
Despite the lucrative numbers, not every conference and university shares the same optimism about the recent realignment. The Big East, which recently turned down a $1.4 billion deal, is the next conference up for TV contract renewal in 2013. It is projected that the recent departures of Rutgers and Louisville, who happened to play each other in the nationally televised Big East Conference Championship, will result in a substantially lower offer this time around for the Big East. A quick look at the current football season provides a vivid explanation why. There was a four-way tie for the 2012 Big East regular season championship; three of those four teams, Syracuse, Rutgers, and Louisville, as well as fifth-ranked Pittsburgh are leaving the conference over the next two years. Making matters even worse, there is already speculation that Boise State and San Diego State, like TCU, will both leave the Big East before playing a single game in the conference. Additionally, realignment rumors have been linked to Big East charter member UConn, predicting a new home in the near future, possibly in the ACC.
The future of many conferences and universities is still very much in flux. The next few months, or perhaps weeks, may determine the fate for many smaller conferences as they compete with one another to capture the most attractive universities and construct the most marketable conferences within their power. We have already seen that conferences such as the Big East are willing to go outside the box to stay competitive, but there are arguments to be made that such extreme measures, although beneficial to the universities, will be detrimental to the student-athletes. San Diego State student-athletes, for example, are going to be subject to unprecedented travel time if many of their conference away games require a trip to the East coast. On the other hand, if that is the price to pay to fund the programs, than there may not be much of an option.
It is near certain that schools will continue to move, but more interestingly, it is not out of the realm of possibility to see the renaming, merging, or even disbanding of many historic and tradition-rich NCAA conferences. For the time being, the Big Ten has fourteen teams, the Big Twelve has ten, the ACC reaches as far West as South Bend, Indiana, and the Big East spans coast to coast.