It was long expected that ESPN and Fox would give the Big 12 some amount of money to not expand. But, the question was, how much? Well, we reportedly have the answer, and it’s not a ton of dough.
ESPN will pay Big 12 $10m total over remainder of agreement to remove pro rata clause. Fox will not increase pay – will keep its pro rata.
— Kristi Dosh (@SportsBizMiss) October 25, 2016
So, ESPN paid the Big 12 an extra $10 million over the remaining eight years of its contract. In exchange for the payment, the Big 12 reportedly removed language in its contract with ESPN that would mandate the network pay the conference more if it expands to 12 or more teams.
So, this helps with the notion that Big 12 is not expanding for the length of this contract (2025). That’s it. Or if they do, the networks will have a major say, because it will have to be programs that ESPN feels add value. But, at this point, with the way ESPN is losing subscribers to cord cutters, this appears to be a major long shot.
Now, the other television partner, Fox, managed to avoid any payments by simply keeping the pro rata clause in the conference’s contract.
At Big 12 basketball media day on Tuesday, commissioner Bob Bowlsby told CBS Sports, “I don’t know where they [Sports Business Journal] get that stuff.” But, from there, there was no comment from Bowlsby.
Big 12 Commissioner Bob Bowlsby declines to comment on reports of pro rata buyout by ESPN, says negotiations with TV partners ongoing.
— Chuck Carlton (@ChuckCarltonDMN) October 25, 2016
So, Fox is essentially gambling that the Big 12 will not expand. If the conference were to expand, the additional television money would be coming from only Fox, unless there was a renegotiation with ESPN.
So the Big 12, who held much of the leverage in this negotiation, thanks to the pro rata clause, took a measly $10 million to not expand. Some might view this as a typical stupid Big 12 move. But, I think there is something bigger and longer term going on here. The Big 12 is trying to play nice, knowing that they want to keep the conference in tact, and having willing TV partners is the best way to do that. Sure, the TV networks could be screwing with the Big 12, promising to help them stay together in 10 years, knowing they really won’t. But, at this point, who the heck knows what the media landscape will look like in 2025? Google? Facebook? Amazon? We don’t have any idea.
In the end, playing nice with ESPN and Fox, instead of fleecing them for money now and hurting the long-term relationship, was the best way for the Big 12 to play its hand.
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