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Is Big 12 Now Positioned to Count to $50 Million in Revenue?

The Big 12’s new television deal allows the league to provide close to $32 million to each of its 12 members, starting with the 2025-26 season.

The six-year extension will pay the league $2.28 billion, an annual average of $380 million.

So, that’s pretty simple math, right? Divide that $380 million per year by 12 members and you get a per-year payout of $31.6 million per year.

 

On Sunday, after the deal was reported, Iowa State athletic director Jamie Pollard was among the chorus of people projecting that the Big 12 would eventually be able to count to $50 million, as in per member.

No, Pollard isn’t bad at math. It’s just there’s more to college sports revenue than the major television contract. It’s one reason why I think there’s a good chance the Big 12 can reach that $50 million figure at some point in the six-year extension.

To understand how you have to look at where the Big 12 is now.

The league’s members received a record $42.6 million for the 2021-22 athletic year. That’s their entire revenue share. Per several sources, the league’s current TV deal pays each of its members about $28 million. So, simple math tells us that the Big 12 had to generate another $14.6 million per member to reach that payout.

 

How? Well, there are a number of ways. The Big 12’s major events generate revenue, including the championship game for football, and the championship tournaments for the other sports. That’s why commissioner Brett Yormark is exploring how to increase that revenue, along with creating new events to generate more revenue.

Another revenue is generated by third-tier media rights, which are usually the conference’s Olympic sports. These could be packaged in a number of ways, including through a network. Right now those rights belong to Big 12 Now on ESPN. It doesn’t look like that’s changing.

There is also the money generated by the league’s bowl game appearances and appearances in other NCAA championships. For instance, the Big 12 has benefited greatly from the revenue share it has received from the NCAA as Baylor and Kansas have won the last two men’s basketball championships. Each conference gets a share of the NCAA Tournament’s basketball fund for each game played. The unit share for the 2021 Tournament was $337,141. The Big 12 earned $32 million from the 2021 Tournament.

But there is one additional revenue source, and that’s the true wild card when it comes to the kind of revenue generation the Big 12 can create in the future, and that’s the College Football Playoff.

Right now, each of the 10 FBS conferences receives a base amount from the CFP. The Power 5 conferences receive $74 million per league. Right now that works out to $7.4 million per Big 12 team. That’s about half of the gap between the current TV deal and this year’s Big 12 payout. Conferences get $6 million for each team that reaches the semifinal and $4 million for each team that plays in a non-playoff New Year’s Six bowl game.

 

So, the playoff is lucrative, whether you have a team in it or not.

So, Big 12 teams currently get $28 million from the TV contract, $7.4 million from the CFP deal and another $7 million or so from the rest of the revenue generation. That gets us to the $42.6 million.

That’s our baseline. Now let’s try to look ahead.

If the new TV deal will pay out $31.6 million per team, and the Big 12 wants to get to $50 million in revenue sharing, then the league needs to produce another $18.4 million per team. Assuming the non-CFP revenue generation is static at $7 million, that leaves 11.4 million per team needed from the CFP. Big 12 teams are already getting approximately $7.4 million per team, so that gap is, what, $4 million or so?

That looks incredibly attainable.

Just last month Front Office Sports reported that the CFP could fetch $2.2 billion in annual rights fees. In case you’re wondering, ESPN currently pays an average of $470 million for the four-team playoff.

If that’s what the CFP gets, that’s nearly five times what it’s getting now.

This is exactly what the CFP wanted — a bidding war to drive up the price, and they’re likely to get it, once its committee determines if the expansion of the playoff can happen earlier than the end of the current deal.

There are natural problems with projections of course. We don’t know exactly how the new deal will be configured. Will revenue generation still be done by conference, as it is now? Will there continue to be tiers between Power 5 and Group of 5? Will there be bonuses for making the playoff, which will be easier now? Or will it be tiered depending by how many games you play, like the NCAA Tournament? Plus, how long will this deal be? There are plenty of unknowns that don’t make it a slam dunk.

So what’s the true gap, then? Remember, the Big 12 is going from 10 to 12 teams. For the current teams, the gap is $4 million per, or $32 million. For the four new programs, they’ll enjoy that revenue share for the first time, and it will likely be $11.4 million per team, or $45.6 million in total.

So, the total gap is $77.6 million. That would be double what the Power 5 gets now as a baseline.

Is that attainable? Well, if the CFP ends up growing the contract by nearly five times what it is now, I’d have a hard time seeing the Big 12, along with the rest of the Power 5, not doubling that base.

To me it appears likely the Big 12 will benefit from this new TV deal, and from a new CFP deal to the point where Pollard’s math would hold up, if not the first year of the new TV deal, then shortly thereafter.

We’ll need hard numbers to be sure. But the Big 12 positioned itself well to bridge the gap.

You can find Matthew Postins on Twitter @PostinsPostcard

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