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It's clear Big 12 has no choice but to do something soon: 7 things to know

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  • It's clear Big 12 has no choice but to do something soon: 7 things to know

    March 7, 2016 2:36 pm ET

    KANSAS CITY, Mo. -- The evidence is mounting. The signs are there for the Big 12. The conference has to do something to address its future.
    While there remains a slow, deliberate pace among Big 12 members considering expansion and/or a conference championship game, the league's clock is ticking.
    “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.”
    This will be. No more knee-jerk West Virginia expansion when, in hindsight, Louisville would have been the better choice.
    Meanwhile, no school is leaving. Not in the near future. It's more about shoring up a future that, without some kind of change, looks uncertain. This is about the Big 12 continuing to exist into a distant future.
    Bowlsby summed it up this way when asked the financial gap between his league and the SEC, a number that currently stands at about $9 million per year in rights fee revenue.
    “If we do nothing, 12 years from now, we'll be $20 million per school behind the SEC and the Big Ten,” he said.
    Sure, that sounds crass, but the bottom line is the bottom line.
    “Success isn't all tied to the money, but it certainly isn't unrelated,” Bowlsby added.
    During the week of its signature event -- the Big 12 basketball tournament begins Wednesday -- the conference still has just about everyone in college athletics a bit on edge.
    Expansion could cause a mini-domino effect among Group of Five schools. Right fees envy has Bowlsby's peers watching closely.
    As the week began, CBS Sports sat down with the commissioner to discuss the state of his league and others across the country.
    The Big 12 is sitting on a potential pot of (inventory) gold: About $75 million worth. The number equates the market value of 70 football and basketball games owned by conference schools outside of the current media rights deals. There are 10 football games -- one per school each season -- worth about $4 million each. Even though we're talking mostly body-bag non-conference games, that's $40 million to be sold to a potential network partner.
    There's another 60 basketball games controlled by the schools worth about $35 million. Those games are usually shown on pay-per-view or local/regional cable systems. A network partner would have to buy up that inventory. Programming is anchored around football and men's basketball.
    The addition of two more teams in expansion adds to that inventory. Meanwhile, Fox and ESPN reportedly continue struggling financially. “They [rightsholders in general] don't have any choice but to continue to buy content,” Bowlsby said.
    Texas' pride: If eventually there is a Big 12 Network, it's clear Texas' collective ego will have to be soothed. It sort of has look like was their idea to fold the struggling Longhorn Network into a conference-wide network.
    LHN, to this point, has been a financial failure, losing a total of $48 million, according to the San Antonio Express-News. A source told CBS Sports that the network continues to lose single-digit millions.
    Bad for ESPN but not so bad for Texas, which continues to collect on a 20-year deal that pays it an average of $15 million per year. But it's also clear that, until Texas football rebounds, LHN isn't worth much of a watch. A reasonable solution could be Texas being the centerpiece of a Big 12 Network.
    “Texas is always going to dominate the content on the network,” an industry source said. “They're good in baseball. They're good in softball. They're good in volleyball. They're good in swimming. They're going to have a lot more presence than other schools just because they're better than other schools most of the time.”
    See how the Texas ego begins to be soothed? We're essentially talking LHN branded as the Big 12 Network.

    A Texas decision could help the future of the Big 12. (USATSI)

    How it would work: Industry sources said ESPN gets 28 cents for each of the approximately 6.5 million subscribers in the state of Texas. That 28 cents represents what consumers pay for LHN on their monthly cable bill. 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 the only single institution network in existence (not counting BYU).
    That amounts to about $25 million in subscription fees taken in by ESPN per year. Let's say a Big 12 Network reaches 50 million cable homes with an average subscriber fee of a dime. That's $60 million annually (50 million x $0.10 x 12 months) -- a net increase of $35 million that more than doubles LHN's production.
    “We can't do network without Texas raising its hand and saying, ‘We're willing to roll it in,'" Bowlsby said. “We've had those conversations, but they haven't raised their hand. But they also haven't said, ‘Stop right now. We're not willing to talk about it.'”
    The coin flip: That's basically what the decision comes down to for the Big 12 as it considers a conference championship game. In the history of such games among Power Five conferences (1992-2015), the underdog has won 28.4 percent of the time (17 times out of 60 games). The underdog has at least covered -- if not won outright -- almost half the time (29 of 60).
    In the two years of the College Football Playoff, the underdog has pulled off three upsets in eight games (37.5 percent). Amazingly, that includes Ohio State's 59-0 win oven Wisconsin in the 2014 Big Ten title game. (Yup, the Badgers were favored by four).
    What does that mean for the Big 12? Uncertainty. Its sample size in the CFP era is two years. The league is batting .500, missing in 2014 and getting Oklahoma in last season. “It's probably fair to say two years doesn't made a tradition,” Bowlsby said, “especially when the two years had different outcomes.”
    The league has engaged a data analytics firm to help it figure out if a championship game is warranted. Here's a cheaper solution considering the volatility of such a game: Flip that coin.
    Big Ten fallout: The Big Ten is in the process of negotiating new media rights deals that will expire in 2016 (football) and 2017 (basketball). Depending on who you believe, the conference is expected to get at least a modest increase in its deals valued at more than $1 billion.
    Many more billions have been spent on sports rights since the SEC Network launched a couple of years ago. None of it on college sports. That's why if expectations are good for the Big Ten, that could mean a trickle down for the Big 12.
    “I don't know if they'll [Big Ten] break the bank,” Bowlsby said. “Now is not the time you break the bank, but they'll get a good deal and ultimately that will help us.”
    Expansion timing: Bowlsby confirmed something regarding his conference's future will have to be decided by the summer. If the league expands, it would probably take two years for the new teams to join. When they do begin play in 2018, there would be only six years left on the Big 12's current deal with ESPN and Fox.
    That suggests only a short-term fix.
    “Contracts are contracts. The terms of the contracts can be changed,” the commissioner said.
    Ongoing jitters: Mike Aresco and the rest of the American Athletic Conference are eyeing the Big 12 warily. The AAC's commissioner knows his league could be impacted if the Big 12 expands. Half his league has been mentioned as possible Big 12 targets: Cincinnati, Houston, Connecticut, Memphis, Central Florida and South Florida.
    “My hope is this thing finally settles down,” Aresco said. “It's been like a Shakespearean drama.”
    His league has no financial penalties if a team would leave. Rather, a price would be negotiated. If the American loses one team, “there probably is a school there that would want to join,” according to a source. If the American loses two teams, it's still ready to move on with 10 teams. The AAC could still play two divisions with a championship game. “I think we've established ourselves as a sixth (power) conference,” Aresco said.
    As for the Big 12's obligations to soothe those jitters, it can't. “I don't want to get out in front and say we're thinking about expansion,” Bowlsby said, “[but] everybody knows we're thinking about that stuff.”

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