Big East in the Post-BCS World, Pt. 2: Is the Current Big East Plan Shortsighted?

Tobi WritesAnalyst INovember 9, 2012

What happens if BYU and the academies do not want to play along?
What happens if BYU and the academies do not want to play along?Otto Kitsinger III/Getty Images

This is the second in a series on Big East expansion.

In the past, I've covered the minutia of how the Big East could look like a BCS Automatic Qualifying conference in the eyes of the power schools by pulling in schools like the military academies.  

I've talked about how adding a school like East Carolina with their 14th slot would have been a smart addition to help the Big East with their diminishing appeal to the major bowls in the southeast. 

I've talked about how there is a lot of sensible synergy in going after the military academies for their nationwide fanbases and even BYU for its mostly western fanbase. 

All of this was solid strategy to keep the Big East's AQ slot in the BCS bowl.

Well, forget all that.

Conditions have changed in a major way.

Today the Big East needs to seriously consider a different plan.  I am going to argue that a larger expansion plan (maybe a lot larger) would be far better suited to protect the future prestige of the conference than their current plan to sign a new TV deal and add one to three schools from a group consisting of BYU, Air Force and Army.

Today I am going to deal with media and membership strategies.  I'll make the case why strategically the first order of business needs to be a larger expansion, not landing a new TV deal.  Later this week, I will reveal the true best assets of the Big East and finally, in the last editorial in this series, I'll flesh out what an optimal expansion might look like.)

Realignment at the top of the FBS world appears over.

The power schools at the FBS level pulled the plug on the BCS and now the turbulent waters of realignment at the top of the FBS ranks just came to an absolute halt.  It is as if someone dropped a crystal of ice-nine into that swirling morass.

Notre Dame, the biggest wild card in the elite ranks, has moved to the Atlantic Coast Conference, instantly stabilizing that conference and likely helping the ACC's TV dollars down the road.

The Big 10 lost their prize and seem likely to back off and rethink their long-term goals. 

With the Universities of Texas and Oklahoma out of the picture for at least a few years, the Pac-12 doesn't have anyone worth pursuing today who their academically selective membership would tolerate adding.  Additionally, they have a long-stated desire to try to mirror the Big 10 in number of members that was only discarded while UT was in play.

The Southeastern Conference could try to raid the ACC, but with Notre Dame in tow and far better academics in the ACC, it is difficult to imagine a president at a school the SEC really wants walking away from the ACC.  Unless the SEC is willing to take a school like Clemson (which is allegedly being blocked by South Carolina), it seems like the SEC may have missed their chance to nab some ACC schools.

As Notre Dame is a football independent, it is very unlikely the ACC will add another FBS playing member and create uneven divisions.  The ACC could remain at 15 members for quite a while.  The idea of also adding UConn seems passe, especially with the retirement of legendary basketball coach Jim Calhoun.

In one fell swoop, the Big 12 just lost their slim shot at both of their main targets (Notre Dame and Florida State).  Given the strength of their schedules in the conference's current configuration and the potential to deliver a Big 12 team into a national title game, they seem unlikely to expand anytime soon.

One of the main reasons a conference without a TV deal tries to sign a TV contract as soon as possible is to discourage at-risk schools from leaving when a predator comes knocking.  For the first time in a long time, the Big East probably does not have to worry about predators.

Unfortunately, with the abandonment of the old BCS system, the Big East members also may not have a reason to worry about what the power schools in the FBS world think of the Big East.  Their membership appears to already have been relegated to the "have-nots" of the FBS world. 

The member schools of the Big East need to be thinking about how to best use their leverage to undo that perception.

I believe the Big East probably needs to re-evaluate their position in the post-BCS world before they even vote on whether to invite any of their named targeted schools or sign any TV deals.

The AQ world no longer exists—today is the day of the "contract conferences"

The Big East did a fairly good job of rebuilding a conference that could hold on to their BCS AQ slot, but there are not AQ slots anymore.  The BCS has been imploded.

Where once there was an alliance between the elite schools of the FBS ranks—many of whom cared about academics—and the major bowls who cared about selling out large stadiums, that is not the case today.

Today, bowl alliances are again between a conference and bowl.  If a bowl doesn't feel a conference offers enough schools that can help deliver a strong crowd or a sellout, they will not offer that conference an annual bowl agreement.

Well-known realignment commentator Frank The Tank rightfully observed that the idea of BCS AQ conferences has now been replaced by whether or not a conference has a deal with a top bowl.  He used the term "contract conference" in a recent article and I think it is likely to be the new designation to classify a "have" conference in the FBS world.

If you think about it, it is a very sensible thought.  Does a top bowl think that your conference membership merits a slot in their bowl game?  Do they think your fans can sell out half of a large stadium?

The Orange Bowl seems primed to cut the Big East loose.  In simple terms, the majority of Big East schools are quite far from Miami and do not draw large crowds to their stadiums—why would they draw good crowds in Miami?  Far better to bring in a Big 10 school with their large traveling fanbases eager for warm weather or an SEC school with their large, passionate and fairly nearby fanbases.

Negotiating long-term deals should always be done from a position of strength.

This is very relevant as the Big East is currently in negotiations to sign a TV deal.  They appear to be putting all of their eggs in that basket.

It is an old BCS world idea: "If your TV money is more like the other power conferences' money, you are a power conference."  That no longer seems to be the status quo.

Today being a have means having a strong position on other fronts as well.

Looking at just the TV side of that, predictions on the potential success of this Big East effort vary greatly. 

Some suggest that the Big East, buoyed by the negotiating firm used by the Pac-12 and several suitors, is on it's way to a deal that will match what ESPN offered them last year.  Big East all-sports FBS member schools could earn annual shares in the same $11 million ballpark ESPN offered last year. Slightly exceeding that number would allow Big East members to declare outright victory in their decisions to pass on ESPN offers.

Like the new deals given to contract conferences the Pac-12, Big 12 and the ACC, that could represent broadcasters yielding to burgeoning valuations in the new TV economy and rewarding the Big East with a significant increase in their per team payouts in spite of their changes to a less attractive membership.  Or just competition driving up payouts.

Others take a much more pessimistic view of the proceedings and predict numbers that could be as ridiculously low as $4 million per FBS all-sports member with $3 million per football-only affiliate and $1 million per Olympic sports member.  In discussing per school payouts in this article, I am going to go with the assumption that this ratio for dividing BE payouts is fairly accurate.

That would be more in line with what occurred with the MWC when their individual payouts went down.  They were effectively punished by the networks for having less appealing media offerings (smaller fanbases, smaller DMAs) in their new membership.

For perspective, the five contracted conferences' average annual TV payouts are $17.6 million per FBS member school.  The MWC averages about $800,000 to $1 million per school annually and CUSA was at about $2 million a year. It is probably a little less than that now with a larger membership today.

Why such a wide degree of separation on the Big East predictions? 

1. Few have a good feel for how this Big East will be valued.  As discussed in the first installment in this series, TV assets are usually judged by past performances. Historic ratings earned by existing Big East members may be seen as buoyed by former Big East fanbases. 

As this Big East was gutted and then rebuilt with faraway teams with little shared history, there is little to suggest how ratings will shape up.  Where are the rivalries the Big East can sell to networks?  The Big East is selling the future potential of a national conference with the ability to provide nationwide content that fills an entire day's schedule.  Which viewpoint will prevail in negotiations?

2. Will there be a bidding war for the Big East?  The Big East is the only major conference brand up on the open market.  They do offer nationwide content that could deliver tripleheaders and might appeal to  other nationwide sports networks. Fox and NBC may have varying levels of interest.  On the other side, ESPN has a lot of content and a lot of money committed to other conferences. If they decide they can let this one go, it could cost the Big East a lot of money.

3. What is the Big East, a power conference or a have-not in the FBS ranks?  Will it be seen as a conference that is a little less valuable than the pre-Notre Dame ACC or merely a little more valuable than the MWC and CUSA?  Are they still a power conference or not?

4. If they are a power conference, why aren't they playing in a big bowl vs. another AQ conference?  If the talk of the rumored new bowl where the Big East has to share their slot with the other have-not conferences doesn't suggest relegation to the kiddie table, I don't know what does.

If the Big East is totally out of the Orange Bowl's plans, it is likely to impact how their TV negotiations will proceed.

The Big East appears to be negotiating their deal as they are becoming a non-contract conference.  That is negotiating from a position of weakness.

If ESPN drops out of the bidding, the Big East's status as a non-contract conference could become a huge factor limiting their offers.

Everything the Big East is doing seems leveraged on landing a fat TV deal.

The plan appears to be:

1. Land huge TV deal.

2) Talk to BYU, Army and Air Force and attempt to lure at least one of them in as a football-only member.  Ideally, they want all three.

I have a sneaking suspicion this is putting the carriage in front of the horse.

Frankly, I see it as a lazy and self-defeatingly parsimonious approach by their membership that is likely to bite the Big East in the butt.

There is no guarantee of a TV deal that far exceeds the $11 million per full member deal ESPN offered last year.

This strategy won't meet their bigger long-term goal of tying the conference to the contract conferences and may not meet their smaller more immediate goal of giving the Big East the leverage to add BYU, Air Force and Army. It also squanders their best assets—more on this in the next installment in this series.

The real benefits of the strategy are that the Big East doesn't need to have decision-makers at their 17 Olympic members and three football-only members agree on anything new.

That should be the least of concerns. This approach hardly seems likely to extract the maximum value from the conference's potential.

There may not be enough money to land that trio even if they do get a nice payout.

While a school like BYU may be more receptive to making a deal now that their avenue into the Big 12 may have dried up, the three schools in question have already turned down the Big East. In fact, they have turned down a better Big East with Notre Dame.

And the leadership at the Big East has just publicly insulted the three schools they want. A Big East source is on record as saying "They'll crawl back once the TV deal is done."

Not exactly a textbook example of how to win friends and allies.  Really, considering the position the BE is in, a head should have rolled for that comment.

I think there are huge problems with the current plan. 

The Big East seems likely to get a "tolerable" TV payment for their membership.

Will tolerable money be enough to get BYU, Army or Air Force to change their minds and join a weaker Big East?   It is much harder to see an affirmative answer in that regard.

Even if the money comes out to a full $11 million per full member, that would only be about $8.25 million per football-only member.  That is what the Big East is going to wave in front of BYU.  That may not be enough to entice BYU to give up independence and walk away from their deal with ESPN.

BYU has a deal with ESPN that reportedly pays them a decent sum (some reports suggest it pays as little as $4 million a year, others suggest BYU could be making as much as $7-8 million a year. They can apparently void that deal to join a BCS AQ conference.  That designation goes away for all conferences after the 2013 football season.

What is to prevent BYU from saying to ESPN next year, "The Big East offered us $8 million per year to move our football to their conference for broadcast on NBC.  Pay us $10 million a year and we will stay with you"?

That is not an oppressive price for BYU football.  Will ESPN let the Big East take a great asset like BYU football?  ESPN doesn't seem to have any love lost for the Big East membership.  Finally, BYU is the best football asset available for the Big East, which makes it strategically shortsighted for ESPN to just let the Big East take BYU.  Some fans feel BYU will get paid by ESPN in a few years anyway.

BYU is actually in a pretty good position.  They get paid fairly well for their TV deals and get good exposure.  They are a welcome nonconference foe for Pac-12 schools.  They are seen in a similar (albeit lesser) light than Notre Dame as an Independent. Their attendance numbers are likely to ensure at least a provisional deal with one of the Big Bowls.

After seeing Utah get into the Pac-12 instead of BYU, the LDS leadership at BYU appears to be chasing exposure. BYU is positioned well today in that regard.

Their affiliation with the West Coast Conference puts the Cougars in front of their fans in a lot of big markets on the west coast.  Unlike the WCC, the Big East does not have strong media markets in the western U.S.

The WCC has TV deals with ESPN and Time Warner that put more money in BYU's pocket and give their basketball a ton of exposure on TV in the west.  Reporter Jon Wilmer called the WCC's ESPN TV deal "the best deal signed by any non-BCS league" when it was signed.

The majority of US LDS members are located in the western U.S.  In fact, just under 60 percent of BYU's alumni live in states with WCC schools.

The WCC is an annual multiple-bid basketball conference.  With BYU, the WCC is likely to receive three bids to the NCAA basketball tournament each year. 

Finally, the WCC is comprised mostly of private schools with religious affiliations.  For the LDS church, being acknowledged as a peer in those circles in any way could be something they would be loath to surrender for a marginal reward.

Independence in football combined with WCC membership in the Olympic sports gives BYU very good exposure, lets them schedule who they like and lets BYU's teams play in several of the largest western markets. 

The Big East has to bring something of real value to the table to interest the leadership at BYU.  A potential small improvement in TV revenues is not likely to be compelling to BYU's leadership.

Army was thoroughly abused on the field while they were a member of the weaker Conference USA and is likely not interested in seeing that happen again in the Big East.  If Air Force is in, they might reconsider, but will Air Force join?

Air Force turned down the Big East over publicly stated loyalty to their current conference members in the MWC.  It is likely the money the Big East lands will not be a huge surprise to Air Force's leadership. It may be foolish to assume a military academy's leadership will back out of their principled public stance over a glimpse of some money. 

It should be noted that five of the schools in the MWC joined the conference in the last couple of years.  It is likely their feelings of loyalty lie mainly with Colorado State and Wyoming.  Those two schools along with Air Force comprise the remnant of BYU and Utah's old voting block, the gang of five. UNM, due to proximity, may be another school to which the AFA feels loyalty.

Finally, it is very difficult to imagine two sensible divisions with the three academies in the conference.

Best and worst case scenarios: There are a lot of negatives likely to affect the Big East's TV negotiations.

Now, people who think the BE will land a great TV deal are assuming their negotiators and their position as a conference on the open market offer them the chance to maximize their deal. 

If a successful negotiation means $11 million per school, doesn't that seem likely to be if everything breaks right for the Big East? 

  • If they remain in a matchup against a contract conference in a high-dollar New Year's bowl.
  • If they land BYU's western fanbase.
  • If they land Air Force and Army's national fanbases.
  • If ESPN, FOX and NBC all bid against each other.
  • And isn't it likely that those projections assumed the Big East would retain Notre Dame's nationwide fanbase?

If the Big East cannot land BYU, Air Force and/or Army on top of that, are the Big East TV payouts likely to be nearer to the higher estimate or the lower estimate?

Having a great negotiating team is absolutely a positive, as is being able to negotiate with all available bidders, but if you enter a negotiation with anything less than your best available offering, you have only yourself to blame when you come out with a long contract that pays you at a substandard rate.

Given that it looks like the Big East is losing their Orange Bowl slot regardless of what occurs with any potential new bowl in the rotation, it seems the Big East is well on their way to being deemed a non-contract conference.  That will be a huge negative in the negotiations and may drive down offers from numbers that may have been discussed as little as a month ago.  If that occurs, it becomes a lot more likely that the Big East will be treated similarly to Conference USA and the Mountain West Conference.

There is a thought common to fans that eventually the five contract conferences will break away from the NCAA and start a more exclusive division. 

Would today's Big East be invited along?  That is really the question the Big East should be asking themselves: "Is the Big East an indispensable part of the power conferences?"

I think when you look at the how much the conference lost in basketball (elite, NCAA tournament proven coaches Jim Boeheim, Jim Calhoun, Jaime Dixon and Bob Huggins), the low attendance numbers of most of their new football members (i.e. unimpressive fan support) and the willingness of the power conferences to drop the BCS AQ system, it should be the first point of discussion for the Big East membership.

Which brings me to the thought of a bigger Big East.

Let's say the contract conference-level money appears to be drying up on the negotiating table.  It behooves the Big East to back away from the table and rethink their media offerings.  I would argue they should take that step anyway to help the long-term stature of their conference.

If the membership is looking at a middling projection—say $8 million per FBS all-sports member, rather than $11 million—it might make a great deal of sense to consider adding more schools from Conference USA and the MWC. 

The argument against not adding those schools is that the best schools in those conferences are not going to bring in an added $11 million of value today as full FBS members. 

Well, that may be the case, but there are probably schools in that group who could add $6 million in TV value today as a football-only member or $2-4 million as an Olympic sports member as part of a nationwide Big East.  Adding a handful of those schools could deliver a nationwide conference that looks sensible to fans, attractive to broadcasters, and indispensable to the five power conferences.

Frankly there is every reason to believe schools of that ilk could generate even more money down the road in a conference that makes more business sense than their current affiliations.

The payouts the better members of both sub-Big East FBS conferences receive is motivatingly low. 

As MWC commissioner Craig Thompson has publicly noted, the MWC footprint only offers five to seven percent of US homes. Negotiating a deal with that limited of a TV offering certainly amounted to entering negotiations with little to offer TV networks, and their TV deal reflects that reality.

And for the record, the MWC member schools have only themselves to blame.  It is easy to target Thompson, but member schools vote in new members, not commissioners.  The MWC is as ridiculously vulnerable to raids as they are because their membership decisions have made themselves more vulnerable to raids. 

C-USA, on the other hand, is still under their TV contract negotiated under the old market economy.  C-USA added enough big markets that their TV deal was not renegotiated early.  It is a better deal than the MWC has, but it still isn't great for schools like ECU with legitimate BCS-sized followings.  

Adding more schools might help the conference dramatically in other problem areas like:

  • Travel time and costs
  • Cohesion as a conference in the eyes of fans of member schools
  • Legitimacy as a national conference in the eyes of the casual college football viewer and the networks
  • Remaining a conference the contract conferences cannot freeze out
  • Appealing to the Orange Bowl or other major bowls
  • And finally, appealing to more TV broadcast suitors. If ESPN is not a motivated bidder, the Big East TV deal could be seriously disappointing.

A misevaluation of the best assets of the Big East

The Big East is approaching this as if they believe their best asset is their upcoming TV deal.

It is not.

Sure, a solid TV deal is a great asset.  It is good for recruiting new members from the MWC and CUSA ranks, but those conferences' low TV payouts and lack of additional significant revenue sources guarantee that any member of either of C-USA or the MWC—well, any school not named the Air Force Academy—will leave for the Big East at a moment's notice. And that is prior to any Big East TV deal being signed. 

It really doesn't matter what the TV deal turns out to be; that reality isn't going to change.

Likewise, any deal the Big East signs isn't going to keep Louisville from jumping to the Big 12 should the unexpected happen and another Big 12 offer appears.

If the Big East turns Fox and NBC bidding into $12 million payouts for its all-sports members, does that make the Big East a power conference?  No.

In this way, the TV deal is kind of a moot point in terms of their conference's larger goals.  Landing a deal as soon as possible is being obsessed over by the Big East membership and it may actually not be in their self-interest.

If any kind of bidding war comes up, you could see a network bid a little more on the front end to secure the content, but be very resistant to any wording that backs the Big East's ability to expand.   A network might pay a premium for, say, 13 members, but might be very resistant to matching those payouts for other schools.

Additionally, the Big East membership may pronounce the deal "good enough" and swear off any further expansion.  That would be a fairly likely move for this large of a conference membership.

Signing a new TV deal with their current membership could easily cap the Big East as the best of the "have-not" conferences.

So what are the assets of the Big East that can rock the new FBS world order?  Read the third installment of this series to find out.


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