Nebraska and Texas Tech and What Will Happen Next?

Any intelligent fool can make things bigger and more complex... It takes a touch of genius - and a lot of courage to move in the opposite direction. ~ Albert Einstein

 

A perfection of means,

We have all been shown the studies that predict the financial future of college athletics is in conference cable networks and that over the next twenty-five years it will become the chief source of any member school's athletic revenue.  All other sources of revenue will be dwarfed by comparison.  This business model, based on the success of ESPN, would guarantee a "double dipping" source of income; (1) cable subscriber fees and; (2) broadcast advertising revenue.  Currently, it is said that ESPN receives a fee of over a $4.00 per subscriber per month where offered on basic cable - and it is offered pretty much everywhere!  (BTW - That is whether the subscriber is watching or not and that does not include revenue from broadcasting commercials.)  This is why ESPN has the financial resources to out bid and overpay for any content it wants (e.g. SEC and ACC football and basketball, BCS, etc.)  As well it is why CBS sought and found a cable network partner for its sports programming.

The Big Ten, which has a cable network, and the PAC 10, which wishes to start a cable network, cannot hope to be offered nationally on basic cable.  However they can attempt to create the largest regional cable network possible to maximize their revenue.  So the creation of a cable network revenue stream is the principle force driving mega-conference formation.  More schools, from more states means more content and more households subscribed from basic cable.  This notion was directly carried in the words and content of both Jim Delany and Larry Scott when they spoke about why their conferences were seriously looking at expansion.  Both made this point perfectly clear - they would pursue potential candidates from population rich areas.

and confusion of aims

So why then has the Big Ten apparently made their first-round expansion pick Nebraska?

I understand the rumors of Texas, of Missouri, of Rutgers, of Syracuse, of Maryland -- but Nebraska?  Don't get me wrong.  Nebraska is a storied and respected program with a loyal mid-western fan base that travels well and from a content standpoint it is more than fine.  However, held to the metric of the parameters that Jim Delany publicly stated were in play - Nebraska just doesn't make sense.  The state has a population of 1.7 million humans and 1.94 million cows.  Even if the cows are all basic cable subscribers - it still doesn't make sense.  It does nothing to increase the Big Ten Network market numbers.  There has to be more to this Nebraska gambit than meets the eye.

seems to be our main problem.

So why has the PAC 10 seemingly forgot what happened in 1994 or what has changed Stanford's mind?

This is the second time the PAC 10 has invited Colorado and the first time they have accepted.  It has been no secret that if the PAC 10's intention is to expand to increase the media value of their conference the logical starting point was the Denver market and Colorado.  The last time (1994) they invited the Buffaloes, they also invited Texas -- only Texas had a problem.

Because of something called the Permanent University Fund (PUF) which is a public endowment that provides the principle for financial support to institutions in the University of Texas and Texas A&M University systems, the public Texas schools are joined at the hip.  The interest generated from the PUF (along with oil rights revenue) goes into something called the Available University Fund. (AUF) which is shared by all Texas public institutions of higher learning.  To give you an idea of the value of this funding, in 1990 the AUF was reported to be $266,119,000 - and here lies the source of the "Texas Problem."  Wherever Texas goes, its cousins (A&M and Tech) must follow or "Uncle Austin" will disinherit the Longhorns.  In 1994 Stanford wasn't willing to invite the "cowboy cousins" and as a result voted no, dashing a potential Texas inclusion.

In 2010 the PAC 10 still has the same voting rules, that being 100% of the membership must approve of the all officially extended invitations.  Texas A&M has since joined the AAU (2001) and that might somewhat soothe Stanford - but what new circumstances have arisen that would changed Stanford's mind about Texas Tech?  (Even Texas President Bill Powers admitted to the Big Ten they had a "Tech" problem.)  For that matter what would possess Stanford to approve membership for Oklahoma and Oklahoma State?  Given past history, it is hard to believe Stanford would be on-board with the complete, as advertised Tech, Okie and Okie State plan.  Something must have changed.  We shall see soon.

Albert Einstein said, "A perfection of means, and confusion of aims, seems to be our main problem."  But after 5 months of this, maybe Eminem is more applicable. "I might talk about it, but that doesn't mean I do it."