Big 10, Big 12, PAC 10, WAC, MWC Realignment. Success? Failure? Fiasco!
I thought I was following this mega-conference development thing pretty closely.
For five months I read and heard about expansion and the creation of mega-conferences. I even wrote about it.
Then, the other day I noticed that the term conference expansion had been quietly replaced by the expression - conference realignment . I guess there were some who thought that expansion had connotations of too wild an action without thought - like a destructive explosion. So they opted for realignment.
I thought about it and then I said it out loud, "Conference realignment." As the words left my lips and I exhaled, I found it left me feeling positive.
Conference realignment . It hints at the positive suggestion of the proper placement of things after the recognition and correction of a misalignment (like the way you feel when you leave work or school after having successfully met all the challenges of a particularly trying day).
Conference realignment. Had the powers that be really fixed the problems surrounding the memberships of college conferences? Was that really even a problem to begin with? I thought the issue was something else.
Anyway, with this new word in hand, let's revisit the expansion, excuse me, realignment process, review the outcome and request an answer to the question - was it a success, a failure or a fiasco? Hint: Words of wisdom from far too many years experience - when the narrative begins to change its vocabulary, there is definitely mischief afoot.
We have been told that among the greatest concerns facing university presidents and chancellors are the rising costs of running an athletic department. The expenses surrounding the university's production of athletics are escalating at a rate of nearly 7% each year. In particular , coaches' salaries, the size of coaching staff and the number of games played by the non-revenue producing sports, have grown at three to four times the rate of other academic spending and are presenting a growing challenge.
There is wide-spread concern that, without a new source of revenue, university athletic departments across the country will be forced to severely restrict or abandon all-together all or most of their current programs. Despite the fact that since 2004, the median athletic department's operating budget have grown by 46%, the presidents and chancellors of the FBS schools do not want to curtail their athletic ambitions. Instead, most favored finding new sources of revenue to balance athletic budgets and promote their institution's brand.
Previously, I pointed out that going forward, the dominant revenue stream for college athletics would be generated by cable TV networks and that this stream is forecast to dwarf all other sources of revenue combined. This includes ticket sales, contributions and guarantees, government support, media rights, concessions, programs, parking, sponsorships, sports camps, endowments and suspicious third parties donations.
Truth be told, college athletics is positioned in a world where all sports, except for football and men's basketball, run at a deficit . Therefore the development and growth of conference cable networks are centered on these two sports and driven by in-market cable subscription rates and the ability to penetrate that market. Contrary to popular opinion, this is done not so much for greed, but out of a plan for self-preservation and it is what is driving the market. The manifestation of this self-preservation at the moment is conferences enlarging their membership by expanding, not realigning
So, last December and February, respectively, when the presidents and the chancellors of the Big Ten and the PAC 10 conferences dispatched their conference commissioners to look into possible expansion, their true mission was, in the case of the Big Ten's Jim Delany, to significantly increase the Big Ten Network's reach and value and for PAC 10 frontman Larry Scott, to increase conference value and lay the groundwork for the creation of as far-reaching and profitable a PAC 10 cable TV network as possible.
And so, the picture has been framed. We need to stay focused on this picture and not let the frame be a distraction. That is why last month within a one-week period, two conferences expanded, two contracted and another re-normalized - all due to the aforementioned issues surrounding self-survival. It seemed to go unnoticed that neither the Big Ten nor the PAC 10 addressed their self-survival revenue issues very well; not to mention that it left three other conferences with insecure financial futures.
I don't think anyone would argue with this contention when it comes to the position the WAC and the Mountain West now find themselves.
The WAC will soon be realigned to eight schools and just about everyone would agree, they are left with limited options. What should they do? Re-enact their protocol from seven years ago and raid the Sun Belt?
Because of these circumstances, their commissioner Karl Benson's recent remarks were interpreted that he, too, had reached the same conclusion. What went relatively unnoticed was his comment that the self-proclaimed WAC moratorium would end in 2012. Why? Maybe Benson knows that by then things will be decidedly different...
As for the Mountain West Conference, a passage from Job 1:20-21 comes to mind, "...The Lord gave and the Lord hath taken away..."
Last month their commissioner, Craig Thompson , said, "We are done...for the time being." However, did he reveal a subtle prophecy when he also said, "The most appropriate action at this juncture is to wait and see how the variables unfold. The opportunity has not been lost." Which opportunity? The opportunity for future expansion or realignment?
This brings us to the buzzard-picked Big 12 Conference.
The Big 12 contends it saved itself. Did it? The proposed new TV deal that commissioner Dan Beebe has successfully peddled to the 10 survivors is believed to double what they currently receive in TV revenue.
This is possible because the loss of the Denver market and the Nebraska program are viewed as insignificant in the eyes of the cable media experts and the fact that now at 10, there are less members to share the pot. That is not a problem, but this arrangement is a problem. As of now, the deal will mean that Texas, Texas A&M and Oklahoma, will receive at least $20 million annually and that the other seven schools in the conference will make between $14 million and $17 million. But isn't this TV payout structure just another version of what led to the Big 12's implosion in the first place?
And, it doesn't end here. Now at 10 teams, they lose their championship game and its generated revenue. Adding two new teams is out of the question since it would blow up the profit margins of Beebe's strategically negotiated deal.
To add insult to injury, the exit penalty fees that will be paid by Nebraska and Colorado to the Big 12, will be shared only by the five would-be defectors as a reward for their saving the conference. And, just in case that is not enough, Texas is free to further line its pockets by pursuing its own TV network.
Is this Beebe's strategic solution? Sounds more like he and Texas are following the lead of the lyrics of 8ball and MJG, "..testing his strategy, with' a slick armed robbery." This conference is anything but stable.
Last Tuesday, Texas Tech head football coach Tommy Tuberville became the Big 12's version of the voice of the child in the crowd from Hans Christian Andersen 's fairy tale, The Emperor's New Clothes , when he said, "I don't think this conference will last long because there is too much [revenue] disparity between all the teams." Three days later, Beebe reprimanded the coach for these remarks. For close to five months he didn't pop is buzz-cut head out of the Big 12 bunker once. Now suddenly this is over the top? I take this as proof of just how unstable the new Big 2 Short-of-a-Dozen is.
The Big Ten has added, excuse me, once again, realigned to include Nebraska and now has 12 members. Because of this they will have a profitable championship game.
Unfortunately for the Big Ten, that is the extent of their profit increase. Actually the Big Ten has reduced the average number of in-market TV subscribers per school. That translates to less cable revenue per school.
The Big Ten's cable network and its FOX Sports platform believe this loss can be offset because, with Nebraska's presence, TBN will increase its ability to penetrate their cable TV market.
The media experts who helped forge Beebe's TV deal contend that the loss of the Nebraska program was "insignificant" toward that end for them. They contend that with Nebraska and Colorado gone, the remaining 10 teams will all get bigger shares. This suggests that from a media revenue standpoint, Colorado and Nebraska weren't holding their own. Why would the addition of that same Nebraska program to the Big Ten have a different effect on their media driven revenue?
Delany's assignment was to increase the number of in-market subscribers per school and enhance the conference's market penetration ability. To be successful, he and the Big Ten had to realign toward the East and as it stands at this point, they are failing.
Question: To what conference could Colorado and Utah be added so that afterwards there would be a smaller perceived gap between that conference and the SEC?
Answer: The NFC-West
The PAC 10 is now two six-packs.
Expanding (oops, I did it again) realigning to include Colorado and Utah, the PAC 10 added two pagers to their belt when they really wanted a cellphone and a Bluetooth connection. Other than the championship game, what increased media value has Scott delivered? The PAC-10's market penetration ability has certainly not been upgraded.
As well, when you begin with the in-markets of Los Angeles (#2), San Francisco (#6), Phoenix (#12) and Seattle (#13), the addition of Denver (#16) and Salt Lake City (#31) does not push the cable subscription per school meter to the right. In fact, it falls further to the left. The drawback of everyone not playing the California schools on a regular basis, (which by the way is mandatory for recruiting success by the desert and the northwest schools in California), cannot be sitting well with any of them. This move may have actually pushed the conference backward.
Yes, it is true that had Scott culled Texas he would have won the Great War of the Realignment of 2010 (in fact it would have been called the Great Expansion War of 2010) But he did not. I contend he screwed up. He got Colorado before he knew the outcome of his Texas gambit and it remains to be seen if one-twelfth of the new Double 6 PAC can be made equal to one-tenth of the old PAC 10.
Nowhere in these five versions of the realignment story have the true elements of long-term financial athletic department stability been addressed. The fact that the entire process is now being termed a realignment implies an admission of failure. Declaring any of these processes a success (regardless of what you call it) is simply delusional.
Five conferences have been altered, none have gained long-term financial security, and all five commissioners know it. Only Benson and Thompson have had the integrity to admit it. No, my friends, this is not a success story, and quite frankly, it is more than a failure. This, my friends, is a bona fide fiasco!
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