Early exits for Texas, Oklahoma could help Big 12 repay members that agreed to diluted revenue upon expansion

Should an early exit by Texas and Oklahoma from the Big 12 be agreed upon, the negotiated monetary penalties related to these departures can be utilized to help the convention’s expansion. Those monies would help make entire the eight legacy Big 12 packages whose media rights payouts are being diluted to help fund the arrival of the league’s 4 latest members.

Baylor, Iowa State, Kansas, (*12*), Oklahoma State, TCU and Texas Tech agreed to share a portion of their media rights distributions from the Big 12’s present offers with Fox and ESPN to make doable the league’s current expansion with BYU, Cincinnati, Houston and UCF becoming a member of the fold within the 2023-24 athletic season. The vote (believed to be held final 12 months) was 8-0 in favor of the transfer with Texas and Oklahoma abstaining, a number of sources inform CBS Sports.

Each of the eight legacy Big 12 faculties agreed to forego $16 million complete ($8 million yearly in 2023-24 and 2024-25), roughly 19% of their $42.6 million annual distributions, sources mentioned. Each of the 4 new Big 12 members are set to obtain $18 million to $19 million yearly, roughly 40% of the unique annual distribution.

BYU, Cincinnati, Houston and UCF will every obtain a full share of media rights revenue when the Big 12 begins its new offers within the fall of 2025, a supply added. That full share shall be a base determine of $31.6 million yearly. Big 12 officers consider the all-in determine will strategy $50 million per faculty as soon as NCAA Tournament and College Football Playoff revenue is added.

If Texas and Oklahoma go away after the 2023-24 season, they’d be on the hook for early termination charges with every surrendering a minimum of their closing 12 months of media rights distribution. CBS Sports beforehand reported these early exit fees could total as much as $168 million.

However, such a penalty would probably be negotiated down to about 60% to 65% of the unique complete, trade sources mentioned. That closing determine would go a great distance to serving to the remaining legacy Big 12 packages recoup the $16 million dilutions they agreed upon.

“That money [for the four new schools] has to come from some place so the other members have to take a dilution as a result of it,” former Big 12 commissioner Bob Bowlsby instructed CBS Sports. “That’s the only place to go get the money, but in the end, whatever the conference gets out of OU and Texas in exit fees and makes on the grant of rights will likely go to reimburse the schools. It likely will balance itself out pretty well.”

While there was rising buzz that a deal for Texas and Oklahoma to depart for the SEC early is close to, there isn’t any proof of formal negotiations.

The packages retained SEC media advisor Alan Gold of their pursuit of a deal. The Longhorns and Sooners initially dedicated to the Big 12 by means of the time period of the present deal when new commissioner Brett Yormark took over in August; nonetheless, their stances modified a few month later, sources mentioned.

Speculation has raged that Texas and Oklahoma don’t have any want to play the 4 new Big 12 members, although they’ve already dedicated to stay within the league for the upcoming season. The convention is within the strategy of finalizing a schedule for all 14 packages.

The legacy Big 12 packages shared cash from their present distributions realizing Fox and ESPN probably would not pay equal worth for the 4 new members. Those faculties did not deliver professional rata (equal) worth to the prevailing deal. League sources mentioned the convention didn’t ask its companions for elevated rights charges.

In 2016, the Big 12 thought of exercising a clause in an previous contract that would have compelled rightsholders to pay equal worth for any expansion. The Big 12 in the end decided not to expand at that time.

For there to be any new settlement on an early exit, Fox would have to be compensated for the lack of Texas and Oklahoma from its present deal. (ESPN would retain Texas and Oklahoma rights as a part of its SEC deal.) CBS Sports reported final month that compensation could come within the type of the Longhorns and Sooners taking part in nonconference video games in Big 12 stadiums after they be part of the SEC.

Such an settlement was known as utilizing “games as currency.”

“They would have to play games in the [Big 12] footprint so Fox and ESPN can have value,” an trade supply instructed CBS Sports. “If ESPN and Fox are happy, [the Big 12] would be happy.” 

In October, the Big 12 introduced a new deal with Fox and ESPN starting in 2025 that is value greater than the present deal that contains Texas and Oklahoma. The aforementioned all-in determine of roughly $50 million would mirror a $7.5 million annual improve in rights charges per faculty..