Conference Realignment: Is Big 12 Expansion With Florida State and Clemson Imminent?

Bob Bowlsby's Said the Big 12 Could Expand. But Will They Do So at the Expanse of the ACC?

Bob Bowlsby’s Said the Big 12 Could Expand. But Will They Do So at the Expanse of the ACC?

Just when we thought things could settle down for a little while among the five power conferences and their conference expansion dreams, Big 12 commissioner Bob Bowlsby had this to say on Wednesday (via CBS Sports):

“We could be proactive [in conference alignment], I think,”

Simple phrasing that could potentially mean nothing. Or could potentially mean the next dominoes start falling on January 28 and 29 when the league meets in Dallas. Personally (and yes, I understand there’s some bias), I don’t see them adding a team from the ACC. Based on the current legal battle around Maryland‘s $50 million exit fee, the soon-to-be-renegotiated-again TV contract, conference television network talks and four incoming new members, it becomes more difficult to create a compelling case for any school to exit. Further, Bowlsby himself at least hints at an unconventional add, should they decide to expand:

“Look at Maryland and Rutgers. They don’t bring programs that are of the ilk of the others in the Big Ten. The philosophy clearly is: ‘As members of the Big Ten we can grow them.’“

There’s two ways to look at that statement. First: they’re willing to take a flyer on a developing program (Connecticut, Cincinnati?) and allow them to reach their full potential within the constructs of the Big 12. For the ACC, this is obviously the ideal situation for the time being — it keeps its best schools in the fold, which at this point, is the most important goal. But for the long-term, the league loses its top two expansion candidates, should the Big Ten pick off a few more schools (not impossible at all).

The other way you can look at this statement is the one that worries ACC supporters right now. Clemson and Florida State surely don’t need to be “developed” into major programs by joining the Big 12. But neither is necessarily the “ilk” of the current Big 12 schools either. You can make similar statements about nearly every other school in the conference, save maybe Virginia Tech and Pittsburgh (solely based on their respective rivalries with West Virginia). Additionally, it’s an unknown which schools are on the conference’s rumored “quality” expansion list. This short list, supposedly built into their television contract, is supposed to enact automatic increases in per-school payouts when schools are added. I’d assume those names include Clemson, Florida State, Louisville, Georgia Tech, Miami and Notre Dame, with BYU as another possibility.

So will the Big 12 expand? Is this the “end of the ACC” that we keep hearing about over and over these past 12 months or so? I’m still tempted to say no, but when you see pieces like Warchant’s “What can be done to save the ACC?” you just can’t tell anymore (no offense to the guys over there, of course). The demands to keep FSU in the fold mostly center around an unequal revenue-sharing plan (which I’m against in theory), and an incentive system that rewards teams on performance. According to the piece,

“There is simply no financial incentive for schools like Wake Forest, Boston College or Duke to pump additional of money into the football programs under the ACC’s current financial structure.”

It goes on to bemoan the exit fee hike, the joint statement of solidarity (fair criticism) and the conference’s insistence on keeping its top teams in the fold. But it also brings to a light an interesting concept: performance incentives. The article calls for rewards for both television viewership and on-field wins, which would conveniently skew the spoils in the Seminoles’ favor. But what if we simply rewarded schools based on victories? In that scenario, Florida State still takes home a good portion of cash above the rest, but they’re joined by the many other schools who have also succeeded since the 2004 expansion (including the “slackers” Wake Forest and Boston College). The issue I see here only comes when a team like Duke consistently fails to receive a performance bonus. After awhile, they have no chance to compete. So while in theory, they could take that as a call to action to improve the program, it can’t necessarily work like that. If a program’s buried, and looks out-manned in a sport, they drop it or move down a level (see the I-A/I-AA split in 1978).

In part, this also assumes that the ACC’s top programs (like FSU) can do better elsewhere. As our own Hokie Mark broke down over on ACCFootballRx, it’s hard to make that case. While crunching the numbers from Forbes’ “Most Valuable Conferences in College Sports” piece that appeared on Wednesday, it ends up that there’s only a $1.8 million per-year advantage for a school to be in the Big 12 versus the ACC. In fact, under current payouts, ACC schools are even earning $5 million more per year than their SEC pals. Those numbers will change dramatically for the SEC, but they will for the ACC too once they renegotiate (assumed, given the additions of Louisville and Notre Dame). And then they’ll go up for the ACC again once they launch their own network (which they very well should). The Big 12 has no such luxury, and won’t because of the Longhorn Network.

Update (1/18): Bryan from the excellent Pitt blog Cardiac Hill brings up another great point via Twitter. On top of a hefty exit fee for ACC teams leaving for the Big 12, those schools don’t even get to collect full television rights for several years. As explained on The Smoking Musket back in March of 2012, West Virginia doesn’t take home a full share of conference television revenue until 2015. So if FSU left, they’d be saddled with $50 million in exit fees, and then would have to wait around until 2018 just to collect full payouts. And even then, they still wouldn’t break even for seven or eight years.

Thanks for the additional tip, Bryan! If anyone’s interested in Pitt or conference realignment, be sure to give him a follow: @FeartheStache

This isn’t an ironclad statement saying that Big 12 expansion won’t happen. Or that it won’t happen at the expense of the ACC. But when looking at the numbers, it’s easy to see there are a lot more reasons to stick around that conference than anyone’s really letting on to amidst all the realignment buzz.

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13 thoughts on “Conference Realignment: Is Big 12 Expansion With Florida State and Clemson Imminent?

    • I think Memphis is the longest shot here. Ideally, it’s Cincinnati who gets the call — the Bearcats really do deserve a fair shake from a major conference. But if the Big 12 were smart, I actually think they’d go with USF and UCF. Access to the Florida recruiting grounds would be key, plus those schools are enormous. If they were to undertake a “project” or two, these should be the choices.

    • I’m not sold. Again, a lot of it is rumor-mongering. And honestly, as I laid out above, there aren’t a ton of compelling reasons to leave the ACC. I’ll stand by my usual statement on realignment: schools and individuals would prefer to improve the situation they’re in than change their surroundings entirely. Realignment isn’t a drop-of-the-hat action.

  1. The numbers you use above include ACC’s 3rd tier rights (as they are part of the same network deal that owns the 1st and 2nd tier rights), but the Big 12 numbers you use don’t include their 3rd tier earnings. (As each Big 12 schools sells their own 3rd tier independent of the others. for instance UT makes 15 million more a year because of the Longhorn Network and that is not included in your figures.) My understanding is that FSU would make nearly 6mil more each year based on it’s own 3rd tier rights than the Big 12 numbers you are using. Clemson, GT, etc would not earn as much, but would be in the 2-4 million range based what smaller Big 12 schools seem to pull in.

    In addition, the calculation is that if 2 of the ACC’s better football schools are added to the Big 12 that each school would then make an additional 1-2 million a year on the renegotiated contract. I believe that figure includes the payout for an added championship game. Add that to
    The above figures and a FSU could be making 8-9 mil more annually than it does now. That is nothing to sneeze at.

    Finally – the terms in which a new team is allowed to begin receiving full payouts are negotiable. If the Big 12 is going after higher quality programs (no offense to WV or TCU – who are making more now even with the partial payments than they would have in the Big East) the Big 12 could begin full payouts immediately.

    I think this entire thing hinges on the strength of the $50mil exit fee. And even that may not be enough if an FSU perceives the future of the ACC as weak.

    • I hear your points on third-tier rights, but that’s still assuming a few things (which I also outline above): that the ACC won’t be renegotiating its television deal with Notre Dame and Louisville now in the fold (could also very well include a third-tier rights provision) and that the ACC won’t start a cable network. The ACC’s digital network has already been airing third-tier games, but there are no revenue figures there already. It’s easy to assume that can/will be transitioned to a cable network at some point, with the digital component also generating additional revenue.

      My issue with the way in which the argument is framed on the Big 12 side is that it assumes rights values for everyone else continue to go up, while the ACC’s will remain stagnant. It’s simply not true. Plus, as we continue to see, most are of the opinion that television and cable revenues will just continue to rise. There’s a cap to all of this growth, and we may be getting close to it.

  2. “There’s a cap to all of this growth, and we may be getting close to it.”

    This may be the most relevant statement in the entire affair. We are certainly nearing the point of diminishing returns, I would think. Once the real market effects of that take hold, we will begin to truly understand the value of a given league reflected in each new contract. Until money is lost, we won’t honestly know what the ceilings of each of the players in this thing really are. After that point – the value of expansion for each team or conference will be much more clear. The problem lies is trying to position one’s self ahead of the crowd. Bets are being made on schools like Rutgers and TCU currently, and contemplating more, and these are predicated on assumed market trends. These may prove to be bad moves in the future. Or not. But what is being discussed today involves fear of an uncertain end game. The logic to apply to a given move thus becomes a moving target. An educated guess. Each network, each conference and each team is looking out for #1. Sometimes they can align their needs together – sometimes the have to go it by themselves. One thing is for certain – everybody won’t win in the end.

    • Very well said. And I agree, there will certainly be clear ‘winners’ and ‘losers’ when all this finally shakes out. Obviously, I’m hoping to see the ACC’s schools succeed — but only as part of this conference. Just hoping that when the growth ceiling’s reached, it doesn’t make college football collapse onto itself.

  3. One thing that you might look at in addition to the money is the fact that both Clemson and FSU would be leaving a basketball first conference to a conference that is 100% football first. That is of course in addition to the additional monies to be had

    • Depends on what the goal is. If I’m FSU and Clemson, I believe I like my chances to make the four-team playoff better coming out of the ACC than the Big 12. I understand what schools’ priorities are now. But I don’t necessarily agree.

  4. Really good discussion. I do however, think the ACC is where FSU, Clemson and others should be vs. the Big 12:
    1. ACC has been according to Nielsen the 3rd watched conference for football and 2nd most watched for BBall
    –the present contract with ESPN is undervalued because their was no competitive bidding…ESPN got a break on value…however, the renegotiation with the association of ND plus the 5 yr look-in, assuming teams stay put, should result in a more competitive if not higher dollar take than the Big 12
    2. The strength of schedule for the ACC should be strong enough for an ACC champion to get to the NC semi finals…especially if it is unbeaten or even with one loss. Does any ACC school feel it will have a better chance in the Big 12 to go undefeated or to have only one loss.
    3. The travel costs for other sports not football and bball will be significantly higher than well as time away from classroom….wait, does Big 12 care about that…does the SEC care about that
    4. What alumni footprint is in the Iowa, Kansas, Okl and WV geography. A report last year indicated less than 10% of FSU’s alumni live in or close to the Big 12 footprint…what would it be for Clemson, UNC, VT, etc…probably not to significant. And don’t forget one of the primary reasons for Notre Dame to go to ACC was alumni footprint….how the heck does someone from anywhere in Fl get to Oklahoma, Iowa, Kansas etc??????

    So if any one of the ACC schools move to the Big 12 that signals one of two things:
    1. The $$$ discussed above and in national media are very wrong…the Big 12 must have a payout significantly above reported figures or thought to have significantly greater payout over the next 10-20 years;
    2. Universities just are not fiscally prudent and intelligent…because frankly, there is no way for alumni to support FSU, Clemson, or GT going to Iowa, Kansas, Oklahoma for football games let alone bball…..lacrosse…wait no lacrosse…etc

  5. The Big 12 remains a leaky vessel. I suspect some sort of scheduling agreement involving the Big 12 and the ACC will emerge in lieu of schools jumping from one to another. That expands interest for all without all the legal hassles. The only question is whether the Big 10 and the SEC move first and create a feeding frenzy. I suspect the tv folks would applaud this because they can create more interesting pairings and, thus, more money for all.

    • The Big 12’s smart in several ways here:

      First — sees how a conference championship game does little to help them once the playoff starts (it sabotaged the league’s title hopes so many times in the BCS era, too)

      Second — if the ACC starts getting picked apart, the Big 12’s next. If the SEC and Big Ten strike as some have thought (not just stopping at 16, but going even further to 18 and 20), the Pac-12 will do the same, meaning Texas, OU, Tech and OSU are gone.

      Third — an ACC/Big 12 alliance isn’t a one-sided deal. The Big 12 gets further distribution in the northeast and southeast, and assists their putrid non-conference SOS. The ACC gets to make in-roads to Texas, while improving its perception (which at this point, is reality).

      It’s a win-win, and I really hope it happens.

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