Texas and Oklahoma will not have to forfeit as much money as initially anticipated for leaving the Big 12 a year early, according to a report by USA Today. The report states that the Big 12 opted for a more amicable split, resulting in a reduction of revenue distribution for the two schools. Here’s what you need to know:
The Financial Implications
When it was announced in February that Oklahoma and Texas would be leaving the Big 12 to join the SEC in 2024, the Big 12 stated that the schools would forfeit a combined $100 million in revenue distribution. However, the USA Today report reveals that more than $80 million of that amount is based on money the schools will not receive in the year after the move.
The remaining amount is attributed to cuts in full revenue shares for the 2023-24 season. The report explains that Texas, Oklahoma, and the other continuing members of the Big 12 will experience reduced shares to finance payments promised to four schools that joined the conference in the summer.
No Money Withheld
Contrary to the Big 12’s bylaws, no money has been withheld from Oklahoma and Texas by the conference. This includes the upcoming 2023-24 season. However, shares for both schools and the other eight schools in the conference will be reduced by approximately $7 million per school compared to what they received in the previous season. This reduction is meant to fund payments of $18 million each for this year to new members BYU, Central Florida, Cincinnati, and Houston.
Transition Payments and TV Rights
While Oklahoma and Texas will not receive money from the SEC’s primary revenue sharing pool in 2024-25, they will still collect millions through football- and men’s-basketball-specific distributions that already existed under the SEC’s bylaws. The report also suggests that the schools could receive additional money through other specially negotiated terms and “transition” payments funded by ESPN.
In addition to these financial arrangements, the Big 12 paid Colorado a $2.5 million “signing bonus” in July when the school agreed to join the conference in 2024.
The Influence of Television Networks
This report highlights the influence of television networks on conference realignment, which has been a source of frustration for many college football fans. Texas and Oklahoma will receive “transition” payments from ESPN to facilitate their expedited move to the SEC. The report suggests that ESPN’s involvement in the Big 12’s TV rights and its investment in the SEC played a role in the clean and amicable split between the conference and the departing schools.
Impact on the SEC
The SEC is also a winner in this situation. The conference gets to add two of the biggest brand names in college football a year earlier than expected, without having to revenue share with Texas and Oklahoma from the media rights pool in 2024-25. ESPN’s contribution further eases the transition for the two schools.
Statements from ESPN and the Big 12
ESPN released a statement to USA Today, explaining that after Texas and Oklahoma decided to change conferences, all parties involved chose to accelerate the process and reach a resolution for the 2024-25 season. Brett Yormark, the head of the Big 12, expressed satisfaction with the outcome, stating that all parties reached an equitable and amicable decision.
The report sheds light on the financial implications of Texas and Oklahoma’s early departure from the Big 12. While the schools will not have to forfeit as much money as initially anticipated, they will still receive significant payments through various arrangements. The influence of television networks, particularly ESPN, is evident in these negotiations. Ultimately, this outcome benefits both the Big 12 and the SEC, with ESPN playing a significant role in facilitating the transition.