Texas and Oklahoma will not have to forfeit as much money as initially expected for leaving the Big 12 conference 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 Texas and Oklahoma announced their departure from the Big 12 to join the SEC in 2024, it was initially stated that they 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 funds are attributed to cuts in full revenue shares for the 2023-24 season, which will be used to finance payments promised to four schools that recently joined the conference.
Withholding of Revenue Shares
Although the Big 12’s bylaws called for a withholding of two years’ worth of conference revenue shares, neither Oklahoma nor Texas has had any money withheld by the conference. This means that they will not face any financial penalties in the 2023-24 season. However, shares for both schools and the other eight members of the conference will be reduced by approximately $7 million per school compared to the previous season. This reduction is necessary to fund payments of $18 million each to new members BYU, Central Florida, Cincinnati, and Houston.
Transition Payments and ESPN’s Role
While Texas and Oklahoma 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. Additionally, the schools could receive additional money through specially negotiated terms and “transition” payments funded by ESPN.
Influence of Television Networks
This report sheds light on the influence of television networks on conference realignment. Both Texas and Oklahoma will receive transition payments from ESPN to facilitate their move to the SEC. The decision by the Big 12 not to be more stringent with exit withholdings for the departing schools may cause some concern among the remaining members. However, it is understandable that a clean and amicable split with Texas and Oklahoma, who are joining a conference where ESPN has invested heavily in TV rights, would ultimately benefit the Big 12.
Impact on the SEC
The SEC is also a big winner in this situation. They get 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 in the 2024-25 season. ESPN’s involvement in easing the transition for the two schools further strengthens the SEC’s position.
Statements from ESPN and the Big 12
According to ESPN, after Texas and Oklahoma decided to change conferences, all parties involved chose to accelerate the process and transition a year earlier. The media partners were then brought in to reach a resolution that would satisfy everyone for the 2024-25 season. Brett Yormark, the head of the Big 12, expressed his satisfaction with the outcome, stating that all parties reached an equitable and amicable decision.
The financial implications of Texas and Oklahoma leaving the Big 12 early have been reduced, thanks to a more amicable split between the schools and the conference. While the Big 12 will experience some financial adjustments, the stability and expansion of the conference are crucial goals that have been achieved. The influence of television networks, particularly ESPN, on conference realignment is evident in this situation. Ultimately, both the SEC and the Big 12 benefit from this arrangement, with ESPN playing a significant role in facilitating the transition for Texas and Oklahoma.