One of the few advantages the crippled Pac-12 had in realignment is that it was next in line among the major conferences to have its media rights contract renewed. At a time when there was a question whether there would even be a Pac-12 after the loss of USC and UCLA, that was everything.
That advantage disappeared Wednesday when the Big 12 announced it would soon enter into negotiations with its media partners, ESPN and Fox. The Big 12 contract that expires in 2025 could now conceivably be renegotiated and moved up ahead of the Pac-12. That conference's deal with the same two networks expires in 2024.
"It's a smart move for [the Big 12]," said a veteran media rights negotiator. "If you're the Big 12, why wouldn't you do this? … It doesn't bind either side."
What it does is create a possibility for the Big 12 to leapfrog the Pac-12 in those talks. ESPN and Fox are expected to meet face-to-face with the Big 12 in the next week or two, sources tell CBS Sports.
"Meetings are imminent," said a person familiar with the quickly-evolving process.
The Big 12 cannot engage bidders other than ESPN and Fox until early 2024
"It is an exciting time for college athletics and given the changing landscape we welcome the opportunity to engage with our partners to determine if an early extension is in the best interest of all parties," said Big 12 commissioner Brett Yormark. "The Big 12 has enjoyed a fantastic relationship with its multi-media rights holders, and I look forward to having these conversations."
Emphasizing the urgency of the proceedings, active conversations are ongoing as the Big 12 considers allowing Oklahoma and Texas to leave the conference early for the SEC, CBS Sports has learned. The two schools are bound to the Big 12 via their media rights deal for three more seasons.
"It's definitely a piece of this puzzle, this OU-Texas separation," said a source familiar with discussions. "Those conversations are definitely happening and are making accessible progress."
If Oklahoma and Texas ultimately leave the Big 12 early, Fox would likely have to be made whole financially because of the loss of the two lucrative TV ratings winners prior to the end of the deal in 2025. Fox's Big 12 valuation is based on those schools staying for the next three seasons. There is also a Big 12 early-exit penalty to consider as breaking the existing grant of rights that would have to be negotiated. A grant of rights binds a school's television rights to the conference if it were to leave before the term of a media rights deal.
Up until this point, Oklahoma, Texas, Big 12 and SEC sources have remained steadfast in saying the programs intended to stay in the Big 12 through the course of the current deal before moving to the SEC.
In moving to open media rights negotiations, one industry source suggested the Big 12 was "joining [the] Pac-12 at the buffet." The advantage for the Big 12 is that it will have 12 schools united going forward even after the departures of Oklahoma and Texas. It can offer rightsholders at least the perception of stability given BYU, Cincinnati, Houston and UCF will be joining the league.
The same cannot be said of the 10 remaining Pac-12 teams. The conference is losing the Los Angeles market, a key in terms of the league's media rights evaluation, when USC and UCLA leave in 2024.
Amid uncertainty about the league's future, an exclusive Pac-12 negotiating window with ESPN and Fox expired earlier this month. League and network sources said the Pac-12 is viable going forward as a 10-team conference.
There remains continued talk within the industry that Big Ten commissioner Kevin Warren is continuing some level of pursuit of California, Oregon, Stanford and Washington in another round of. While rightsholders have pushed back at such a move, the fact that the Pac-12 hasn't signed a deal yet indicates its schools at least have options.
"While the Pac-12 may clearly be looking at trying to replace UCLA and USC, maybe the Big 12 is happy with their membership," said ESPN executive Burke Magnus on a Sports Business Journal podcast last week. "It's not about a realignment or acquiring new membership, necessarily."
The ultimate irony: In May 2020, Texas Tech president Lawrence Schovanec revealed that the Big 12 had sought to move up negotiations on a new deal. At the time, the conference was rejected. Consequently, two months later, news leaked the its two flagship universities were leaving for the SEC.
That reignited conference realignment, which has led us to this point with another irony. Thethat worked with the Pac-12 last year, Endeavor, is now working with the Big 12.
The Pac-12 ultimately decided not attempt to add Big 12 programs after the latter conference was wounded by the losses of Oklahoma and Texas. Sources indicate that Endeavor is now advising the Big 12 to take a serious look at adding Pac-12 teams.
Given ESPN lost out on bidding for the Big Ten rights, industry sources have indicated it can be somewhat of a "kingmaker" in deciding the future of the Big 12 and Pac-12.
ESPN needs games in the so-called "fourth window," those which start starting after 10 p.m. ET. The Pac-12 could provide that, although not necessarily with those teams playing in their current conference. CBS Sports reported this summer the Big 12 was in deep discussions with Arizona, Arizona State and Colorado and Utah.
There is still a faction within the conference that wants to expand. However, industry sources have emphasized that any combination of Pac-12 and Big 12 teams does not bring in additional revenue on a per-school basis. Those sources valued the annual rights of programs in those conferences anywhere from $21 million to $35 million annually. The Big 12 will make $44 million per school in the final year of its current agreement.
Under its new monster agreement, Big Ten schools will make an average of $75 million annually.
Whatever happens, the Big 12 and Pac-12 will take a significant cut to their current rights fees given the departures of Oklahoma, Texas, UCLA and USC.
Sources warn, though, if Warren is successful in taking four Pac-12 schools, it would be logical for the Big 12 to swoop in to take four of their own. That would compel the Pac-12 to expand, most likely to the Mountain West. San Diego State and Fresno State have been mentioned prominently.