With rumblings growing about the Big 12 possibly adding Gonzaga, some extra context has been reported about the pro rata clause included in the conference’s new media rights deals.
First, as reported by Michael Smith of the Sports Business Journal on Tuesday, the pro rata clause only applies to Power Five schools.
The Big 12 negotiated a pro rata clause into its contract, meaning the conference is assured of getting a raise if it expands with another Power Five school. And everything is pointing toward more expansion from the Big 12, sources say. The conference also has the grant of rights from the membership, another measure to ensure security.
Gonzaga, of course, isn’t a Power Five school. That means if the Bulldogs join the Big 12, the pro rata clause won’t kick in, the size of the overall pie won’t grow, and payouts to each school will shrink from the reported $31.7 million per year.
San Diego State is another school that isn’t in a Power Five conference. And in a column detailing the Aztecs attempts to earn an invite to a Power Five conference, John Canzano revealed another detail about the Big 12’s pro rata clause – it only applies to ESPN’s chunk of the media rights agreement, which is around 63% of the total value.
There’s something interesting in the Big 12’s new media deal, however. The pro-rata clause for expansion was only agreed upon by ESPN, which holds 63 percent of the new contract. Fox, which owns the other 37 percent, declined to include it. The clause also only allows for the addition of a Power Five member, per media insiders.
Doing some back of the envelope math, that’s around $240 million per year paid out by ESPN, or around $20 million per school, with Fox paying $140 million per year, or roughly $11.7 million per school. This means that even if the Big 12 expands with Power Five members, only the roughly two-thirds of the annual media rights value paid by ESPN would increase, with Fox not budging on their chunk.
This is pretty messy, and if you’re the Big 12, it puts you in a tough place when it comes to expansion. Raiding the AAC for more schools, like the Big 12 did when it added future members UCF, Cincinnati, and Houston, won’t increase the size of the pie and will decrease overall payouts to schools. The same would happen if the Big 12 plucked schools from Conference USA, Mountain West, or the Sun Belt. With the Big Ten and SEC effectively poach-free due to its massive media rights deals, that leaves the ACC (whose schools are largely deemed a better fit for any potential Big Ten or SEC expansion) and the Pac-12 as feeding grounds for the Big 12.
As it always was going to, what it comes down to in this media rights cycle is the Pac-12’s negotiations. If they’re able to get an acceptable deal, we can put a pin in further expansion for the next few years. If negotiations keep dragging on, the conference could get plundered and that would be that.
