On Big 12 Expansion and Navy

When I left last week to go on vacation, Big 12 expansion was considered a dead topic. There would be no Big 12 television network, and there didn’t seem to be much of a reason to expand without one. It seemed like a safe time to head out to camp in the desert for a few days. Now that I’ve returned, I’m wondering if the heat might have made me hallucinate. Not only is expansion back on, but it’s imminent. And it could be as many as four schools! And Bill Wagner is campaigning for Navy!

That’s the last time I take a vacation.

I guess it was too good to be true to think that we were done with conference expansion talk. It seemed that, with TV contracts settled and a playoff in place, we had finally entered into a period of stability. And we did, I guess… For about a year. Now everyone’s waiting for the Big 12 to make a decision one way or the other, and on the surface it appears that expansion is back on.

The argument for Big 12 expansion always seemed dubious to me, and it doesn’t help that the rationale has changed multiple times. First, they were expanding in order to have a better shot at landing a team in the playoff, which never really made sense. College football’s postseason format has changed four times in the last 20 years. It’s going to change again. I’m not sure how expanding makes playoff inclusion any more likely, anyway.

Then the conference allegedly wanted to expand in order to have enough content for its own television network, but with Texas unwilling to give up the Longhorn Network, a Big 12 network isn’t feasible.

Now, the conference appears to favor expansion in order to make some short-term money.

The reason for the league’s apparent change of heart is that the ACC announced that it will have an ESPN-backed network by 2019. That would leave the Big 12 as the only conference among the so-called Power Five without its own television network and the millions in revenue that those networks generate. Falling behind in revenue would have competitive consequences– you don’t want to see Big Ten schools hiring away Big 12 coaches, after all– and the league apparently doesn’t want to take that chance. With a network still out of the question, Big 12 leadership is looking for other ways to make up that revenue gap.

The plan, apparently, is to take advantage of pro rata clauses in the league’s existing television contracts with ESPN and FOX. These clauses state that the per-team value of the contracts doesn’t change if the Big 12 expands. If a contract averages $20 million per school now, for example, adding two more schools would increase the overall value of the contract by $40 million. (Why the networks agreed to this, I have no idea; I’m sure it had something to do with the uncertainty surrounding all of college athletics at the time). However, when a conference expands, its new members typically don’t receive a full share of the conference’s revenue right away; they’re phased in. That means that the difference between the new value of the contract and the new members’ share would be distributed to the league’s existing schools.

That would explain why the Big 12 has floated the possibility of expanding by four schools instead of two; more teams would mean more money. However, I’m not completely convinced that they will expand at all. All signs suggest that they will, and while I admit that it’s likely, I have a hard time making sense of it. Expanding just to take advantage of current contract provisions would solve a small short-term issue by creating a bigger problem in the long run.

Maybe I’m alone in this, but Big 12 expansion seems like a bad idea to me. Yes, they are falling behind, but the Big 12’s current revenue situation isn’t exactly dire. While the Big Ten and SEC are the clear kings of cash, the Big 12 makes about the same as the Pac 12 and ACC on a per-school basis. That’s before the Big 12 adds a football championship game, too, which will add another million or two annually to each school’s coffers. The ACC is getting its own network that could potentially vault it into a clear third place, but that isn’t a guarantee. The Pac 12 has a network today, but they haven’t been able to secure widespread distribution for it. While the ACC’s geography means that it will almost certainly get better distribution for its network than the Pac 12, it still isn’t going to be the revenue juggernaut that the Big Ten Network is.

Granted, I could be wrong. Maybe the Pac 12 will finally get picked up by DirecTV and start seeing bigger subscription fees from its network. And maybe the ACC network will take off and become a powerhouse, leaving the Big 12 as the weakest of the Power Five conferences by far. They certainly have reason to be concerned given current trends. So how would expansion help them in the long term?

That’s the problem– it wouldn’t. If the Big 12 can’t create its own network, the only other way to increase long-term revenue would be to raise the per-school average on the league’s Tier 1 and Tier 2 contracts. There are no schools willing to join the league that have the clout to do so. If there were, they would have already been invited long ago. Adding new members only serves to trigger the pro rata increase in the league’s current contracts. For the next contract, those new schools would be an albatross that could potentially reduce the league’s per-school TV revenue, and their TV partners have indicated as much. To cash out now at the expense of the future would make it reasonable to ask if the Big 12 even expects to have a future.

There is another option, however. The Big 12 could use the pro rata clauses as leverage to renegotiate those contracts. If ESPN and FOX don’t want to pay for schools that would (in their eyes) water down the league, they might be willing to pay to keep it from happening. To prevent paying $40 million per year for two schools they don’t want, they could perhaps pay $25 million or so to keep things the way they are. This way, the Big 12 could increase their annual take without sharing anything with new schools, and they wouldn’t have any perceived dead weight when the time comes to work on the next contract.

That seems like the logical course of action to me. So far, though, the Big 12 has been very convincing in making everyone believe that they intend to go through with expanding. Sure, it could just be a negotiation tactic, but it doesn’t look that way.

So let’s say they do expand. Why not choose Navy?

A few months ago, I sent out a tweet for my own amusement:

I sent it out as a joke, but could a case actually be made for the Mids?

One could accuse Bill Wagner of being a homer and pushing a pipe dream, but as unrealistic as it might be to hope for an invitation, his was a column that needed to be written. Navy might not be invited to the Big 12, but it deserves more respect than it has received in this process. It was right for someone to stand up for the program. Wags points out what should be obvious: that Navy’s football performance ranks among the best of the Group of Five over the last decade. The Naval Academy has a reputation for top-notch academics. It’s located in a media hotbed. If the Big 12 is hell-bent on expansion, there are a number of reasons why the Naval Academy is as good or better than any other Group of Five program.

Let’s put the resume together, shall we?

No Big 12 network: Strangely enough, it’s the lack of a Big 12 network that makes this discussion possible. A conference television network needs content, something that Navy wouldn’t be able to provide as a football-only member. Without a network, though, there’s no need for hours of softball and volleyball programming, making football-only membership a possibility.

A winning program: Like Wags said, the results speak for themselves. Of course, there would be legitimate questions regarding a service academy’s ability to compete against the Longhorns and Sooners on a regular basis. While Navy hasn’t truly followed the 4-4-4 scheduling model for several years now, joining the Big 12 would blow that philosophy to smithereens. On the other hand, as I pointed out a few years ago in another thought exercise, Navy joining a Power Five league would completely change service academy recruiting. Navy would never lose a recruiting battle to Army or Air Force again. They’d become a service academy all-star team. It still wouldn’t be enough to challenge the Big 12’s titans, but it could be enough to be respectable against the rest of the league.

Actual television value: No Group of Five program brings the kind of television value that the Big 12 would need to match the league’s existing per-school share on the next television contract. However, there are two that at least wouldn’t be a total drag. One of them is BYU (even though they aren’t technically G5). The other is Navy, which is the only consistent winner among the G5 that has valuable television properties of its own: half of the Army-Navy game, and (to a lesser extent) the Navy-Notre Dame game. Networks have already demonstrated that they’ll pay for Navy’s top games.

Academics: The Naval Academy’s academic reputation is as good or better than any in the FBS.

Name-brand recognition: The Navy name arguably carries more weight as a national brand than any other in the Group of 5, with its historical significance, association with college football’s most celebrated rivalry, and USNA’s status as a national school. Again, only BYU really competes here. (Army would too, but their current struggles make them victims of recency bias).

Travel partner for West Virginia: The Mountaineers are on an island in the Big 12. Navy would give them a next-door neighbor.

— Washington and Baltimore media markets: D.C. is the country’s #8 media market. Baltimore is #26. Navy is in the middle of both.

Maybe it seems ridiculous to picture Navy alongside leviathans like Oklahoma and Texas in the Big 12, but this is a case of the old joke: you don’t have to outrun the bear, you just have to outrun the other campers. If the Big 12 is going to add Group of Five schools, Navy only has to stand out among that group. And they do– far more than they are given credit for. Navy isn’t some feel-good cinderella story anymore. They are a legitimate, consistent football program at an elite school. Change the name on the uniform, and there is no doubt that this program would be getting far more talk as an expansion candidate.

And that brings us to the first of several reasons why Navy will not be seriously considered:

Perception: Remember Coach Niumatalolo at last year’s AAC media days?

 “People talk about us coming into the conference, and we have great respect for the programs and the head coaches, but we didn’t come from NAIA football,” Niumatalolo said. “We’ve been playing decent opponents.”

Coach Niumatalolo and the rest of the Navy staff have worked tirelessly to put a winning football program in Annapolis, yet they never seem to get real credit for what they’ve done. There’s still a sense that service academy football is too much of a novelty to be taken seriously; good for putting a “military appreciation day” on your schedule, but not a team you expect to win. At some point, after Cinderella wins for years, can you still call them Cinderella? After more than a decade, Navy has reached that point. Coach Niumatalolo was expressing some frustration over the perception of his program, and one can hardly blame him.

As unfair as it is, it’s a perception that has endured, which makes Navy a tough sell to television executives looking for value to justify spending hundreds of millions of dollars. When even the most outspoken advocates for Navy football were questioning whether the Big East made sense, how could anyone expect the public to react favorably to the Mids joining the Big 12? How is a service academy going to help the Big 12 go toe-to-toe with the SEC? Right or wrong, the public wouldn’t buy it, which means that television wouldn’t buy it. And TV is the whole point of this exercise. Besides, while Navy joining the Big 12 would shift the balance of service academy recruiting, that’s a subtlety that just about nobody outside of this blog’s audience would appreciate.

If the Big 12 is going to expand, the best programs as far as perception is concerned would be ones that the public remembers as BCS programs: Cincinnati, UConn, and USF. Plenty of people remember BYU’s national championship, which also helps their case. Houston even gets a little bit of a bump here thanks to their historical association with the other Texas schools as members of the Southwest Conference.

Football-only membership: A football-only membership might be possible without a conference television network, but that doesn’t mean it’s palatable. No other Power Five league has football-only members, and this gets back to the perception problem. To invite football-only members would be a tacit admission that those athletic departments– and by extension, the schools– aren’t really peer institutions.

To understand how university presidents think about these things, you have to remember why colleges participate in athletics to begin with. It’s basically advertising, and conference affiliation is a huge part of each school’s image and brand. University presidents don’t want to be associated with schools that don’t fit the same image that they are trying to project for their own institutions.

It sounds like snobbery, but that’s not necessarily the case. For example…

Academics: Navy is a tremendous academic school. That does not, however, mean that they are the right fit in the eyes of university presidents. The Naval Academy is a small, undergraduate-only service academy. Every member of the Big 12, on the other hand, is rated under the top two tiers of doctorate-granting research universities in the Carnegie Classification system. University presidents managing the brand associations of their graduate schools will generally prefer that the conference invite other universities with a similar focus.

West Virginia doesn’t need a travel partner: At least, not for football. They need a travel partner for non-revenue sports and sports that play midweek games. Navy doesn’t help with that.

— Media market doesn’t matter: The reason why media markets were such a big deal in the last round of conference expansion was because those conferences were looking to set up their own networks. By choosing popular schools in large media markets, they forced those local cable providers to pick up the new conference network, delivering more money to the conference via carriage fees. Without a network on the horizon, the need to expand into larger markets goes away.

In this case, Navy’s loss is Houston’s gain. One of the arguments against the Cougars has always been that any future Big 12 network would already be carried by local cable providers without them. If there won’t be a network, then that’s a moot point. The president of the University of Texas has already voiced his support for Houston, and I’m sure that the Longhorns would love to see another school added to their sphere of influence in the league. I don’t know that the schools outside of Texas feel quite the same, though.

Either way, the miracle Big 12 invite isn’t going to come for Navy. What, then, is the best case scenario? That’s obvious, if not likely: for the Big 12 to stay at 10, allowing the American to keep on growing (in stature, not numbers). That outcome would be disappointing for those schools hoping to move, obviously. Not that you can blame them; that’s just the sad state of college athletics today. I’m optimistic about the American’s future, but there’s no doubt that membership in the Big 12 would make life easier.

Another possibility that would leave the American intact would be for the Big 12 to add BYU and Colorado State. Most reports, though, are that AAC schools are at the top of the Big 12’s list; if they do expand, it’s likely that the former will take a hit. Should the Big 12 take BYU and one school from the American, life will go on. No one school is propping up the AAC. If they take two schools, then things get a little more sketchy. The American is a deep league, but it will be difficult to overcome the optics of having been raided when trying to position yourself as the top Group of Five conference.

(If the Big 12 takes 4 AAC teams, then turn out the lights, the party’s over).

The shadow of uncertainty is unfortunate, with the American coming off of its best football season to date. We should be celebrating our own success and getting excited about an encore, but instead we all get to watch as half the conference scrambles to leave. It will be nice when all this is finally over with. For now, we wait.

 

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18 Responses

  1. We would not be competitive in the Big 12—but 25M per year might take us there.

  2. You are consistently wrong on here and you are wrong again. Navy could be very competitive in the Big 12. Win it, No, but look at the bottom of the Big 12. Navy would be just fine.

  3. Would it be nice to be asked to join the Big12? Yes. Definitely. But then you have to play all those guys. We would be the Vanderbilt of the Big12, or the Maryland/Rutgers of the Big10. I just re-watched the Houston game, and they ran around us like we were standing still. Oye.

    • It’s unfair to cherry pick one game. You could just as easily point to the Pitt game.

    • Houston also lost to UCONN and should have lost to Memphis if the best kicker in the league hadn’t missed a FG. You can’t just look at one game.

    • Mike’s column was well written bringing out the positives and the negatives. Navy has had way more sustained success than Houston over the last 15 years.

  4. The emphasis that USNA would have to put on football to have any success against schools in the Big 12, which are so very different from them, would change the program in a mostly negative way. I also fear it would change the school in a negative way. Probably to the point where it would eliminate one of the best reasons many Navy fans are devoted to the team, and the school.

    • Completely disagree. We could compete without changing anything. We would never win it, but we most certainly would compete. The middle to bottom of the Big 12 is awful.

    • I love Navy football with a passion but what sense would it make to join a conference in which we would probably never win a league title. One of our best teams in history, last year (11-2), did not win the division (tied) or the league title of the AAC. I don’t think there is a single team in the Big 12 that Navy couldn’t beat on any given week but week after week matchups with these teams would wear them down. We don’t have that kind of depth. I would prefer the Big 12 to look in another direction AND the AAC stay as it is.

    • The reason it would happen is to prevent being on the wrong side of the line when a split happens. Vanderbilt’s not going to win the SEC either, but good luck convincing them to leave.

  5. Was at an alumni lunch this week with the Supe as the guest speaker and he said unequivocally membership in the Big 12 was not something USNA was interested in.

  6. These columns make me sound so much smarter than I am around the water cooler (yes, we still have one…)

    That said, it is a strange feeling when a football column starts sounding like an MBA case study. I agree with your sentiments that it is sad when the football discussions at large center around money and television deals.

    I like the Supe’s words above. While we (and definitely Coach Ken, Chuck and the rest of the staff) deserve more respect and should be in the conversation, I think it would be a bad idea for so many reasons, one of which should be our own internal view of ourselves and what we stand for. Doesn’t pay the bills, and maybe a little polly-ann-ish, but we are different, and that is a good thing.

  7. It really comes down to a TV deal. This is the giant money-maker. But fear of loss comes into play. Make a move now or see how things shake out. Do a deal now or hope for better terms later? This goes for both the conference and the network. Who blinks first? There are complicating matters on the horizon. There are indicators that another big round of “cord-cutting” will occur with viewers abandoning their MVPDS (cable/satellite TV service). The loss of every household affects the bottom line of the cable sports channels. If this occurs then sports channels — particularly ESPN — will face further financial difficulties. (There are options for a channel like ESPN to make-up for the lost viewers but they don’t make-up for the lost revenue.) ESPN is already in the midst of major layoffs and is dumping higher-priced talent in order to dramatically cut costs. Over-paying on conference fees is just one culprit. The situation is more likely to get worse than better. In addition, when it comes to football it’s always about the TV market size. (The one exception has been Notre Dame which is unique in its decades-long national following.) In spite of how we grads feel about this, Navy doesn’t generate the viewer interest in Baltimore & DC markets as does say, U of Houston in Houston (also a top 10 market). My company owns TV stations in both Baltimore and DC. Sad to say, but even an out-of-state ACC match-up generates more viewer interest than a Navy game. (I have a theory or two about this.) Lastly, it’s difficult to imagine Texas not protecting the Longhorn Network. Ironically, it was the launch of the Longhorn Network that precipitated the whole conference realignment a few years back.

  8. I really think the Big 12 needs to concentrate on just the central part of the country. I never understood WV going to the Big 12, I think half of the Big 12’s issues would go away if they dropped them and replaced them with a Houston, Tulane or Memphis. They could add in a CSU and BYU and you’ve got a good, balanced sports-wise and academic conference there. Of course, I’ve always felt if Navy went into a P5 it would be the ACC, perhaps someday going in with Notre Dame.

    • This whole Colorado State thing makes zero sense

  9. Personally, I do believe Navy has the qualities to become not just respected, but competitive in the Big 12. For as many benefits the Big 12 can gain from adding Navy – given its history, unique offense, the military, etc…I think an equally “politically incorrect” uncertainty with a strong desire to answer it would loom over Navy’s hypothetical addition to the Big 12. Is Navy going to increase the Big 12’s strength and allow it to fully rival the SEC?

    I wouldn’t wager that the Big 12 will ever say anything in reference to the SEC in terms of their possible expansion, but overall – it’s my two cents.

  10. Navy should appeal to the Big XII, being a national (&patriotic) brand, rich traditions, excellent standards, never good markets, and would be competitive without being threatening.

    Air Force has expressed an interests in joining and i think along with Navy, would round out the Big XII to 12 nicely.

  11. Mike,

    What your prediction vs Temple?

    Ed

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