Big 12 Needs ‘Creative Ways’ to Make Money

The first report, from CBS Sports’ Dennis Dodd, was that the Big 12 is considering a private equity investment of up to $1 billion in exchange for up to 20% stake in the conference. A cash infusion of that magnitude would put the Big 12 in the same ballpark as the Big Ten over the next several years.

Then, shortly after that report, ESPN’s Pete Thamel broke the news that the Big 12 was exploring a naming rights partnership, and Brett McMurphy added that Allstate was the company to watch for to land those rights.

So, why the sudden urge to bring in large chunks of cash by any means necessary? Well, Brett Yormark is trying to make up lost ground in a financial arms race with the Big Ten and SEC, and there’s already a significant gap that is only widening as time presses on.

Simply put, the Big 12 is playing catch up, and the pressure is on.

“I have not yet today (spoken with Big Ten or SEC sources) because this just broke probably in the last 90 minutes,” Thamel said on the Pat McAfee Show on Thursday. “It’s a good question. I don’t feel like there’s a pressure in those leagues that’s as significant to do that.”

Big Ten and SEC schools are set to increased portions of the College Football Playoff revenue on top of their hefty media rights deals that are going into effect soon. So, there’s no pressure on the Power Two to do anything but enjoy the fruits of their prosperous labors.

Meanwhile, as Thamel points out, the Big 12 and ACC won’t see nearly as much money coming in, and with other sports outside of football needing their funding to come from somewhere, things could get tight.

“Look, ultimately, when the next College Football Playoff contract kicks in, so that would be after we have the ’24 season come up, then ’25, then we’re expected to go to a 14-team playoff,” Thamel continued. “Although that’s not solidified, it’s widely expected to happen. There’s essentially a $20 million shift of money that’s going to go to the power teams and all the teams in the Big Ten and the SEC. So they can just sort of line that CFP money up — and I’m oversimplifying something very complicated — they have a way to just get that $20 million, share it with the athletes, and sort of keep business as usual as they’ve done it.”

So, if the Big 12 were to get to the point that ends aren’t meeting, and there’s more money being required to sit at the big boy table, the next thing to go could be those sports that aren’t producing revenue—and that’s not good for anyone involved. Thus, creative ways of making money are born.

“The ACC and Big 12 don’t get nearly the same cut of that CFP revenue. Because of that there’s going to be creative ways (to raise money),” Thamel said. “And this ties back to the reasons why we’ve seen the Clemson lawsuit and the Florida State lawsuit to attempt to break the Grant of Rights and leave the ACC. They feel like they’ll be $20 million behind annually at least every year. So you stretch that out over 10 years, it’s $200 million, and they don’t feel like they have enough revenue to compete, so they’re trying a creative legal way to get out.”