Month: February 2013

The Big East Name Defects from the Big East: Catholic 7 Expansion and Branding

On By Frank the TankIn Big East, College Basketball, College Football, DePaul Blue Demons, Illinois Fighting Illini, Sports318 Comments

It figures that a conference that has lost 5 all-sports members, 8 non-football schools and 3 schools that accept invites to join but then backed out before playing a down of football within the past 18 months would ultimately end up losing its own name.  Both Brett McMurphy of ESPN.com and Mark Blaudschun are reporting that the Big East presidents are expected to approve a plan to allow for the “Catholic 7” defectors from the conference (Georgetown, Villanova, St. John’s, Seton Hall, Providence, DePaul and Marquette) to keep the Big East name and leave the league for the 2013-14 season.  Pete Thamel of SI.com notes that Fox is pushing for the early exit and is expected to announce a contract with the Catholic 7/Big East when it unveils its plans for its new pair of sports networks of Fox Sports 1 and Fox Sports 2.  He also reports that the Catholic 7’s keeping of the Big East name and early exit are effectively being paid for by leaving the exit fees and NCAA Tournament credits of the other Big East schools that have defected or will be defecting (West Virginia, Syracuse, Pitt, Louisville, Rutgers and Notre Dame).  Meanwhile, a consensus has formed that Xavier and Butler will be added immediately to the new league with the old name for next season with a chance that a 10th, such as Creighton, comes in at that time.  The Catholic 7/Big East would then likely move up to 12 with St. Louis and Dayton (or possibly Richmond) in 2014-15.

The fight over the Big East was interesting since it’s a brand name that has been dragged through the mud lately yet still had a lot of value to both the Catholic 7 and Conference Formerly Known as the Big East football schools for different reasons.  From my vantage point, the Big East name is more valuable with the Catholic 7, but was more valuable to the football schools.  That is, the Catholic 7 are more able to fully realize the value of the Big East name since it had the bulk of the remaining historical members that weren’t in other power conferences and there wouldn’t be a cognitive dissonance if they held their conference tournament at Madison Square Garden.  On the other hand, the football schools have little association with each other besides being new members of the league that was known as the Big East specifically.  The Catholic 7 could have more easily re-branded themselves under a different name since the average sports fan could already largely recognize that group as a cohesive unit, while the football members will need to sell a new untested name on top of educating the public about who is in their conference.  As a result, I’m a little surprised that the football schools didn’t pull out a rant like Marlo did on The Wire about how “My name is my name!”

Of course, the exit fees and NCAA Tournament credits of the other Big East defectors that the Catholic 7 are leaving behind aren’t small amounts.  Some back-of-the-napkin calculations would put that at least on the order of $20 million just for the NCAA credits.  (Edit: Jeremy Fowler of CBSSports.com reported earlier this month that the Big East actually has a “Realignment Reserve Fund” that is projected to be worth $68.8 million by 2020.)  Significantly, it’s likely that none of that is going to the incoming members of the league as part of their entrance agreements since it is standard operating procedure that new schools do not receive any of the revenue earned before they joined.  This means that UConn, Cincinnati and USF, which are currently the only all-sports members in the Big East with voting rights (Temple still isn’t a full member yet), are probably ending up with all of that money that the Catholic 7 are leaving behind, which would certainly make it more palatable for them to let go of the Big East name in return.  It’s at least some financial consideration for literally the only three schools in all of FBS that will end up earning less conference-level money outright in the new college football playoff system that starts in 2014 than they are in the current BCS regime.

Maybe it is all for the best for the football schools that thought that they were going to be in a conference called the Big East.  Andersen Consulting had to go through an acrimonious split with its parent Arthur Andersen back in the late-1990s, including losing an arbitration proceeding where it was forced to give up any reference to the then-extremely valuable Andersen name*.  The new name “Accenture” was chosen and literally hundreds of millions of dollars needed to be spent on re-branding efforts.  What seemed like a huge branding blow in 2000 ended up becoming one of the most fortuitous name changes in history just a year later when the Enron scandal hit and took Andersen down entirely as an accounting firm.  Sometimes, a fresh name with a new start can end up being better in the long run even if the benefits aren’t obvious today.

(* I was a finance major at the University of Illinois in the late-1990s and, without question, the most prestigious of the then-Big Five accounting firms was Arthur Andersen.  The sad irony of Andersen getting taken down in the Enron scandal partly for enabling poor audit decisions in order to preserve other types of tax services fees was that its main reputation, at least in Chicago, was that it was actually the least sales-oriented and most client-focused of the large accounting firms.)

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

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B1G Dirty South Expansion

On By Frank the TankIn Big Ten, College Basketball, College Football, Sports1,568 Comments

Conference realignment observers have been chatting about the Big Ten raiding the ACC for awhile, but there were two separate reports today from sites with fairly good track records that point to this possibly occurring sooner rather than later.  InsideMDSports, which is the site that was among the first to report that Maryland was heading to the Big Ten, has Tweeted that North Carolina has an offer from former Dean Smith disciple Jim Delany and that Virginia and Georgia Tech are in the mix.  Meanwhile, Mr. SEC has his own post about how UVA and Georgia Tech have spoken with the Big Ten, but there won’t be any moves until there’s clarity in the ongoing Maryland/ACC lawsuit.

As I’ve stated previously, this all jives with what I believe the Big Ten wants to do with expansion.  The demographic shift to the South (both in terms of sheer population and football recruiting) has been a concern of the Big Ten for quite awhile – recall the results of the conference’s expansion study back in 2010 before they added Nebraska.  UVA in particular would give the Big Ten flags on both sides of the Washington, DC metro area, which might end up being the second most important market for the conference after Chicago when all is said and done.  (New York City is obviously the great white whale for college sports, but penetrating that market is going to be a long-term process for the Big Ten.  DC, on the other hand, can be turned into a legit “Big Ten town” immediately with the right combo.)

UNC, as one of the most prominent brand names in college sports that can deliver its entire home state all on its own, is at or near the top of the list of both the Big Ten and SEC, so it wouldn’t be a surprise if Delany had offered his alma mater an invite years ago.  However, I’ll reiterate that the Tar Heels are going to be one of the toughest nuts to crack in conference realignment (if they’re even crackable at all) since TV money alone isn’t going to sway them.  The ACC culture is strong at that school and, even if there are other defections from that league, UNC alone could keep the rest of the conference together just as the presence of Texas kept the Big 12 together.

Georgia Tech is a name that is brought up in Big Ten expansion discussions fairly regularly.  In a vacuum, there’s a lot to like about Georgia Tech – a great academic school in a top TV market and football recruiting area that is one of the largest destinations for Big Ten grads outside of the Midwest.  The problem, though, is that the SEC rules (and likely always will rule) Atlanta.  If there is a broader Southern expansion for the Big Ten (e.g. UVA, UNC, Georgia Tech and Florida State are all added to create an 18-school Big Ten), then there probably is enough of a critical mass of fans in the Atlanta market where it’s worth it to be the #2 conference there (as it’s such a strong college football market overall).  I’m not a fan of it being a lone geographic outlier in the South, though, which is close to what it would be if only UVA were to be added with the Yellow Jackets.

At the same time, as someone that implored people to “think like a university president and not like a fan” when it came to conference realignment back in 2009, I’ve now come full circle in badly wanting to make sure that the Big Ten ends up with at least one more legit football power if it is going to continue expanding.  Unless Notre Dame suddenly gets conference religion, the only realistic option on that front is Florida State and, by several accounts, the Seminoles are there for the taking.  As I’ve stated before, Florida State hits virtually every metric that the Big Ten is looking for long-term: football power, growing population and massive TV markets.  I understand better than most people about the importance of TV markets and academics to the Big Ten, yet this expansion gravy train is still ultimately fueled by football games that sports fans actually want to sit down and watch.  Let’s hope that if the Big Ten actually is able to further raid the ACC (and I’ll be a skeptic of that occurring until the day that there’s an actual announcement) that Jim Delany (who I’m sure is more than open to the prospect of adding FSU) is able to remind the university presidents that there still needs to be football branding on top of collecting large metro areas and research institutions.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

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A TV Network Killed the Big East (and It’s Not the One in Bristol)

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, DePaul Blue Demons, Sports893 Comments

Brett McMurphy and Andy Katz of ESPN.com have reported that NBC has verbally offered the remnants of the Big East between $20 million and $23 million per year for six years for the conference’s TV rights for all sports (including both football and basketball).  That would be approximately $2 million per year for each school in the league.  By way of comparison, each individual school in the Big Ten, SEC, Pac-12 and Big 12 (and depending upon who you talk to, soon the ACC) will make about as much TV money on its own annually than the entire Big East conference.  This is the latest news in the stunning decimation of the Big East since the league rejected an offer from ESPN two years ago worth an average of $130 million per year.  During that time frame, the Big East has lost 5 football members that have actually played in the league (Pittsburgh, Syracuse, West Virginia, Rutgers and Louisville), 8 non-football members (Notre Dame, Georgetown, Villanova, St. John’s, Seton Hall, Providence, DePaul and Marquette) and 2 3 schools that defected before they even played a down of Big East football (TCU, Boise State and San Diego State).  In the middle of that process, the conference also lost its place in the college football postseason structure, where it failed to secure a “Contract Bowl” slot (with its former BCS AQ counterparts Big Ten, SEC, Pac-12, Big 12 and ACC) and is now part of the “Gang of Five” non-power conference group (with the MAC, Conference USA, Mountain West Conference and Sun Belt as new counterparts).  The Big East made a huge gamble in taking its sports rights to the open market when it turned down that lucrative ESPN offer and even the largest conference naysayers couldn’t have predicted how badly that decision would backfire.

The argument that ESPN systemically devalued the Big East to the point where it was effectively destroyed is taken as gospel by many Big East partisans.  It started back in October 2011 with a quote from the then-AD at Boston College stating that ESPN “told [the ACC] what to do” in the wake of Pitt and Syracuse defecting to the ACC.  This line of thinking then continued on as the Big East lost more access in the new college football playoff system than any other conference (in fact, they’re likely going to be the only league that will end up making less money in the new format than it does in the current BCS system) and then suffered a literal avalanche of defections in the past 5 months.

However, it wasn’t the Bristol-based network that effectively killed off the Big East as we once knew it.  Instead, Fox, in its pursuit of becoming the main competitor to ESPN in US sports television, ended up pulling the trigger.  Consider two critical moves:

(1) Big Ten expands with Maryland and Rutgers – When the Big Ten added Maryland from the ACC and Rutgers from the Big East, Jim Delany wasn’t looking to aid its first tier national TV slate that’s being shown on the Disney networks of ABC and ESPN (unlike the addition of Nebraska in 2010).  Instead, the main beneficiary from this expansion was Fox, which is 51% owner of the Big Ten Network (BTN), since it now has an argument that the network should be carried on basic cable in the New York City and Washington, DC markets.  If anything, this move was terrible for ESPN since it makes Fox/BTN much stronger on the East Coast and took away schools from the two main conferences – the ACC and Big East – in which the Worldwide Leader owns all tiers of conference multimedia rights.  Without Fox and the BTN, the Big Ten doesn’t take Rutgers directly from the Big East or indirectly causing Louisville to defect (since the ACC replaced Maryland with the Cardinals).  The Big East still had the ability to survive as a viable football conference with Louisville and Rutgers in the fold, but once they were gone, Boise State (and subsequently San Diego State) didn’t believe that they would receive enough TV money to justify being complete western geographic outliers.

(2) Catholic 7 leave the Big East… because Fox convinced them to do so – A few weeks after the Rutgers and Louisville defections, the 7 remaining Catholic non-football schools (DePaul, Georgetown, Villanova, St. John’s, Seton Hall, Providence and Marquette) decided to split off from the Big East’s football members in order to form a new league (hereinafter called the “Catholic 7”).  Multiple reports from both ESPN (including the McMurphy/Katz report linked above) and Sports Illustrated have stated that Fox is the leading suitor for the rights to the new Catholic 7 league with offers of between $30 million and $40 million per year depending upon whether it has 10 or 12 schools.  That represents the Catholic 7 making around $3 million per year for basketball rights, which is more than the NBC offer to the Big East of $2 million per year for both basketball and football.

I’ve previously set forth reasons why the Catholic 7 would be more valuable than the new Big East even when they don’t offer any football (namely that football in and of itself isn’t what’s driving value and the Catholic 7 brand names and markets are much stronger top-to-bottom in order to garner a premium).  Even if you don’t want to believe that’s the case in terms of comparing the inherent values of the Catholic 7 versus the Big East, a Tweet from Brett McMurphy on Saturday should put this into clearer focus:

Do you see what occurred here if this is true?  Fox approached the Catholic 7 before they split off, which means it’s not so crazy to believe that Fox wanted them to split off.  So, if you believe that Fox is overpaying for the Catholic 7, then you might be right.  However, the point is that Fox needed to overpay the Catholic 7 in order to serve as a catalyst for them to split off.  If Fox just merely offered “fair market value” to the Catholic 7, then they likely would have stayed in the hybrid.  (Anyone that thought that the Catholic 7 would have split off without the knowledge that they’d be getting paid more compared to staying in the hybrid Big East isn’t thinking straight.)  There needed to be an extraordinary financial windfall from Fox in order for the Catholic 7 to take the extraordinary step of splitting off from the Big East football schools.  As a result, it’s almost pointless to try to compare the on-the-court basketball quality of the Catholic 7 versus the New Big East.  The amounts that are being offered by Fox to the Catholic 7 reflect a “blood money” premium offer that they couldn’t refuse, whereas the Big East isn’t going to garner any premium at all and will be subject to the “normal” market forces in play.

That leads to a corresponding question: why would Fox do this?  Why would it want to pay this much for the Catholic 7 instead of, say, simply bidding for the entire hybrid Big East?  Well, let’s take a step back and examine what Fox actually needs in terms of sports content.  The reality is that Fox (and when I say “Fox”, I really mean its new cable networks Fox Sports 1 and Fox Sports 2 as opposed to over-the-air Fox) already has a fairly full sports slate in the fall with Major League Baseball, NASCAR, Pac-12 football and Big 12 football rights.  As a result, they don’t have much of a need for other college football games.  The biggest programming gap that Fox has right now is during the winter, where its cable networks are pretty much wide open outside of some Pac-12 basketball rights.

I’ll put on my own tinfoil hat here, where my semi-educated guess is that Fox: (a) no longer had much interest in the New Big East football product after Rutgers and Louisville left, (b) still had interest in the Big East’s basketball product in order to provide winter programming and (c) didn’t want to get into a bidding war with NBC and/or ESPN to buy a Big East package for both basketball and football when all it really wanted was basketball.  As a result, Fox went straight to the Catholic 7 (who represented most of the schools that they wanted to showcase for basketball, anyway) and offered up enough money that would simultaneously be a financial boon to those schools while allowing the cable network operation to save money compared to a competitive bidding situation for the all-sports hybrid Big East rights.  It’s the very essence of a “win-win” for both the Catholic 7 and Fox here.

Meanwhile, the Big East has been left with only one legit suitor with NBC since Fox obviously has no interest (seeing that it made an offer to the Catholic 7 to split up the league), CBS has little funding for its fledgling CBS Sports Network and ESPN has had lukewarm feelings toward the league.  Without a bidding war, the already thrifty Comcast/NBC organization zero incentive to drive up the price of the Big East on its own, so this very low offer reflects that reality.  Either NBC takes the Big East rights or ESPN comes in to match it with its right of first of refusal (which the McMurphy/Katz article notes that the Worldwide Leader has), but there’s no other potential fountain of cash out there.

Sometimes, it’s not quite as simple as saying “UConn is a much better basketball program than DePaul, therefore, UConn should get paid more than DePaul”.  Timing matters in conference realignment and TV contracts, so in this case, Fox had a specific need in a situation where the Catholic 7 was in the right place at the right time.  Granted, that’s no consolation for the fans of schools that are left in the Big East and who may need to start hanging up pictures of Rupert Murdoch on their dartboards instead of Mickey Mouse.

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

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Big Ten Expansion Lacrosse-Style, Potential Catholic 7 Fallout and the “Classic East” C7 Name Game

On By Frank the TankIn Big East, Big Ten, College Basketball, College Football, Sports555 Comments

It’s been a wacky week in sports: a power outage at the Super Bowl, moms stealing national letters of intent, a previously listless Illinois team taking down #1 Indiana (I-L-L!) and the Big Ten’s next expansion target appears to be… Johns Hopkins University.  Let’s get to some conference realignment talk:

(1) Big Ten Expansion and Johns Hopkins – In a somewhat surprising bit of news, the Big Ten is apparently targeting Johns Hopkins as an associate member for lacrosse.  Adding Johns Hopkins on top of Rutgers and Maryland would give the Big Ten the minimum number of teams for both men’s and women’s lacrosse (6) to garner an automatic NCAA Tournament bid.  This has brought up the question as to whether the Big Ten would consider other associate members, such as adding Notre Dame or Boston University for hockey or all of the Big West to improve baseball.  I don’t see that happening, though.  From my vantage point, Johns Hopkins is about as unique of a situation as it gets since (a) as noted, its addition is the difference between the Big Ten having an NCAA auto-bid lacrosse league versus having none at all, (b) men’s and women’s lacrosse are the only sports that Johns Hopkins plays at the Division I level (all of its other sports are in Division III), so they would technically be an “all-sports” member for the Big Ten since it is providing “all” of the sports in which the conference sponsors a league (unlike Notre Dame or BU that obviously play at the Division I level in other sports), (c) Johns Hopkins happens to be an elite lacrosse power, so their combination with Maryland would instantly make the Big Ten into a top notch league in that sport and (d) in terms of academics and research funding power, Johns Hopkins is about as top notch as you can get outside of the Ivy League, which means that they can provide further gravitas to the Committee on Institutional Cooperation, which is the academic research consortium of the Big Ten and the University of Chicago.  All of those factors make Johns Hopkins into a unique expansion target for the Big Ten that I don’t believe would apply to other potential associate members.*

(* Note that the College Crosse blog has a fairly skeptical view of the Johns Hopkins/Big Ten marriage occurring because it believes that Johns Hopkins holds the leverage here.  That’s a pretty fascinating lacrosse-centric viewpoint where there is actually a bizarro world where Jim Delany could be considered to be completely powerless while much of the rest of the conference realignment universe believes that he can bring the likes of North Carolina and Florida State to their knees.  All I know is this: whatever ESPNU might be paying Johns Hopkins for lacrosse games probably wouldn’t cover a day’s catering bill at the Big Ten Network.  If Johns Hopkins turns down a Big Ten offer, it certainly won’t be because of TV money or exposure.  The College Crosse analysis is focused upon the on-the-field element and concludes that the Big Ten supposedly doesn’t offer Johns Hopkins anything worthwhile, but it’s unlikely that the school is examining this conference option for any competitive reason.  Instead, it’s about an possible offer to be part of the most powerful conference and brand in college athletics on the basis of a single sport that isn’t football or basketball along with being the only school that the league has ever granted an associate membership to.  That’s an invitation that the vast majority of university presidents and athletic directors in this country would kill for.  We’ll see how Johns Hopkins approaches this going forward.)

Now, what does the prospect of adding Johns Hopkins mean for Big Ten expansion overall?  One school of thought is that adding Johns Hopkins and a Big Ten lacrosse league would make it more palatable for Virginia and North Carolina to consider the Big Ten (as they have powerhouse lacrosse programs that have greater influence on campus than their revenue might indicate).  The other viewpoint is the flip side, where the Big Ten wouldn’t be considering the addition of Johns Hopkins at all as an associate member if it believed a larger expansion that included UVA and/or UNC was imminent.  I tend to favor the latter point of view.  As much as I see the benefits listed above with adding JHU for lacrosse, I highly doubt it would be happening if the Big Ten thought that more full members with their own lacrosse members would be joining at any point in the near future.  That doesn’t mean that UVA or UNC won’t ever join the Big Ten, but the talk about Johns Hopkins is a bit of a canary in the coal mine on the overall status of conference realignment as of now.

(2) Potential Catholic 7 Fallout – We’ve spent most of our time here lately focused on the large potential realignment earthquakes with the power football conferences along with analyzing who might the 7 Catholic schools splitting from the Big East (AKA the “Catholic 7” or “C7”) might add to their new basketball-centric league.  However, we haven’t really examined the potential fallout from the formation of the new C7 league, which may very well affect every single Division I basketball conference that doesn’t sponsor FBS football.  While I’m an ACC Armageddon skeptic, there should be little question that the basketball conference landscape is going to get smashed as soon as the C7 announces who they’re adding (and that could happen any day at this point).

The C7 still appears to have Xavier and Butler as locks to be additions with some combination of 3 of Creighton, Dayton, St. Louis and VCU.  (My semi-educated guess is that VCU will end up being left out as a result of being a lack of an institutional fit.)  In any scenario, the Atlantic 10 is going to end up losing a crippling chunk of top programs, while the Missouri Valley Conference is at risk of losing its top breadwinner, as well.  Will the A-10 end up attempting to raid the MVC or vice versa?  Could both the A-10 and MVC start fighting over programs from the Horizon League (e.g. Loyola and/or my parents’ alma mater of UIC in the Chicago market)?  Will the Colonial Athletic Association get poached by the A-10 again (e.g. George Mason and/or Northeastern)?  Who would the Horizon and CAA end up raiding for replacements?  Missouri-Kansas City (UMKC) just announced today that it is leaving the relatively geographically friendly Summit League for the spread out WAC that has been life support, which makes no sense on paper… unless they believe that the Summit will get picked apart after the C7 makes their move. The number of permutations is endless, so it’s tough to even wrap my mind around how all of these conferences are going to react to the C7’s final decision.  It’s particularly curious that there really isn’t any indication whatsoever as to who the Atlantic 10 would be interested in when they inevitably need to backfill their membership (assuming that they even want to stay as a 14-school conference), so it’s difficult to reasonably predict who will be moving despite the fact that there will likely be dozens of schools shifting leagues.  I’m going to give this some more thought, but I’d be interested to see what you (as the readers of this blog) believe will happen since (a) it’s uncharted territory and (b) much more imminent compared to FBS power conference moves as of now.

(3) My Vote for the Name of the C7 League: “The Classic East” – Assuming that the C7 won’t be able to keep the Big East brand name for their new league (which is still an item that’s up for negotiation), there have been a number of religiously-related names suggested out there, such as “The Vatican League” or “The Big Priest”.  However, I came across a suggestion from a discussion on VUhoops that I believe is brilliant: “The Classic East”.  It’s a name that gives the C7 league a new and separate identity yet still evokes the tradition and history of what the old Big East used to be.  Think of how the Coca-Cola Company backtracked on its “New Coke” disaster and brought back its original cola formula as “Coca-Cola Classic”.  Anyway, that’s my vote if the Big East name stays with the football schools.

Enjoy the weekend and let’s hope the Illini can keep building upon tonight’s massive win!

(Follow Frank the Tank’s Slant on Twitter @frankthetank111 and Facebook)

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