What’s going on in the Big 12 and beyond? I expand and explain every Sunday in Postscripts at Heartland College Sports, your home for independent Big 12 coverage.
Today the Big 12 has a gap it can’t make up and the Big Ten’s new financial disclosure lays out why the Big 12 made the private capital deal it made.
The Gap Even Private Money Can’t Bridge
The Big 12’s private capital deal with RedBird Capital and Weatherford made news earlier this week — at least until the Big Ten stole its thunder and showed in stark detail why the Big 12 is searching for revenue everywhere it can.
Late in the week, the Big Ten Conference announced its revenue payout to its members for the 2024-25 athletic year, which was the first for the league with 18 members and its massive new media deals with CBS, NBC and Fox. We all knew it was going to be big. But, wow. Just, wow.
The Big Ten generated $1.47 billion in revenue that year. It intends to distribute $1.37 billion to its members. Per The Athletic, the Big Ten’s revenue surged by $540 million over the league’s previous high. The disbursement is $490 million higher than the previous year.
And if you think the SEC is keeping up with that, well, not so much. The SEC announced its $1.03 billion distribution in February. Meanwhile, the Athletic quoted the Big 12’s most recent overall revenue number was $460 million. That should go up when the league announces its numbers later this month. But it won’t come close to the Big Ten.
Ok, now I get why Utah wanted in the Big Ten.
A fully vested share in the league provided members a range in revenue share from Ohio State ($91.55 million) to $76 million, based on a variety of factors.
Here’s the kicker. Oregon and Washington only got partial shares and made from $46 million to $48 million.
I’ve written about this gap several times here in Postscripts. I’ve written that it will be nearly impossible for the Big 12 to make it up. This shows you exactly why. The Big Ten’s and the SEC’s revenues is only going to go up, even if the Big 12’s revenue goes up. It’s uncatchable.
It lays out why the Big 12 made the private capital deal it made. It’s one way to give their members access to more revenue. So far, no school has publicly committed to using the $30 million it will have access to. UCF has already said publicly it won’t use it. A recent announcement by Arizona State of a $10 million endowment to the football program shows that ASU may not need tap into the money, either.
It’s not a matter of need, I don’t think. All of the schools could use the revenue. But do they want to place a bet now that they must pay back later to an outside entity? None of them may wish to do so. So then why approve it? Because of what comes with it — access to two entities that can help them drive more revenue with fewer strings attached.
The Big 12 hasn’t formally announced the deal, but it comes without RedBird or Weatherford getting an ownership stake in the Big 12 or having a say in its direction. I must imagine that when this was framed as a private equity deal two years ago that was a red line for most of the Big 12’s presidents.
RedBird and the Big 12 have already been working together. Per Ross Dellenger at Yahoo Sports, RedBird has helped the Big 12 generate $130 million for the next five years through third-party deals with Venmo and The Players Era tournament, among others. That working arrangement only gets ramped up with what Dellenger reported as the RedBird Business Development Partnership.
Strategically, this also gives the Big 12 more access to a potential long-term television partners in CBS and TNT. As I wrote earlier this week, RedBird holds some assets from Paramount Global as part of its $15 billion portfolio. Paramount owns CBS and is attempting to purchase TNT, developments that could benefit the Big 12 in its next television negotiations past the end of the current deal in 2030-31.
This is a “no stone unturned” kind of deal, one that Big 12 commissioner Brett Yormark likely understands most of the schools won’t tap into the big money but are cool with whatever the partnership brings in sponsorship and television money down the line.
The Big 12 can’t make up this gap. Yormark and the schools know it. The best they can do is give their schools every tool at their disposal to be the best they can be with what they have. The Big Ten just showed how big the advantage is. The Big 12 is just going to have to make it work.
