The Goat Pen

Fifer wrote:Uh oh, storm clouds are darkening around the Miami Hurricanes.

http://collegefootballtalk.nbcsports.co ... crosshairs

Here are five facts that everyone needs to know about ESPN's inherent conflict in the coming new world order of college athletics:

1. Television money is going to be the primary reason why teams change conferences.

The primary reason the SEC wants into Texas? Television markets. The state of Texas standing alone has more people than Tennessee, Alabama, Louisiana, Kentucky, Alabama, and South Carolina combined. Indeed, as Andy Staples has pointed out, the entire SEC has a population of around 50 million. In one fell swoop, the addition of Texas would bring in 25 million more. Those eyeballs are really, really valuable.

This is why ESPN is so integral in the expansion process, it controls the purse strings. The more attractive the team is, the more valuable that team's addition would be to a conference's television deal. That makes sense, right?

But the opposite is also true, the more attractive a team is the more crippling it is for that team to leave a conference with an existing television deal.

That would be fine if ESPN only had a deal with one side of the equation -- the one making the additions or the one losing the team -- but ESPN has a deal with both sides of the equation. When ESPN is the entity providing the additional money that's leading a team to switch conferences, it's incredibly hard for the network to not breach its contract with the conference that is losing a member.

2. ESPN will pay more for rights fees as conferences grow.

How do we know this? Because major conference commissioners are not fools. Those commissioners know that sooner or later four 16 team mega conferences are coming. While these commissioners can't speak to the particulars of a contract, all you need to know is this: There's no way in hell the SEC is adding Texas A&M if that means less television money for the rest of the conference members.

Now, and this is where it gets interesting, what if ESPN said no to more money for additional conference members?

The SEC might be able to hit the open market with a voided television deal. Why does that matter? Now you've got Comcast, Fox, and ESPN all bidding for the preeminent rights package in all of college athletics. (I'm going to write more about this later this week. Don't worry). But my guess is ESPN would be terrified of losing the SEC just three years into its deal. So it's going to pay more, much more for an expanded SEC.

3. We've already seen ESPN maintain rights fees in the face of league retraction with Nebraska and Colorado leaving the Big 12.

Big 12 commissioner Dan Beebe was hailed as a genius for getting ESPN to maintain it's $65 million yearly payments even with the loss of two attractive television properties in Nebraska and Colorado. Indeed, it was these television assurances that kept the Big 12 from imploding last year. I'd argue that rather than being a great negotiator, Beebe didn't negotiate anything -- I bet ESPN told him it would keep the rights fees the same. Why?

Because ESPN's lawyers advised ESPN to keep the payments the same since Nebraska was leaping from one conference it had a television deal with, the Big 12, to another conference it had a television deal with, the Big 10.

Yep, ESPN was conflicted then too. Only no one noticed.

I haven't seen anyone write about this factor in ESPN keeping the Big 12 payments the same despite the loss of two members, but I'd guarantee it's the major reason why ESPN didn't negotiate a lower rights fee -- because ESPN was worried about the conflict and a resulting lawsuit.

That's why I'd bet my house that ESPN will commit to spending the same amount of money to a Big 12 minus Texas A&M as it was paying to a Big 12 with A&M. Because if it used A&M leaving for the SEC as a reason to cancel the contract, the Big 12 would sue the hell out of ESPN for breaching the deal in the first place -- inducing A&M to leave by paying the SEC more money for A&M.

4. The SEC would like to expand into ACC markets at some point. The primary obstacle there is also ESPN's television rights deals.

ESPN is the primary network partner of the ACC. Just as ESPN would have to be concerned about inducing A&M to leave, ESPN would be a major player in any team leaving the ACC for the SEC. OKTC has previously reported that the SEC would be most interested in expanding into ACC states where it has no teams, that is Virginia or North Carolina. Again, that addition of new teams would lead to more money for the SEC, but it would also lead ESPN to be stripping away the value of one of its properties, the ACC.

The inducement for the school to leave the ACC? More money from the SEC. Where does that money come from? All roads lead to ESPN.

5. ESPN could get hit with paying lots of money for conference deals that aren't valuable.

Now, let's get interesting here, if ESPN keeps having to pay the same amount of money for diminished conference television deals while also paying more for mega conference deals, could the network face a tough business environment in college sports?

Hell, yes.

From a purely business perspective a diminished conference is worth much less than the "whole" conference. But ESPN is so conflicted that it has to keep paying the same rights fees in order to avoid being sued for breaching its contracts.