TV money is breaking college sports
The upheaval going on in college sports that has seen multiple major schools switch conference allegiances is being driven almost entirely by a lust for TV dollars.
Why it matters: The gulf between the haves and the have-nots created by the ocean of money in college sports is only going to get wider.
Driving the news: USC and UCLA will join the Big Ten Conference starting in 2024, making it the first conference to span both coasts. In 2025, Texas and Oklahoma will decamp from the Big 12 for the SEC, joining superpowers such as Alabama and Georgia.
- These moves are done to increase the payouts to schools. For example, USC and UCLA stand to make an additional $40 million a year by moving from the Pac-12 to the Big Ten, thanks to the Big Ten's new $7 billion rights deal announced this week.
- The Big Ten will be the first conference to eclipse $1 billion annually in media rights revenue.
- The moves triggered a domino effect of smaller schools moving up the ladder. Last year saw a five-month period where 24 schools switched conferences, Axios Sports' Jeff Tracy reported.
The big picture: Live sports valuations keep skyrocketing as sports, particularly football, offer the last pillar of the legacy cable model.
- But then there are two other factors unique to college sports: Each conference acts as its own separate entity and media giants such as Fox and Disney have financial stakes in the long-term health of those conferences.
- Fox owns 61% of the Big Ten Network, while ESPN owns 80% of the SEC Network and has a joint venture with the University of Texas for the Longhorn Network.
- "Because of this fragmented marketplace, individual entities can use that to their advantage to advantage themselves, which may or may not be in the best long-term interest of college sports," Bruin Capital CEO George Pyne told Axios.
The intrigue: The Big 12 even publicly accused ESPN — one of its own biggest rights partners — of meddling to convince Big 12 schools to leave.
Yes, and: Pyne argues that nobody making these moves is considering the downstream effects of college sports' musical chairs.
- "This has huge ramifications to the college ecosystem, which really aren't being taken into consideration," Pyne said. "It does really become a survival of the fittest and every man for himself."