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Television broadcasting deals in college athletics

This is an excerpt from Administration of Intercollegiate Athletics-2nd Edition by Robert Zullo & Erianne Weight.

Although disparity in financial resources has existed in college athletics for decades, the gap between the haves and the have-nots has escalated in recent years, largely due to television broadcasting deals. Broadcasting contracts for the Power Five conferences—the Southeastern Conference, the Atlantic Coast Conference, the Big Ten, the Pac-12, and the Big 12—range from US$2.4 billion to US$3.6 billion. Contract lengths range from 6 to 20 years, and annual per-school payouts run from US$17 million to US$44 million (Here’s a Look, 2021).

Trends indicate these numbers will continue to increase in the foreseeable future, because negotiating windows exist within all of these contracts, and schools continue to change conferences to position themselves for greater financial reward. In fact, the recent conference realignment has been attributed largely to the desire to maximize revenue from broadcasting rights. Major conferences can command more revenue in these contracts by increasing their number of member institutions, and individual schools are willing to change conferences in order to stake their claim to guaranteed annual payouts from television deals (Dodd, 2021). The University of Oklahoma and the University of Texas moving to the SEC started the most recent realignment, announcing their move in 2021. To offset the Big 12’s loss of two staple athletic programs, the conference announced the addition of the University of Central Florida, Brigham Young University, the University of Houston, and the University of Cincinnati. In 2022, USC and UCLA announced their move to the Big Ten conference, and in 2023, the University of Oregon and the University of Washington announced they also planned to join the Big Ten. In the fall of 2023, Stanford University, the University of California, and Southern Methodist University were announced as the newest members of the Atlantic Coast Conference.

Conference realignment in 2010-2011 resulted in a new financial layer for conferences and member institutions in the form of the exit fee, charged to institutions that wish to leave a given conference. In response to the realignments, conferences increased their exit fees to deter schools from leaving. The Big 12 levies an exit fee equal to one year’s worth of conference revenue. The Atlantic Coast Conference (ACC) also changed its exit fee from US$20 million to US$50 million in an effort to deter members from leaving (Smith, 2012). However, these exit fees have not slowed down conference realignment because the financial benefits to the schools outweigh the cost of moving conferences.

More Excerpts From Administration of Intercollegiate Athletics 2nd Edition