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The AAC’s next TV deal could affect Big 12 expansion and all of college football

Schools will have to decide what they care about more: short-term money or the chance to jump ship down the road.

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AAC Championship - Memphis v Central Florida Photo by Julio Aguilar/Getty Images

The American Athletic Conference, by all rights, had an outstanding football season. UCF went undefeated for the second season in a row and will have a great chance to beat LSU in the Fiesta Bowl. Cincinnati posted on its best seasons in years, Tulane made a bowl game for just the second time since 2003, and Memphis, Houston, USF, and Temple all made bowl games as well.

Now, AAC schools have to answer a question that could change the direction of their league — and maybe the rest of the sport, really — forever.

Sports Business Journal reported Monday ($) that the league’s schools are considering installing a grant of rights along with the AAC’s next TV deal. A grant of rights involves schools signing over their rights to their own TV money to the conference for a set term, making it effectively impossible for universities to leave for another league.

As SBJ explains, a grant of rights in the AAC’s next deal could prevent schools from jumping ship — say, to join the Big 12 or another league in conference realignment. In return, the schools would get a much bigger up-front payment than they’re currently getting:

The conference is asking schools to sign a grant-of-rights agreement that theoretically would lock them into the conference for the duration of the next media rights deal.

The AAC’s current seven-year, $126 million package with ESPN expires in 2020. A new deal could be three to four times higher, but only if the top AAC schools commit to stay in the conference, sources said.

The Big 12 has a grant of rights that expires at the end of June 2025. When it does, it’s possible that realignment tears that conference apart. The Big Ten and ACC have similar agreements; the ACC used to deter schools from leaving the league by imposing a big “exit fee,” but it moved to a GOR model after Maryland announced it was leaving for the Big Ten.

Whether a grant of rights would be smart for AAC schools depends on if they care more about up-front cash or realignment flexibility.

Right now, the AAC’s TV deal pays out a little less than $2 million per school per year, per SBJ. That number should jump in a new TV deal no matter what, but with a GOR, it could potentially jump to $6-8 million, or even higher. For a school like USF or Memphis that makes less than $50 million in athletic revenue in a given year, even a modest increase could go a long way.

But signing over your TV rights in exchange for more money takes Big 12 membership in 2025, or movement into another Power 5 league, off the table. Sure, earning $8 million a year from TV is pretty good. But the Big 12 paid out over $33 million to each school last year. Even if that number declines somewhat with more schools getting pieces of the pie, the payout from any power league is miles bigger than what the AAC could offer.

At various points earlier this decade, and as recently as 2016, the Big 12 publicly flirted with expansion. No fewer than 17 schools pitched themselves. The Big 12 has passed on expansion so far, but it could definitely look again when its grant of rights expires in 2025.

At that point, Texas and Oklahoma might weigh other options, and the Big 12 could fall into all kinds of realignment chaos. Some in the industry think an ongoing legal fight over player compensation could also lead to more shuffling in the near future.

Realignment could open up opportunities for certain AAC teams, making it a bad idea for them to give up their media rights for any time beyond 2025.

Not every program in the AAC is likely to be a Power 5 candidate. But if you’re UCF, a huge school that’s gone undefeated in football two years in a row, with a competent basketball program, and in a large, growing city, do you want to completely close yourself off to other potential opportunities? What about Houston, USF, Cincinnati, or Memphis?

All were plausible Big 12 expansion candidates before. Even UConn, with its historically bad football team, might want to keep its options open. Parking football elsewhere and moving its basketball teams to a maybe-expanding Big East could be appealing.

Getting a GOR done would be the best outcome for the AAC institutionally, and probably the best thing for schools like East Carolina and Tulsa. But unless they can convince schools that might have realignment opportunities to give those up, it’s hard to see a deal getting done.

The AAC could consider another option to keep everyone happy, but that one carries its own serious risks.

The SBJ also reported the AAC has explored top schools getting bigger payouts than others, which would be a change from the league’s current model.

This is potentially risky. Most DI conferences share revenue equally, even though members seldom bring in the same amount of money. Ohio State’s Big Ten check is the same as Northwestern’s, for example. There are examples of leagues with one (or a few) outsized members extracting concessions, but ask Big 12 fans if they’re cool with the arrangement Texas has, or Mountain West fans about Boise State.

Unequal revenue can make it harder for the smaller schools in a league to improve, and can create resentment that can boil over and even threaten a league. A bigger check might help keep UCF and Cincinnati around for now, but what about the next time they need Tulane or Temple to vote a certain way?

One big thing could change this whole equation: Playoff expansion.

Beyond fatter paychecks, maybe the biggest reason a school would want to leave the AAC is to get better access to the College Football Playoff. UCF’s last two seasons have laid plain how difficult (or even impossible) it is for a Group of 5 team to make the field.

But what if the Playoff expands to eight teams after the end of the current contract with ESPN after the 2026 season? An eight-team playoff, especially if one bid were guaranteed to a non-power conference, would be much easier for an AAC team to make. In fact, there might be an argument that a Cincinnati or a UCF might have a better chance at qualifying out of the AAC than the Big 12, or whatever other power league exists at that point.

But can you credibly predict what the Playoff will look like in the late 2020s today? Confidently enough to let it affect a decision of this magnitude?

So, the AAC’s schools have hard, individualized choices to make.

What they decide to do will have impact more than just their own athletic departments and ESPN’s pocketbook. It could impact the rest of college football.