Courtesy of
Forbes.com
I cover the business of sports.
2/29/2012 @ 11:51AM
Missouri and Texas A&M are splitting from the Big 12 in order to join the SEC next season. The schools are following in the footsteps of Colorado and Nebraska, which left the Big 12 last year for the Pac-12 and Big Ten, respectively. The move is a costly one, and Missouri and Texas A&M will
have to part with a combined $25.3 million in order to leave their conference.
The $12.4 million that Texas A&M is leaving behind comprises roughly one-third of the
$45 million generated by its football teamin 2010. But the move is well worth the payout, as the SEC offers far greater opportunities for the school to profit on college athletics.
The level of on-field success is also far greater in the SEC, which pays off to the tune of millions in terms of bowl game revenue. Last season, for instance, the Big 12 and SEC each sent eight teams to a bowl game, but teams from the SEC played in more prestigious bowls. The SEC received roughly $76 million in bowl payouts, 46% more than the $52 million earned by the Big 12. Also consider that the SEC has been represented in every National Championship Game since 2007 and has had 12 teams go to a BCS bowl in the same time period. The Big 12 has sent only eight teams to BCS bowls since 2007. The difference is quite significant, given that each BCS bowl appearance is worth over $18 million.The SEC’s current television contracts with CBS and Disney-owned ESPN bring in an annual $205 million, whereas the Big 12′s contracts with ESPN and News Corp.’s Fox generate just $150 million each year. The addition of Missouri and Texas A&M will diminish each SEC team’s share of conference revenue, but the difference in contract values highlights the increased value of playing in the SEC. In fact, eight SEC teams appeared on ourannual ranking of College Football’s Most Valuable Teams, compared to just three teams from the Big 12.
Television and bowl game revenue are far greater in the SEC, and that doesn’t even begin to touch on the benefits of the SEC’s rabid fans. A greater fan presence, both at games and watching on TV, means that Missouri and Texas A&M will have better opportunities for marketing and sponsorships. It may take a few years for Missouri and Texas A&M to earn back their $25.3 million, but it’s a price worth paying for access to the SEC’s vast earning opportunities.
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