Tuesday, December 15, 2009

Will the Big 10 Raid the Big XII? An Exercise in Club Theory 

Sports leagues can be thought of as clubs. To enter any club, permission must be obtained from the incumbents, which means a sufficient number of them must be made better off by the entrant. Similarly, the entrant has to be made better off by joining the club. If it is mutually-beneficial, we'll see entry into the club.

You probably are aware that the Big 10 has become serious about adding a 12th member. Former Wisconsin football coach and current AD Barry Alvarez and the legendary Joe Paterno of Penn State have both gone on the record saying that the Big 10 needs to seriously add a 12th school, primarily to benefit the football side of the ledger. The SEC, Big XII, and ACC all play meaningful games into December, including league championship games, two weeks after most Big 10 programs finish their regular season. Teams from those leagues get extra practice time and attention (i.e. television appearances, money from the championship games, and recruiting coverage). While the Big 10 teams have to wait. Expansion proponents feel that money is being left on the table

The last time the Big 10 expanded was in 1989 when Penn State was added as a member. The last time the Big 10 sought to expand was in 1999 when it made an offer to Notre Dame, an offer that ND rejected. This time around, schools such as Notre Dame, Nebraska, Missouri, Iowa State, Cincinnati, Syracuse, Louisville, Rutgers, and Pittsburgh are the primary candidates mentioned in the press. Regarding the club theory of the Big 10, Stewart Mandell comes closest to capturing the essence of what Big 10 programs are thinking.

The Big Ten does not publicly release revenue-sharing figures, but it's been reported that its rights deals with ABC/ESPN and the Big Ten Network generate about $212 million annually. (That's in addition to the league's direct profits from its jointly owned network.) Add in this season's two BCS berths ($22.3 million) and five other bowl berths (about $14 million), and we're talking a minimally estimated $248.3 million in shared revenue, or $22.6 million per team.

Therefore, any potential 12th team would have to add $22.6 million in "value" to renegotiated TV and bowl deals to prevent the others from losing money. With all due respect to Missouri, Pittsburgh, Syracuse and Rutgers (the most commonly discussed candidates), there's only one viable school that could guarantee that kind of gold mine: Notre Dame. The Irish rejected the Big Ten's last invitation in 1999, and the school has given no indication it's willing to reconsider.


So I have a hard time thinking that the Big 10 will raid the Big 12 before they check their options to the east of Big XII country, namely Notre Dame, Syracuse, Rutgers, and Louisville.

Update: Stacey Brook also thinks Notre Dame is the best fit but that it is likely to refuse an invite. He suggests TCU as a possibility, one I had not thought of. I doubt if the Big 10 will go outside a border state to a school, especially one that is 1,200 miles from UMich, 1,100 miles from tOSU, and 1,400 miles from Penn State, the Big 3 in the Big 10.

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