The Hotline mailbag publishes weekly. Send questions to wilnerhotline@bayareanewsgroup.com and include ‘mailbag’ in the subject line. Or hit me on the social media platform X: @WilnerHotline
Some questions have been edited for clarity and brevity.
I don’t understand why the Big Ten’s other 16 schools are not seeing it the same as USC and Michigan. Why would the programs relegated to lower payout tiers settle for an agreement that gives the rich schools more money? Why not demand equal sharing across the conference? — JR
Readers of this mailbag should note that we are devoting half the questions to the Big Ten’s private capital deal — this, in addition to the Hotline’s column earlier in the week comparing the Big Ten’s bad vibes to the tumult in the Pac-12 prior to its dissolution (and several previous articles on the subject).
Why all the attention? Because the Big Ten’s proposal, if approved at some point, would change the future of college sports, not only for the 18 member schools but for every Division I conference.
The deal would, for example, eliminate the possibility of a super league emerging in eight or 10 years because Ohio State and Michigan would have their media rights tied to the Big Ten into the 2040s, and there won’t be a super league without them.
Now, let’s address the issue raised in the question.
With the infusion of $2.4 billion from UC Investments would come the creation of three revenue tiers, both for a mammoth initial payouts and for subsequent annual distributions.
Ohio State, Michigan and Penn State are on the first tier ($190 million up-front payments per school).
Oregon and USC are on the second tier ($150 million).
Everyone else is on the third tier ($110 million). And yes, that includes Washington, which was willing to accept a lesser status than Oregon.
Why would 13 schools agree to third-tier classification?
That’s easy: Fear.
Fear of getting left behind by the super league.
While the cash infusion has received the bulk of the attention, the aspect of the deal that truly matters is the 10-year extension of the Big Ten’s grant-of-rights, from 2036 to 2046. That change would bind all 18 schools together and prevent the blue bloods from leaving everyone behind.
Nobody wants to be the next Washington State or Oregon State. Everyone wants to remain contractually tied to the Buckeyes and Wolverines.
But the third-tier schools had to give something up in exchange for a 20-year commitment by the blue bloods, and that something was cash. Ohio State and Michigan (and Penn State) were set to receive $80 million more than the Purdues, Minnesotas, Washingtons and UCLAs.
Of course, the difference between the top brands and bottom brands is vastly more than $80 million — the Buckeyes and Wolverines account for more than half of the Big Ten’s media value by themselves.
But that distribution model satisfied everyone except the Michigan and USC boards, which 1) understood their immense market value, 2) opposed the 20-year rights lockdown and 3) recognized the inherent flaw in giving up 10 percent of the Big Ten’s annual revenue.
(Ohio State was initially on board with the plan, as dumb as that sounds for the bluest of the blue bloods, but the Buckeyes grew to have serious concerns about the proposed governance structure, according to multiple sources with knowledge of the negotiations.)
Let’s reframe the situation: On Wednesday, Jagdeep Singh Bachher, head of UC Investments, told the University of California regents that the deal carried a projected return of 12 or 13 percent.
“I hope it happens and just request you all do a little prayer for us,” he said.
If the investing entity is that motivated to strike a deal, perhaps it’s not such a smart move for the Big Ten.
Or as a source familiar with the negotiations told the Hotline: “These university presidents don’t know this stuff. You give them $100 million and tell ’em their athletic debt will go away, and they’re like, ‘Where do I sign?’”
Maybe I’m dense, but I still don’t understand what Big Ten Enterprises is supposed to do, or offer in terms of value. — @MorganDucks
Not at all. The confusion is fully justified.
Big Ten Enterprises would have been (and still could be) the conference’s commercial arm — a means of centralizing revenue that would have been distributed annually to the schools and the investor.
After all, UC Investments could not purchase equity in the schools themselves. The conference needed to create a for-profit subsidiary that could be owned by an outside entity.
But here’s the catch: The amount of untapped revenue available for Big Ten Enterprises was limited.
“The flexibility of a private enterprise, and the power of centralizing, is worth something,” a source with expertise in sports business told the Hotline (via text message) last week.
“But how much, really? The biggest revenue stream (TV) is already centralized, and the next two biggest (tickets and donations) never will be.”
In other words, the main value-add for Big Ten Enterprises would have been sponsorships, but that function could be handled by the conference office. The Big Ten doesn’t need a commercial subsidiary “to sell jersey patches,” as another source noted.
The presence of outside capital was the only reason to create Big Ten Enterprises.
What does that tell you?
If the Big Ten signs a private capital deal, with or without USC and Michigan, how will that affect the new TV contract when it comes time to renew? Will the TV networks hold all the cards, and will the private capital have a say in the negotiations? — @jimmy0726
There will be no deal without all 18 schools on board — that became clear earlier this week when UC Investments announced it was backing away unless unity was secured. And according to Singh Bachher, there is “no deal on the table.”
The Hotline was mystified that UC Investments would even consider moving forward without Michigan and USC agreeing to lock up their rights beyond the current expiration date of 2036. The extended timeline (to 2046) was critical to the return because it allowed for multiple media rights deals (every five or six years) that would drive the valuation. Without Michigan and USC, the Big Ten is worth considerably less.
We were equally dumbfounded that commissioner Tony Petitti considered moving forward without Michigan and USC and indicated punitive measures might be taken against the duo. (We have confirmed that through multiple sources, by the way.)
A more idle threat we cannot imagine. The Wolverines and Trojans would have been welcomed into the SEC the minute their Big Ten rights expired in 2036. Or they could have joined forces with Notre Dame as Independents selling their rights together. The only threat generated by the moving forward without Michigan and USC was the destruction of the conference.
To the question specifically: The private capital deal would not have changed the timeline for the Big Ten’s next media rights cycle.
The current deal, signed with Fox, CBS and NBC three years ago, ends in the summer of 2030. Would UC Investments have been involved in the process? Yes, albeit as a passive investor.
Keep in mind that Fox controls the Big Ten’s grant-of-rights, through its majority stake in the Big Ten Network, until 2036. Ultimately, the schools will sign the deal that Fox wants them to sign.
Since kicking teams out seems highly unlikely, is there anything the Big Ten can do to raise the level of competition, especially for their bottom-tier schools? — Will D
This question offers the Hotline a chance to address an under-reported aspect of the private capital deal: It was a means of boosting the conference’s competitive depth.
The conference’s current state is easy to diagnose. With Ohio State, Indiana, Oregon Michigan and USC, the Big Ten is extremely top-heavy.
The quality depth is poor, especially when compared to the SEC, which benefits from more good programs and smaller membership.
Only one-third of the Big Ten schools (six of 18) are included in the latest CFP rankings, compared to more than half of the SEC (nine of 16). And before you attribute that to SEC bias on the part of the selection committee, consider the Big Ten is 5-7 against other Power Four schools/Notre Dame while the SEC is 10-4.
As one source suggested, the infusion of private capital would have helped the middle-tier schools cover long-term debt, pay for revenue sharing and increase coaching staff compensation, thereby increasing their prospects for on-field success.
The Big Ten’s soft middle is particularly concerning (for the conference) with playoff expansion likely one or two years away. The SEC’s depth could create a significant advantage in a world where four (or more) at-large spots are added to the field.
In fact, Petitti’s radical plan to create multiple automatic bids for the Big Ten could be viewed as a way to hide the conference’s soft middle.
The 12-team College Football Playoff looks too small. The FCS has 24, with eight earning byes. The CFP could expand to 24 with opening week Dec. 13 (using this year’s calendar), the semifinals Dec. 27, a break for bowls and the championship on Jan. 5. — @CurtisBlack
The Hotline’s official stance is the following: 12 is terrific, especially for a few years; 16 would be tolerable; anything beyond 16 is a bad idea because of what it might do to the regular season.
Now, Petitti and the Big Ten would argue that a 24-team playoff would make more games more impactful late in the season. But I don’t want seven- and eight-win teams in the CFP.
Sure, the NFL playoffs include teams that finish 10-7 or 9-8. but guess what: College football isn’t the NFL and can’t become the NFL or it will lose enormous appeal.
The question also broaches the sticky issues of the postseason calendar.
We wholeheartedly agree the playoff should be moved up, with the championship game played before the NFL postseason begin. But there are strong ties to the major bowls as quarterfinal and semifinal sites on New Year’s Eve and New Year’s Day. The Rose Bowl on Dec. 27 doesn’t work, at least for the Rose Bowl.
There are issues with the front end of an expanded playoff, as well. Moving the opening round to the second Saturday in December would mean teams participating in conference championships might not have a break. Yes, they could eliminate the conference championships, but that would involve renegotiating TV deals.
It’s an incredibly involved process.
At this point, it appears the CFP will remain at 12 for the 2026 season. Beyond that, the format and size is anyone’s guess.
Many readers might disagree, but the Hotline hopes the event doesn’t expand beyond 16.
Do you think the state schools like Washington, Oregon, Ohio State and Alabama will be required to divulge how their $20.5 million for revenue sharing is divided among various sports and, specifically, how much will go to individual athletes? I doubt it will be divided equally. — K Westgate
A good question that lacks an easy answer.
Public schools are subject to Freedom of Information Act requests, but those differ by the state. Documents that might be available in Oregon might be inaccessible in Alabama, for example.
From what the Hotline has gathered in recent months, schools might divulge the total revenue being shared but not the sport-specific details. And the contracts with individual athletes are almost certainly off limits to the public.
That said, most schools in the Power Four are sharing about $14 million with football and $3 million with men’s basketball — the amounts could be a little higher or lower depending on the school and the conference. The rest goes to Olympic sports or new scholarships.
Remember, up to $2.5 million of the maximum amount ($20.5 million) can be offset by scholarship increases.
With the Pac-12’s recent announcement regarding the media distribution of its football and basketball games, is it a foregone conclusion that the remaining sports content (volleyball, baseball, etc.) will end up behind a streaming paywall? — @Seattleite206
That’s a safe bet, yes. The only question is which streaming service.
Maybe the content will be available on ESPN+. Or Paramount, which is CBS’s service.
Or perhaps the Olympic sports content is produced in-house by Pac-12 Enterprises and placed behind a paywall controlled by the conference.
We suspect it could be a few months before that issue is resolved.
Oregon State should hire Rick and Jerry Neuheisel. What are the pros and cons if that happened? — @brycetacoma
The pros would be the entertainment value, since both Neuheisels are sharp and funny and quite candid. Of course, that could be a detriment if the father-and-son show takes away from their focus on winning.
All in all, a double dose of Neuheisels is fun to think about — Rick said on ‘Canzano and Wilner: The Podcast‘ that he thinks about coaching all the time — but it’s not plausible.
We expect the Beavers to go in another direction although, in keeping with the Neuheisel concept, they could make an outside-the-box hire.
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