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Big business ties could factor in Big 12 expansion

Back at the turn of the decade, the University of Memphis was fighting to get into a better conference.

The Tigers couldn't offer winning football or a massive TV market. But they did have one big advantage: a local Fortune 500 company in their corner. And thanks in part to Memphis' connection to FedEx -- and the potential sponsorship and advertising revenue the company could provide -- the Big East took in the Tigers.

Now, Memphis once again is campaigning for stronger conference affiliation, this time the Big 12, which will be contemplating expansion in the coming weeks.

And like with the Big East, Memphis is banking that FedEx -- and the company's pledge of millions in sponsorship dollars for the Big 12, as ESPN.com reported earlier this month -- can boost its candidacy.

But will big business in Memphis, and in the cities of other Big 12 expansion hopefuls, actually play a part in Big 12 expansion decisions, should the league vote to add membership later this year?

"Any kind of commitment from a major corporation can be a positive," said former Big 12 commissioner Kevin Weiberg, who also served as the Pac-12's deputy commissioner from 2010 to 2014, when the conference expanded from 10 to 12 teams. "But it's only one factor among many that a conference will evaluate."

This time around, the Big 12 can afford to weigh such factors more thoroughly than the previous time it expanded.

In the summer of 2011, with Nebraska gone to the Big Ten and Colorado in the Pac-12, the league was down to eight members and fighting for its conference life after both Texas A&M and Missouri bolted for the SEC. The league swiftly selected the two schools with the strongest football programs, as TCU and West Virginia both had recent BCS bowl victories. The Horned Frogs, though, had a relatively small alumni base, while the Mountaineers operated out of one of the country's least populous states.

Yet this time, winning football figures to be just one factor the Big 12 could examine. And this could be the biggest factor: What can best expand the conference's revenue intake.

Last year, the Big 12's average payout was about $23.3 million per full-member school, which was roughly $9.4 million less than what SEC schools received. With the SEC Network still in its infancy and the Big Ten reportedly netting a massive $250 million annual deal with FOX for half its tier 1 television rights, Big 12 commissioner Bob Bowlsby recently acknowledged that the gap between those conferences and the Big 12 figures to balloon in the status quo.

"If you look at our television and our size and our current contracts and the fact that we don't have a network and all of those things, the trend lines between us and particularly the SEC and the Big Ten begin to diverge," Bowlsby said. "Who knows exactly how far we'd be behind? But we know we'll continue to lose ground."

To close that budding gap, the Big 12 is likely to explore every revenue opportunity available. And that could include the potential commitment of big businesses headquartered outside the league's footprint and connected to expansion candidates.

"It's always going to be about what assets an institution brings to the table and whether it can produce additional revenue that everyone can share," said Jeff Schemmel, a longtime athletic director and conference administrator who now heads College Sports Solutions, an Atlanta-based college athletics consulting firm. "It has to translate to revenue to the conference that can be shared with all schools in the conference."

FedEx, which has a track record of sponsoring college athletics, including the Orange Bowl for 21 years, has been the most aggressive in dangling sponsorship dollars in front of the Big 12. But the delivery services giant could have competition.

Earlier this year, the Cincinnati Enquirer reported that fellow Fortune 500 companies Kroger and Macy's, both based in Cincinnati, have been lobbying Big 12 leaders on behalf of the University of Cincinnati. Kroger has sponsored the Daytona 500, while Macy's has been a sponsor of the SEC.

Could that prompt others to follow suit?

Marriott Hotels, for example, has a robust partnership with BYU. The BYU men's basketball team plays in the Marriott Center, while the school's business school is called the Marriott School of Management.

Houston, meanwhile, is home to the second-most Fortune 1000 companies in the U.S., and two weeks ago, University of Houston's regent chairman Tilman Fertitta suggested to CBS Sports that Houston being in the Big 12 should be an automatic. Fertitta is chairman of the Landry's restaurant corporation and has a net worth of $3.1 billion.

And Andy Bessette, executive vice president and chief administrative officer of insurance giant The Travelers Companies, is an alumnus of the University of Connecticut and also a member of the school's board of trustees.

"It's all about net money. Can the addition of a FedEx enlarge that pie enough to make a difference for the existing schools? At the end of the day, that's what the Big 12 is going to look for." Former AD and league administrator Jeff Schemmel

No matter the connections, revenue is key.

"The bottom line is the bottom line and it makes no difference how you get there," said Tom Hansen, who was the Pac-10's commissioner for 26 years before retiring in 2008.

At the same time, Hansen was also skeptical that sponsorship potential could turn into a game-changer for any school making expansion decisions, especially when compared with the money conferences now make through television rights.

Others shared that skepticism.

"Big conferences now have a revenue base of $300 million or more," Weiberg said. "When you take a look at a single investment a company can make, it's probably relatively a small portion of that. It's not insignificant. But it pales in comparison to the dollars flowing in from television rights."

Another industry insider familiar with sponsorship agreements pointed out the figures would "have to be astronomical" to make a difference.

"What is a company going to pitch in to move the needle?" the insider said. "I can't imagine that being realistic."

"And I don't know how it makes sense for the business. They've got to make money. They've got to pay stockholders. It just seems far-fetched."

Then again, FedEx at the least seems committed to doing whatever it can to making Memphis as attractive as possible to the Big 12.

Recently, ESPN.com obtained a letter from FedEx chairman Fred Smith, which Memphis president David Rudd forwarded in February to four Big 12 presidents, including West Virginia's Gordon Gee.

In his own letter, Rudd not only reiterated that FedEx would be willing to sponsor a Big 12 championship game but that FedEx also "would uniquely position the University of Memphis to request only a portion of new revenue for several years until renegotiation of the conference media right agreement occurs."

Oklahoma president David Boren said in May that while he wants Texas to give up the Longhorn Network so the league can create a Big 12 network, he doesn't want to do so at the expense of Texas' bottom line. The Longhorn Network, operated and partially owned by ESPN, pays Texas an average of $15 million a year.

FedEx covering Memphis' television cut for several years could, in theory, allow the Big 12 to reroute even more TV cash back to Texas, in order to make a Big 12 network more financially viable for the Longhorns.

"It's all about net money," Schemmel said. "Can the addition of a FedEx enlarge that pie enough to make a difference for the existing schools?

"At the end of the day, that's what the Big 12 is going to look for."