The Joel Klatt Show: A College Football Podcast - Emergency Pod: Colorado and Coach Prime are heading to the Big 12

Episode Date: July 28, 2023

FOX Sports’ lead college football analyst Joel Klatt provides his reaction to the big news out of Boulder that Colorado will be leaving the Pac-12 and rejoining the Big 12 in 2024. Joel begins by breaking down how we got to this point, specifically how the changes in the TV Media landscape over the last decade have led to this moment. He then gets into the importance of the Big 12 reading that TV landscape well while the Pac-12 is paying the price for failing to do so. Joel dives into the current state of the two conferences and where things go from here for each. He finishes by giving Colorado credit for the best offseason in College Football after hiring Deion Sanders and making this move to the Big 12. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hey, what's up everybody, Joel Klatt here. We've got an emergency pod situation getting ready to go here on the Joel Klatt show. First of all, I want to thank everybody for being a part of and listening to and downloading and sharing all of the episodes of the Big Noon conversations. It's been a huge hit. So thank you for listening and giving feedback on social media. You can follow me on all the social medias personally at Joel Clad on Twitter, at Joel underscore Clatt on Instagram. You can follow the show, more importantly, at Joel Klatshow on all of the social medias out there. Make sure that you subscribe to our new YouTube channel.

It is a specific channel just for the Joel Klatt Show. Make sure you subscribe and you'll get all the content that we've got in particular as we get starting here with the regular season next month. we have been releasing these interviews that are obviously kind of pre-recorded. And so this is more of the live show, if you want to call it that. And we had to get on and give some instant reaction to the huge news of more conference realignment, the University of Colorado, going back to the Big 12. My alma mater going back to the Big 12. I've got a lot of thoughts on this.

And so let's just kind of dive into these thoughts that I have regarding the huge news today, Colorado, back to the Big 12, leaving the PAC 12 for the 2024 season. Just so that you know, this is the way I'm going to break it down. I'm going to give you a little bit of a background of what I know about just the industry and maybe why we're in the situation that we're in. Then let's look at it from the PAC 12th's perspective in terms of what happened and maybe what went wrong. Let's take a look at the Big 12 perspective, and then we'll look at the Colorado perspective at the end. So that's how I'm going to walk through this thing here, and we'll get going. Hopefully, again, these subjects are hard, and they can be convoluted, and nothing is what it seems. What you will hear in the next 15 to 20 minutes is not what you will read in every single article that you read about this subject.

Let's dive into it. Let's start with the background, basically like, why are we in this situation? Okay. If you listen to this show, you know that I love talking about the business of college football, the television side of things. And this was and is a business decision. And it's born out of a very tried-in. and true a business model in terms of this television revenue distribution in the conferences, but it's also borne out of a shifting business model.

Okay. So what do I mean by that? Well, the first thing I mean is that if you take a look at the conference television deals from 10 years ago, and we've talked about this on the show, they all looked very similar. And the reason was is because what was driving value a decade ago or a little over a decade ago was quantity. And that was the case because the business model was about cable subscriber fees. There was roughly 110 to about 120 million cable homes in the United States. And so it was about getting the biggest markets possible to then have a channel and have subscriber fees so that you could get the biggest potential revenue based on those subscriber fees.

Now, what's happened in the last decade is obvious. we all know that cord cutting started to happen. So what happened was is that the revenue stream went away from quantity, and it went towards now quality. So the money in the industry had to get smarter. We've been over this again, and I've given you these numbers. If you take a look at the most watched game in terms of a conference matchup in every one of the conferences, you see that the Big Ten and the SEC have massive, massive.

audiences for their biggest games. Michigan, Ohio State, over 17 million, Tennessee, Alabama, over 13 million. These are massive audiences. And then you get to every other conference and all of those games, even the biggest games in those conferences, they pale in comparison, just over $5 million for the ACC, and just over $4.5 million for really both the Big 12 and the Pact 12. So because of that, what happened? Well, there was a pie. There was a pie of dollars that networks were going to spend on live sports. And that pie is being gobbled up by the things that are going to drive the most eyeballs, the NFL, the Big Ten, and the SEC.

So it's not that the pie is growing, is that that pie is being divided in ever-increasing sections to those three entities. The NFL alone is charging a billion more dollars annually to the networks out there just because they can. And that's not even for more inventory. That's just because of the NFL's popularity. Well, the Big Ten and the SEC got massive television contracts. Why? Because they drive the quantity of eyeballs because those live appointment viewings, that's what's most valuable. It's no longer about the quantity of the cable bundle anymore.

Now there's just over 60 million homes in the United States that actually have the traditional cable bundle. So that business model is totally fledgling. So there's this pie of money. It's being divided into where you're going to get the most eyeballs and everybody else has to fight for the scraps. Well, the ACC didn't have a deal to be negotiated because their grant of rights is going into the mid-30s. All of this to tell you, there was basically enough pie for. one television deal and there were two entities fighting over it, the PAC 12 and the Big 12. Okay. So that's, you get a big picture discussion about, why are we in this position?

Well, we're in this position because there was one television deal to be had between the PAC 12 and the Big 12. All right. These two conferences had very different outlooks about this situation, this reality that I was just discussing to you. The PAC 12 had this view, and maybe it's because of their location, maybe it's because of what's been going on for the last, you know, five, eight years in this conference. Their conference headquarters had been in San Francisco near Silicon Valley. They had this notion that it's like, no, you know, the pie is actually much bigger than it is and there's bigger deals to be had because of streamers. and don't worry, we're going to be rescued and our deal is going to be bigger because of streamers and technology.

Okay. So they thought that the pie was actually bigger than it was. The Big 12's viewpoint was actually more, I would call it rooted in reality, which was they needed to get to the table first and eat first. And so they did. Brett, Your Mark's decision and the Big 12's leadership's decision to get to get, to that deal first is why we are here. When he talked to me for Big Noon conversations, he said as such, he said, it was the most imperative thing that we had to do was go out there and solidify the deal with the traditional partners, ESPN and Fox, so that we had stability.

And that stability, as you will see during the course of this podcast, was paramount and everything that happened with Colorado. So he gets the stability that he wants, Brett Yormark and the Big 12 conference. And then the PAC 12 has these visions of some saving grace from a streamer that really hasn't materialized. And now all of a sudden, the one deal to be had has been had by the Big 12.

So they not only get the resources of that pie, the only resources left out there to spend on live sports, but they also get the exposure. And it's the exposure that is the traditional exposure that most college football fans expect, which is the two biggest and most premier college football networks out there, which is ESPN, obviously, which almost made college football, and Fox Sports.

And so there we are. All of a sudden, the Big 12 has this amazing amount of stability and exposure. Well, that's going to be very valuable then as we move forward. Okay, now let's take a look at the PAC-12's issues. I talked a little bit about the way that they viewed what was going on in the marketplace and how that was a problem. Well, that was a problem because immediately, once the Big 12 solidified their television deal, all that mattered for the remaining schools in the PAC-12 conference,

the 10 schools, obviously after USC and UCLA moved to the Big 10, And all that mattered was, okay, what does our deal look like? What's the number? That's the question. If you talked with anybody around the league, if you talked with anybody in leadership, that's what they asked. What's the number? And if you go back to October of last year, there was some communication about that

number being fairly large. And somewhere much north of what the Big 12 had just negotiated and something just under what the Big Ten had just negotiated. had just negotiated. But that number was never real because the deals never came to fruition. And because of that, it just kept getting pushed out a later date, pushed out further and further and further. And there's a framework of a deal. And well, okay, we can't announce because there's nothing done. Well, now there's another framework of a deal, but we've got to push it out. And all the schools were asking for was some stability. Okay, what is our deal? Who is it with? What's the number? What's a general

idea of what's going to be happening? And it never materialized. And it got pushed out so long that I believe last week was the straw that broke the camel's back, at least from the Colorado perspective, when at Pact 12 Media Days, George Kolovkov says, the longer we wait on a deal, the more options we have. that's that's just not the case that's just not the case um if there were that many options they would have been solidified there would be concrete offers and there would be actual figures that these schools could work up work off of and it's just not what has happened so could could have this been avoided? Possibly. Possibly if they were to get a deal. But really the deal to be had was the one with the traditional exposure, which is what the big 12 jumped the PAC 12 for all the way back last year when they were able to sign the deal with ESPN and Fox. I actually think that the schools, when you actually think about it in that sense, after you hear me break it down like that, the schools, then you could make a,

a strong argument have shown a tremendous amount of patience in this whole situation, and in particular in a really precarious spot because this revenue is paramount for these schools and these programs to continue. I'm surprised that it actually took this long for any move to be made, primarily because of the constant push that has gone on from the Pact 12 side in terms of when a deal could or would potentially be made. Now let's take a look from the Big 12 side. I think that this is a lot easier to talk about. But when you look at what happened today with Colorado moving to the Big 12, now we understand why it happened.

right? I just broke down all the market dynamics. I broke down kind of the trouble that the Pact 12 had and maybe the misstep that they made in terms of viewing the marketplace wrongly. Well, the Big 12 beats them to market. They get the deal. And then now what do they offer? Stability. Okay. And what did today do for the Big 12 even further? Offer even more stability. You heard Rick George, the athletic director at Colorado, talk about it. I mean, I can't even, How many times did he say the word stability? It was over and over. And this further stabilizes this conference.

And then today, it took it a step further. When Colorado moves from the PAC 12 to the Big 12, now all of a sudden the Big 12 has a bit of a show of strength in the marketplace. So now all of a sudden, you not only get a new deal, but this new commissioner is out there, and it seems to be making things happen. And now there's a bit of a show of strength that they can go and command and draw the University of Colorado to the Big 12 because make no mistake about it,

Colorado was attracted to the Big 12 and it wasn't just for the television deal. It was also for the leadership and the plan. And that stability and show of strength, I think is important moving forward. I think it's also important to note that they're not going to be done. The Big 12 is not going to be done. I don't know what school is going to be next, but they're not going to play with 13 teams next year. Someone else is joining the Big 12. And I don't know who it is. There's been a lot of speculation. Maybe it's one of the four-corner schools, which would obviously further destabilize the PAC-12 conference. There's been talk about Yukon. I don't know who it's going to be, but somebody else is going to be coming only because of the numbers. They're not going to play

football with 13 teams. Just read between the lines there, right? Like the Big 12 is not done just based on that. And they're obviously going to want somebody that wants them. And so there's going to be a whole dance here in the coming days and weeks about who that 14th team is going to be. The next thing that this does is I think it puts their commissioner, Brett Yormark, in a real position, maybe not of like ultimate.

strength because I think that we all know, and I think even he would admit to this as well, we all know that Tony Petiti, the new commissioner of the Big Ten, and Greg Sanky, the commissioner of the SEC, and probably even Greg, because of his tenure with Tony being so new, like those are the guys that are going to command the strongest positions when we start talking about things that affect the sport globally, namely the college football playoff, and how that's going to look and what that's going to look like in 2026 and beyond. Right. But what this does today, with Colorado moving in there, it further stabilizes and it further

strengthens Brett Yormark's position within those conversations. I don't think that that should be overstated because that's an important piece of what's going to be happening moving forward. So Colorado helps themselves a little bit because they get into a position where they're hitching their wagon to a leader that's increasing his strength in terms of the position that he holds within the sport globally. Now, let me get to Colorado in their perspective. And I touched on this briefly. I'm actually a bit surprised that it didn't happen sooner. Based on what has gone on over the last eight months,

I believe that Colorado has shown a great amount of patience in dealing with the PAC 12 and what could potentially come from a television deal. And ultimately, what they saw was more stability, more exposure, a revenue picture that looked much more stable to continue to quote Rick George. And in a lot of ways, when you sit back and you look at it with all the things that I've just talked about over the last few minutes,

this was a bit of a no-brainer. It's a bit of a no-brainer. And at times you can wonder like, wow, I'm shocked that it took this long. You're going to read a lot about how this could be about, you know, like, you know, the wins and losses. and this can be about, you know, what programs are the strongest, and this could be about, well, from Colorado's perspective, Dion wants to recruit in Texas. You see, I don't think it's necessarily about those things.

I think it's more about what I've been talking about from a marketplace standpoint. And then you get into Colorado makes this move. This move is beyond Coach Prime. This move is for the future of, of the athletic department and institution. They needed to make this move because of the instability of the PAC 12, clearly, and what they viewed as a better partnership and way forward into the future in the Big 12.

After USC and UCLA moved, you know, the PAC 12 was already on shaky ground. And that became even, you know, more shaky when the D.C. and UCLA moved, you know, deal never arrived when they were beat to market by the Big 12. And so everything that happened further destabilized that conference and led to Colorado making this decision to go out there and join forces with the Big 12 and kind of go back home, if you will. Where does that leave us? And actually, last thing on Colorado, can we just take a parachute out for a moment? If you all of a sudden, just for a moment, go back. This is a 1 and 11 football team that lost by an average of 29 points and had one,

maybe two winning seasons dating back to 2005. And in the span of, call it eight months, the athletic director at Colorado, Rick George, and the chancellor Phil de Stefano, have made massive decisions that were bold, that were, I mean, to put it lightly, like, legacy decisions, the first hiring Dion Sanders,

and the second is making this move to the Big 12. You can make an argument than in the last eight months, no athletic director has done more for his school than what Rick George has done at the University of Colorado. This is a school that's going to be on big noon Saturday, the first two weeks of the season. They got a five-star recruit. They got the number one transfer out of the portal.

They got a coach that is a gold jacket Hall of Famer. They sold out their spring game. They're moving to the Big 12, getting a full share in their first season. Rick, I mean, like, they were a one and 11 team and lost by an average of 29. And the offseason that this program has had, whether I went there or not, I'd be saying this. Like, there hasn't been a better offseason in college football or in college athletics. Not in my estimation.

There's been some really good hires out there. People have had great recruiting classes. but when you look at the actual impact of what they were, what they are, and what they could be moving forward with these decisions, these decisions are like way, way beyond what I think anybody could have possibly imagined. And so, you know, I'm proud of Rick. I know him well. I'm proud of Rick and what he can do. And this in some ways, because of what Brett told us on the show in Big Noon conversation, when I asked him about like, if you're expanding, what do you look for?

And he talked about brand upside. Well, you know what brand upside means the prime effect. We talk about it on this show. We've kind of coined it on this show. Everything gets bigger with Dion Sanders. Okay. Now, people will take shots and you see it all over college football. Coach has taken shots at him.

But everything that you could see that has potential to it, it goes to a 10 as well. That's the prime effect. Do you think Colorado's in the Big 12 without Dion Sanders? I don't know. I don't know. I think that's a great question. You can make an argument that they, that they wouldn't be because they wouldn't have that brand upside. So these decisions, I tell you what, they are, they are generational in their impact of what Phil de Stefano, the chancellor and Rick George, the AD have made at Colorado. Where does this leave the PAC 12? That's kind of where I'll finish off. I'm not sure. I still believe, like, Like, okay, they have nine schools now committed for 2024. And I believe that they are all in the same boat that Colorado was in up until today, which is what's the deal?

What's the future? What's the number? Where is the exposure? That has to be solidified. If this conference is going to remain moving forward, then that has to be solidified. ASAP. Thank you for listening. Emergency Pod.

This is our first emergency pod in the history of the Joel Clat Show. And lo and behold, it's the University of Colorado. How about that? To Colorado to the Big 12. And I tell you what, it's going to be exciting. It'll be a great year. And just remember, Big Noon kickoff, Big Noon Saturday. We'll be in Fort Worth for a Big 12, Pact 12,

soon to be Big 12, Big 12 showdown. Colorado that first week of the season. Remember to follow us on all the social medias. And again, make sure to go and subscribe to our YouTube channel, Joel Clatt Show on YouTube. That's where all our content will be, all the video content. And we appreciate you always listening and being a part of the show. Have a great week. We'll be back next Monday with our last big noon conversation, Tony Petiti, the new commissioner of the Big Ten. That was a great conversation. So make sure on Monday to come back for that. And then the following Monday, we get into preseason content as we start rolling into a brand new college football season.

I can't wait. I know you can't wait either. All right. Have a great weekend, everybody. Thanks for listening.