As Big East Catholic schools prepare to break away, key issues emerge
The departure of the seven Catholic Big East basketball schools from the league appears to be inching toward inevitability.
"I think it's certain the seven schools will leave, barring some substantial financial or legal impediment," a source with direct knowledge of the situation told SI.com.
Officials from the seven schools have been in daily contact about their potential departure, with another conference call scheduled for Thursday. There are a number of issues that still need to be resolved, but their discussions include securing legal representation, financial advising and television consulting help regarding their departure.
The new conference would likely be a 12-team basketball-based league, although the five new schools to be added to the group of Villanova, Marquette, Georgetown, St. John's, Providence, Seton Hall and DePaul are not certain right now.
A cadre of Atlantic-10 schools, including Xavier, Butler, Dayton, St. Louis, along with Creighton of the MVC are the most likely candidates. The move could potentially attract more money for the schools than the current $1.6 million they receive from television. (The potential fate of the NCAA tournament units of the schools are a significant unresolved financial issue.)
But the breakaway schools from the Big East stress that this is more of a philosophical than a financial move, as they no longer want their fate tied to mediocre football and a group of schools with little in common.
"What's football going to look like in 15 years?" Marquette athletic director Larry Williams told ESPN 540 in Milwaukee. "They may not be in the power position they are in today. How do we as an elite basketball program fit into the landscape of this football dominated environment? I don't have a complete answer for you, but that's the question."
The dynamics of a potential departure still have not been worked out and are a critical part of the discussion. The potential for the schools to dissolve the league is dwindling, as it's far more likely that the seven will just break away. But the tenor of the seven schools right now is clear. Big East Commissioner Mike Aresco is in scramble mode to save the league, as he had a conference call with the presidents on Wednesday.
"There's movement every day," said a source. "How much? Who knows? I think there's movement every day."
Ultimately, many of the key issues -- the fate of the Big East name, Big East tournament, the estimated $60 million in exit fee money, lucrative NCAA tournament units -- will need to be hashed out by lawyers. Big East sources have indicated the league isn't going to roll over, as the dynamics of this potential move are complicated and expensive.
"If anyone tells you they know what's going to happen with the legal issues, the brand, the name, Madison Square Garden and all those issues, I don't think they're being honest," said a Big East athletic director.
Here are the key issues impacting the future of the league.
There had been a perception the past few years that a basketball-only league would offer little financially in the open market. The schools in the Atlantic-10, for example, currently make less than $400,000 annually in television revenue.
The Big East basketball schools make about $1.6 million annually ($26 million divided among the 16 schools), but that number was tied to strong brand names like Syracuse, Louisville and Pittsburgh. Conversations with multiple consultants and television executives about the future of a 12-team Catholic conference have yielded a range of figures. The Big East schools could easily get their current financial number and likely get $2 million annually with a new deal. At the most optimistic ceiling, the teams could get $3 million per year, although that's considered Pollyannaish. The ironic part is that by the Big East leaving its exclusive television negotiating window with ESPN and CBS this fall, it essentially opened up the basketball schools to test the market. There are multiple interested television suitors in this more competitive environment and a number of strong potential markets -- Washington, Philadelphia, New York, Chicago.
The way the NCAA pays teams for reaching the NCAA tournament is extremely complicated. Teams aren't given a single, fat check for reaching and advancing in the NCAAs. Instead they are given units for making the NCAA tournament and more for advancing. The value of each unit is approximately $245,000, which is paid to the league over six years.
Units are a huge financial piece in the value of a basketball league. In the Big East's 2011-12 fiscal year, it received $27.3 million in NCAA tournament units (113 earned over previous six years at $242,000). In 2012-13, the league will receive even more -- $28.7 million thanks to 117 units over six years.
"The interesting point is that people focus on the TV dollars," said a Big East official. "Currently our unit dollars as a revenue stream exceed our TV revenue for basketball schools. We generate more dollars from NCAA participation."
A key financial issue here is that the units of schools like Syracuse, Pittsburgh, Louisville, West Virginia and Notre Dame are still going to go into the Big East coffers after those schools left for other conferences. (Rutgers never reached an NCAA tournament in its entire Big East tenure.) Those units are a significant amount of money annually. One of the biggest legal issues to be fought out will be what happens to the league's units? And can the breakaway schools take their units with them?
There's also a pile of money in exit fees, as there's an estimated $70 million due to the league. Could the unit revenue and exit fee money be enough to keep the Big East together?
What about the other assets?
If the seven schools leave, it's likely that they'll be able to take the league's automatic qualification with them. NCAA rules state that a baseline for an automatic bid in the NCAA tournament is a collection of seven schools that have been playing together for five or more years.
The seven Catholic schools have that and will be able to take a bid with them. A source said that the NCAA, because of the volatility in the landscape, would strongly consider granting the hodgepodge leftover Big East schools a waiver for an automatic bid. (And there would be decent basketball with UConn, Cincinnati and Memphis).
The Big East's current biggest asset is its tournament in Madison Square Garden. If anyone says they know exactly what will happen with that, they are lying. It's hard to imagine MSG holding a Big East tournament with just one legitimate Eastern team -- UConn. At the same time, where would they hold the tournament?
Don't expect the Big East to roll over and hand away its lunch money, as its brand name and tournament are two valuable assets.
One source indicated Wednesday that it's unlikely the league will vote to dissolve, as a more likely scenario will be that they simply break away and start anew. What's very clear is that many of these significant issues will be settled in court, with the only certainty being that there will be significant legal bills.
What's driving the schools to leave?
Ultimately, this is a philosophical move to allow the basketball members to control their own fate. The role that Aresco has played in this varies on who you talk to. Some view him as a guy in an untenable situation. Others say his lack of communication and reluctance to share information has driven a wedge in the league.
The Big East hired Aresco in August with designs on getting the most out of its latest television deal in the wake of a flurry of departures. Aresco's leadership is being questioned by some, especially with the lack of membership input regarding the addition of Tulane.
"It can't be overlooked that the silence internally has driven this and closed the door on a lot of things that needed to happen," said a source. "These schools aren't doing this as a vendetta, they're saying, 'How can we best have knowledge and influence over our own future?'"
(Aresco, for example, didn't inform the Big East football school athletic directors about the meeting on Sunday with the Catholic school athletic directors and presidents. Many found out through the media.)
One of the biggest ironies of the seven schools pulling away is that the one Catholic school most advocating staying together is Georgetown. Georgetown president Jack DeGioia, who has the most history with the league, has been a vocal proponent of trying to keep things together. The irony is that DeGioia and former Big East consultant Paul Tagliabue were among the strongest voices for the Big East to reject its deal worth more than $150 million per year from ESPN last spring. Of all the schools advocating to vote that down -- Notre Dame, Rutgers and Pitt -- Georgetown is the only one left, trying to hold things together.
After former Big East Commissioner John Marinatto resigned in May, there was a cry for more leadership. So far, its questionable whether Aresco has shown to be the galvanizing figure the Big East needs.
"I think Mike is doing the best he can with what he has," said a source. "He has a collection of fine enough institutions that don't have a whole lot in common."
Who will be added?
The realignment gold rush will start again. One thing is certain, the seven breakaway Catholic schools will not join the Atlantic-10 as ESPN reported as a possibility earlier this week.
Instead, they will likely use their brands and leverage to poach the Atlantic-10. Many of the schools in that conference fit the religious bend of the league and have strong attendance, infrastructure and brand names. (The A-10 schools would be leaving behind a lot of money in NCAA units.) There are others schools being bandied about, however. George Mason and perhaps VCU will be considered, and Gonzaga is a curious option, though its biggest disadvantage is geography. (The league plans to be an all-sports league, which would make travel expensive.)
The seven schools will have to decide whether they want to consider UConn and Cincinnati, two powerhouse hoops programs. The downside to those is that the Catholic schools have been disappointed in how they've publicly lobbied to leave the Big East. And their inclusion likely wouldn't last long, as they'd jump at the first offer of another conference in order to improve their lot in football. Simply put, inviting those schools would be inviting the problems the conference is attempting to leave.
Temple could be a different story if the Big East breaks up and it ends up in another league for football. Perhaps the league would consider the Owls on a dual-membership basis, although Villanova would likely object.
For now, the Xavier, Butler, Dayton, St. Louis and Creighton are the leaders in the clubhouse. But that's far from settled, and there's plenty more options to discuss.
Can the current Big East be saved?
Probably not in this form. Ultimately, Aresco's decision to add Tulane will likely be remembered as the stake that drove the league apart.
Williams didn't mince words about Tulane to ESPN Milwaukee. "I was not pleased that we issued an invitation to Tulane without any diligence to what effect that would have on our basketball product, the draw on our RPI and other such things," Williams said. "I was disappointed that I wasn't able to participate as a member of the conference in the deliberation that went into adding that."
That statement underscores the communication issues with Aresco and also showcases a tipping point for the basketball schools believing their product was watered down beyond repair.
The numbers CBSSports.com floated last week about the Big East's potential television revenue -- $60 to $80 million -- were too low. But the number wouldn't have risen much over $100 million annually, and part of the reason is that so much of the Big East's inventory had no real value.
There was simply no appetite for Providence-UCF games. A smaller league with good markets and brand names has a higher quality of content.
If the league stayed together, there's certainly potential that the basketball schools could make similar or more money. The issue right now is that they don't seem to care, as they'd rather push off and forge their own territory. The few holding optimism that the current alignment can be saved are the football athletic directors, but it's fleeting.
"The attitude is not common sense is not as much emotions," said a Big East athletic director. "Sometimes emotions make you do things quickly and it sounds like the train is taking off here."