How an unfinished TV deal led to an unexpectedly hectic first month for the new Big Ten commissioner

May 22, 2023 ndowd

Pete Thamel, ESPNMay 21, 2023, 05:00 PM ET

When the Big Ten officially introduced Tony Petitti as its new commissioner nearly a month ago, he listed four immediate priorities in his role as one of the most powerful people in college sports.

The league needs to integrate USC and UCLA for the 2024-25 season, explore the new media rights deal for the expanded College Football Playoff and focus on the tricky issue of name, image and likeness.

Lastly, Petitti prioritized the official completion of the massive television contract worth more than $7 billion negotiated by his predecessor, Kevin Warren. This issue may have seemed like a mere formality, but complications to the much-celebrated deal arose soon after he accepted the job.

Nearly three months before the season kicks off and those TV deals begin, the Big Ten does not have completed longform contracts, which include the fine print details. Instead, Petitti is engaged in significant “horse trading,” according to multiple sources, to get the NBC primetime deal finished and figure out what the network calls “outstanding issues” in order to uphold as much value as possible.

“These deals aren’t done, and they aren’t what they were represented to be from the standpoint of the NBC deal and the availability of all members to participate in November games in primetime,” said an industry source.

Interviews with nearly a dozen sources in and around the Big Ten and the college sports industry paint a picture of Petitti sprinting to navigate details left unresolved from his predecessor.

As a result, there’s a trail of unhappy athletic directors seeing money disappearing from their bottom line, frustrated television executives and big-name coaches irked about the lack of transparency in details that weren’t communicated to them.

Kevin Warren took over as Big Ten commissioner in January 2020, and in just three years at the helm, he dealt with the COVID-19 pandemic, helped bring USC and UCLA into the conference in a landscape-altering deal, and secured the massive TV payday before heading back to the NFL as team president and CEO of the Chicago Bears.

When he accepted that job, he said he was leaving the Big Ten in a “demonstratively better position,” which was true financially as its schools project more revenue than any league over the course of the deal. His work adding USC and UCLA, who join the conference after the 2023-24 season, was widely praised by members and provided a financial jolt to the television deal.

On campus, it’s a bit more muddled. Big Ten schools have seen potential revenue disappear the past few months from a contract that was announced back in August as being worth an average of nearly $1 billion per year through the 2029 football season. More than $70 million in total is suddenly in flux — nearly $5 million per school — and it has left administrators around the league seeking answers and calling for financial accountability.

Recently, schools have found out:

They are going to have to pay back nearly $40 million to Fox because, according to sources, Warren delivered NBC the Big Ten football title game in 2026 without the full authority to do so. This all has unfolded under the complicated backdrop of the Big Ten conference not actually controlling the rights to the inventory of this latest deal — the Big Ten Network does, which is majority owned by Fox. (More on that below.)
They are going to have to pay $25 million total for a deal to pay Fox back for lost 2020 football game inventory. This came after an arrangement between Fox and the conference that was unable to muster the lost revenue from the COVID-19 season.
There’s tens of millions of dollars of value of the NBC primetime deal in flux, as Petitti has been racing to ensure it keeps as much of its original value as possible. Historically in the Big Ten, after the first weekend in November, schools were not required to play night games for myriad reasons — health, recovery and campus logistics among them. These were known in league circles as “tolerances,” and prior television contracts accounted for them.

Multiple sources told ESPN there’s been pushback from a number of schools, including Michigan, Ohio State and Penn State, to play those late-November night games under the new contract. That leaves Petitti to figure out how to uphold a deal for hundreds of millions of dollars for primetime games without cooperation from some of the league’s marquee teams for part of the regular season’s most important month.

Athletic departments and coaches around the Big Ten say they were surprised November night games would be part of the deal. They weren’t asked for permission to play them prior to the deal or informed of the change ahead of the deal, according to sources. At the same time, NBC wasn’t aware until well after the initial contract was signed this summer that these big-brand schools had historic tolerances that were part of the prior television arrangements and would resist being available.

“NBC was surprised, and I was surprised,” said Michigan athletic director Warde Manuel. “We had not discussed, and I had not discussed with anyone in the league to change the tolerances we had agreed upon years ago.”

Within the industry, though, there was an expectation that, considering the scope of the deal, all schools would play in prime time.

“The fault here is with the administrators on campus,” said another industry source. “How did the presidents, chancellors and athletic directors not know this? The universities all signed off on the deal.”

While this is being worked through, Ohio State, Penn State and Michigan State recently agreed to concessions to make short-term sacrifices to help the league make up for some lost revenue from the NBC deal.

Penn State will play on the road in a short week on Black Friday against Michigan State, a game that was scheduled before Penn State agreed to it. Ohio State will host Michigan State on Nov. 11, the latest-ever home night game in Ohio State history, which is viewed as another concession to help the league through this moment.

“This is what he’s walking into right now,” another industry source said of Petitti. “Tony is trying to save it, and what Penn State and Ohio State are doing is actually trying to minimize the losses.”

Warren did not return requests for comment.

“We’re excited to start our Big Ten deal this fall,” an NBC Sports spokesman told ESPN. “We had a great relationship with Kevin Warren, and same with Tony Petitti. We’re confident that any and all outstanding issues are well on their way to being resolved.”

A full understanding of the deal Warren helped negotiate with NBC, CBS and Fox begins with a bizarre twist — the Big Ten didn’t technically own the rights. (Hence the tension over Warren using the Big Ten title game without Fox’s permission.)

In 2016, when the Big Ten announced its long-term television deal with Fox and ESPN, the announcement didn’t include all the details. One of the things that didn’t get disclosed at the time, nor as the new deal was being discussed in recent months, was that the Big Ten Network had acquired all of the league’s programming rights back in 2016 through an undisclosed date. The length of that deal with the Big Ten Network from 2016 is carried at least through the current deal, which has been announced through the 2029-30 season.

This relationship was known by athletic directors, television executives at rival networks and officials in other leagues, even if it wasn’t announced publicly. It flashed out into the public at various times, including Sports Business Journal reporting in April 2022 that two Fox senior executives were in the room when various media companies — ESPN, Amazon, NBC and others — met with the league about their television packages.

What this also essentially meant was the latest round of Big Ten television deals were effectively sub-license arrangements, in which both the Big Ten Network and Fox essentially controlled the rights and worked with the Big Ten to sub-license them off. That meant a majority of the value of the deal had already been sold.

“It was a joint negotiation with the conference and FOX working together and doing deals with these other networks,” said an industry source. “They both needed each other to do the deals.”

That factor is key to understanding the issues Petitti faces. There are two new partners — NBC and CBS — attempting to work out their longform deals. There’s a familiar partner, Fox, that’s riding shotgun on this bumpy ride, including being upset Warren promised a title game Fox controlled without permission.

The league and Fox had also been in talks with Amazon about the deal that ultimately went to NBC, but according to sources, there was late pushback by key campus stakeholders that some of the biggest brands weren’t ready for part of a marquee package to only be available on streaming. That set up the push to get as much money as possible from NBC.

And it leaves the league facing a decision on a potential bonus for Warren, who didn’t have a bonus clause tied to a television deal in his contract. Warren’s predecessor, Jim Delany, got a bonus of more than $20 million that was announced in 2017, and he’s still getting paid for it because he led the negotiation that sold all of the rights through this decade. (The bonus had been in Delany’s contract prior to the deal.)

The league has brought in an outside search firm, Korn Ferry, to determine whether Warren’s work with this television deal should bring him a bonus.

One certainty is that the Big Ten television deal, despite the size, has not satisfied many coaches around the league.

In a Big Ten Zoom call with Warren and the league’s men’s basketball coaches this summer after the deal was announced, sources say, Michigan State basketball coach Tom Izzo was critical of Warren for the lack of transparency and consultation on the deal.

Izzo recently said coaches weren’t consulted by the league prior to the deal: “One thing about coaches, you’re almost asking the wrong people because we’re the last to know anything,” Izzo told ESPN.

Izzo added that he has “concerns” on the amount of games available only on streaming and said that would be among his first questions to Petitti, as “it was not discussed with us [coaches] at all.”

“Those are some things I’d like to see with the new commissioner, that there’s some transparency in working together,” Izzo said.

Izzo’s concerns reverberate among the rest of the Big Ten coaches, as Ohio State coach Chris Holtmann added: “For our league to continue to grow and evolve in this new era, I think at the very minimum the veteran coaches like (Izzo and Purdue’s Matt Painter) should have a direct line of communication and a voice in the conversation.”

Ohio State football coach Ryan Day echoed Izzo’s sentiment about communication and transparency.

“There was a collective disappointment among coaches on how the night game issue was handled,” Day said. “We were surprised when it emerged, and there was no consultation on the change with coaches as a group prior to the television contract being announced.”

Additional reporting by Jeff Borzello.

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