Big 12 mulls selling naming rights, opening door for conference to be rebranded with corporate sponsor

The Big 12 is exploring the possibility of selling its naming rights to a corporate sponsor that could raise hundreds of millions of dollars for the conference, sources confirmed to CBS Sports.

The deal would be the first of its kind in college athletics, triggered by the growing need for new revenue streams as the industry prepares to share with players as part of the multibillion-dollar House v. Board of Education settlement. Big 12 commissioner Brett Yormark presented the naming rights proposal to conference administrators during a meeting in Dallas in late May.

First reported by Yahoo! Sports, the idea is for the conference to drop the “Big” from its name and replace it with the corporate sponsor, although the “12” will likely be kept, according to a source familiar with the proposal.

The Big 12 is trying to close its financial gap with the SEC and Big Ten, which will soon surpass the other Power Four conferences in revenue from its television deals and College Football Playoff payments. The Big 12 is expected to earn $12 million per team annually in the new 12-team CFP, ranking fourth among power conferences; Big Ten and SEC teams receive about $21 million.

The Big 12 are also exploring a private equity investment that could inject up to $1 billion in exchange for up to a 20% stake in the league, CBS Sports’ Dennis Dodd first reported Thursday. Luxembourg-based CVC Capital Partners is in discussions with the Big 12, and a source told CBS Sports the talks are “very serious.”

The Big 12 teams are currently earning $31.7 million each from Fox and ESPN in a media rights deal that ends in 2031. Add in the infusion of money from private equity and the two revenue streams would combine to move the Big 12 “much closer” to the Big Ten Media Rights Agreement, according to a person with in-depth knowledge of the proposal.

“Private equity and naming rights are among a variety of commercial opportunities the league is exploring to close the gap between the Big 12 and the Big Ten and the SEC, and to maintain the highest level of competitiveness,” said another Big 12 source. Big ups to CBS Sports.

The Big Ten leads all conferences, with its schools expected to earn approximately $75 million a year under its new media rights deal with Fox, CBS and NBC.

The Big 12 has formed a small working group of three Big 12 presidents to dissect the details of a possible private equity investment, a source told CBS Sports. The current Big 12 rights deal is worth $2.3 billion.

FBS programs will soon be required to pay players for the first time in history. The NCAA and the power conferences chose to settle the House v. Board of Education lawsuit. NCAA last month with a proposal that would allow schools to share up to $22 million annually with athletes. In total, schools are expected to pay up to $300 million over the next decade for back payments totaling approximately $2.7 billion and future revenue shares for athletes.

Yormark said in May that the growing interest among private equity in college sports was “validation” for the growth of the college sports enterprise and its bright future. Several academics have explored private equity opportunities, most notably Florida State, which has partnered with private equity firm Sixth Street as it continues to explore leaving the ACC due to revenue disputes.

SEC Commissioner Greg Sankey was less than enthusiastic about the prospect of private capital entering the college athletics market during his conference’s spring meetings in May, although he also called the interest a “compliment.” He highlighted the threat facing restaurant chain Red Lobster, which faces annihilation following a private equity partnership, and the strict guidelines on how private capital is used in professional leagues.

“There are cautionary tales about private equity out there,” Sankey said. “I’ve had half a dozen or more meetings with representatives, all good people, all learning opportunities, but I think people need to exercise a certain level of caution before they just jump into action.”