Memphis has proposed to the Big 12 a lucrative membership proposal — a serious enough endeavor that league presidents met Monday to discuss the offer — but the proposition is not believed to have the necessary support, for now.
The proposal from Memphis — one of the most aggressive membership propositions in college athletics history — features hundreds of millions of dollars in sponsorship commitments to the Big 12 from UM-affiliated corporate partners, as well as the school eschewing revenue distribution from the league for at least five years.
Multiple sources spoke to Yahoo Sports under condition of anonymity about the proposal, which is the latest and most serious chapter in the school’s effort to move out of the American and into one of the four power leagues.
This particular effort began more than a year ago. Memphis president Bill Hardgrave has spent at least 14 months visiting with the presidents and top athletic administrators of many Big 12 schools in individual, on-campus meetings that have culminated in a membership offer to the league that is expected to be as high as $200 million over the next five years.
Big 12 officials are in the midst of exploring the proposal, but league-wide support is not there, multiple conference officials told Yahoo Sports. Any expansion move needs the support of a super majority of the league’s presidents and chancellors, or 12 of the 16. A more finalized copy of the Memphis proposal was disseminated among conference athletic administrators in the past few days.
Over the past 18 months, the conference seriously explored two expansion proposals, from Gonzaga and UConn, only for each to fail to gain the necessary support. This effort is much more lucrative, but hurdles remain.
“I’m not certain it has enough support,” one Big 12 leader told Yahoo Sports over the weekend.
“We vetted Memphis when we added the other four [Cincinnati, UCF, Houston and BYU] and chose not to add them,” another Big 12 administrator said. “What’s changed now?”
However, the proposal was attractive enough to garner weeks of exploration from the conference. It comes at a financially stressful time as Big 12 leaders work to compete against the Big Ten and SEC, both with more lucrative television contracts and revenue distributions. The timing is important. On July 1, college athletics launched into a new era in which schools can directly compensate athletes in a capped revenue-sharing system.
The industry has never been in a more money-hungry time. Already, Big 12 schools are receiving roughly $1 million in additional revenue from a sponsorship with PayPal. Memphis’ proposal would have increased that by at least $2 million with sponsorship commitments from UM partners. The school is historically aligned with partners such as FedEx, Lowe’s and AutoZone.
Memphis’ proposal is described as a “no-risk” concept, according to some in the Big 12, and it also sets a standard, perhaps, of expansion fees to enter a league. The school would: take zero distribution for the final five years of the league’s new television deal with ESPN and Fox; add the sponsorships in excess of $150 million over five years; and subject itself to expulsion after 2030-31 if Big 12 deems it is not adding value.
The sizable offer represents a historic moment in college sports of a school literally purchasing its way into a conference — a move that further expounds upon a precedent set by SMU’s entrance into the ACC. While SMU agreed to take no league revenue for a stretch of time in the ACC, the school did not arrange millions in sponsorships for the league.
The pricy nature of Memphis’ offer speaks to its unwavering desire to elevate to a power conference — something the program attempted to do years ago with the ACC. Under Hardgrave and new athletic director Ed Scott, the school has increased investment significantly over the past several years, with financial help from sponsors like FedEx and Lowe’s.
With a massive gift from FedEx coming, the UM officials expect to share the full $20.5 million in rev-share with athletes by next year, they have told Big 12 leaders. Any move out of the American would come with another steep price tag. The American exit fee is expected to be at least $25 million — a similar fee that SMU paid the conference upon its departure last year.
Where Memphis goes next remains unclear. Pac-12 officials have expressed serious interest in the program and even offered the school a term sheet last year — something Memphis leaders rejected. Memphis officials have, as well, held talks with leaders in the Big East about a potential move of its basketball program.
