LINCOLN — Nebraska has acquired its “Get Out of the Big 12’’ card, but it isn’t leaving for free.
The conference revealed Tuesday that it will withhold $9.25 million from an estimated $19.37 million in revenue that has been or will be distributed to NU in its final two years of Big 12 competition.
Nebraska, headed to the Big Ten Conference in July 2011, isn’t yielding money out of pocket.
About $1.2 million due NU from 2009-10 that hasn’t been paid yet will stay with the Big 12, Chancellor Harvey Perlman said. Another $8 million will be withheld from the $10 million to $14 million Nebraska would have expected to receive as a Big 12 member in 2010-11.
Though Nebraska won’t write a check, there is an impact.
The hit, Perlman said, comes more in having to temporarily scale back plans or purchases until the settlement fee is absorbed through the yearly budgeting process.
A $7 million budget surplus in the athletic department for next year will be wiped out by Tuesday’s settlement.
“We’ve got it covered,’’ Perlman said. “It’s not without its issues, but it’s manageable from the athletic department’s point of view, and it’s manageable from the university’s point of view.’’
Nebraska won’t fully share in Big Ten Conference revenues for another five to seven years.
But NU won’t make less in the Big Ten than it would have in the Big 12 during the transition. Once fully in the mix, Nebraska will earn about $20 million to $25 million per year from its new league.
Nebraska considered legal action to avoid all exit penalties associated with separating from the Big 12.
“As a law professor and a lawyer,’’ Perlman said, “I still think we had a very significant legal argument that would have prevented them from imposing any penalty.’’
So why not pursue it?
“As a law professor and a lawyer,’’ he said, “I’m also cognizant of risks associated with litigation. What I think is the law may not turn out to be the law. There was a variety of complications.
“When you look at everything, it made sense in this setting to get this behind us.’’
Nebraska and the Big 12 came to terms in a negotiated settlement handled by a mediator. The 48 percent hit on revenues was less than the 80 percent set out in Big 12 bylaws.
Had NU pursued legal action, it might have used some of Big 12 Commissioner Dan Beebe’s own words against him.
After Nebraska accepted a Big Ten invitation on June 11, Beebe remarked that the Big 12 would be “better off’’ without Nebraska and Colorado (headed to the Pacific-12), and that remaining Big 12 teams would make more money.
What was the Big 12’s response when those remarks were brought up in negotiations?
“It was slightly different in tone and character,’’ Perlman said. “A lot of things were said on both sides, as you would expect, in a circumstance like this.’’
Perlman said he expects the 10 teams left in the Big 12 to do at least as well financially, if not better, in the future. That’s why there were questions about why Nebraska and Colorado faced exit fees.
Even so, he said, “Long term, I would think a school with the reputation of the University of Nebraska brings value to a conference that will not be brought to the Big 12 after this year.’’
One potential discount Nebraska negotiated with the Big 12 is $500,000 if the Huskers reach a BCS bowl game this season.
Perlman said the negotiation process has been stressful and time-consuming.
“I’m relieved to have it behind us,’’ he said. “It is a distraction. It’s the question everyone was intrigued by.
“We’ve been in conversations with the conference on and off since we left. In the last two or three weeks, we’ve had some pretty intense negotiations.’’
Internal discussions occurred, too.
Though the athletic department budget for next year will be trimmed $7 million, Perlman said he will waive for one year the annual $2.5 million fee the athletic department pays to the university for academics.
Overall, Perlman said, it’s a hardship to lose out on money that was expected to come in.
“But I think you have to make investments that are in the long-term interests of the university,’’ he said. “I think everyone agrees that joining the Big Ten was.’’
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444-1024, lee.barfknecht@owh.com
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