...gotten as far as they did" is faulty, for at least 3 reasons.

First, you mention national media reporting that there were serious discussions... well, there was also national media reporting that Sunday play was the big issue. Using your logic that if Sunday play were an issue then negotiations wouldn't have gotten serious - then you have to conclude that the national media was wrong about either negotiations being serious or Sunday play being an issue, because both were reported. So, which were they wrong about? I don't think they were wrong about either...

Second, it's common in negotiations to initially acknowledge the biggest issues keeping the sides apart then to table discussion on those issues and work on the things that are fairly easy to settle first. So, negotiations can actually get quite a ways down the road before work on the serious roadblocks occur. The reasoning for that is simple - both sides hope that if everything else is a "done deal" then the other side will more willing to compromise on the big issue. Obviously BYU isn't going to budge on Sunday play, but they can concede other things that will make Sunday play less of an issue - such as taking less revenue to make up for playing a championship game on a less lucrative day or something.

Third, there were also national media reports that the B12 was fine with BYU's Sunday play "demands", but their media partners were not. So, negotiations could have gotten a long ways down the road with no significant road blocks until the B12 goes to their media partner saying "how much more will you pay us if BYU is added" and the media partner says "hold on, I know we don't have the basketball championship on Sunday now, but we reserve the right to have it on Sunday in the future and that means BYU is a problem for us". Some national media said that is exactly what happened.

There were people on BYU's side who thought they had a deal - even to the point that press conference dates and times were beginning to be leaked. So, even with BYU's so-called demands, a deal was close. Then, something happened on the B12 side of things. The B12 essentially stopped returning BYU's calls. I think it was a combination of several things after a deal was very close to being done... 1) The B12 media partner nixed the deal because of Sunday Play. 2) T. Boone Pickens - an outspoken BYU critic - got people, especially the new conference leadership, to listen to him. And, 3) Texas acquiesced on adding TCU.