tier one provider gets its pick of which games to televise. Any games the tier one provider doesn't show become available for the second tire provider. Anything not picked up by the first two tiers goes to tier 3.
For example, in our current basketball deal, for home games ESPN has tier one rights. CBS Sports has tier two. If neither opts to show a game, BYUTV can show it (if it's at home or if it's a road game and the road team agrees). Non-conference road games go according to that school's conference TV situation.
Some conferences don't free up tier 3 rights to the individual schools. The Big XII does.