UPDATED INFO AVAILABLE: Kristi has posted an updated breakdown of the television contracts on ESPN.com (5/10/12).
My search for details on all of the current television deals for each conference in one place failed. Which must mean BusinessofCollegeSports.com needs to compile all the details in one easy-to-find place, right?
To understand the chart, you first need to understand the types of rights available. Here is a very general explanation. First-tier rights are for football and/or basketball games broadcast nationally. Second-tier rights are for football and/or basketball games not selected by the first-tier rights holder. Third-tier rights are any games not selected by the first or second-tier rights holders and rights for all sports other than football and basketball. These rights are often sold on a per-school basis (not negotiated by the conference as a whole) and often go to regional networks (like Comcast Sports Southeast, Raycom, or SportsNet New York) or can be reserved for networks like the Big Ten Network and the Texas Longhorn Network.
All that being said, deals are now being done for multiple tiers. For example, the Pac-12’s new deal with ESPN and Fox covers first and second tier rights. Meanwhile, the ACC’s new deal that begins this fall covers football, men’s and women’s basketball, Olympic sports and all conference championship games. Basically, it’s an all-inclusive package with a sublicensing arrangement in place with Raycom for games not broadcast by ESPN.
| First-Tier Rights | Term of First-Tier Rights | Second-Tier Rights | Term of Second-Tier Rights | Total Per Year Average | |
| Big 12 | $480,000,000 (ESPN) | 8 Years | $1,170,000,000 (Fox) | 13 Years | $150,000,000 |
| 08/09-15/16 | 12/13-24/25 | ||||
| Pac-12 | $3,000,000,000 (ESPN and Fox) for first and second-tier; 12 years (12/13-23/24) | $250,000,000 | |||
| ACC | $1,860,000,000 (ESPN) for all-inclusive; 12 years (11/12-22/23) | $155,000,000 | |||
| SEC | $825,000,000 (CBS) | 15 Years | $2,250,000,000 (ESPN) | 15 Years | $205,000,000 |
| 09/10-23/24 | 9/10-23/24 | ||||
| Big Ten | $1,000,000,000 (ESPN) | 10 Years | $2,800,000,000 (BTN) | 25 Years | $212,000,000 |
| 06/07-15/16 | 07/08-31/32 | ||||
| Big East | $200,000,000 (ESPN) | 6 Years | $54,000,000 (CBS) | 6 Years | $42,333,333 |
| 06/07-11/12 | 7/8-12/13 | ||||
Some caveats are in order now that you’ve seen the chart. Keep in mind that the per year number is an average. It is not necessarily what each school gets each year. A number of these contracts have escalator clauses, including the new Pac-10/12 contract. In the early years of that contract, it will be $180 million per year (or $15 million per school) and in the later years it escalates, according to Larry Scott via conference call on Wednesday following the contract’s announcement.
Though it doesn’t fit in the chart, you can’t forget the money Texas is receiving for The Longhorn Network. They’ve been guaranteed $300 million over the next 20 years from ESPN. Similarly, the amount listed above for Big Ten Network revenue is a projected amount which could grow if the network exceeds expectations.
Deals for third-tier rights are too cumbersome to cover here. Some third-tier rights are bundled by conferences and sold to regional networks while others are retained by schools and sold individually to local or regional networks. More on that in a future post.
The next contract we expect to hear about is out of the Big East. Rumors of a new deal have been circulating lately and reports have it that they were close to a deal with ESPN but considering shopping on the open market. Numbers floating around for a deal with ESPN were in the $110-130 million range per year, which would more than triple their current contract. With the SEC, ACC and Pac-12 now all on the ESPN family of stations, can the Big East get a deal with enough exposure from them?
And what will happen with the Big 12’s first-tier rights? I’ve heard a lot of comparisons between their recent deal with Fox and the Pac-10/12’s new deal announced yesterday with ESPN. I think it’s comparing apples to oranges. It should be no big shock that the Pac-10/12 would receive more money for their first tier rights than the Big 12 received for their second tier rights. Let’s wait and see what kind of dough the Big 12 commands when their first tier rights are up for grabs in the next few years.
UPDATE: I’ve posted school-specific broadcasting revenue from third tier rights sold individually here.
Special thanks to Mark Ennis of Big East Coast Bias for helping me track down the elusive value of CBS’s contract with the Big East!
Author
Kristi A. Dosh is the founder of BusinessofCollegeSports.com and has served as a sports business analyst and contributor for outlets such as Forbes, ESPN, SportsBusiness Journal, Bleacher Report, SB Nation and more. She is also the author of a book on the business of college football, Saturday Millionaires. Kristi is a sought-after consultant and speaker on topics related to the business of college sports and a former practicing attorney. Click to learn more
Related
69 Comments
Leave a Reply Cancel reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Recent Posts
- Buick Partners With Five College Basketball Stars in “See Her Greatness” Campaign
- MarketPryce Partners With UCLA Women’s Basketball Team Through TikTok Challenge
- Pringles Launches Pringles NIL March Mustache Collection
- Colorado Football Sells More Than 30,000 Tickets For Its 2023 Spring Game
- How Can International Athletes Get NIL Deals? Here’s How to Do It Safely
Nostradamus
May 5, 2011 at 5:29 pm
It will be interesting to see how the Big XII leverages primary rights with the loss of the Big 12 championship game, the fact they may lose inventory, and the loss of Nebraska and Colorado. I think they’ll obviously be ahead of where they are now, but I don’t see them catching the Pac 12 or the Big Ten who negotiates their primary rights and partial secondary rights at the same time.
Art Director
May 5, 2011 at 5:42 pm
Awesome work. It’s helpful to look at this in a dollars per team per year format:
Pac-12: 20.8
Big 10: 17.6
Sec: 17
Big XII: 15 (although they don’t split revenue equally. Texas, aTm and OU get $20, others get $13).
Big E: $5.3
Also, I know the MWC gets $1.1 per team per year
Brian
May 5, 2011 at 6:07 pm
Kristi,
I agree that third-tier rights are highly varied and tough to track down, but I think you do them a disservice by saying the money is minimal for most. Several schools are even making more than $10M a year, including Ohio State despite not having the rights to any football games. Compared to the per school payouts from the main TV deals, an extra $5 or 10 million is significant.
Kristi Dosh
May 5, 2011 at 8:28 pm
You’re right that there are some deals with some real money, but I can’t go through every single school. At least not yet.
Brian
May 5, 2011 at 10:28 pm
I didn’t mean to imply that you should check for every school (although that’d be great info if you did). I just felt dismissing all third tier deals as minimal presented a skewed picture. As in other forms of revenue, the big boys (especially in the B10 and SEC) make a lot more money than the other schools. This widens the total revenue gap considerably.
The other additions I’d suggest for future work would be also presenting the total per school (a more fair comparison, and something you’ve been doing throughout your great series of articles) and adding in conference championship game deals.
Kristi Dosh
May 6, 2011 at 7:43 am
Brian, I’ve got a piece today that may accomplish some of what you’re interested in on a school-by-school basis. So, thanks for the suggestion.
I didn’t present an average per school because the Big 12 doesn’t share equally and I didn’t want to do it if I couldn’t do it for every conference. Figured it was math people could handle if interested.
Frank the Tank
May 5, 2011 at 6:18 pm
Thanks for posting this synopsis. Another thing to note is that the Big Ten Network 2nd tier fees are variable – that $2.8 billion is what’s guaranteed by the BTN (with partner Fox) to the Big Ten, but can rise depending upon the network’s profits (and by all accounts, the BTN is already exceeding profit expectations by a large margin).
Nostradamus
May 5, 2011 at 9:44 pm
Frank pretty sure the Big Ten Network isn’t guaranteed $2.8 billion. That figure comes from a 2008 Fox estimate based on the network meeting all of Fox’s targets. We obviously don’t know what Fox’s targets are, and to that end we don’t necessarily know that the network is exceeding profit expectations either.
What we do know for certain is the is the Big Ten Network paid the conference $72.1 million for 2009-2010 (pulled straight from the Big Ten’s IRS form 990). We know that they paid the conference about $67 and $70 million in the two prior years.
Silvermann has said in the press that the profit has more than doubled since inception and ad revenue has
Mark Silverman, would discuss specific numbers, saying only its profit has already more than doubled over 2009 as its ad revenue has risen 30 percent. Still not a whole lot of information to go on. When we get the next 990 for the Big Ten we’ll get a better picture.
Kristi Dosh
May 5, 2011 at 9:46 pm
I agree with Nostradamus, which is why I referred to it as a projection and not a guarantee.
Nostradamus
May 5, 2011 at 10:52 pm
Still agree with how Kristi handled this, but after doing some reading Frank The Tank does have a valid point.
The Big Ten’s $72.1 million from the Big Ten Network right now is a rights fee only (this will continue to escalate on its own). This is a hugely important point going forward.
I’m not going to link the article, because I want this post to go through, but on 3/2/09 from the Milwaukee Journal Sentinel “The Big Ten Network is alive and well”
“The network also has proved profitable for the 11 member universities. The rights fee is $70 million, so each member university gets $6.3 million. “That grows every year,” Silverman said. “And as our success becomes realized, the schools will get a share of the profits.
The Fox network has an equity stake in the network. “Once Fox recoups its investments in a few years, there will be additional profits that schools will get,” Silverman said.”
So the Big Ten isn’t seeing any of the profit yet from the company it owns 51% of. We don’t know how much the Big Ten Network is making in profit, though I’ve seen revenue estimates in the range of $200 million. We also don’t know the dollar trigger for Fox’s initial investment.
Why is this important? Well if you grow only the rights fee out at 3% annually, that alone gets you $2.4 billion over the 25 year life of the contract. We’ll get a better estimate when the conference starts seeing it’s share of the profits, but the fact that the BTN turned profitable so soon… The BTN is going to blow that $2.8 billion estimate out of the water.
Kristi Dosh
May 6, 2011 at 7:31 am
I whole-heartedly agree the BTN will exceed projections. Those types of projections are always conservative, and the growth in popularity of college football is anything but conservative, not to mention other programming that may be compelling.
Folski
May 5, 2011 at 9:28 pm
Kristi,
Nice job but you have a serious error concerning the PAC 12. The $3 billion is for 1st tier rights only (44 football games a yr). The PAC 12 network gets 36 games a yr (some first pick games) and since the PAC 12 owns the whole network (Big 10 only owns 51% of Big 10 network), revenue from the PAC 12 network should actually be 150% to 200% of the Big 10 revenues which you have listed as $2.8 billion for the Big 10. Third tier revenue for the PAC 12 will come from digital platforms and the Asian Rim countries. No one except PAC 12 Commissioner Larry Scott really understands the total revenue package. It is unbelievable.
Kristi Dosh
May 5, 2011 at 9:44 pm
Sorry, Folski, but I disagree. Deal is with ESPN and Fox for first and second tier rights. Pac-12 Network will choose behind them subject to any special stipulations the contract might have.
I don’t think we know enough about how the Pac-12 Network will be structured to comment on its profit making ability yet.
Folski
May 5, 2011 at 10:24 pm
All right to disagree. But I thought you would like to be consistent in your analysis. If the Big 10 network is considered a “Second Tier Rights” revenue stream, then the PAC 12 Network with better content and 100% ownership by the PAC 12 should also be listed as a “Second Tier Revenue” stream. Even if the revenue stream is just a ?, at least you would have it represented appropriately.
The PAC 12 network will have better content than the Big 10 network because it will actually have the first pick of games on 2 weekends a season. It will also have 2nd pick of games on 2 additional weekends. This means games like USC vs Oregon or other top teams which could affect the BCS Championship game could be on the PAC 12 network. Nothing like that is possible on the Big 10 network.
But if you want to correct yourself next year that’s okay.
Kristi Dosh
May 6, 2011 at 7:38 am
Folski, in technical terms the deal with ESPN and Fox is for first and second tier rights, which is what I reflected. Those rights are subject to stipulations like the ones you mentioned where the Pac-12 Network has superior rights. That doesn’t make the Pac-12 Network the second tier rights holders.
If there were solid projections being put out by the Pac-12 or any kind of guarantee about the revenue stream, I would gladly include it in the Pac-12 valuation on the chart. But it’s too early for that.
Nostradamus
May 5, 2011 at 9:48 pm
I’m reminded of the saying “Don’t count your chickens before they hatch.” Kristi can’t report on something that isn’t there yet.
I’d be very hesitant to say the Pac-12 will get 150% to 200% higher revenue than the Big Ten. The Big Ten had valid reasons to give up equity in a network. Without a partner Scott may find he has a tougher road negotiating carriage.
Folski
May 5, 2011 at 10:51 pm
Your right the Big 10 did have valid reasons to give up 49% of the equity in the Big 10 network. Some of the reasons were 1) a conference network had never been done before. No one knew how long it would take to be profitable (if ever) 2) sharing equity also meant sharing the risk, less down side 3) their partner at least guaranteed sat system income right away which made it less risky 4) it took several years to get other cable/sat systems to carry the Big 10 network as a premium station 5) the Big 10 did not have Larry Scott.
However all these reasons have pretty much disappeared except Larry Scott. The Big 10 network did the heavy lifting and proved to cable/sat companies that a conference network is profitable for all involved. Pretty much these same cable/sat systems are the ones the PAC 12 network will be dealing with in PAC 12 states to get premium cable fees. The market has been established.
Also sports programming is in huge demand right now by advertisers. Live sports are the one main source of programming that is not recorded and replayed later. Thus live sports ads are not be fast forwarded past. This is the main reason sports programming is getting premium dollars now. The PAC 12 network will have some premium live sports based on first and second pick of games on some weekends.
Once again the PAC 10 will get 100% of the profits since it owns 100% of the network. This is unlike thew Big 10 network that only gets 51% of profits to its teams.
Finally, Larry Scott is the key to the whole operation. The guy is several steps ahead of every other conference commissioner when it comes to marketing. In the long term, the $3 billion TV rights might end up being less than what either the PAC 12 network or digital platforms/Asian rim countries provide the conference.
Richard
May 5, 2011 at 10:50 pm
To add on to what Nostradamus said, I also wouldn’t say the PTN has better content than the BTN. When it comes to quantity, it’s actually about the same. As for quality, for one, the only conference that can justifiably use the BTN as a comparable is the SEC if they ever start a network. As we saw, the new B10 football title game was roughly valued at 1.5 times the new P12 football title game. As for picks, it’s true that the PTN has first pick a couple of times, but the BTN could also jump the pecking order (because it has the right to show at least one conference game of each team). Further more, we haven’t even talked about carriage. It took the BTN a long hard slog to get on everywhere in the B10 footprint, and B10 fans care more about B10 sports than P12 fans about P12 sports, plus no where in the B10 footprint was there a player like Comcast in LA, who is such a big part of the overall footprint that the PTN would have tough sledding if they couldn’t get on there. Finally, 100% ownership means 100% of the upside but also 100% of the risks. Starting a network will cost $100M from what I understand, and while the B10 limited its downside by relying on Fox’s money, infrastructure and expertise, the P12 won’t be able to rely on a partner if they don’t give up equity.
Earl
May 5, 2011 at 10:51 pm
Folski is right about the Pac-12 Network should probably be considered 2nd tier rights for this analysis.
He’s also right about the Pac-12 Network having an impressive inventory of football and men’s b-ball games. I believe Fox and ESPN will receive 68 men’s b-ball games while the Pac-12 gets the rest, which will amount to over 50 games.
However, I think 150% of the Big Ten’s revenue is probably closer to accurate instead of 200%.
I doubt the Pac-12 Network will garner the subscriber fees that the Big Ten Network can, but owning 100% of the Network versus 51% for the Big Ten should net the Pac-12 probably more revenue.
I am thinking the Pac-12 Network will generate 75% of the Big Ten’s Network and so they should make something like 50% more than the Big Ten when you factor in 100% ownership.
If you divide $2.8 billion over 25 yrs, it comes out to $112 million a year, or about $9.3 million a yr for each of the 12 schools.
I figure the Pac-12 should eventually be able to do $15 mill per school from its network.
Of course these are all pie-in-the-sky estimates.
I believe the Big Ten Network is already exceeding projections so the numbers could be bigger, for both conferences.
Richard
May 6, 2011 at 12:28 am
To add to the risk/reward argument, Folski, I don’t think Fox has recouped its startup costs in the BTN yet (or if it has, it’s recent). Also the cable players on the west coast are not the same cable players in B10 country. Again, the SEC can use the BTN as a roadmap, but the P12 really can’t.
Folski
May 6, 2011 at 12:10 pm
This is an interesting debate and truthfully no one knows for sure what the final income outcomes will be. However there can be little doubt that if the BIG 10 network is a 2nd tier revenues source then the PAC 12 network should also be a 2nd tier revenue source with an unknown revenue stream. Now on to the discussion.
First, an interesting question is: If the Big 10 network was starting today would they give a partner 49% equity stake? When Larry Scott asked the Big 10 executives this question the answer was no they would not knowing what they know now.
Also, Fox has recouped it’s initial investment and will split profits on a 49% to 51% basis with the BIG 10 network.
Second, the cable/sat companies in the PAC 12 are the same cable/sat companies the BIG 10 have worked with. The cable/sat companies in the PAC 12 network footprint are:
AT&T U-Verse
Bright House
Cable One
Charter Communications
Comcast
Cox Communications
DirecTV
Dish Network
Mediacom
Time Warner Cable
Verizon Cable
WOW
All of these cable/sat companies are in the BIG 10 network footprint. This is contrary to what Richard has posted. These companies have already paid premium fees to the BIG 10 network and will pay premium cable fees to the PAC 12 network.
Third, Larry Scott has studied the BIG 10 network closely. He believes one of the existing problems with he BIG 10 network is the lack of top flight quality live sports programming. The Big 10 will correct this when their next primary rights contract comes up. But since the PAC 12 network is getting built now, he is providing it with top quality live programming from the get go. A USC vs Oregon game or any other top flight game is a possibility on the PAC 12 network.
It is true that the BIG 10 network gets at least one game with every conference team. But the Ohio St, Michigan, Wisconsin, etc. games the BIG 10 network gets is not against other top flight teams but against weaker BIG 10 teams. A Ohio St vs Michigan game won’t appear on the BIG 10 network until the first tier rights are renegotiated in the next contract.
Also I suspect a little homerism from Richard when he says in terms of content the BIG 10
can only be compared to the SEC. While the SEC is currently superior to other football conferences the Big 10 is not. Any the quality of content in the PAC 12 network will be superior to the quality of the content of the BIG 10. This is only because Larry Scott and the PAC 12 network has learned from the experience of the BIG 10 network who graciously gave Scott and his team complete open access to their network.
In the long run, it is very conceivable the revenues from the conference networks will exceed what they receive from the so called first tier rights.
Kristi Dosh
May 6, 2011 at 12:27 pm
I don’t see it as being the case that just because the Big Ten Network is second tier it means Pac-12 Network is…the Big Ten has no deal in place with anyone else for second tier rights, they reserved those for the BTN. However, every release on the Pac-12 deal has stated if was for first and second tier rights to ESPN and Fox. Pac-12 Network will pick third with the exception of the stipulations they negotiated where they’re guaranteed a certain number of games or certain picks.
Pingback: That Orrin Hatch is so cute. | Get The Picture
Pingback: School-Specific Broadcasting Revenue «
Kristi Dosh
May 6, 2011 at 10:07 am
For those interested in what each school is showing as revenue for selling any individual rights, check out today’s post: https://businessofcollegesports.com/2011/05/06/school-specific-broadcasting-revenue/.
Pingback: The Big Ten is Gonna Get PAID! - HawkeyeNation Forum
Earl
May 6, 2011 at 11:58 am
In terms of possible carriage issues for the Pac-12 Network (PTN), I don’t think its going to be a big issue.
With the quality of programming the PTN will have, providers like Comcast and Direct TV will be lining up to put the PTN in their programming.
Just b/w L.A., S.F./Bay Area plus Sacramento/Sotckton/Modesto, Seattle, Phoenix and Denver markets, you are talking Top 20 Media Markets in the nation.
Heck just the CA markets are huge.
Also consider that Comcast does not want to get completely shut out of the College Football/Men’s basketball programming on the West Coast. With ESPN and Fox getting their piece of the pie, there will be tremedous pressure on Comcast to put the PTN on their system to get theirs.
I think the PTN won’t have that hard a time of getting on to all areas within their media footprint.
In terms of cost, I agree, it will take time to for the Pac-12 to be able to recoup the costs of starting up a network, but the long-range benefits of being 100% owned outweigh the short term costs of construction of the network.
When you also factor the Pac-12 creating a digital network where they will be able to utilize their 3rd tier rights and have that content more mobile-friendly, which is the trend of the future AND you also consider the future expansion of coverage and marketing out to Asia and the Pacific Rim, where the Pac-12 has inherent advantages over other conferences based on alumni base and popularity of certain Pac-12 schools in that part of the world, its hard not to see how the revenue stream from the PTN and 3rd tier rights could end up being quite significant down the line.
Bottom line: Larry Scott is a visionary and was a great hire as Commissioner for the Pac-12.
Folski
May 6, 2011 at 12:40 pm
Earl
Well stated and thanks for the support.
What people don’t understand is Larry Scott is not a typical “conference commissioner”. He is a sports media rights expert by trade. He was hired by the PAC 12 to maximize media rights revenue. He demanded certain things from the conference members: 1) equal revenue sharing 2) his office control all media rights for the conference 3) individual PAC 12 schools buy back any local media rights they have sold.
The guy is a visionary when it comes to sports media rights. His overall plan includes 1) first tier TV network revenue 2) PAC 12 network revenue 3) digital platform revenue including talks with Apple and Google 4) Asian Rim countries revenue through “Olympic” sports which the PAC 12 leads the country in (Conference of Champions). Every media right of every PAC 12 school is controlled by his office which gives him great leverage when negotiating rights to any and all possible revenue streams.
Kristi Dosh
May 6, 2011 at 12:45 pm
Folski, we can definitely agree in one thing…Larry Scott. I worked under him at the WTA Tour when I was in law school and saw some of his media rights negotiations first-hand. He knows his stuff and was a HUGE hire for the Pac-12!
Folski
May 6, 2011 at 1:15 pm
Glad we agree.
Richard
May 6, 2011 at 2:20 pm
Folski:
1. The cable companies may be the same, but the market and content are different. Just because OSU can put the BTN on everywhere in Ohio doesn’t mean Rutgers can put a sports channel on in NYC or that USC/UCLA can deliver SD or even get the PTN on in LA without a fight.
2. Also, the SEC is comparable to the B10 in attendance, merchandising revenue generated, and bowl attractiveness, which is all a proxy for overall attractiveness of the product. Other conferences are not on the same level.
Earl
May 6, 2011 at 3:34 pm
Richard:
There are many alumni/fans of Pac-12 team all over CA, North and South. There will be big demand for the PTN throughout the media footprint.
And, again, the issue for Comcast, Direct TV ect. is going to be getting a piece of the action on the Pac-12 media deal.
They need content to fill their channels and programming and its all about getting eyes on T.V.s and media footprints and the Pac-12 has a huge media footprint.
There is boom going on for media outlets to get sports programming and College Football and Men’s College B-ball are the two biggest college sports.
Its pretty much to the point where in order for Comcast to be competitive, they will need to get in on the Pac-12 media rights deal because ABC/ESPN, Fox and CBS have already carved out big niches for themselves in college sports programming.
m (Ag)
May 6, 2011 at 3:00 pm
The Big Ten’s ABC/ESPN deal should be reported as first & second tier rights deal.
The SEC sells a CBS broadcast games (1st tier), then sells ESPN a bunch of cable games (2nd tier), leaving each school to make money selling a package of its remaining games (3rd tier).
The Big Ten sells Disney a package for ABC and ESPN (cable and network=1st and 2nd tier); rather than sell the other games by school, they package them together on the Big Ten Network (3rd tier).
Really the boundary isn’t clear for the Big Ten between 2nd and 3rd tier, since the BTN can occasionally pick ahead of cable, but listing it as the 3rd tier is probably the best way to stay consistent.
From what I understand, the ACC deal leaves no games for the conference or individual schools; it should be listed as 1st, 2nd and 3rd tier rights.
Kristi Dosh
May 6, 2011 at 3:14 pm
The ACC deal is football and basketball only. Olympic sports still up for grabs.
Nostradamus
May 6, 2011 at 3:58 pm
Just an update on the Big Ten’s $2.8 billion over 25 years.
This is from a 2008 News Corp (Fox) SEC 10-Q (Quarterly filling)
“In July 2007, the Company entered into a contract with the Big Ten Conference for rights to telecast certain Big Ten Conference sporting events through fiscal 2032. The Company will pay approximately $2.8 billion over the term of the contract for these rights.”
So the $2.8 billion is indeed a rights fee only estimate and per the wording of that quote includes absolutely nothing in terms of any profit the conference will ultimately make from it’s majority ownership of the network.
Folski
May 6, 2011 at 4:14 pm
Richard,
First, if you don’t want to admit the Big 10 network was much more of a gamble/uncertainty at the time it started than the PAC 12 network is now then you just don’t understand the advantage that second to market products have. The Big 12 has proven to cable/sat providers that it is in their best interest to pay premium revenue fees to a conference network when that conference has a school in that state. They make money doing it. It is a financial reality today that wasn’t there when the Big 12 started.
Second, cable or sat companies no longer have a monopoly. Since you are hot on Comcast and the LA area, I will use them as an example. Say as little as 10% of homes in LA want the PAC 12 channel and will actually change TV providers to get it (by the way you usually get a much better price by being a new customer so a customer can actually save money by switching) Also assume either Direct TV or Dish Network carry the PAC 12 network because they can provided it to the whole PAC 12 footprint from pretty much a single source. It’s a no brainer for a sat provider. That is why the original Big 10 partner was
So now Comcast has to make the decision to lose 10% of it’s possible customers because of premium rights fee of $.88 per month. What do you think they will decide? And remember you actually want to keep your job. By the way, cable companies have paid premium fees to a lot of networks that provide under 1% of a potential market.
Numerous cable operators including Comcast have decided to pay the premium fee to conference networks with instate schools. And by the way California has 4 instate PAC 12 conference schools. If you think a cable/sat provider in Cal won’t pay premium fees for a single network that provides 4 instate schools, then you really don’t understand.
Also please give Larry Scott some credit. He has been talking to the cable/sat providers in the PAC 12 footprint for over a year. The deals are pretty much done and will be announced within 2 months.
Also not sure where a New Jersey school like Rutgers guarantees anything in NYC or NY state. The Big 10 network has only proven that a conference network can get premium fees from cable/sat providers in states that have schools in the specific conference. So that is all I am saying the PAC 12 network can benefit from.
Finally, JMO you are probably right that in terms of attendance, etc., the Big 10 is similar to the SEC. But that is completely irrelevant to the discuss of cable/sat providers and premium fees. As I have previously stated cable companies have paid premium fees to networks that provide a much smaller % of the market than the PAC 12 network will. All a cable/sat provider has to do eliminate one premium channel and picking up the PAC 12 network is no additional cost to them while appealing to a large market.
By the way, according to the Big 10 network premium fees are $.88 per month. Non premium fees paid by cable/sat providers outside the Big 10 footprint (no school in state) are $.05 per month. So premium fees from instate cable/sat providers are the key to conference network revenues.
Richard
May 6, 2011 at 6:32 pm
“Numerous cable operators including Comcast have decided to pay the premium fee to conference networks with instate schools.”
Here’s the entire list of conference networks that have managed to charge a premium fee over virtually it’s entire footprint:
1. BTN
The mtn got on hardly anywhere, and couldn’t even crack DFW when TCU was part of that league. Now, I’m not saying the Pac12 is the MWC, but it’s also not the B10 when it comes to popularity.
Folski
May 6, 2011 at 8:22 pm
Richard,
Having reread my post, I need to drop the “s” off of networks. So now you quote form my posting reads:
“Numerous cable operators including Comcast have decided to pay the premium fee to a conference network with an instate school.”
Here is a partially list of cable/sat operators that have payed (the Big 10 network) a premium fee:
AT&T U-Verse
Bright House
Cable One
Charter Communications
Comcast
Cox Communications
DirecTV
Dish Network
Mediacom
Time Warner Cable
Verizon Cable
WOW
These cable/sat companies just happen to be the cable/sat companies in the PAC 12 foot print. No matter how you whine, they pay the Big 12 a premium fee and they will pay the PAC 10 a premium fee.
Also you need to drop this “holy than thou” attitude when it comes to the Big 10. You guys may be popular in Big 10 country but the quality of Big 10 plays is not better than the PAC 12. Let’s just keep this on a business level discussing dollars and sense objectively.
Richard
May 6, 2011 at 10:35 pm
Folski:
That was what I was doing! Business sense tells you that what matters isn’t what happens on the field as much as the demand/loyalty for the product. All that wonderful on-the-field performance has netted the P10 a uniformly worse bowl order than the B10 after the Rose Bowl, worse revenue (even when not counting TV), and worse merchandising sales.
Nostradamus
May 6, 2011 at 4:22 pm
Folski,
We still have no evidence that Fox has recouped their investment in the BTN. We know from about a year ago that the BTN is turning a profit.
That in itself could simply mean the network is no longer losing money. It is no making money and beginning to pay Fox off. We likely won’t know when it happened until we see a bump on the conference’s 990.
-We also don’t know how the rights fees are being handled either. Is the Big Ten essentially paying itself, or is it coming from a separate News Corp pot outside this deal?
Folski
May 6, 2011 at 5:26 pm
Hard numbers are hard to come by but there are several sources that indicate the profit has been sufficient to pay Fox back.
According to SNL Kargan (a media company specializing in this sort of thing) in the 2009/2010 year (3rd yr in business), the Big 10 network generated about $200 million in revenue and had a profit of 30% ($60 million). By 2012 SNL Kargan is projecting an income of $273 million and a profit of 36% ($91 million). So based on the low end of these projections, if the Big 10 network made $60 million in 2009/2010 and 2010/2011 at least $120 million was available from these 2 years. This is believed to be more than Fox start up costs.
Secondly, the average fees to Big 10 schools over the 25 year was projected to be about $10 million a year. It started out in the $6 -7 million per school range and was supposed to increase gradually over the 25 yr period. However according to most reports the Big 10 schools are already getting $10 million each this year.
Since Fox is supposed to recoup it’s initial costs before Big 10 schools got any profits above the scheduled fees, this is a very good indication that the network is extremely profitable and Fox has been paid back. Profits are being dispensed besides the contract fees to the Big 10 teams.
Again, I have no actual proof since the Big 10 network won’t disclose it’s financial condition until federal filing reports are made public. But I think it’s safe to say, Fox has been paid back.
Earl
May 6, 2011 at 5:55 pm
Folski,
Great stuff. Makes me even more excited for the launch and future of the PTN!
Matt Sarzyniak
May 18, 2011 at 9:34 am
Kristi,
Your Big East number is missing a zero. The Big East receives $200 million over six years ($33.3 million as you correctly state in a more recent article), but you have $20 million as your listed number.
Brian
May 18, 2011 at 11:04 pm
A correction:
The Big Ten deal with ABC/ESPN runs through June of 2017, not 2016. The deal was for 10 years and started in August 2007.
Pingback: Deadline set for Big East expansion? Sort of | CollegeFootballTalk
Pingback: College football is facing an identity crisis | CollegeFootballTalk
Pingback: Ohio Locals | Blog | CFT: Tressel still must pay $250000 fine
Pingback: CFT: Tressel still must pay $250,000 fine | Sport News
Pingback: Texas’ Contract with ESPN for the Longhorn Network «
Pingback: Texas A&M to the SEC? «
Pingback: Texas A&M Leaving Big 12 - Page 238 - CycloneFanatic
Pingback: Texas A&M Leaving Big 12 - Page 239 - CycloneFanatic
Pingback: Texas to the ACC: Is it so crazy? «
dreambig40
September 26, 2011 at 1:56 pm
Read the Collegiate-Athlete Memorandum on Facebook Causes.
Pingback: An Unlikely but Interesting Scenario: UNC to SEC «
Pingback: Big East vs. Big 12: Which is more stable? «
Pingback: Moving Perks: TCU to the Big 12 «
Pingback: Boise concerns, C-USA exit fees highlight Big East expansion hurdles | CollegeFootballTalk
Yada
January 5, 2012 at 9:35 pm
Please include the small conferences in the future…
Thanks
Pingback: clemson thinking ahead - Page 2
Pingback: Urban’s Way . . . or the Highway « The Red and Whack
Pingback: *****The Super, Mega, Huge Big 12 Expansion Thread***** - Page 1350 - CycloneFanatic
Pingback: *****The Super, Mega, Huge Big 12 Expansion Thread***** - Page 1351 - CycloneFanatic
Pingback: Arguments Favoring FSU & Clemson’s Move to Big 12 Lack Merit | College Football News, Opinion and Analysis | Chuck Oliver.Net
Pingback: Is ESPN Responsible for SEC’s Football Dominance? | College Football News, Opinion and Analysis | Chuck Oliver.Net
Pingback: Could ESPN Be Responsible for SEC’s Football Dominance? | College Football News, Opinion and Analysis | Chuck Oliver.Net
Pingback: When Kevin Ware Went Down | CONSTRUCTION
Pingback: Finally something the SEC Sucks at | DudeYouCrazy
jakdownas
October 2, 2014 at 1:38 am
Below you will find the important facts and figures I feel every consumer should know surrounding Claire Casey’s Capture His Heart book and complete training system for attracting and winning the love of the man you want.claire casey capture his heart and make him love you forever video review