changing economics

[Kolumbo]

espn screwed UCONN and considers bruce a hero. I don't think I can double boycott something, can I?

 

[The X Man]

espn screwed UCONN and considers bruce a hero. I don't think I can double boycott something, can I?

Well it was the price they had to pay to get the Diane Sawyer interview.

http://www.dailymail.co.uk/news/art...ugs-Diane-Sawyer-interview.html#ixzz3g3Nve1jH

 

[whaler11]

As they purge anyone who isn't an interchangeable drone - seems pretty clear they aren't kidding around on the expense side.

 

[Western PA]

From Lafayette IN. JConline.com

BTN profits increase Big Ten revenue
MIKE CARMIN
Mike Carmin, mcarmin@jconline.com 1:02 a.m. EDT July 16, 2015
Big Ten Conference
28CONNECT 18TWEETLINKEDINCOMMENTEMAILMORE
The Big Ten Network continues to pay off financially for Purdue and other conference schools.

As part of the more than $32 million Purdue received from the Big Ten during the 2014-15 fiscal year, $1 million was generated from BTN profit shares, according to a document obtained by the Journal and Courier through a records request.

The Big Ten Network, which the league owns along with Fox, began showing a profit in 2011-12. However, those shares were initially held back by the conference to help with the transition of Maryland and Rutgers.

Big Ten deputy commissioner and treasure Brad Traviolia said this is the first year the conference distributed BTN profit shares to schools. Traviolia, though, declined to say which schools received them and how much was distributed.

The conference's five-year budget plan, obtained in 2014, showed the league projected to distribute $11 million - $1 million each to 11 schools - in BTN profit shares beginning in 2014-15. The profit shares are subject to approval by the Big Ten's Chancellors and Presidents.

The league's newest members – Maryland, Nebraska and Rutgers – are operating under a six-year financial integration plan and not expected to receive BTN profit shares. Nebraska is scheduled to receive its first full financial share in 2017-18 – the first year of the league's new television contract - while Maryland and Rutgers will receive full shares starting in 2020-21.

However, Maryland negotiated a front-loaded deal with the Big Ten, according to multiple reports, to slice into the athletic department's deficit.

During 2012-13, Nebraska received $16.4 million from the league, according to the Big Ten's IRS Form 990.



http://www.jconline.com/story/mike-carmin/2015/07/16/btn-profits-increase-big-ten-revenue/30226149/

 

[jlarson]

From Lafayette IN. JConline.com

BTN profits increase Big Ten revenue
MIKE CARMIN
Mike Carmin, mcarmin@jconline.com 1:02 a.m. EDT July 16, 2015
Big Ten Conference
28CONNECT 18TWEETLINKEDINCOMMENTEMAILMORE
The Big Ten Network continues to pay off financially for Purdue and other conference schools.

As part of the more than $32 million Purdue received from the Big Ten during the 2014-15 fiscal year, $1 million was generated from BTN profit shares, according to a document obtained by the Journal and Courier through a records request.

The Big Ten Network, which the league owns along with Fox, began showing a profit in 2011-12. However, those shares were initially held back by the conference to help with the transition of Maryland and Rutgers.

Big Ten deputy commissioner and treasure Brad Traviolia said this is the first year the conference distributed BTN profit shares to schools. Traviolia, though, declined to say which schools received them and how much was distributed.

The conference's five-year budget plan, obtained in 2014, showed the league projected to distribute $11 million - $1 million each to 11 schools - in BTN profit shares beginning in 2014-15. The profit shares are subject to approval by the Big Ten's Chancellors and Presidents.

The league's newest members – Maryland, Nebraska and Rutgers – are operating under a six-year financial integration plan and not expected to receive BTN profit shares. Nebraska is scheduled to receive its first full financial share in 2017-18 – the first year of the league's new television contract - while Maryland and Rutgers will receive full shares starting in 2020-21.

However, Maryland negotiated a front-loaded deal with the Big Ten, according to multiple reports, to slice into the athletic department's deficit.

During 2012-13, Nebraska received $16.4 million from the league, according to the Big Ten's IRS Form 990.



http://www.jconline.com/story/mike-carmin/2015/07/16/btn-profits-increase-big-ten-revenue/30226149/

To put this into perspective, Purdue is getting $5 million dollars more from the 2014-2015 cycle than the 2013-2014 cycle because of the B1G expansion and $15 million more than what Florida State is getting from the ACC.

Let me say that again, Purdue is getting $15 million more than Florida State is got from the ACC.

Michigan is getting a payment of $34.7 million from the 2014-2015 cycle.

So that is more than what SEC schools got, by more than $1 million per school.

BTN is profitable and valuable.

The B1G will continue to expand. Too much profit being made not to keep building and expanding.

 

[Dooley]

To put this into perspective, Purdue is getting $5 million dollars more from the 2014-2015 cycle than the 2013-2014 cycle because of the B1G expansion and $15 million more than what Florida State is getting from the ACC.

Let me say that again, Purdue is getting $15 million more than Florida State is got from the ACC.

Michigan is getting a payment of $34.7 million from the 2014-2015 cycle.

So that is more than what SEC schools got, by more than $1 million per school.

BTN is profitable and valuable.

The B1G will continue to expand. Too much profit being made not to keep building and expanding.

Yup. Expansion means conferences more money. Don't tell that to anyone (especially the ACC or B12!).

 

[Western PA]

Not sure that dividing the Big Ten revenue pie to include 2 or 4 more pieces makes sense. Each new school would have to increase incremental value of the conference by more than $35 million for all existing members just to stay whole.
How many schools can do that? Notre Dame and Texas, perhaps, but those ain't gonna happen for the B1G.
I am not convinced Big Ten presidents are convinced expansion beyond 14 is prudent. But we'll see.

 

[Seaa Blue]

Not sure that dividing the Big Ten revenue pie to include 2 or 4 more pieces makes sense. Each new school would have to increase incremental value of the conference by more than $35 million for all existing members just to stay whole.

The next TV contract is an opportunity to add schools and revenue at the same time. It won't happen again for a long time.

The only other possibility I can think of is a package that includes Texas.

 

[jlarson]

Not sure that dividing the Big Ten revenue pie to include 2 or 4 more pieces makes sense. Each new school would have to increase incremental value of the conference by more than $35 million for all existing members just to stay whole.
How many schools can do that? Notre Dame and Texas, perhaps, but those ain't gonna happen for the B1G.
I am not convinced Big Ten presidents are convinced expansion beyond 14 is prudent. But we'll see.

Plenty of demographic grab out there yet for the B1G....

1) Oklahoma's big brand

2) KU basketball

3) Texas

4) Carolina's

5) Atlanta if they can get Georgia Tech

6) Florida (would likely need to land Florida State)

7) Continued expansion in other sports than football - Hockey, LaCrosse, Wrestling, etc. Wrestling is the third most watched sport on BTN. LaCrosse might beat wrestling in rankings next school year though since there will be a ton more LaCrosse games on BTN to watch.

 

[Dooley]

Plenty of demographic grab out there yet for the B1G....

1) Oklahoma's big brand

2) UCONN basketball - to finish off northeast

3) Texas

4) Carolina's

5) Atlanta if they can get Georgia Tech

6) Florida (would likely need to land Florida State)

7) Continued expansion in other sports than football - Hockey, LaCrosse, Wrestling, etc. Wrestling is the third most watched sport on BTN. LaCrosse might beat wrestling in rankings next school year though since there will be a ton more LaCrosse games on BTN to watch.

Fixed.

 

[Western PA]

Plenty of demographic grab out there yet for the B1G....

1) Oklahoma's big brand

2) KU basketball

3) Texas

4) Carolina's

5) Atlanta if they can get Georgia Tech

6) Florida (would likely need to land Florida State)

7) Continued expansion in other sports than football - Hockey, LaCrosse, Wrestling, etc. Wrestling is the third most watched sport on BtN LaCrosse might beat wrestling in rankings next school year though since there will be a ton more LaCrosse games on BTN to watch.

Except for Texas, I don't see $35 million in any of those. The B1G tried the football brand thing with Nebraska with yet to Be determined results.
I know it is not popular on a UConn board, but basketball doesn't have enough swing to justify KU. Otherwise UConn would have landed in in P5 conference long ago.
Carolina, UVa will be the last to turn out the lights in the ACC. And Florida State comes with major travel problems, particularly for Olympic sports
Gaining live events for BTN would seems attractive, but not $35 million per school attractive. Watching BTN and SEC Net it becomes obvious BTN is having difficulty selling advertising around Olympic sports.
I am increasingly skeptical that either the SEC or B1G will find attractive dance partners any time soon.

 

[Dooley]

Except for Texas, I don't see $35 million in any of those. The B1G tried the football brand thing with Nebraska with yet to Be determined results.
I know it is not popular on a UConn board, but basketball doesn't have enough swing to justify KU. Otherwise UConn would have landed in in P5 conference long ago.
Carolian, UVa will be the last to turn out the lights in the ACC. And Florida State comes with major travel problems, particularly for Olympic sports
Gaining live events for BTN would seems attractive, but not $35 million per school attractive. Watching BTN and SEC Net it becomes obvious BTN is having difficulty selling advertising around Olympic sports.
I am increasingly skeptical that either the SEC or B1G will find attractive dance partners any time soon.

Just because I'm curious, how did RU and MD get to $35M?

 

[Western PA]

Just because I'm curious, how did RU and MD get to $35M?

Don't know other than the obvious grab for large eastern markets. Cable household numbers helped. I am guessing being in the DC Metro and NYC market push was strategy for the upcoming network contacts.

What is your thinking?

 

[Dooley]

Don't know other than the obvious grab for large eastern markets. Cable household numbers helped. I am guessing being in the DC Metro and NYC markets was a strategy for the upcoming network contacts.

In 2010, UConn sold their T3 rights for $8M/yr (10 yrs/$80M) to IMG. That's for just a handful of football and basketball games as a member of a, then, dying Big East conference. UConn also sold their WBB T3 rights for $1.1M/yr. I know WBB isn't for everyone (or most people outside of CT), but that's still $$. That gets UConn to around $9-$10M for T3 rights on football, MBB, and WBB. If you follow the old T3 x 3 rule, that puts UConn at around $27M-$30M.

In 2008, UConn signed an apparel contract with Nike for 10 years, $45.5M. This deal came before TWO MBB national championships and two pretty good football seasons that saw the Papa John's and Fiesta Bowls. $4.5M/yr in apparel and cash.

T3 bundle = $27M
Nike = $4.5M

That right there gets you well over $30M. And, again, all of these contracts were signed before two MBB national championships and a pretty good 2-year run for football as a member of a dying (or dead) Big East conference. Both deals, at the time, put UConn's value firmly in the middle/higher end of collegiate contracts with other BCS peers.

The above doesn't dive into conference credits, which UConn obviously brings as being a national title contender in MBB and WBB most years.

And if you want to talk markets, UConn has presence in NYC and would, obviously, deliver #30 DMA Hartford/New Haven. There is much debate about just how much presence UConn has in Boston. But the B1G isn't adding schools based on what presence they have in markets now...they're adding them based on what kind of presence that they could potentially have in the future. You put UConn in the B1G, you get presence in DMAs 1, 7, and 30 (some more than others). Presence is presence.

I know RU and MD were added because of cable boxes and potential. But can you honestly say UConn doesn't have the same potential of, at the very least, both of those schools?? The two deals above for T3 and apparel were more lucrative than similar deals by RU and MD (and we all know Maryland's affiliation with Under Armour!!).

So, finally, if Big East UConn was valued higher than RU and MD, can you imagine how much higher B1G UConn would be valued at in comparison with the same two schools?

 

[Western PA]

Thanks for the response.
The Tier3 is for 1 year? Very nice. But in the B1G much of that money -- for local broadcast and marketing rights, for example -- stays with the school. All of the shoe money does. So much of the math still does not work.
The rub, as I see it for UConn, is Rutgers entry into the B1G likely gets "credit" (right or wrong) for the increase in NYC cable market numbers. I don't think UConn can multiply that number by 2 even considering the Harttford DMA. I don't doubt UConn has appeal in Boston, but I do doubt it is enough to move cable system operators.
If it was my call, I would have added UConn to the B1G and not Rutgers. I think the AAU thing was a factor for the presidents. In the minds of the snobbish B1G presidents, I am guessing kNU fall from AAU grace was an embarrassment and took away one of the conference brag lines.
As I said, I admire UConn's basketball program greatly, but the fact it was not invited to the P5 dance in all of this chaos has to tell us something about how conferences do or do not value basketball.
In a more basketball centric world, UConn, KU and Duke would be calling the shots.

I just don't see the B1G getting bigger.
Most think it is moving toward 64 schools in 4 conference with 16. Given the expenses of cost of attendance and the whole Pandora's box in the potential for name rights payments to athletes, I can see some schools dropping out. Those won't be able to justify subsidizing the athletic departments at the new required higher levels. This could end up at 4 conference of 14 for 56 total. Schools like Iowa State and Washington State, for example, might just give up the fight.

 

[jlarson]

Purdue can pay for it COA with BTN profit Bonuses. FSU had to cut staff in ATH Dept to pay for its COA.

 

[4UConn]

ESPN IS Disney, representing well over 40% of revenues and, I believe, over 50% of the company's operating profit. That, of course, includes ABC and some other channels. Nevertheless, Disney better figure this out before all the shorts do.

 

[dayooper]

Thanks for the response.
The Tier3 is for 1 year? Very nice. But in the B1G much of that money -- for local broadcast and marketing rights, for example -- stays with the school. All of the shoe money does. So much of the math still does not work.

Correct. The Marketing/coaches shows/radio broadcasts/apparel contracts stay with the school. The Big 12 proponents say that the tier 3 contracts are similar or even more than the Big10/SEC. They aren't.

The rub, as I see it for UConn, is Rutgers entry into the B1G likely gets "credit" (right or wrong) for the increase in NYC cable market numbers. I don't think UConn can multiply that number by 2 even considering the Harttford DMA. I don't doubt UConn has appeal in Boston, but I do doubt it is enough to move cable system operators.

Hmmmmm . . . UConn doesn't have to multiply by 2. The NYC media market is so large, they have to to add just enough to make it worth the while. That being said, the majority of the monies from the contract won't come from the BTN, it will come from main media package. The Fox/ESPN/ABC monies will dwarf anything the BTW will bring in. Yet, the money isn't the only reason to bring in another NE team. It's also about the exposure in an area where the Big10 schools want to draw general ed students from. Having UConn the Big10 schools plastered all over NYC media while they play UConn basketball is a huge boon for the existing Big10 teams. Rutgers does not register in the winter months and the Big10 schools need a way get their brand in their desired area during basketball season.

Quite frankly, none of us on this board know the metrics for why a school will get admitted into a particular conference. It's more than increasing the BTN cable subscriptions for the Big10.

If it was my call, I would have added UConn to the B1G and not Rutgers. I think the AAU thing was a factor for the presidents. In the minds of the snobbish B1G presidents, I am guessing kNU fall from AAU grace was an embarrassment and took away one of the conference brag lines.

No so sure UNL being a black eye. Michigan and Wisconsin led the charge to get them removed from the AAU. They wanted to have them removed a year before they were admitted into the Big10, but knew they didn't have the votes. If it was a black eye to the Big10 presidents, the punched themselves in the face.

As I said, I admire UConn's basketball program greatly, but the fact it was not invited to the P5 dance in all of this chaos has to tell us something about how conferences do or do not value basketball.
In a more basketball centric world, UConn, KU and Duke would be calling the shots.

There is no certain criteria for what a conference needs. UNL was/is a football king, a national brand that is well known by most casual sports fans. UMD/RU had great markets to be tapped. TAMU was a foothold in Texas and Missouri was entrance in KC/St Louis for the SEC. The ACC additions of Pitt, 'Cuse, and BC were about markets too.

The Big10 needs live programming people will watch during the winter months and teams like UConn can help with that.

I just don't see the B1G getting bigger.
Most think it is moving toward 64 schools in 4 conference with 16. Given the expenses of cost of attendance and the whole Pandora's box in the potential for name rights payments to athletes, I can see some schools dropping out. Those won't be able to justify subsidizing the athletic departments at the new required higher levels. This could end up at 4 conference of 14 for 56 total. Schools like Iowa State and Washington State, for example, might just give up the fight.

I just don't think the 4x16 model is workable and devil is in the details. Getting certain schools to cooperate will be a big challenge. How will that work? I see a couple of ways:

1. Existing conferences. With there being five existing conferences, one will have to be blown up. The most likely candidates would be the ACC and the Big12. The issue is how do you divide them up? If you blow up the ACC, how is the Pac going to acquire schools? They would be forced to stay at 12 while others would have to go to 20. That or they would be forced to take schools that they don't want (UNLV/BYU/Boise St/New Mexico). If you blow up the Big12, how do you break it up? Does OU and UT want to stay together? How do you decide who gets them? Who gets KSU/ISU/Okie St/Baylor/TCU/Tech/WVU?

2. Break up the conferences and reform into more geographical division (NFL model). Seems easy enough, but that goes against what the conferences are trying to do. The schools want exposure in certain places and this really doesn't fit the bill. Who do you let in and who decides who is part of the 64? With ND, someone has to leave and I just don't see anybody wanting to. If the windfall is large enough, no one will leave. If it's not, than why do it?

People want an easy way to make this all nice and neat. It's not, and it would be very difficult to make it that way. Here's a possible way to split up the schools geographically and have some resemblance of tradition with 4x16 (with WF leaving the P5).

West: Washington, Washington St., Oregon, Oregon St., Stanford, Cal, USC, UCLA, Arizona St., Arizona, Utah, Texas, Baylor, TCU, TTU, Colorado

North: Michigan, Michigan St., Ohio St., Indiana, Purdue, Illinois, NW, Wisky, Minnesota, Nebraska, Kansas, Iowa, Iowa St, KSU, OU, Okie ST

South: Texas A&M, Missouri, Arkansas, LSU, Ole' Miss, Miss St., Bama, Auburn, Vandy, Tenn, Kentucky, Georgia, GT, Florida, Miami, FSU

East: S. Carolina, Clemson, Duke, UNC, NCST, UVA, VTU, Louisville, PSU, Pitt, WVU, UMD, Rutgers, 'Cuse, BC, ND

The issue is, will schools like Michigan, Ohio State, and the like lose their NYC link? Will the NE schools want to lose their Florida connections? It just doesn't work well.

No, each conference will do what's best for themselves and make it work in the structure.

 

[Western PA]

I don't see the break-up in conferences as predicted by Chip Brown. I think the 4x14 or 4x16 will align among the four surviving conferences.
I don't see UConn moving the football money meter enough for the B1G. If you discount BTN revenue as you suggest, basketball is a ratings afterthought for conferences and TV execs as viewership of regular season games trends downward. That's why I suspect no school (short of Texas or Notre Dame or a big ACC school) brings in enough cash and/or significant new markets to support share dilution.
I am not a betting man, but I think the B1G stands pat unless and until the ACC blows up and then N.C. and UNC get consideration.
The SEC and B1G are in positions where they don't have to move unless the schools available are sure-fire cash machines. They need not rush until it shakes out. Even just standing pat they will continue to dominate. And to take my 4x14 theory further, both are at 14. That leaves 28 spots in the upcoming scramble.

 

[The Funster]

5x16 or 4x20, IMO. That will allow a mix over a broader area to help with some market capture. Another option is to have regional recruiting camps to help recruit out of conference areas which is another way to smooth out regionality. Think NFL. It is the model for college FB to follow, less the draft, of course.

 

[Stinger92860]

Don't know other than the obvious grab for large eastern markets. Cable household numbers helped. I am guessing being in the DC Metro and NYC market push was strategy for the upcoming network contacts.

What is your thinking?

UConn is in a large eastern market and a large part of CT in located in the NYC DMA. Did you not know this? The state of CT would be a top 21 DMA on its own.

 

[Western PA]

UConn is in a large eastern market and a large part of CT in located in the NYC DMA. Did you not know this? The state of CT would be a top 21 DMA on its own.

I think I read that someplace , but for the Midwesterners in the B1G, the assumption is Rutgers has NYC covered. I hate to keep repeating this, but if Connecticut was that attractive of a stand alone market, it would be in in P5 conference already.

 

[Western PA]

5x16 or 4x20, IMO. That will allow a mix over a broader area to help with some market capture. Another option is to have regional recruiting camps to help recruit out of conference areas which is another way to smooth out regionality. Think NFL. It is the model for college FB to follow, less the draft, of course.

There simply are not 80 schools that can afford the massive expense that college football is becoming. Besides, those who run CFB are greedy bastards, loath to share money with those they deem unworthy.

 

[UConn990411]

I think I read that someplace , but for the Midwesterners in the B1G, the assumption is Rutgers has NYC covered. I hate to keep repeating this, but if Connecticut was that attractive of a stand alone market, it would be in in P5 conference already.

Anyone who makes this statement is either uneducated on the subject or very simple. Or both.

Connecticut isn't a great market, but it's just as good - if not better - than Syracuse, Pittsburgh, and whatever market Virginia Tech brings to the ACC. Conference realignment hasn't been as simple as you're trying to make it out to be.

 

[Western PA]

Anyone who makes this statement is either uneducated on the subject or very simple. Or both.

Connecticut isn't a great market, but it's just as good - if not better - than Syracuse, Pittsburgh, and whatever market Virginia Tech brings to the ACC. Conference realignment hasn't been as simple as you're trying to make it out to be.

If the market is so great, how do you explain the ACC taking a look at it and then going with Syracuse, Pitt and VTech? We all of those ACC folks uneducated or very simple?
If I was in charge, I would have gone with UConn over Syracuse, by the way.