(03-25-2014 02:11 PM)Shannon Panther Wrote:  

(03-25-2014 01:35 PM)TodgeRodge Wrote:  I did not look too in depth, but the Big 10 has a 1 billion dollar "first tier" deal for 10 years coming open in 2016

they also have a CBS basketball deal for 6 years 72 million coming open at the same time and a 145 million dollar 6 years for the Big 10 football championship

so the Big 10 did a good job of making networks bid against each other for various pieces of property and I don't think they will have that same success this time around and I don't think those pieces of the pie will have the same value as a package deal as they do individually and I don't think there will be a bidding frenzy to get all of those pieces together

the Big 10 football championship has had poor attendance relative to the yearly attendance numbers of the teams that played in it each season

college basketball still makes money, but as the BE found out not near as much without some football mixed in because networks run all year around and need content all year around.....and I don't think it is a persuasive argument to say that people foresaw the decline of the BE teams so soon after the split and the relative amount of "oh yea the BE" that has resulted so far

and recent deals show that "first tier" rights are not as valuable as they once were and the right to "pick the desired match ups first" is only about as valuable as the right to get a whole lot of content to show all year long and to show on multiple channels owned by one media company

so it is my opinion that the right to pick the first most desired match ups and the combined Big 10 programming that is coming available at the same time is not going to be a massive new amount of cash for a "first tier" deal because "first tier" is not what it once was and the properties will not be split and bid as individual parts like in the past when media rights deals, conference championships and the like were all newer

and 2016 is a LONG WAY off in the terms of where media is headed and cable TV specifically and carriage fees and the internet ect so again I think the Big 10 is not in line for a huge new "first tier" deal like in the past because that no longer has quite the same relevance as in the past

I checked my estimate against your numbers. And I am happy to report we agree. If they double their current Tier 1 rights that you provided above, and increase their B1G Network revenues from $7.5 million to $10 million annually (a 40% increase for the new states, possibly too high) they will land between $24 and $25 million per team annually.

What I do understand, is what a market is and what a commodity is. College sports rights are a market. Individual games are a commodity. While there is some variance between the prices within a commodity, there is a limit on this. Inside of ESPN, they have a business plan that allows for a total spend on broadcast rights. If ESPN pays the B1G twice the going rate for their commodities, (games) this leaves less for the other conferences. This becomes the new market price and since prices have a limited variance within the market, it creates inflation within the market. Now ESPN has to pay more for the other conferences or they will go to Fox, CBS, NBC, etc. They have a fairly fixed income structure because they have carriage agreements with individual cable systems. So the only way to pay that is to cut profit or cut costs. The only other form of income is advertising revenue, and rating drive that.

I do allow, that there are times when a business will "buy the business" for little or no profit in order to secure a foothold in an industry, to establish their name, or to damage a competitor and improve their standing. ESPN may feel the need to do this with the B1G. If they do, they may overpay and my estimates may be low. I don't think they will, which is why my estimates are what they are.

We also agree that 2016 is a ways off, and it is hard to predict what can happen in 2 years. The country could encounter another economic collapse or inflation could kick in with a vengeance. Either of those would have a profound impact on what the numbers are. Based on what I know now, this is my estimate. In 2 years we will know if my forecasting ability is like Nostradamus or the Dude from WV.

I will point out, that no one else cares to share the math behind their estimates. Show 'em if you've got 'em.

nice to find consensus haha

here lets do the math from a different perspective

33 million X 14 teams = 462 million

here is what I see for the Big 10 deals

BIG TEN

First-tier rights: $1 billion, ESPN, 10 years through 2016-17
Second-tier rights: $2.8 billion, Big Ten Network, 25 years through 2031-32
Select basketball rights (minimum of 24 games, men’s tournament semifinal and championship games): $72 million, CBS, six years through 2016-17
Football championship game: $145 million, FOX, six years through 2016
Per-year average: $248.2 million
Per-school, per-year average: $20.7 million

so the 1 billion 10 year (100 million per year) deal is coming open

the 72 million 6 year CBS BB deal is open

and the 145 million 6 year Fox CCG is coming open

and most importantly 462 million - the current 248.2 million = 213.8

the current BTN deal is 112 million per year and for 12 teams that averages 9.33 million per year, but we know from the last payouts that with Nebraska included the Big 10 network only paid out 7.6 million and that is right FROM THE BTN WEBSITE

http://btn.com/2013/05/06/report-big-ten...7-million/

and we know that was LESS than the years before when there were only 11 teams so the idea that the BTN grows revenues just because teams and "markets" are added has proven to not be true with the addition of Nebraska so far

so 248.2 - 112 = 136.2 that is paid out by the other deals besides the BTN

and we need to get that to 213.8 if we are going to get the total TV deals to 33 million

so they need to add 77.6 million to those 3 existing packages of rights to get there

and I think that 145 million for 6 years is WAY too steep for the CCG and again especially when it is packaged back in as a whole and I think those basketball games as a whole package with the rest will not be worth 12 million

and again I see no way that all those properties get bid individually

and of course we know for a fact that the BTN payout was 7.6 million (right from the BTN itself) and that is well under a 12 team average of 112 million and there are two additional mouths to feed from there......and again it is a proven FACT that the addition of Nebraska REDUCED the BTN per team payout and did not add to it so again lets wait until (powerhouses) Rutgers and Maryland bring those "markets" and the "profit" before we count that

so we are at best looking at about a 7.6 million per year per team payout from the BTN (that is giving powerhouses Rutgers and Maryland credit for delivering the same dollar fees in new "markets" for the BTN as current BTN members do and that Nebraska was UNABLE to do)

so 33 million - 7.6 million = 25.4 million X 14 teams = 355.6 million in new money over and above the 136.17 that the up for bid properties currently bring to get the big 10 to a REAL WORLD 33 million in TV MONEY as has been claimed

so it is really not the addition of 77.6 million for those deals per year is is actually the addition of 355.6 - 136.17 = 219.41 that would needed for a REAL WORLD 33 million in TV MONEY

so the packages up for bid need to go up about 160% to get the Big 10 teams to a REAL WORLD 33 million in TV money and while the tier 1 deal is from 2006 the other deals are only from 2010 (6 years to 2016) and thus they were signed right at the time when media rights were exploding and again I personally think those are HIGH payouts and probably will not be equaled as a package much less bumped up 160% and that leaves the 1 billion portion of the deal to go up dramatically which I don't think will happen for a number of reasons