(03-10-2017 03:47 PM)ken d Wrote:  

(03-10-2017 03:26 PM)orangefan Wrote:  

(03-10-2017 02:43 PM)ken d Wrote:  

(03-10-2017 02:18 PM)orangefan Wrote:  ESPN got three things from the extension negotiated after Syracuse and Pittsburgh joined: 1) additional inventory from adding Syracuse and Pittsburgh 2) a four year extension, and 3) the addition of three Friday night football games, one of which Syracuse agreed to host.

It was clearly a combination of all of these things. However, just the change in the market between 2010, when the ACC signed the $13 million/year/school deal , and 2012, when the P12 got $21 million/year per school that still left enough inventory for the P12 to be formed, meant that adding any quality school would have increased the average per school value of the ACC TV deal by a lot.

Let's say that the P12 deal implies a value per school of $25 million/year per school (FOX + ESPN + P12 Network). Adding two schools to the ACC with a value of $25 million/year would by itself raise the per school average of the ACC deal from $13 million to close to $15 million.

To be clear, I'm not saying as a general premise that Syracuse and Pittsburgh are worth around twice as much as the schools in the ACC ($25m vs. $13m). However, I am saying that the market changed so much in those two years, that the 2012 value of Syracuse and Pittsburgh was in fact twice as high as the 2010 per school average value of the ACC schools.

But that's apples and oranges. There is no way to "what if" what may have happened but didn't. I would imagine that by the time the ACC invited Pitt and Syracuse, ESPN was already willing to increase the average payout to existing schools to $17MM, and believed that those two schools would not dilute the value of the product they were buying. I don't believe that at any time ESPN assigned a valuation of $25 million dollars to either school.

And FWIW, the math is wrong at $25MM. If the ACC was worth $156MM before expansion (12 X $13MM) and $238MM after expansion (14 X $17MM) that would imply that Pitt and Syracuse were worth $82MM between them. If that were their true worth, I believe they would both be playing in the B1G tournament this week instead of the ACCT.

The only thing I am prepared to conclude is that ESPN believed that the ACC's value would not be diluted by adding these two schools.

I've already said that the increase from $13 m to $17 m was a combination of three factors. I agree, if it was just the expansion, then Syracuse and Pittsburgh would be implicitly worth $41 million a piece. I'm speculating that based on the value of the P12 deal, the implicit value of Syracuse and Pittsburgh was around $25 m/year, with the remaining increase due to the extension and the addition of Friday games. Of course, none of the existing member except BC were willing to commit to a home Friday game, so that increase is attributable in part to Syracuse as well. The $25 million is absolutely in line with what the P12 got per school so it should not be that difficult to believe that Syracuse and Pittsburgh were worth this much.

With respect to the possibility that ESPN would have offered an increase to $17m/school anyway, that is simply not plausible. ESPN had a binding agreement with the ACC at $13m/school and would have no reason except charity to offer more -- even though by 2012 it was definitely worth more based on changes in the market As I said, extending the contract and adding Friday games were part of the basis for the increase, so if the ACC were willing to do these things, those opportunities were available without expanding.

I guess we'll just have to agree to disagree. You seem to be suggesting that the long-term extension of the contract and GoR had little value to ESPN compared with adding Pitt and Syracuse. I guess if I were a Pitt or Syracuse fan I'd like to think that were true. But I'm not and I don't.

The GOR was not part of this extension, so yes with respect to that. The increase to $17m/school was announced May 9, 2012. The Grant of Rights was announced April 22, 2013, and was accompanied by a bump to $20 million/year, along with the addition of ND, the ND football deal, the addition of UL in place of UMD, and an agreement in principle to start an ACCN.
https://www.washingtonpost.com/blogs/hok..._blog.html
http://www.cbssports.com/college-footbal...ghts-deal/

I think the four year extension actually had a lot to do with the bump to $17m. That's why I am saying $25 m/year as a value for Pittsburgh and Syracuse rather than $41. That makes the extension and the Friday games worth 2/3 of the bump for the existing schools