(03-07-2014 07:37 AM)quo vadis Wrote: (03-07-2014 06:46 AM)Shannon Panther Wrote: (03-02-2014 08:15 PM)Topkat Wrote: Thanks bullett, I see the article projected a $30-35M per school Tier 1 contract in 2017 (I know its only a guess).
But in the case of Ohio State, if the Big 10 gets a 30-35M (per school) Tier 1 deal, add to that 7M (BTN) + Bowls + Championship Series + NCAA Credits = Money from the Big 10.
An additional 11M (for radio and advertising) + tickets + merchandise (all this varies by Big 10 school) and the widening of the money gap starts to really kick in. I would also look for the BTN to try and kick up its monthly cable fee to get closer to the SEC number when renewal time comes.
The B1G might distribute $30 - $35 million in total revenue after their new contracts are signed. They will not get that amount of money for their tier 1 contract. First of all, they are only selling half or less the inventory than the other conferences. I'll personally be surprised if they get $20 million for their tier 1 rights. If they get that, TV is saying they are twice as valuable as the B12 and the PAC 12 based on recent contracts. The B1G uses other tier 2 rights for their network.
No broadcaster will lose money to own the B1G's tier 1 rights. My personal guess would be they will double their current take on tier 1. That would be around $14 -$15 million per school, per year. Plus the bumps in other broadcast revenues will put them in the $25 million range for broadcast revenues per school. That is a 25% increase over the B12 and PAC 12 numbers. Add in the NCAA credits and bowl revenues and that is where you get the $30 - $35 million annual number.
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The B1G is distributing $26.5 million per school this year. The new playoff/bowl system will be worth about $8 million per school more than the current system, so that gets them to just about $35 million right there.
Factor in the bump from the new media deal that they will sign and by 2017 they will be approaching $40 million per school. That will be ahead of everyone, including the SEC, and way ahead of the ACC. Those are the spoils of being smart and not selling everything to ESPN like the latter two conferences did.
Quo, the bump for the B10 for the Sugar Bowl and Playoff is about $6.35 million. They get $40 million for the Sugar Bowl, and $55 million for the playoff. That's $95 million divided by 15 or $6.35 million so they are closer to $33.5 million than $35 million.
The ACC only gets about $82.5 million and when that's divided by 15 you get $5.5 million. The ACC is projected to distribute about $23.5 this year. So for 2015 the ACC would only be at $29 million, plus whatever the ACC gets for adding Louisville, (half million?) = $29.5. In 2016 the ACC gets $2 million more if there is no network, and the ACC has a look in in 2017. So in 2017 the ACC would be at $31.5 per school minimum, perhaps as high as $33. The B10 might be at $40 million by then and $40 to $33 million means the ACC is at 82.5% of the B10 which is reasonable.
The main issue though is that a $7 million conference distribution per team differential is chump change when you look at the revenues of the B10's top 4-5 teams. Ohio State, Penn State, Michigan, Wisconsin, Iowa. For Ohio State and Michigan, the extra $7 million represents about 5% of their annual revenues.
$7 million a year seems like a great deal more but if your overall revenues are already well above $100 million, it's not that much in the scheme of things.
Most NCAA competitions is within a conference so you need to dominate your conference and that takes money. It takes less money to dominate the ACC than it does to dominate the B10 or SEC.
It takes about $90 million a year to be competitive in the B10, and it takes about $115 million or more to dominate football and be competitive in the other sports. FSU and Clemson can do that in the ACC for $95 million and $75 million. My point being that costs in the ACC to dominate and be competitive are about 12% to 15% less than in the B10 or SEC.
To me it's akin to the cost of living and real estate. The best home in an equal subdivision in Boston, SF, and Raleigh with the same square footage and amenities might be $3 million in Boston, $4.5 million in SF, and $2 million in Raleigh. Cost of competition is driving by multiple schools competition with each other and you have that in the B10 and SEC so Ohio State, Michigan, Wisky and Penn State drive the cost up with their huge revenue generating stadiums. Bama, Auburn, Tennessee, LSU, and Florida do the same in the SEC. The ACC doesn't have that level of competition because no one in really pushing Clemson and FSU. If two of VT, UVa, UNC, or Miami could really push CU and FSU, then the cost of competition in the ACC would go up.
Hey, I think this would make a good dissertation topic.
