(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

The Big Ten would be best served to negotiate its deal early. Nebraska, Maryland and Rutgers are new to the negotiations. The NBA deal is coming up as well. 2016 is the new 2015 as far as contracts are concerned. My money is on a Big Ten contract well before 2016 and Delany spinning.

(03-25-2014 01:33 PM)BruceMcF Wrote:  The fact remains that the Big Ten will be selling as large a basket of goods as the other P5 conference, and the fact that their broadcast and first call cable rights are presently pooled into a single "first tier" contract does not prevent them being split into separate pieces.

Indeed, while your economics degree may only be a bachelors, as a business analyst you ought to understand that if either their broadcast rights or their first call cable rights are picked up by a group of broadcasters, it will be normal for them to be split into two different contracts. Its only the fact that ABC has the broadcast rights and ESPN the first call cable rights, so the rights are all located in a single corporate family, that makes it preferable to have a single contract for those rights, giving ABC and ESPN better scheduling flexibility.

I used the PAC's TV numbers and I calculated what the B1G's current contract would be under those payment terms. Here is what I found.

The PAC 12 contract is for $250 million annually for 44 FB games, the FB championship game, 68 basketball games and the post season Men's BB Tourney.

http://www.bruinsnation.com/2011/5/4/215...12-network

Assuming 80% is for football and 20% is basketball, we get the following payouts per game.
Football - $4.55 million per game
Basketball - $735,294 per game

The B1G's contract is $100 million per year for 41 FB games and 60 basketball games. They also get $24 million for the championship game for a total of $124 million for a comparable basket of goods.

http://www.bigten.org/genrel/062106aac.html

41 football games x 4.55 million = $186.4 million
60 basketball games x $735,294 = $44.12 million

Total Revenue = $230.5 million
There is also the CBS BB contract which is worth $6 million per year. which I assume will double to $12 million. That puts the total revenue at $242.5 million.

My original assumption was the B1G would double their current broadcast revenue of $130 million annually to $260 million. The difference is about $18 million per year which is probably the value add you can expect for being the B1G.

I concede the point on the basket of goods. It is comparable to the PAC's deal, not smaller as I thought. However, I think my spitball analysis stands up under the scrutiny of actual numbers.

Just keep in mind that ESPN will be negotiating with the SEC as well. What one gets the other will expect comparable numbers.

(03-25-2014 01:35 PM)TodgeRodge Wrote:  

(03-25-2014 01:02 PM)bullet Wrote:  

(03-25-2014 12:44 PM)TodgeRodge Wrote:  [quote='krup' pid='10596613' dateline='1395764704']
[quote='Shannon Panther' pid='10596464' dateline='1395762992']

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

The Big 10 ccg was the ONLY Fox broadcast in the top 25 rated college football games. So I think it is paying off for Fox.

For the Big 12, the giant increase (450%) was in the Tier II contract. Tier I only went up about 67%. So for the Big 10, the question is how much of that Tier II added value is already captured in the BTN and how much in the 2017 contract.

(03-25-2014 12:44 PM)TodgeRodge Wrote:  

(03-25-2014 11:25 AM)krup Wrote:  

(03-25-2014 10:56 AM)Shannon Panther Wrote:  

(03-25-2014 07:15 AM)krup Wrote:  I have never seen a good explanation of how the "enforcement" of a GOR would work (or does no one really know because they have never been challenged??). Aren't the schools in a GOR signing away their TV rights to the conference IN RETURN FOR A SHARE OF THE CONFERENCE'S TV REVENUE?

Without hearing otherwise, it seems to me to that there are scenarios where certain schools would be attractive to a conference with a cable network even with a GOR.

Let's hypothesize that, 5 years from now, the ACC is making $21mm from their ESPN deal and the B1G is making $33mm from their new TV deals and the BTN. The B1G adds UNC and UVA.

The B1G doesn't change the number of games they control (the new B1G conference road games for UNC and UVA they gain are offset by the fact the UNC and UVA home B1G conference games would fall under the ACC contract).

However, ESPN (ACC) would still have to pay UNC and UVA $21mm for televising all of their home games, wouldn't they?

Wouldn't the $12mm per year the B1G has to pay UNC/UVA be worth it, for the opportunity to increase the BTN revenue in the populous states of No Car and Va??

I stopped reading at the B1G making $33 million from their TV rights. They are currently getting $7.5 million for the B1G Network. The best they can hope for is $10 million after adding Rutgers and Maryland. And this is wildly optimistic. They are only selling their Tier 1 rights. In what universe would anyone pay $23 million for Tier 1 rights when the current going rate for Tier 1 & 2 is around $20 million? The other conferences have look in clauses. These are tied to the market rate being paid for TV rights. By paying the B1G those numbers it ensures the others will get close to that in look in years. That is a business model that has bankruptcy built in. My guess is all 5 P5 conferences will be within 15% of each other after the B1G and SEC renegotiate their deals.

Maybe if read through passages and tried to understand them instead of "stopping reading" you would learn things that might keep you from embarrassing yourself.

The relevant conference to the B1G is the Pac 12, because they:

-are the only other major conference that retained enough game rights for a conference cable network and sold the rights to the rest

-are the only other major conference whose TV rights came onto the open market AFTER rights contracts went through a huge escalation (not just before, like the ACC or SEC).

So, the Pac12, whose TV ratings pale in comparison with the B1G, got $20mm a year for their TV rights but the B1G won't get at least $23mm.

Go ahead, prove you're not a troll and post links to evidence of these look in clauses that guarantee the ACC stays within 15% of B1G revenue.

The B1G makes 10% of the ACC's annual revenue just from the Fox contract to show their football championship game !

just a few points here

the PAC 12 deal is for the first and second tier rights while the Big 10 deal that is coming open is for first tier only which makes a difference especially when the PAC 12 deal is controlled by ESPN for both tiers while the Big 10 deal will only be for the firs tier and there is no option for the second tier or below because that is the BTN

Pac 12 is split between FOX and ESPN. They alternate first pick of games more or less week to week.

(03-25-2014 07:16 PM)bullet Wrote:  

(03-25-2014 01:35 PM)TodgeRodge Wrote:  

(03-25-2014 01:02 PM)bullet Wrote:  

(03-25-2014 12:44 PM)TodgeRodge Wrote:  [quote='krup' pid='10596613' dateline='1395764704']
[quote='Shannon Panther' pid='10596464' dateline='1395762992']

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

The Big 10 ccg was the ONLY Fox broadcast in the top 25 rated college football games. So I think it is paying off for Fox.

For the Big 12, the giant increase (450%) was in the Tier II contract. Tier I only went up about 67%. So for the Big 10, the question is how much of that Tier II added value is already captured in the BTN and how much in the 2017 contract.

The biggest thing for the Big 12 was that the 2007 FOX contract extension was RIGHT before the tier 2 market exploded up. So basically FOX had us for WELL below market value for 4-5 years. The big increase was merely catching us back up to the market.

The Big Ten has multiple revenue increases coming.

A tier one increase.
New BTN revenues from the NYC-NoVA corridor from Rutgers and Maryland

New bowl deals including the Rose and Orange (3 guaranteed slots).

Conference playoff distributions

This past year according to reports, the league paid full members about $25.7 million per.

Maryland has a projected payout of $32 million from the league for next year which wouldn't include the new tv deal, but would include the conference playoff distributions and new bowls and probably some increase in BTN revenues.

That's a difference of about $6.3 million but its difficult to say how much of that would be for the BTN increases alone.

The big Big Ten jump though comes in 2017 with their new tier one deal.
They project to go from $34.5 million in 2016 to $43 million in 2017.

That's a jump of $8.5 million per school and tells us that they expect a significant bump from their media rights deals.

(03-25-2014 12:44 PM)TodgeRodge Wrote:  just a few points here

the PAC 12 deal is for the first and second tier rights while the Big 10 deal that is coming open is for first tier only which makes a difference especially when the PAC 12 deal is controlled by ESPN for both tiers while the Big 10 deal will only be for the firs tier and there is no option for the second tier or below because that is the BTN

This is incorrect. The Big Ten deal coming up is for Tier 1 and 2 for practical purposes. They call the Big Ten Network Tier 2, which by default makes the ESPN gig "only" tier 1, but if you look at the content and number of games, it is pretty much the same. The PAC 12 contract sold 44 football games to ESPN/Fox (3.67 per team) and retained 36 FB games for the PAC 12 Network. 68 men's basketball games (5.667 per team) will be on ESPN/FOX with the rest on the PAC 12 Network. To compare the Big Ten contract is for 41 Big Ten football games ((3.727 per team)and for 60 men's basketball games (5.455 per team), with the rest on the Big Ten Network. Note that when the Big Ten signed that contract, they had 11 teams versus 12 (meaning their contract actually has more FB games per team sold nationally). The new Big Ten deal, if structured per team comparably to the 2006 deal will be for 52/53 football games to be sold via Tier 1/2 in 2016 and 77 basketball games. Both more than the Pac 12 sold in total.


Often people use the "tier" terms differently. But for practical purposes, and more importantly for comparative purposes, the Big Ten and Pac 10 Network are Tier 3, as they are games not picked up for national TV. For old school purposes, Tier 1 means first pick (usually OTA station) and Tier 2 means second pick (usually national cable). Whether you call the Big Ten Network Tier 1 or 2 is irrelevant: they sell as much or more product to national TV as any other conference.

(03-24-2014 04:46 PM)10thMountain Wrote:  Seriously doubt anyone wants the legal hassle of testing a GOR.

What was the GOR fallout of TAM & Missouri leaving? Sorry, I am doing some catching up on this topic.

(05-16-2016 03:47 PM)ZippyRulz Wrote:  

(03-24-2014 04:46 PM)10thMountain Wrote:  Seriously doubt anyone wants the legal hassle of testing a GOR.

What was the GOR fallout of TAM & Missouri leaving? Sorry, I am doing some catching up on this topic.

I think it was signed after they left.

Correct.

There was no GOR in existence to be an issue for any of the teams that left the old B12.