(05-02-2014 12:39 PM)SouthPhillyFall Wrote: The Navy average is off since the Army-Navy game pulls in over 6 million viewers. I'm not sure how the TV deal works with Navy, but it's clear Navy is a great TV asset for the conference.
CBS owns the TV rights to the Army-Navy game and Navy's home games through 2017. It also owns the TV rights to the Navy-Notre Dame through 2018. Navy's deals with CBS were grandfathered in or the length of the contract according to Aresco when he was executive vice president for programming at CBS Sports (
Link)
Now what happens to the rights after 2017/2018, I don't know. If I had to guess, I'd say that the American will gain the TV rights for all of Navy's home games but that Navy will keep the rights to the Army-Navy game. Again, that is just my guess on what will happen.
(05-02-2014 12:39 PM)SouthPhillyFall Wrote: When you compare the viewership and look at how much ACC is getting paid, the AAC should be getting $4.5 million/year per member for its TV deal assuming the basketball values are the same.
It isn't as simple as saying "We have 1/4 of their viewership so we should be paid at least 1/4 of what they are paid". For starters, such an analysis doesn't take into consideration that competition for rights might change across different ratings levels. For example, a conference with high viewership might attract significantly more competition than a conference with a lower level of TV ratings. More competition for rights means more bidding which means higher TV revenue. Lots of competition could inflate revenues at the high end of the ratings scales and lack of competition could devalue it at the low end (i.e. you might end up with a more exponential curve instead of a linear curve).
When you compare the viewership and look at how much ACC is getting paid, the AAC should be getting $4.5 million/year per member for its TV deal assuming the basketball values are the same. We know that is not the case, but they are probably not very far off. If someone felt like comparing the viewership of the AAC basketball games vs those of the ACC, we could calulcate pretty accurately what a fair TV deal would be. But that would take hours upon hours. As a guess, the AAC should be getting around $3.5 million to $4 million/year per member.
Also, you have to remember that the whole purpose behind rating is to generate ad revenue. As one might expect, programs with higher ratings on average tend to produce higher ad revenues. However, we can't automatically assume that ratings and revenues are linearly related. Program A might have double the ratings of program B, but those higher ratings might end up pulling in 3-4 times as much ad revenue. So in reality, is Program A only twice as valuable as Program B (only based on ratings) or is it actually 3-4 times more valuable (based on the revenues it is able to generate)?
(05-02-2014 12:39 PM)SouthPhillyFall Wrote: We could calulcate pretty accurately what a fair TV deal would be. But that would take hours upon hours. As a guess, the AAC should be getting around $3.5 million to $4 million/year per member.
Market economics is not based on what is fair and not fair. You are allowed to take your product to the market place and charge whatever you can convince the market to pay for you. The American chose to sign with ESPN for the amount of money that it did because that offer was the best one that it could get. The American might think it deserves more than what it is getting, but unless it can convince the marketplace, otherwise, it is getting the best deal it could get.