(06-26-2014 05:16 AM)CardFan1 Wrote: Yes, $1 a month x around 7 million cable subscribers between both states. Not a bad days work.
To break even on the expansion, the B10 has to add enough subscribers in the target area, paying enough a month, to cover the cost of adding two more shares to the B10 slices of their pie. Using an average distribution of $25 million per school, the Big 10 needs $50 million to pay for adding Rutgers and MD. On top of that, the B10 is splitting a future revenue stream the Playoff and Rose Bowl money smaller. MD and Rutgers would get about $6.3 million of that revenue, costing the other 12 B10 Teams about a $1 million a year over a 12 team league.
To break even going forward, the B10 needs to bring in about $62 million more from adding MD and Rutgers.
If there are 7 million subscribers and they are fully captured, meaning they will pay whatever the service passes along as a cost, then according to my math, the B10 needs to earn 74 cents per subscriber to break even. Above that is profit.
By my math, if the B10 get's a return of $1 dollar per all 7 million, they will net about $22 million a year that when divided by 15 shares, (14 schools and the conference office) nets about
$1.5 million per team for adding Rutgers and MD.
Then in 2018, they would start to see any added revenues for MD and Rutgers in the base TV deal. However, figuring what that really is will be very difficult because the value of Ohio State football will be lumped in with the values of Neb, Rutgers and MD football and I don't know how you tease that out since their base TV deal did not change at the time of the additions. (If they did change with Nebraska, I missed it).
The B10 was not going to add MD and Rutgers to take a huge financial loss. They just aren't going to gain a huge windfall on a per team basis, but they will have taken players "off the board", poked a finger in the ACC's eye over ND, and helped their overall demographics.
The problem the B10, SEC, and ACC all face is that future additions have to feed 16 mouths. The 14 current members, the office, and the new member.