The Big Ten and SEC may have the least amount of options for increasing revenue on a per school basis if nothing else changes. However, if either conference moved to 16 (or 15 I suppose) and were able to host semi-final conference championship games in football, those are two more revenue sources that would open up a whole slew of new schools that would pay their way into the conference.

(11-28-2015 11:44 AM)GE and MTS Wrote:  The Big Ten and SEC may have the least amount of options for increasing revenue on a per school basis if nothing else changes.

Maybe, but that's like saying "Bill Gates and Warren Buffett may have the least amount of options for growing their wealth". Doesn't matter when you already are floating on a mountain of cash.

Conferences like the AAC and MWC have to worry about growth potential, the B1G doesn't.

(11-28-2015 11:49 AM)quo vadis Wrote:  

(11-28-2015 11:44 AM)GE and MTS Wrote:  The Big Ten and SEC may have the least amount of options for increasing revenue on a per school basis if nothing else changes.

Maybe, but that's like saying "Bill Gates and Warren Buffett may have the least amount of options for growing their wealth". Doesn't matter when you already are floating on a mountain of cash.

Conferences like the AAC and MWC have to worry about growth potential, the B1G doesn't.

I know, but my comment was more to set up the rest of my post than as a standalone comment.

(11-28-2015 12:42 AM)JRsec Wrote:  

(11-27-2015 08:51 PM)Wedge Wrote:  

(11-27-2015 07:03 PM)JRsec Wrote:  There is a second takeaway from all of this that is evident, just not quite as evident as the divided CFP money, the BTN and SECN have as you noted earlier distanced the SEC and Big 10 from the rest of the P5 schools. It seems inevitable regardless of future models of television distribution that this chasm is only going to grow.

GOR's are effectual only in the short term now. Economic pressure and time are now going to be the allies of the Big 10 and SEC.

There's a limiting factor, which is that if expansion is driven by money, then it only makes sense to add new members who increase the average TV payout per school, not new members who just feed at the trough.

The larger the SEC and Big Ten TV payouts get, the fewer the number of schools who would potentially boost the revenue of the existing members. If the TV money gets large enough, there won't be any schools other than UT and ND who bring enough value to boost the existing per-school payouts, and it won't make economic sense to add anyone else to either league.

Your point is valid, but as things stand now there are 4 that could add value. A Virginia school, a North Carolina state school, Texas, and Oklahoma. Oklahoma does it on content. Texas adds value any way you look at it. Additions in North Carolina and Virginia do it by markets (while that model lasts). Notre Dame won't join a conference but yes they would add. That's it. And I might add that the schools are pretty much the same for the Big 10.

Agreed. The options are already limited to those, if adding value is the primary consideration.

Your point about "while that model lasts" is good, and it means that a program that adds only markets is ok for now but a program that adds both markets and brand name (UT, ND, UNC in that order) is what you want most in a TV/internet future where we don't yet know which platforms will provide the most money.

(11-27-2015 07:01 PM)quo vadis Wrote:  

(11-27-2015 01:48 PM)lumberpack4 Wrote:  Quo, your analysis of income as a driver for conference change is deeply flawed. You are missing the fundamental point that revenue is a function of football seats in the stadium not television. $20 MILLION more in a conference does not help if your football stadium seats only 50K and your in conference completion seats 100K. This is the Maryland problem.

You are assuming my analysis is wrong by imputing to it things I didn't say. I understand that the biggest source of income teams have is local. For example, LSU makes about $80 million of their $130 from filling up their stadium and all the revenues (suites, season tickets, parking, etc.) that come from that.

But, it's not merely a matter of having football seats in the stadium. Maryland could play at nearby FedEx field, an NFL stadium with all the amenities and 85,000 seats, and they wouldn't make a dime more than they do playing at Byrd because they don't have the fan base to fill a stadium that size or pay for all those amenities. LSU has 100,000 rabid fans who will pay high prices for season tickets, seat licenses, luxury suites, etc. Maryland just does not.

Still, Maryland is better off being in the B1G and getting that bigger media money. No school's "neighborhood" is its conference. These days, your neighborhood is national. If you are Maryland, you are competing with Alabama as much as you are Ohio State. Much better to make $70m and be 9th in the B1G in revenue than make $50m and be 5th in the ACC in revenue. It is a national comparison.

The ACC is in revenue trouble, because yes, they don't have the fan bases of the B1G and SEC, but there is also no doubt that widening media money gap is exacerbating an already bad situation.

TV money is not the root cause of P-5 moves. Moves are triggered by hatred of certain other schools within a conference or the search for long-term stability.

Every school that left the Big East did so because the Big East was not formed as an all sports conference and the football schools and non-football schools could not co-exist as their needs were different.

Miami, BC, and VT did not leave the Big East for money. Nebraska did not leave the B12 for money. They left because they hated Texas and hated that the Big 8 had morphed into the Big Texas conference. Colorado left because they had nothing in common with Texas. TAMU left because they HELL HATED Texas.

Rutgers left the Big East because it had collapsed. MD left the ACC because their System President wanted it that way because of his love affair with the B10, and because he hated certain ACC schools such as Duke and UNC, and his past mismanagement as Chancellor set into motion MD's athletic bankruptcy.

More money is nice, however an extra 10 or 20 million is not "more money" when you trade that for a conference where you are $70-80 million behind the conference leaders in revenue. All you have done is changed neighborhoods but moved into a more expensive house.

No one without a 90-100 seat football stadium is going to be able to financially compete against the 15 or so schools that do have such a sized venue and the ability to sell said extra tickets.

It's been mentioned before and confirmed by folks attached or near to UNC, NC State, VT, and UVa, that all four of those schools have run the numbers regarding the attempt to compete on a regular basis with Ohio State, Michigan, Penn State, Wisconsin, Michigan State, Alabama, LSU, Tennessee, Florida, TAMU, and Auburn - a working group at UNC found that they would need an additional $50 million a year just to maintain their current ACC standing in the B10 and at least $35 million to maintain that standing in the SEC.

That number applies to all four schools. That makes extra TV money nearly meaningless. Extra TV money helps only if you are content NOT to compete in conference football.

Only some at FSU and Clemson ***** and moan about money as if the conference or TV can help. Clemson's football tickets are reasonably priced - they aren't trying to rape their fans. FSU is underselling Doak by about 6000 seats a game. Bama, TAMU, and UT all seat about 100K, Doak and Memorial only seat a little over 80K. That's a $10 million disparity in revenue that no TV fixes.

You are wrong about the neighborhood. Only fools move into houses they can not afford.

I would encourage folks to look closely at the numbers in Equity in Athletics.

For instance here is Maryland's plight:

When you look at the numbers for unallocated funds you see that MD received 31.1 million out of their 87 they made. Those are donations, loans, gifts, money off annuities and endowments. In the revenue that Penn State, Michigan, and MSU reported, such "revenue" was only 28 million, 24 million, and 10 million respecitively. We know the B10 "loaned" and fronted MD money, how much is difficult to say, but $15 million a year is probably closes. That puts MD's revenues much closer to $72 million in the B10, once the loans and gifts are netted out.

Now let's look at what those four schools spent on football versus what they made:

Michigan - made 88M, spent 31 M net profit of $57 million to fund other sports
PSU - made 71M, spent 35 M net profit of $36 million to fund other sports
MSU - made 59M, spent 27 M net profit of $22 million to fund other sports

MD - made 30 M, spent 16 M net profit of $14 million to fund other sports

This is the small football stadium effect in action. PSU and Michigan spend more on football than Maryland grosses on football.

This is not a long term revenue model that you will see other ACC schools follow unless they are willing to abandon football as Duke did for most of the last 40 years.

What I am seeing is that AAC and MWC could make a P7 conferences in spending and making money. Those two are pulling away from the other 3 G5 conferences as well.

From my standpoint for the MWC, they make money in football and basketball. The downside would be San Jose State. That is why Long Beach State and Wichita State seems interested being part of that conference.

(11-28-2015 03:07 PM)lumberpack4 Wrote:  More money is nice, however an extra 10 or 20 million is not "more money" when you trade that for a conference where you are $70-80 million behind the conference leaders in revenue. All you have done is changed neighborhoods but moved into a more expensive house.

No one without a 90-100 seat football stadium is going to be able to financially compete against the 15 or so schools that do have such a sized venue and the ability to sell said extra tickets.

But a question that you have to ask in any "arms race" problem (which is what we are talking about) is how much is the marginal bang for the buck?

How much do the big stadium schools spend on football because it is necessary to stay where they are, and how much do they spend on football because football generates so much revenue that they have to spend some share of that revenue in FB as a CYA move in seasons that they do not win it all?

The big stadium schools are schools with big alumni bases that care a lot about football ... and the expected brand value of a blue chip prospect that plays in one of those big stadiums will be bigger than one that plays in a smaller stadium, just because of that ... and the spending that is just gold-plating & feather-bedding does not increase that value, but is just another symptom of that value.

After all, Maryland is tens of millions behind the biggest spenders ... but they are within $6m of their division winner, who is going to be playing in a CCG that pits #5 in spending against #8.

So being competitive in football in the Big Ten does not seem to be something that is limited to schools that have budgets of $120m+ ... Maryland is "earning" between 80% and 93% of the CCG teams, and Northwestern is going Bowling with a 9-2 record on earnings of $70m.

The fact that Maryland's earnings are not all actual earnings is more of a concern, but if Maryland recruits well for offensive and defensive systems that are well suited for their available talent, they have the opportunity to grow those earnings.

And meanwhile, there's always BBall.

(11-28-2015 08:58 PM)BruceMcF Wrote:  

(11-28-2015 03:07 PM)lumberpack4 Wrote:  More money is nice, however an extra 10 or 20 million is not "more money" when you trade that for a conference where you are $70-80 million behind the conference leaders in revenue. All you have done is changed neighborhoods but moved into a more expensive house.

No one without a 90-100 seat football stadium is going to be able to financially compete against the 15 or so schools that do have such a sized venue and the ability to sell said extra tickets.

But a question that you have to ask in any "arms race" problem (which is what we are talking about) is how much is the marginal bang for the buck?

How much do the big stadium schools spend on football because it is necessary to stay where they are, and how much do they spend on football because football generates so much revenue that they have to spend some share of that revenue in FB as a CYA move in seasons that they do not win it all?

The big stadium schools are schools with big alumni bases that care a lot about football ... and the expected brand value of a blue chip prospect that plays in one of those big stadiums will be bigger than one that plays in a smaller stadium, just because of that ... and the spending that is just gold-plating & feather-bedding does not increase that value, but is just another symptom of that value.

After all, Maryland is tens of millions behind the biggest spenders ... but they are within $6m of their division winner, who is going to be playing in a CCG that pits #5 in spending against #8.

So being competitive in football in the Big Ten does not seem to be something that is limited to schools that have budgets of $120m+ ... Maryland is "earning" between 80% and 93% of the CCG teams, and Northwestern is going Bowling with a 9-2 record on earnings of $70m.

The fact that Maryland's earnings are not all actual earnings is more of a concern, but if Maryland recruits well for offensive and defensive systems that are well suited for their available talent, they have the opportunity to grow those earnings.

And meanwhile, there's always BBall.

A few observations if I may. First you don't have to build a bigger house right away. Whether a conference is the Big 10 or SEC all you have to do is do your part in the first decade. Our stadia didn't appear overnight. Most of them had been added onto multiple times. If your school is suddenly earning 18 million more because of your new affiliation you bank some, and slowly renovate. After all your new conference mates know where you are coming from when you are invited. South Carolina didn't suddenly build a bigger stadium and Arkansas played in Little Rock frequently in the early years of SEC membership. But here we are 23 years later and yes their facilities are a lot nicer now. So don't think like newlyweds who think they have to have everything their older friends have and have it now. Conference affiliation, like marriage, doesn't work that way. You earn it, you save it, and you build equity that you later convert into growth.

If you can bank 180 million more in a decade you will be surprised what you can do especially if you set up matching donors among your corporate and private deep pockets. And you don't start with a brand new stadium either. You add on 15 to 20 thousand seats at a time by filling in endzone gaps, adding upper decks, etc.

So, the deficit that you start with is bridged in year one partly by your new conference revenue sharing. Then you grow. The average mid tier ACC school won't start at the bottom even in the SEC or Big 10. So while I get your point, it's not as dire as you make it out to be.