Fox owns about 50% of the Big Ten Network. If Fox really wants the Big Ten package, could they offer the a slice of BTN?

Some dude in Forbes magazine in 2014 valued ESPN at $50B. Clay Travis gives ESPN's subscription revenue as $7B, BTNs as $290M. If we use the same multiple of subscription revenue-to-value, that values BTN around $2.1B.

So if Fox offers 25% of BTN, stretched over a ten year deal, that's about $500M in at least nominal value to the Big Ten. Fox's entire share would be around $1B.

(01-23-2016 02:18 PM)johnbragg Wrote:  Fox owns about 50% of the Big Ten Network. If Fox really wants the Big Ten package, could they offer the a slice of BTN?

Some dude in Forbes magazine in 2014 valued ESPN at $50B. Clay Travis gives ESPN's subscription revenue as $7B, BTNs as $290M. If we use the same multiple of subscription revenue-to-value, that values BTN around $2.1B.

So if Fox offers 25% of BTN, stretched over a ten year deal, that's about $500M in at least nominal value to the Big Ten. Fox's entire share would be around $1B.

Fox owns 51% of the BTN. So they probably wouldn't have to offer anything close to 25%, as that first 1% sold to the B1G has outsized value because it would shift controlling interest to the B1G.

Good idea.

That is a great idea. I wonder how the Big Ten would receive it.

On one hand the Big Ten will get a bigger share of the income from their network (or a larger share of a loss I suppose). On the other hand, this could be the last big payday for the conference before the TV revenue bubble bursts and the Big Ten could be leaving a lot of potential money on the table to take a larger ownership in a network that will be making less money.

Yep, it's a great way to dump an outdated model and at the same time divest yourself of it while it still pays. If ESPN offers the SEC the same deal we should say no and just keep the revenue until 2034. The we could develop and own our own streaming operation by laying aside a million a year per school until 2034 and unveil the new SEC model.

(01-23-2016 08:49 PM)JRsec Wrote:  Yep, it's a great way to dump an outdated model and at the same time divest yourself of it while it still pays. If ESPN offers the SEC the same deal we should say no and just keep the revenue until 2034. The we could develop and own our own streaming operation by laying aside a million a year per school until 2034 and unveil the new SEC model.

Seems reasonable to me, JRsec, however, - and I am not trying to be rude - don't assume streaming will be the model by 2034. It could be the next next thing after streaming by then. But setting aside money for whatever model is coming would be good.

It's interesting how some on this forum talk as if cable/sat have already lost 95% of their peak subscriber number.

I guess posting here naturally trains you to project out 25years and pick a path that suits your agenda.

(01-24-2016 09:56 AM)Soobahk40050 Wrote:  

(01-23-2016 08:49 PM)JRsec Wrote:  Yep, it's a great way to dump an outdated model and at the same time divest yourself of it while it still pays. If ESPN offers the SEC the same deal we should say no and just keep the revenue until 2034. The we could develop and own our own streaming operation by laying aside a million a year per school until 2034 and unveil the new SEC model.

Seems reasonable to me, JRsec, however, - and I am not trying to be rude - don't assume streaming will be the model by 2034. It could be the next next thing after streaming by then. But setting aside money for whatever model is coming would be good.

You're not being rude, just practical. I agree that at the speed with which technical advancements are occurring it could well be the next best thing by then.

(01-23-2016 07:29 PM)GE and MTS Wrote:  That is a great idea. I wonder how the Big Ten would receive it.

On one hand the Big Ten will get a bigger share of the income from their network (or a larger share of a loss I suppose). On the other hand, this could be the last big payday for the conference before the TV revenue bubble bursts and the Big Ten could be leaving a lot of potential money on the table to take a larger ownership in a network that will be making less money.

If we are heading for a bubble burst, then taking a big pay day would be the better way to go. Assuming cable is a dying medium, why would taking a heavier investment in a that dying medium be a wise decision for the Big10?

That said, I think the predictions of a bubble burst for college sports rights is wrong and I think the predictions of cables demise are over the top. I'm not saying change isn't coming to cable--it s. I think streaming will grow bigger, cable will lose some share of its market, and I think a la carte cable is coming. I also think the bottom line is the public wants to be entertained. With hand held devices, smart TVs, and all manner of streaming devices--the demand for content will be INCREASING, not decreasing. That suggests content will become even more valuable in a future with more delivery methods and more opportunities to watch content on the go at any time of the day.

What's going to change is how you are billed for content and its delivery method. I also expect super low prices on streaming will disappear as conten providers charge higher prices to streaming outlets for thier rights. If streaming services like Netflix balk at the higher prices, then the content providers will simply bypass streaming outlets completely by offering their content via thier own dedicated streaming sites (you'll see NBC-Go for instance). As sellers of content see income from rights fees to cable companies decline, the difference in revenue flowing to content makers will have to be made up from streaming entities. Content costs money to make. Content is the reason consumers go to streaming sites or tune into cable networks. Thus, the content providers are going to get paid one way or another as they are the only reason cable and streaming companies ever see a dime from consumers.

(01-24-2016 10:07 AM)MplsBison Wrote:  It's interesting how some on this forum talk as if cable/sat have already lost 95% of their peak subscriber number.

It hasn't happened, but it's on a likely path to happening. Execs at the networks are paid a lot of money to make those projections. Course sometimes they make them wrong anyway.

Quote:I guess posting here naturally trains you to project out 25years and pick a path that suits your agenda.

Half right. I don't know that I have an agenda in the Big Ten rights negotiations, except for being able to have been right if it happens.

I was the rightest about the New Big East contract, remember, huh? That and $4.79 gets me coffee at STarbucks.

(01-24-2016 11:02 AM)JRsec Wrote:  

(01-24-2016 09:56 AM)Soobahk40050 Wrote:  

(01-23-2016 08:49 PM)JRsec Wrote:  Yep, it's a great way to dump an outdated model and at the same time divest yourself of it while it still pays. If ESPN offers the SEC the same deal we should say no and just keep the revenue until 2034. The we could develop and own our own streaming operation by laying aside a million a year per school until 2034 and unveil the new SEC model.

Seems reasonable to me, JRsec, however, - and I am not trying to be rude - don't assume streaming will be the model by 2034. It could be the next next thing after streaming by then. But setting aside money for whatever model is coming would be good.

You're not being rude, just practical. I agree that at the speed with which technical advancements are occurring it could well be the next best thing by then.

You're both right in the sense that the next model (whenever it becomes dominant) is very likely to be one in which the money comes only from consumers who specifically choose the sports channels, rather than the current model which is essentially a tax on everyone who subscribes to cable or satellite.