(06-10-2016 10:12 AM)arkstfan Wrote: Values for G5 aren't a constant rising nor falling. The situation of each negotiation depends on the market needs of the day.
The old CUSA deal.
Fox did not have any CFB content they could distribute nationally. CUSA 2.x got a premium for being their first national content.
CBSSN had basically nothing except MWC. CUSA 2.x got a premium for being their first Eastern/Central timezone content.
Fox has elected to not take on ESPN with a large inventory online package like ESPN has done with ESPN3
Fox can now distribute Big XII and Pac-12 nationally and apparently is getting part of the Big 10 package. Fox's needs are different than when the old deal was done.
ESPN ended up with a lot of excess AAC and MAC content and is selling it to CBSSN for less than CBSSN paid per game to CUSA. That's going to create deflation.
The AAC wanted to walk from ESPN and NBC was willing to show them love making them a big part NBCSN and the various Comcast RSNs. ESPN had right of first refusal and elected to match the NBC offer. Did they pay that price because that was what AAC was worth to them or because that was a fair price for them to pay to keep NBC limited to Notre Dame in owning FBS content?
MAC nailed their negotiation. They reopened at a point when NIU had pulled some audiences in excess of a million viewers (not something that happens often with the G5) and while ESPN was looking to expand its ESPN3 portfolio and wanted to expand its weeknight portfolio so that they now double book MAC games late in the season with the most attractive game going to ESPN2 or ESPN and the lesser game getting selected for ESPNU but they pay a premium to get two games moved to the weeknight so they can flex.
I would bet a quality hamburger (not fast food cardboard) that when Fox and CBSSN cut the fee to CUSA that CUSA could have gone forward and done a full blown renegotiation for more years at a price higher than what this deal produced (being a two year deal is almost certainly lowered in value just on that point alone) but the commissioner and key presidents refused to accept that the total value should drop in a long-term deal even though there had been significant membership changes as well as the premium generating conditions no longer being in place. I'm pretty confident a better deal could have struck at that point instead of doing a deal with the conclusion of the existing deal rapidly approaching.
The marketplace is changing (again) and a good G5 deal isn't an impossibility but it will happen when there is malalignment between how TV makes money and what they have available to exploit making money, that fueled the AAC deal it fueled the CUSA 2.x deal.
That's a really good post, looking at it without emotion and based on the business of TV and content.
What most people miss it that, outside of 15-20 teams, who's actually playing is not that important. Casual fans only watch their team and the really big match-ups, the next step up will watch some games involving teams their team plays (conference viewers), hard core folks watch any game on TV, picking the one that interest them most if there are multiple options.
For networks, they have to fill "x" number of hours per week with content. Sure, they want the best ratings they can get, but the ratings between mediocre P5 match-ups and decent G5 match-ups aren't that great, not enough to make much of a variation in ad rates. The big money to the P5 conferences is really attributable to the top 3-4 teams in each of those conferences, all other teams are just filler.
So, when the amount of product exceeds the amount of content needed, the value drops. These networks have started sharing the cream of those top 15-20 teams by having multiple players with each conference. So now they can fill a lot of their content requirements with games that involve those top teams. No longer does ESPN have to decide to show Ohio State-Indiana or Michigan-Purdue. They pick one and Fox shows the other. Now Fox doesn't need to pay up to get USM-La Tech because they are going to have the Michigan game.
I think they finally figured out that they were paying for 12-14 Saturday conference games, but could only show 2 of them. Paying for content they couldn't use, and then spending money to acquire additional content to fill other slots from the G5. So they got away from exclusive conference contracts.