I wonder, because many around here post TV ratings for various conferences and events and argue that these numbers have big implications for TV contracts.

But how close tied are the two things? For example:

1) In 1997, the SEC was paid $3m per school by its media contracts, last year it made almost $40m per school. Have TV ratings for SEC football really gone up 12x in the past 20 years?

2) ESPN is paying $80m per year (2013-2025) to broadcast the Rose Bowl. From 2003 - 2013, the Rose Bowl rights sold for $30m per year.

Are Rose Bowl ratings really 2.7 times as high now as they were in 2005?

I suspect that media contracts factor in things other than TV ratings, but maybe these examples are exceptions?

Has nothing to do with tv ratings. Has everything to do with people watching tv now when they want to via DVR, Hulu, Netflix, etc. with these there is no ability for advertisement, which makes live content like sports more valuable since the person cannot fast forward through the commercial breaks. Since there a less ways to advertise on TVs and live events gives you the best bang for the buck for an advertiser they are able to charge more for advertising spots and in return pay more for tv contracts.

And also competition. I doubt you could draw a straight line correlating viewership and contract value. There will be fierce bidding wars for the BIG10, SEC, etc. that will drive the price for those contracts higher. AAC fans always say that ESPN is getting a deal for their properties based on ratings and what they're paid but that's likely what the network likes about them. It's not the same "must have" property regardless what the back of their helmet says.

(05-03-2017 07:53 AM)quo vadis Wrote:  I wonder, because many around here post TV ratings for various conferences and events and argue that these numbers have big implications for TV contracts.

But how close tied are the two things? For example:

1) In 1997, the SEC was paid $3m per school by its media contracts, last year it made almost $40m per school. Have TV ratings for SEC football really gone up 12x in the past 20 years?

2) ESPN is paying $80m per year (2013-2025) to broadcast the Rose Bowl. From 2003 - 2013, the Rose Bowl rights sold for $30m per year.

Are Rose Bowl ratings really 2.7 times as high now as they were in 2005?

I suspect that media contracts factor in things other than TV ratings, but maybe these examples are exceptions?

All that shows is the inflation in value of live events that aren't viewed later skipping commercials.

Breaking down the ratings delivered by each league in football and basketball in a given time period vs what their next TV deal was valued at would be more instructive.

Multiple factors at play
1. Inflation
2. Live sports are more important for advertisers because less dvr and recording. That was far less relevent in 1998.
3. The above goes doubly for young adults advertisers are trying to reach who are watching less TV in addition to doing even more DVR.
4. SEC was probably undervalued somewhat at that point.
5. ESPN pays some extra to get on ESPN rather than a network (where ratings would be a little higher but being on ESPN means both commercial revenue and revenue from cable fees).

(05-03-2017 08:37 AM)ohio1317 Wrote:  Multiple factors at play
1. Inflation
2. Live sports are more important for advertisers because less dvr and recording. That was far less relevent in 1998.
3. The above goes doubly for young adults advertisers are trying to reach who are watching less TV in addition to doing even more DVR.
4. SEC was probably undervalued somewhat at that point.
5. ESPN pays some extra to get on ESPN rather than a network (where ratings would be a little higher but being on ESPN means both commercial revenue and revenue from cable fees).

So in other words, the link between media deals and TV ratings isn't that strong?

(05-03-2017 09:02 AM)quo vadis Wrote:  

(05-03-2017 08:37 AM)ohio1317 Wrote:  Multiple factors at play
1. Inflation
2. Live sports are more important for advertisers because less dvr and recording. That was far less relevent in 1998.
3. The above goes doubly for young adults advertisers are trying to reach who are watching less TV in addition to doing even more DVR.
4. SEC was probably undervalued somewhat at that point.
5. ESPN pays some extra to get on ESPN rather than a network (where ratings would be a little higher but being on ESPN means both commercial revenue and revenue from cable fees).

So in other words, the link between media deals and TV ratings isn't that strong?

Depends on the perspective. Your initial premise is looking for the correlation from the 2017 versus 1997 perspective. This clearly shows that other factors have driven the increase in media deals over the last 20 years - as several posts above illustrate.

However, if you compare the media deals of the SEC and B1G versus the ACC, PAC, AAC, MWC, etc., I believe you will see a correlation between media deals and TV ratings.

(05-03-2017 09:02 AM)quo vadis Wrote:  

(05-03-2017 08:37 AM)ohio1317 Wrote:  Multiple factors at play
1. Inflation
2. Live sports are more important for advertisers because less dvr and recording. That was far less relevent in 1998.
3. The above goes doubly for young adults advertisers are trying to reach who are watching less TV in addition to doing even more DVR.
4. SEC was probably undervalued somewhat at that point.
5. ESPN pays some extra to get on ESPN rather than a network (where ratings would be a little higher but being on ESPN means both commercial revenue and revenue from cable fees).

So in other words, the link between media deals and TV ratings isn't that strong?

Ratings might be the biggest factor driving his 5 bullet points. Ratings are simply an estimate of audience size and drawing power. Without the ability to attract a mass audience, I doubt any of his bullet points are relevant. .

(05-03-2017 08:34 AM)mturn017 Wrote:  And also competition. I doubt you could draw a straight line correlating viewership and contract value. There will be fierce bidding wars for the BIG10, SEC, etc. that will drive the price for those contracts higher. AAC fans always say that ESPN is getting a deal for their properties based on ratings and what they're paid but that's likely what the network likes about them. It's not the same "must have" property regardless what the back of their helmet says.

The SEC is "must have" programming not only because it can attract a big audience---but because in the struggling cable model, it is a property people will switch cable carriers over. In other words, there is a large number of folks that will drop Comcast and switch to ATT-Uverse if Comcast doesn't have SEC games but ATT does. Thus, the SEC can deliver not just ratings--but more importantly---subscribers.

That said, the ability to simply attract a big audience is still very valuable. Doing so at a low rights cost is VERY attractive. However, that ability to draw a large audience almost always means the "low cost" is going to rise quickly because there are lots of competitors for properties that offer large audiences at a low cost. Thus, you'll see a significant bump for the AAC rights---but it's not going to be anywhere near where the P5 live.

(05-03-2017 09:02 AM)quo vadis Wrote:  

(05-03-2017 08:37 AM)ohio1317 Wrote:  Multiple factors at play
1. Inflation
2. Live sports are more important for advertisers because less dvr and recording. That was far less relevent in 1998.
3. The above goes doubly for young adults advertisers are trying to reach who are watching less TV in addition to doing even more DVR.
4. SEC was probably undervalued somewhat at that point.
5. ESPN pays some extra to get on ESPN rather than a network (where ratings would be a little higher but being on ESPN means both commercial revenue and revenue from cable fees).

So in other words, the link between media deals and TV ratings isn't that strong?

The link is very strong. You have a loaded question-- based on the big east contract. The ratings are what determines the prices if said property has ratings. 25-54 is the age group. For sports it was Males, 25-54. I sold ads for Univision in Houston and sports radio in Vegas and Pheonix.

(05-03-2017 09:02 AM)quo vadis Wrote:  

(05-03-2017 08:37 AM)ohio1317 Wrote:  Multiple factors at play
1. Inflation
2. Live sports are more important for advertisers because less dvr and recording. That was far less relevent in 1998.
3. The above goes doubly for young adults advertisers are trying to reach who are watching less TV in addition to doing even more DVR.
4. SEC was probably undervalued somewhat at that point.
5. ESPN pays some extra to get on ESPN rather than a network (where ratings would be a little higher but being on ESPN means both commercial revenue and revenue from cable fees).

So in other words, the link between media deals and TV ratings isn't that strong?

No, ratings are important, but the quality of the ratings has a big impact.

As noted, sports benefit from the need for viewers to watch the event live. This makes it much more likely that the viewers will see the advertising included in the telecast. The market for prerecorded programming has become extremely diffuse, not only because of DVRs, but also video on demand and other entertainment options such as video games. Sports ratings may be gradually declining, but they are holding their ratings better than other alternatives. In a market where viewership for other programming is becoming more diffuse, programming with stable ratings becomes more valuable.

Some sports also offer advertisers quality demographics. Males 18-49 (and 18-34 even more so) are one of the most difficult groups for advertisers to reach. Basketball and football tend to do very well in these demographics (as does soccer, FWIW), which benefits college sports.

Individual channels also must fight to be included on the most popular cable tiers and to receive the highest possible subscriber fees. Sports fans tend to be incredibly loyal, so cable operators must include channels that offer the important teams/conferences/events. This can lead to a bidding war between channels trying to build a portfolio of rights to "must have" teams/conferences/events. This factor is not entirely ratings related, but presumably a team/conference/event that is important to many viewers will get good ratings from those loyal fans.

As others have stated, the rights fees from 20 years ago are basically irrelevant compared to now. There are much broader overarching factors that apply to sports rights in general (e.g. increases in cable subscriber fees where sports networks received disproportionate benefits, the relative value of sports programs and other live events rising due to DVRs and on-demand streaming, etc.). So, the *relative* value of sports rights has increased drastically compared to virtually all other forms of TV programming over the past 20 years. Don't look at it as whether the Rose Bowl has increased its ratings by 2 or 3 times since 1997. Instead, look at how the Rose Bowl and other top sports properties have retained a large percentage of their audiences since 1997 (particularly the NFL, where they've effectively retained nearly 100% of their audience over the past 2 decades), whereas the top 10 scripted TV programs today get ratings that are only a fraction of what the top 10 scripted TV programs in 1997. With overall revenue still going up during that time period (with higher ad rates and cable subscriber fees), a much higher portion of that revenue is getting dedicated to sports today.

As for the value of TV ratings versus individual rights fees for leagues and conferences, they're very strongly correlated. The NFL clearly has the #1 ratings overall among all demographics, so they get the most. The NBA is generally the #2 pro sport in terms of ratings and score very high in the age 18-34 and 18-49 demographics that draw higher ad rates, so their latest contract reflects that fact. The Big Ten and SEC generally trade the #1 and #2 spots in the ratings depending upon the year, but the Big Ten has more of a nationalized viewership in more valuable markets (whereas the SEC ratings are propelled by NFL-level ratings specifically in the South), so the Big Ten has long received a slight premium over the SEC. The correlation between ratings and TV contracts (taking into differences in platforms where ratings on ESPN need to be discounted compared to ratings on FS1) is very strong *within* the sports industry. (Now, if you're saying that sports rights fees bear no relation to fees that might be paid to programs *outside* of the sports industry that might have higher ratings, then that's correct. However, that's all driven by sports being relatively DVR-proof and having the most valuable ad demographic of younger males.)

Good point about declining TV ratings for everything. Comparing today's Rose Bowl TV ratings to those of 1980 would be like comparing last week's ratings for "Big Bang Theory" to ratings for the last season of "M*A*S*H".

(05-03-2017 10:37 AM)Wedge Wrote:  Good point about declining TV ratings for everything. Comparing today's Rose Bowl TV ratings to those of 1980 would be like comparing last week's ratings for "Big Bang Theory" to ratings for the last season of "M*A*S*H".

Exactly. Think of it this way: Sunday Night Football on NBC has about the same-sized audience as the old Monday Night Football package on ABC. Yet, SNF is virtually always the #1-rated show on all of TV every week, whereas MNF rarely cracked the top 10 until the very end of its ABC run (which coincided with the rise of DVR usage). Scripted program ratings have universally gone in the tank (Big Bang Theory's ratings would have gotten it cancelled in 1997, but its ratings now make it arguably the most valuable scripted program in TV) and the most consistently-rated non-sports TV shows have sports-like DVR-proof competitive qualities (such as The Voice or Survivor). That is a big reason for the rise of reality TV - they actually get a lot more live viewership for a fraction of the cost of a scripted program. In that vein, sporting events constitute reality TV in its purest form.

Number one factor, can the programming maintain or even generate subscribers? Subscriptions account for 70%+ of revenue at ESPN and growing.

Ratings are huge factor as to the cost of advertising. But, the revenue generated from advertising is minimal compared to the subscriber revenue. Why did the BE get a big contract? FS1 debuted in 90 million homes. Doubtful FS1 would be on basic cable in many major BE cities unless they were carrying the BE games.

So, do ratings matter? Sure, but with respect to the major conferences and must see major sporting events, only a second tier consideration. Its nice to get tens of millions extra if your programming draws big ratings. But, at ESPN, maintaining 10 million subscribers, corresponds to over $1 billion in revenue per year. Hence, the loss of 12 million subscribers in the past few years is the real cause of the belt tightening. Why is the SEC worth boatloads of cash? How many cable systems would drop ESPN off their basic tier if the SEC moved to NBCSports? Now ask yourself, how many cable systems would drop ESPN if the AAC, CUSA or MAC left ESPN? For these conferences that don't move the subscriber needle, they are getting paid based on advertising dollars. Hence, the paydays for them are much much lower.

And one other factor is the coverage. Pretty much every SEC game gets on TV now. And they are virtually all national. Before it was a limited number of games and most were regional.

That again ties back into ratings, which is the ultimate driver, even if it is "expected" ratings. These are long term contracts.

To expand on what Frank said: people have more recently realized what was has been true for some time -- network TV other than news and sports is literal dog crap.

It's almost like they have this formula for putting out really crappy TV shows, and they stick with it no matter what.


I refuse to watch network TV, other than news and sports. Reality shows are trash TV, and their scripted shows just plain suck.



I'm sure others have already hit on this, but I'll also throw in that there are basically two revenue streams for TV programmers (ESPN, etc.): 1) per subscriber fees that they charge cable systems (Comcast, Charter, etc), and 2) advertisers pay to put commercials on the events.

The value of sports has gone through the roof, because it's one of the few things that people almost always desire to see live and will even not change the channel on commercial.

(05-03-2017 09:02 AM)quo vadis Wrote:  

(05-03-2017 08:37 AM)ohio1317 Wrote:  Multiple factors at play
1. Inflation
2. Live sports are more important for advertisers because less dvr and recording. That was far less relevent in 1998.
3. The above goes doubly for young adults advertisers are trying to reach who are watching less TV in addition to doing even more DVR.
4. SEC was probably undervalued somewhat at that point.
5. ESPN pays some extra to get on ESPN rather than a network (where ratings would be a little higher but being on ESPN means both commercial revenue and revenue from cable fees).

So in other words, the link between media deals and TV ratings isn't that strong?

I agree with the Buckeye but he left out one crucial detail, "When was the TV contract first signed and for how long?" Arbitrarily picking a date can be extremely misleading since ultimate valuation will not be recalculated fully until the next renewal, or in the case of the SEC with a renegotiation clause for two market additions, but even that was limited by comparison to what could be factored in with a renewal.

There is a strong relationship between % of viewers actually watching vs total possible viewers and the compelling nature of competition, or lack thereof, and advertising dollars. The payout is more in line with advertising dollars than it is the sliding range of factors that contribute to them. So the query itself is misleading because it leaves out the factors that lead to the ad revenue paid to the network which then bases its media deal on the ability of the product to produce that ad revenue.

(05-03-2017 09:36 AM)Attackcoog Wrote:  

(05-03-2017 08:34 AM)mturn017 Wrote:  And also competition. I doubt you could draw a straight line correlating viewership and contract value. There will be fierce bidding wars for the BIG10, SEC, etc. that will drive the price for those contracts higher. AAC fans always say that ESPN is getting a deal for their properties based on ratings and what they're paid but that's likely what the network likes about them. It's not the same "must have" property regardless what the back of their helmet says.

The SEC is "must have" programming not only because it can attract a big audience---but because in the struggling cable model, it is a property people will switch cable carriers over. In other words, there is a large number of folks that will drop Comcast and switch to ATT-Uverse if Comcast doesn't have SEC games but ATT does. Thus, the SEC can deliver not just ratings--but more importantly---subscribers.

That said, the ability to simply attract a big audience is still very valuable. Doing so at a low rights cost is VERY attractive. However, that ability to draw a large audience almost always means the "low cost" is going to rise quickly because there are lots of competitors for properties that offer large audiences at a low cost. Thus, you'll see a significant bump for the AAC rights---but it's not going to be anywhere near where the P5 live.

The AAC has decent audiences in the grand scheme and no real Marquee programs. It's great filler content but not the content you build your CFB presence around. ESPN will have a few competitors for the AAC, none of them will want to go too high in the bidding. We'll see.

(05-03-2017 01:21 PM)mturn017 Wrote:  The AAC has decent audiences in the grand scheme and no real Marquee programs. It's great filler content but not the content you build your CFB presence around. ESPN will have a few competitors for the AAC, none of them will want to go too high in the bidding. We'll see.

Navy will make a difference. Not marquee program difference, but marquee game difference. Won't Army-Navy and Navy-Notre Dame be part of the AAC's package every other year? Or is Army-Navy its own deal?

On a side note - I wonder if the AAC could be an eventual home for Texas Olympic sports (with football independent) if Oklahoma and Kansas were to leave the Big 12...