(05-22-2017 09:23 AM)GoldenWarrior11 Wrote: I'd be interested in hearing JR's thoughts, but I think the SEC really needs to make a play for Oklahoma, and in order for the SEC to get OU, they can seal the deal by taking OK State. If the SEC stands pat for too long, the B1G could eventually offer membership to both OU and Kansas, which would put their conference on the doorstep of Texas - which could then end up being the move that puts the B1G over the SEC.
Doubling up the Oklahoma market may not be the huge boost the SEC would want, but it would be a protective move against the B1G from (eventually) getting Texas.
You must have been reading the Fluguar tweets.
We've kicked that around for a few years now, especially on the SEC board. But in the past year we have heard this idea from 3 beat writers from the Big 12 region and from Paul Finebaum. While I don't give any of those 4 a great deal of weight I do give such weight to Tony Barnhart who has also suggested the same.
Some of the SEC folks (who have been sold on the market expansion concept) think that doubling down in a small state makes no sense whatsoever.
But before 2010 I was, and remain, a huge proponent of brand additions and schools that increase content value.
The whole market model was an agenda driven device that was used by the networks, one in particular, to break up advertising leverage within states and conferences by utilizing this model to split up large states. You will note that the loss of A&M by the Big 12 probably did more to imperil the situation than the loss of either Colorado, Missouri, or Nebraska. Why? It split the competition within the state of Texas for advertising.
It is also why a move by Cincinnati to the ACC would have an impact on Ohio, though not nearly as much as A&M's move had on Texas. It's not like Ohio State or Texas suddenly have less draw, but that advertisers might be able to reach a whole state through a reduced rate by utilizing a competing interest. The total amount of advertising might increase but the share going to pay another conference where there was none before helps the network and reduces the leverage of the conference with regards to what they make off of rates.
So making sure that large states which have been solidly locked into one conference with their P5 schools were targeted for division by the market model was the goal. The market model was never intended to last because the subscription fees promised duplicated the population of the state in payouts. Once the split up to different conferences happened for that state's schools a new pay model was going to be introduced, one based on % of the market viewers but still paid by subscription fees. But if Florida could be split (FSU to the ACC in '91 assured FSU would not pair with Florida in the SEC), Texas A&M to the SEC in 2012, the push for Virginia Tech and N.C. State to the SEC in 2012 all would have split large states. Or in FSU's case prevented the SEC gaining leverage in a huge state.
California was immune because of geography.
Before cord cutting brought a demise to this model the idea was that once states were divided in allegiance it would accomplish several things all benefiting the networks:
1. We would have moved to a subscription fee model that paid a conference by the % of households that ratings showed watched their conference, instead of paying that conference for all of the states cable households and then duplicating that payout to another conference sharing that state. By moving to a % of households pay method the networks would essentially pay just once for the total households subscribing. This of course would have reduced the overhead of networks and reduced the conference payouts when the old contracts were up. So in effect the market model payout was a tease to get the big markets to split up.
2. The networks would have increased the number of interested parties with regards to those large population states having been divided into different conferences. Now you might have two whole regions that watch one OOC games between large conferences even though the game was simply between two state foes. Thereby you increase both the scope of the advertising and the number of viewers which increases the profits of the networks.
3. You gain a second and less leveraged angle to enter a state for advertising if there is just one school from that state in another major conference (like A&M is to Texas).
So if you replaced total market subscription pay outs with % of market subscription payouts you get a reduced overhead. But if you replace % of market subscription payouts with actual payouts for those viewing you kill the market model all together. What do the those actually viewing tend to watch? Their teams to be sure, but then the most competitive games of the week. A conference can't control the former, but a conference stacked with competitive teams will come out on top in actual viewers most every time.
In 2012 which were the more competitive additions Missouri/A&M or Maryland/Rutgers? Last year the Big 10 Network's valuation as presented by SNL Kagan fell from 1.59 billion dollars to 1.142 billion. That was a drop in valuation of 39.2%. The SECN fell from 4.77 billion to 4.692 billion, or a drop of 1.67%. Now certainly not all of the BTN's drop was from cord cutting, but almost all of the SEC's drop was. The BTN paid out profit sharing amounts equal to about their total drop but cord cutting seemed to hurt the BTN more than the SEC. Why? Probably content.
The fight for Oklahoma is a fight that clearly will be over content value for the Big 10 versus the SEC. Both conferences are lowering standards in pursuit of Oklahoma. Oklahoma would be 16th in a 16 member Big 10 in academic standing and the only school in it to have never been in the AAU. So offering OU is a lowering of the Big 10's academic standing. The SEC knows that Boren leans Big 10 but as a former governor who is tied to OSU as well that should the SEC offer OSU along with OU (even though OSU would be 15th in a 16 member SEC and OU would be 7th, or slightly above our academic MEAN) that the SEC stands a much better shot at getting OU. So while the pair lowers our academics as well taking both to get OU means more money, and it cuts the ability of our chief competitor to gain ground.
With the SEC offering both however the mitigating factor is that for the last decade the Cowboys have been near the top of the Big 12 most of those years. They have content value and are competitive in all revenue sports and in non revenue sports as well. The don't add enough to cover their entry, but with their content and OU adds it's workable. If the SEC adds Oklahoma we not only pick up a state, but a higher % of DFW which increases our ad payouts in Texas since DFW is a monster market. That addition would cement the SEC as the leader in revenue moving forward.
Last year we outearned the Big 10 by 150 million in revenue as a conference. The average Gross Revenue per school payout was almost 14 million more when T3 was added in (T3 in most conferences doesn't go through the conference but is paid directly to the school and therefore is not accounted for in Total Conference Revenue).
In 2018 the Big 10 will close the gap by 5 million a year per school in revenue with their new TV contracts. Adding Texas and OU would close another 5 million in that gap. But if the SEC adds either Oklahoma or Texas the Big 10 can't catch us and we not only grow another 2.5 million in per school payouts for the addition, but our SECN revenue and T1 & T2 revenue go up because of addition ad revenue particularly in DFW. If the Big 10 can land either Texas or Oklahoma then we stay essentially in the same position that we will be in at the close of the 2018-9 season.
The catch here is that Texas probably isn't in play for the Big 10. So the game for the whole enchilada in revenue distribution (which helps with recruiting and facilities) is the competition over Oklahoma. This is precisely why if the SEC feels it has no shot at Texas they will absolutely offer the pair of Oklahoma schools.
Tony Barnhart saying so is relevant because he doesn't just beat his gums. He has to be confident in information before he tosses something out there. He is trusted with confidential information by the SEC office and by the ACC regularly and does not betray confidences and doesn't need to drive hits or be a sensationalist as he is well read, and listened to. We'll all miss him when he is gone. But even if Barnhart had not weighed in the preponderance of parties aware of this struggle were right.
Kansas doesn't really add to the Big 10's bottom line in a significant way. They will increase the content value of Big 10 basketball and since the Big 10 is deep in basketball that will be significant. But in the Big 10 even basketball is only 20% of the total revenue. So Kansas is a nice travel mate but hardly the football content multiplier they want. Oklahoma is the game for them hands down.
So the war is over Norman, but the SEC will play the full state press with OSU and the Big 10 will play the academic association card and both will push hard.
It's just that in the back of my mind I have to wonder if the best thing for the sport would be for Texas and Oklahoma to head west to the PAC so that a relative balance is maintained. If neither the SEC nor Big 10 land Oklahoma and both miss out on Texas we probably keep a P4. If Texas and Oklahoma are split between the Big 10 and SEC the gap with the PAC and ACC grows and we likely head for a reduced P2 of closer to 48 schools than 65 and what would essentially be 2 leagues as opposed to 4 large conferences. If one conference gains both the other conference will push for a merger (PAC/Big 10 vs ACC/SEC) to gain leverage.
So as an SEC guy I would love to see us land a historic program like the Sooners. But as a college football fan who has lived in all 4 regions and enjoys the flavor, or what's left of it, in those distinct regions, I would be totally comfortable with the PAC winning big on this one.
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Berry Tramel: Would the Big Ten welcome OU?
