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Some Napkin Math On Realignment with Regard to UT, OU, and KU
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JRsec Offline
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Some Napkin Math On Realignment with Regard to UT, OU, and KU
Michigan released a 2018 projected budget showing a 51.1 million dollar payout for TV revenue, bowl revenue and BTN distributions. The SEC will likely be paying out 43 million at the end of 2017 and is projected in the 45 million range for 2018. So just what does that mean for realignment?

Now foremost all speculation ends with the valuations given by FOX and ESPN so those two could make the difference for anyone. But lets use the projected revenue numbers for 2018 for the sake of argument.

A couple of years ago when the SEC was projected to make 38 million Oklahoma was projected to be worth an additional payout of 2 to 2.5 million per SEC school if we added them. Texas would have been around the same, but worth more to the Big 10 because they don't have a presence there yet and we have A&M. Kansas's value to either has never been discussed.

So if Oklahoma is to add a value of 2.5 million to the SEC that means that they would have to have a total worth to the SEC of 82.5 million to accomplish that. And since that for the SEC would about 85% in football value that's where they have to add the value of the market of Oklahoma with the deeper penetration that would use to bring higher rates in DFW, and the added content value of each SEC game they played in a year (figure 4 million for conference games, and key OOC games, and about 2 million for the other 3). So about 42 million would come in the value of the games. The other 40 million would have to made up by the cable subscriptions for Oklahoma roughly 4 million x 1.30 for the rates to the SEC. That's 5.2 million leaving 34.8 million to be made up from all other sources like increased ad rates in DFW and from dispersed Oklahoma fans elsewhere, and from bowl revenue.

So you could figure about the same for Texas.

Now, I just don't see how Kansas can do that for us or for the Big 10. Remember that in the Big 10 only 20% of the total revenue comes from basketball. In the SEC only 15% of the total revenue comes from basketball.

I would also say that clearly at 45 million a year base in 2018 that there would be no room for little brothers to remain viable as secondary schools. Only the networks could guarantee enough revenue to make a little brother viable at this point.

In the Big 10 the task gets more daunting. Oklahoma would have a comparable value to the Big 10 (around 2.5 million). Texas would be worth more to them (maybe a 3.5 million dollar bump) because of the huge market of Texas. But at 51 million per school payout the Sooners would have to be worth 88.5 million to the Big 10 to be included. So if Oklahoma is added Kansas would have to be worth 88.5 million to them as well. I just don't see how they make this cut? The state is under 3 million in population and the Big 10 is deep in basketball but needs football gravitas. So Kansas doesn't give them what thy need in addition to probably not paying their way.

Kansas would likely need Texas paired with them to make the Big 10 enough money to make it worth it. I'm not sure Oklahoma could do that.

So my take at this juncture is that Texas and Oklahoma as a pair is the preferred option of both the SEC and Big 10. Oklahoma could move on its own and make it just fine. Kansas can't. If Kansas is to head to the B1G then most likely they will need Texas to cover them at the 51 million mark. That pairing could still make a nice profit of maybe 2 million or a little less in payouts in the B1G. Oklahoma might not be able to cover Kansas at a profit for the Big 10. As a pair they may not be that appealing anymore.

If that's the case then Oklahoma without Texas makes no sense or cents for the Big 10. The game for them will be Texas and Oklahoma as first option, and Texas and Kansas as second option.

I'd say the same is true for the SEC as well.

The most interesting scenario for the SEC would be whether Texas & Texas Tech are worth it. The only reason they would be is that all 3 state Texas schools would command a higher rate for the entire state in advertising and Texas will pass 27 million in population this year. So every game played by, and between, each of those 3 would pay quite nicely. ESPN would have to calculate that one too. But that kind of control in a state that large could be profitable.

But if what I suspect is true then the ability of Oklahoma to get OSU into the conference without ESPN's help may be about at an end as far as the math works. Furthermore, I don't see Oklahoma and Kansas as being a profitable pair for the SEC, although it would be more workable for us than for the Big 10.
(This post was last modified: 08-13-2017 09:01 PM by JRsec.)
08-13-2017 03:51 PM
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Lenvillecards Offline
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Some Napkin Math On Realignment with Regard to UT, OU, and KU
This is another reason why it would make more sense to partially merge the B12 with the PAC. The SEC & B1G are basically maxed out, no pair brings enough ROI.


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08-14-2017 08:11 AM
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JRsec Offline
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RE: Some Napkin Math On Realignment with Regard to UT, OU, and KU
(08-14-2017 08:11 AM)Lenvillecards Wrote:  This is another reason why it would make more sense to partially merge the B12 with the PAC. The SEC & B1G are basically maxed out, no pair brings enough ROI.


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Well to put it another way Lenville there is a pair that is worth the ROI, Texas and Oklahoma. The problem is if either conference acquires that pair to move to 16 then no other conference will catch them and that means that the PAC and ACC will fall way behind whoever did. And since the likeliest two conferences to land the pair would be the SEC or the Big 10 that means that the ACC would have a neighboring conference that could almost double them up which would lead too more instability.

The winning conference would lure ACC schools with money the first opportunity they could, and the losing conference would lure them to catch up with the winner. Eventually we would have three major conferences and then two. And that wouldn't be healthy for the game.
08-14-2017 12:55 PM
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Win5002 Offline
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RE: Some Napkin Math On Realignment with Regard to UT, OU, and KU
(08-14-2017 08:11 AM)Lenvillecards Wrote:  This is another reason why it would make more sense to partially merge the B12 with the PAC. The SEC & B1G are basically maxed out, no pair brings enough ROI.


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Your explanation above is why for having balanced leagues among college football it is best if the Big 12 & PAC 12 merge.

It was not the best option for Texas & OU individually to go to the PAC 12 at least with only 4 teams. Merging or going with 5 to 7 other teams makes the move a lot better situation because they maintain more games in CST zone, and they should be able to limit the number of west coast games to at most 2X per year and they could put in requirements those games start by 7:30 CST.

Maybe even this helps us get to 4 equal leagues and the leagues negotiate their product as 1 for tv revenues and the expanded playoff within conferences to replace the bowl system for the 4 participants in the CFP.
08-14-2017 01:00 PM
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AllTideUp Offline
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RE: Some Napkin Math On Realignment with Regard to UT, OU, and KU
I think one way or the other, the next windfall is in the expansion of the playoffs and the addition of Power games to the schedule. Perhaps it's new games added to the CFP? Perhaps it's conference semis and I think more money might be made for everyone if they do it that way...more games that way for one thing.

If we're to get the playoff expansion and ultimately more Power vs Power games then I think we'll need another realignment. I'm not sure what shape it will take, but we need to get to 4 leagues and roughly equal numbers of schools from league to league.
08-14-2017 04:40 PM
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