(09-19-2017 05:04 PM)quo vadis Wrote: (09-19-2017 09:25 AM)krup Wrote: (09-19-2017 08:52 AM)orangefan Wrote: (09-19-2017 08:13 AM)The Cutter of Bish Wrote: (09-18-2017 11:17 PM)quo vadis Wrote: The ACCN may be a smash hit, but this move makes it pretty clear that as of now, ESPN regards it as a second/third banana outfit.
I wouldn't go that far. The optics aren't what the ACC would maybe ideally want, like what the Big Ten has in Chicago, SEC in Charlotte, PAC in San Fran, and even LHN in Austin. The ACC will not have its media operations center in their "heart."
This is, however, what happens when you give yourself exclusively to a provider or can't masterfully negotiate terms down to this level. Yes, the ACCN will happen. When, where, and how are debatable in their relevancy.
What I think maybe ESPN does think, and this isn't exclusive to ACCN, is that these college sport networks aren't worth the mega-investment and all of this lavishness. That the returns aren't fantastic, but, that ESPN "bought into" the market overpaying to be a part of these other ventures (especially LHN). With the ACCN, they get to pump the brakes a bit.
No question LHN has been a disaster, but your assessment of conference networks is completely incorrect.
According to SNL Kagan's Economics of Basic Cable Networks, 2016 Edition, t he SEC Network generates operating income of $345 million on revenues of $571 million. BTN generates operating income of $159 million on revenues of $401 million. These are tremendously successful ventures for both the conferences and their network partners. Indeed, the SEC Network is one of the few bright spots the ESPN has been able to report, offsetting a good portion of the decline in revenues from their other networks. ESPN needs the ACC Network to be a repeat of that success almost as badly as the ACC does.
What we're seeing here is just a management decision by ESPN to make the most efficient use of its existing facilities. ESPN has obviously become more cost conscious. With recent layoffs, I suspect ESPN has plenty of existing underused studio space and unused office space to host ACC Network operations. Charlotte has been the location of ESPN Regional Television (syndicated and ESPN3 productions), ESPNU and SEC Network. It's possible that space there is limited, and that the choice to base operations out of Bristol is more about using existing space as compared to paying to expand the space occupied in Charlotte.
I take 3 things out of this thread in general and your post specifically.
1. The SEC really benefitted from the Big Ten initiating the conference network movement. They are both running a network for about $230 million, but the legwork the B1G did proving the concept was viable allowed the SECN to sign more lucrative carriage deals and the $170 million or so more they are making in revenue is going right to the SEC network bottom line.
The SEC would have really benefited from the B1G initiating the conference network movement had Slive realized in 2007 that Delaney was right and that the network route was the way to go. But, stupidly, he rejected that model and signed an ordinary deal with ESPN, one that turned out to massively underestimate the SEC's burgeoning value.
Thus, even though the SECN is generating $$$ hand over fist, it is ESPN, not the SEC, that is benefiting most from that, because ESPN was able to drive a hard bargain thanks to it already owning the SEC's rights.
Slive's lack of forsight in 2008 has cost the SEC hundreds of millions in revenue that it, not ESPN, should be getting, and it has resulted in the B1G being on a superior revenue trajectory.
Quo you bang this drum annually and the rhythm keeps getting more and more skewed. The trajectory for the Big 10 revenue is only up for TV revenue and only up because their rights deal came up prior to the SEC's.
You do realize that in 2018 they will enjoy a 3 million dollar advantage in TV revenue over the SEC. In 2023 the SEC will have it's T1 rights up for bid and the pendulum will swing back the other way.
The Big 10's trajectory for revenue is not better. They are still falling behind the SEC in % of growth in people and what was once a sizable advantage for the Big 10 is slowly but surely eroding away and with it a % of their upward trajectory.
The SEC out earned the average Big 10 school (now that the numbers for the privates are in) by an average of 16 million per school in total revenue distributions last year.
So in 2018, provided the SEC doesn't receive any kind of bump in donations, merchandise sales, ticket sales, etc. they will only enjoy a 13 million dollar advantage over the B1G in per school revenue. When the new T1 rights deal is completed we will again be earning more even in TV rights.
On the other hand the value of the BTN lost 39.2% of its total value last year. I'll be keeping an eye on their valuation at the end of this year. And I know they get to renew their T1 & T2 contract again in 2024-5. Big deal! The SEC still has a renegotiation clause in our contract should we add a couple of more schools.
Holding a pissing match over 3 million dollars worth of TV revenue when the average SEC school brought in 131 million in total revenue doesn't even amount to 3% of the pie. It's more like who grabs the last cookie off of the plate really. The B1G distributed right at 115 million in total revenue per school on average. They ain't hurtin' either, as we say in the South.
And in your regular remarks on this matter you always neglect the obvious: Slive, Delany, and Swofford all worked in the TV rights industry prior to becoming commissioners. They all know which side of the equation their bread is buttered on and it sure as hell isn't the conference! That's why the networks had advantages over all of us. They set up their personnel and people they were accustomed to dealing with as our point persons. Mr. Fox you are now in charge of the chicken coup.
The reason that Delany started an independent BTN is because ESPN tried to low ball their offer to the Big 10 and Delany was smart enough to realize that they were whizzing down his leg. The reason Slive didn't go that route was because until FOX bought out the BTN they never gained the carriage they needed to maximize their revenue from it.
This of course is part of the reason that the PACN has never flown. Like the Spruce Goose it skimmed the Bay and then was put back in the Hanger. Why? No takers. Why? Because no network has a piece of it.
Why do you think the SEC started making money right away? Because ESPN made sure it got complete carriage for its opening. So it's apples and oranges and what you consistently ignore on this point is that the SEC has outpaced its rivals to the North where it counts, the bottom line. For all of their investment and struggles if a region of the country (Big 10) with more than a 3% population advantage over the SEC, and with more living alumni than the SEC, is only making 2% more than we are for TV revenue, then we came out ahead.
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ACC Network will be operated out of Bristol, Connecticut instead of Charlotte, NC...
