Here’s a nugget at the end. The pac 12’s current tv deal is for 12 years 3 billion. The AACs new deal is for 12 years 1 billion. The AAC deal is EXACTLY 1/3 of the value of PAC deal. Just a nugget I found interesting on conference tv deals. Not 10x as much as some believe. 3x as much.
well when an idiotic plan comes together and looks ridiculous why not bump your stupid high expectations by 50%
so pay $750 million for something that barely turns a profit and that relies on dying cable subscriber fees that it has been highly unsuccessful at getting and is in fact losing at a fast rate, but in the end "profit" by selling that entity to some other fool
this is what happens when dot com kiddies write business plans in a non dot com era
And you people keep thinking teams in the Big 12 want to join the Pac-12.
750 million, not billion. but it's a lot.
Can't help but think that if I (or my investment company) had 3/4 a BILLION dollars laying around there would be much better places to invest it in besides the PAC 12.....
(03-21-2019 01:04 PM)BullsFanInTX Wrote: [ -> ]Here’s a nugget at the end. The pac 12’s current tv deal is for 12 years 3 billion. The AACs new deal is for 12 years 1 billion. The AAC deal is EXACTLY 1/3 of the value of PAC deal. Just a nugget I found interesting on conference tv deals. Not 10x as much as some believe. 3x as much.
To be accurate though, the Pac-12 deal is only for their Tier 1/2 stuff, the stuff on Fox and ESPN. The AAC deal is for the whole thing.
(03-21-2019 01:41 PM)BadgerMJ Wrote: [ -> ]Can't help but think that if I (or my investment company) had 3/4 a BILLION dollars laying around there would be much better places to invest it in besides the PAC 12.....
My thoughts exactly. Or for that matter, any FBS conference. Why would someone with millions of dollars invest in a college football conference? How do you get a return on your investment?
(03-21-2019 02:08 PM)SoCalBobcat78 Wrote: [ -> ] (03-21-2019 01:41 PM)BadgerMJ Wrote: [ -> ]Can't help but think that if I (or my investment company) had 3/4 a BILLION dollars laying around there would be much better places to invest it in besides the PAC 12.....
My thoughts exactly. Or for that matter, any FBS conference. Why would someone with millions of dollars invest in a college football conference? How do you get a return on your investment?
You're getting an equity share in the PAC 12 networks, which should theoretically produce a profit at some point. It might also give you a share of the PAC 12 TV rights fees from Fox/ESPN/whoever.
(Yes, it's bonkers and this will not get off the ground, and if it does get off the ground everyone will hate it)
(03-21-2019 01:04 PM)BullsFanInTX Wrote: [ -> ]Here’s a nugget at the end. The pac 12’s current tv deal is for 12 years 3 billion. The AACs new deal is for 12 years 1 billion. The AAC deal is EXACTLY 1/3 of the value of PAC deal. Just a nugget I found interesting on conference tv deals. Not 10x as much as some believe. 3x as much.
But ... the PAC deal was signed in 2011 and expires in 2024, and they have their own network which is distributing about $2m per school, even though badly mismanaged. They could sell that too if they get rid of Scott.
(03-21-2019 02:14 PM)quo vadis Wrote: [ -> ] (03-21-2019 01:04 PM)BullsFanInTX Wrote: [ -> ]Here’s a nugget at the end. The pac 12’s current tv deal is for 12 years 3 billion. The AACs new deal is for 12 years 1 billion. The AAC deal is EXACTLY 1/3 of the value of PAC deal. Just a nugget I found interesting on conference tv deals. Not 10x as much as some believe. 3x as much.
But ... the PAC deal was signed in 2011 and expires in 2024, and they have their own network which is distributing about $2m per school, even though badly mismanaged. They could sell that too if they get rid of Scott.
at this point I doubt they could sell it
they distribute $2 million to each school with nothing left over
so unless the investor is going to take zero return the only way an investor could get a return is to take part of the $24 million going to the PAC 12 members
even if they took 100% of that if an investor was OK with a 5% return they could invest $480 million
but of course that leaves nothing for any of the PAC 12 members so why would they do it unless they feel the up front $480 is worth it
and of course no one is going to invest $480 million because there is little chance they could ever sell that channel to anyone else, cable subscribers are declining especially for the PAC12n and it would take forever to get their money back $24 million a year in returns and that is not including the fact that they could get 3% in Tbills with no risk and probably better than 5% in sticks and bonds with little risk
so the cost of that $480 million in capital is high so they would need well over a 5% return
someone might be willing to pay well under $100 million for all of the PAC12n, but I doubt that even because it would take a long time to get their money back unless they were taking most all of the payments that used to go to the conference members and even then there is little chance they could ever sell it
and the idea that anyone would buy it and be able to gain more carriage (and thus boost profits and return on investment) is pretty much out the window now because it has been pretty much proven that no one is demanding the PAC12n and any of the companies that could probably force carriage by bundling with other channels are not going to be willing to push the limits with the known "not in demand" PAC12n especially when that purchase comes with the overhead of running an entire network that no current companies need
(03-21-2019 02:14 PM)quo vadis Wrote: [ -> ] (03-21-2019 01:04 PM)BullsFanInTX Wrote: [ -> ]Here’s a nugget at the end. The pac 12’s current tv deal is for 12 years 3 billion. The AACs new deal is for 12 years 1 billion. The AAC deal is EXACTLY 1/3 of the value of PAC deal. Just a nugget I found interesting on conference tv deals. Not 10x as much as some believe. 3x as much.
But ... the PAC deal was signed in 2011 and expires in 2024, and they have their own network which is distributing about $2m per school, even though badly mismanaged. They could sell that too if they get rid of Scott.
The Pac-12 will turn things around. They need to fire Scott at least two years before they start negotiating the new tv deal. They also need USC to start winning big again and UCLA and Arizona to be back in basketball.
I know some AAC fans are excited about the new tv deal and rightfully so. But it’s delusional to think they’re somehow getting close to the Pac-12 monetarily. The “Conference of Champions” is the king of the West, they have flagship/land grant institutions and two elite private schools and own the most populous state and the #2 television market. Their place in the P5 is not in danger and they’ll get paid as a power conference in 2024. The AAC? They’re the best G5 in football and the best basketball league outside the P6. The new tv deal reflects that but it’s nowhere near the Pac-12 or the ACC (the weakest P5).
(03-21-2019 02:32 PM)UTEPDallas Wrote: [ -> ] (03-21-2019 02:14 PM)quo vadis Wrote: [ -> ] (03-21-2019 01:04 PM)BullsFanInTX Wrote: [ -> ]Here’s a nugget at the end. The pac 12’s current tv deal is for 12 years 3 billion. The AACs new deal is for 12 years 1 billion. The AAC deal is EXACTLY 1/3 of the value of PAC deal. Just a nugget I found interesting on conference tv deals. Not 10x as much as some believe. 3x as much.
But ... the PAC deal was signed in 2011 and expires in 2024, and they have their own network which is distributing about $2m per school, even though badly mismanaged. They could sell that too if they get rid of Scott.
The Pac-12 will turn things around. They need to fire Scott at least two years before they start negotiating the new tv deal. They also need USC to start winning big again and UCLA and Arizona to be back in basketball.
I know some AAC fans are excited about the new tv deal and rightfully so. But it’s delusional to think they’re somehow getting close to the Pac-12 monetarily. The “Conference of Champions” is the king of the West, they have flagship/land grant institutions and two elite private schools and own the most populous state and the #2 television market. Their place in the P5 is not in danger and they’ll get paid as a power conference in 2024. The AAC? They’re the best G5 in football and the best basketball league outside the P6. The new tv deal reflects that but it’s nowhere near the Pac-12 or the ACC (the weakest P5).
Look,,, hating the AAC is Quo job. Go find another conference to hate.just kidding.
(03-21-2019 01:36 PM)quo vadis Wrote: [ -> ]750 million, not billion. but it's a lot.
Fixed, I hit the wrong button by mistake.
(03-21-2019 02:05 PM)johnbragg Wrote: [ -> ] (03-21-2019 01:04 PM)BullsFanInTX Wrote: [ -> ]Here’s a nugget at the end. The pac 12’s current tv deal is for 12 years 3 billion. The AACs new deal is for 12 years 1 billion. The AAC deal is EXACTLY 1/3 of the value of PAC deal. Just a nugget I found interesting on conference tv deals. Not 10x as much as some believe. 3x as much.
To be accurate though, the Pac-12 deal is only for their Tier 1/2 stuff, the stuff on Fox and ESPN. The AAC deal is for the whole thing.
I think the AAC is still negotiating a small CBS deal, so our total TV payouts could be closer to 8m, and total annual distributions between 10-12M once you factor in the other stuff (NCAA credits, bowl revenue, etc).
The AAC needed to get above 10M per school in total annual distributions, and they seem to have done that.
The Pac 12 better get their house in order or it will be the Big 12 and Big Ten that end up raiding them.
(03-21-2019 02:44 PM)Tigersmoke4 Wrote: [ -> ] (03-21-2019 02:32 PM)UTEPDallas Wrote: [ -> ] (03-21-2019 02:14 PM)quo vadis Wrote: [ -> ] (03-21-2019 01:04 PM)BullsFanInTX Wrote: [ -> ]Here’s a nugget at the end. The pac 12’s current tv deal is for 12 years 3 billion. The AACs new deal is for 12 years 1 billion. The AAC deal is EXACTLY 1/3 of the value of PAC deal. Just a nugget I found interesting on conference tv deals. Not 10x as much as some believe. 3x as much.
But ... the PAC deal was signed in 2011 and expires in 2024, and they have their own network which is distributing about $2m per school, even though badly mismanaged. They could sell that too if they get rid of Scott.
The Pac-12 will turn things around. They need to fire Scott at least two years before they start negotiating the new tv deal. They also need USC to start winning big again and UCLA and Arizona to be back in basketball.
I know some AAC fans are excited about the new tv deal and rightfully so. But it’s delusional to think they’re somehow getting close to the Pac-12 monetarily. The “Conference of Champions” is the king of the West, they have flagship/land grant institutions and two elite private schools and own the most populous state and the #2 television market. Their place in the P5 is not in danger and they’ll get paid as a power conference in 2024. The AAC? They’re the best G5 in football and the best basketball league outside the P6. The new tv deal reflects that but it’s nowhere near the Pac-12 or the ACC (the weakest P5).
Look,,, hating the AAC is Quo job. Go find another conference to hate.just kidding.
Who’s hating on the AAC?
I don’t hate it, I actually root for our former confeeence mates. If I’ll be hating a conference, I’d go for the big leagues like the SEC or a very powerful school like Texas not a G5 conference.
The article suggests that the EBITDA for NewCo was $286 million last year. If I'm reading this correctly, NewCo would obtain all the conference's media rights, which includes their $3B 12 year deal. That would mean that most of the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) come from that contract.
In the corporate world (which this clearly is not) a stable company on the market would sell for somewhere around 7 X EBITDA, which would value NewCo at around $2 Billion. A $750 million stake would be roughly 38% of that. So, each PAC 12 school would get about $65 million cash up front for the sale of their equity to NewCo, and would get about $8 million less per year from the media deals than they get now going forward.
The way I see it, neither side should want this deal. Even at a price of $500 million it shouldn't make anybody happy.
(03-21-2019 04:23 PM)ken d Wrote: [ -> ]The article suggests that the EBITDA for NewCo was $286 million last year. If I'm reading this correctly, NewCo would obtain all the conference's media rights, which includes their $3B 12 year deal. That would mean that most of the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) come from that contract.
In the corporate world (which this clearly is not) a stable company on the market would sell for somewhere around 7 X EBITDA, which would value NewCo at around $2 Billion. A $750 million stake would be roughly 38% of that. So, each PAC 12 school would get about $65 million cash up front for the sale of their equity to NewCo, and would get about $8 million less per year from the media deals than they get now going forward.
The way I see it, neither side should want this deal. Even at a price of $500 million it shouldn't make anybody happy.
Agreed, it is another dumb Larry Scott idea, designed to cover for his earlier dumb ideas.
What will save the PAC is that it is also bad for investors so probably will not sell.