CSNbbs

One has to wonder, how much longer will the BTN and PACN continue before they start to shed as much "overhead" as possible. They could use COVID-19 as a cover unless they have to keep their payroll numbers up to avoid PPP penalties.

Many networks have already done this. Plus most people are free lancers so really they are just screwed. Free lancing let’s them work for multiple places


Sent from my iPhone using Tapatalk

Pac 12 Conference and Network had a second round of layoff on Wednesday.
https://awfulannouncing.com/ncaa/pac-12-...yoffs.html

Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

My cable bill has not been reduced despite the fact the SEC Network hasn't featured actual live content in quite some time.

Unless ESPN is willing to job the SEC and ACC over payments they are nonetheless receiving from cable subscribers then these leagues will have revenue as well. The structure of the contract is irrelevant unless ESPN has specifically stipulated that the schools won't receive revenue in the event of no competitions.

Of course, the other variable is how many people start cancelling their subscriptions in the event of no games, but that's a dynamic that could affect anyone.

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Until customers tire of paying for networks than provide no content and force their service providers to drop them. That will be phase II of the financial calamity if football is played without them.

(08-27-2020 01:39 PM)AllTideUp Wrote: [ -> ]

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

My cable bill has not been reduced despite the fact the SEC Network hasn't featured actual live content in quite some time.

Unless ESPN is willing to job the SEC and ACC over payments they are nonetheless receiving from cable subscribers then these leagues will have revenue as well. The structure of the contract is irrelevant unless ESPN has specifically stipulated that the schools won't receive revenue in the event of no competitions.

Of course, the other variable is how many people start cancelling their subscriptions in the event of no games, but that's a dynamic that could affect anyone.

There might be a profit sharing component in place between ESPN and the SEC and ACC, but otherwise, my understanding is that it's a pure rights deal for the conference networks. ESPN owns 100% of those conference networks along with the Longhorn Network. Without games, ESPN can suspend payments (just as they did when sports leagues stopped playing for several months once lockdowns started in March and they weren't supplying games to the mothership ESPN network).

In contrast, the Big Ten and Pac-12 unequivocally are still receiving direct payments from their respective networks' subscriber fees, which are the same whether games are played at all.

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Actually Frank they still receive 50% of the cable subscriptions that remain in effect just the same as the Big 10 gets 49% of what FOX profits. All of them suffer if the overhead is not cut as NET profits are shared as is by process the overhead.

The real risk is still with the self owned companies as those absorb red ink if advertising drops are dramatic. The SEC and ACC can't run in red ink because they only share profits and aren't responsible for overhead which of course the Big 10 is 49% responsible for and for which the PAC is 100% responsible.

So you see, while all of them risk earning nothing, only the self owned entities risk actually running in the red.

The ACN's deal is patterned on the SECN's deal and the SECN gets 50% of the NET profit meaning after ESPN has deducted overhead from the Gross profit. During normal operation the SEC essentially pays for some high dollar ESPN personalities that get rolled up in that, but during times like these we can only earn less. We can't run in red ink and neither can the ACC. The abiding question is not how many subscribers we keep as both the SECN and ACCN will keep subscribers. The question is will there be enough ad revenue to keep a NET profit to split.

(08-27-2020 02:43 PM)chidave Wrote: [ -> ]

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Until customers tire of paying for networks than provide no content and force their service providers to drop them. That will be phase II of the financial calamity if football is played without them.

There's no forcing service providers to drop channels that are under contract. It doesn't work that way. These contracts are generally multi-year deals.

Now, a service provider may definitely have a lot of leverage if a sports channel is entering into negotiations for a new contract. This is where we get into the constant carriage fights that we see across the country.

That being said, as I've mentioned many times here previously, sports fans are the *most* important customers for cable companies. They are effectively the only people that are keeping the cable bundle alive. Many sports fans are also ignorant of the fact that they are the ones receiving the best deal in the cable bundle - it's the Lifetime and HGTV viewers that are subsidizing the sports viewers as opposed to the other way around and this pandemic has exacerbated that fact. That's why a la carte pricing makes no sense for the typical American sports fan (e.g. the person that watches one or more of the major pro sports leagues and/or the major college conferences).

(08-27-2020 02:46 PM)JRsec Wrote: [ -> ]

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Actually Frank they still receive 50% of the cable subscriptions that remain in effect just the same as the Big 10 gets 49% of what FOX profits. All of them suffer if the overhead is not cut as NET profits are shared as is by process the overhead.

The real risk is still with the self owned companies as those absorb red ink if advertising drops are dramatic. The SEC and ACC can't run in red ink because they only share profits and aren't responsible for overhead which of course the Big 10 is 49% responsible for and for which the PAC is 100% responsible.

So you see, while all of them risk earning nothing, only the self owned entities risk actually running in the red.

The ACN's deal is patterned on the SECN's deal and the SECN gets 50% of the NET profit meaning after ESPN has deducted overhead from the Gross profit. During normal operation the SEC essentially pays for some high dollar ESPN personalities that get rolled up in that, but during times like these we can only earn less. We can't run in red ink and neither can the ACC. The abiding question is not how many subscribers we keep as both the SECN and ACCN will keep subscribers. The question is will there be enough ad revenue to keep a NET profit to split.

Right, but there's a large difference between profit sharing and a true revenue split. The SEC and ACC receive 50% of net profit at the bottom line. In contrast, the Big Ten, as part owner, is receiving 49% of gross revenue at the top line (and the Pac-12 receiving 100% of gross revenue at the top line), which is quite different than net profit. That gross revenue amount is a significantly larger and direct figure. Now, you're correct that ownership comes with the sharing of expenses, as well, so there's risk for the Big Ten and Pac-12 on that front.

(08-27-2020 02:59 PM)Frank the Tank Wrote: [ -> ]

(08-27-2020 02:46 PM)JRsec Wrote: [ -> ]

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Actually Frank they still receive 50% of the cable subscriptions that remain in effect just the same as the Big 10 gets 49% of what FOX profits. All of them suffer if the overhead is not cut as NET profits are shared as is by process the overhead.

The real risk is still with the self owned companies as those absorb red ink if advertising drops are dramatic. The SEC and ACC can't run in red ink because they only share profits and aren't responsible for overhead which of course the Big 10 is 49% responsible for and for which the PAC is 100% responsible.

So you see, while all of them risk earning nothing, only the self owned entities risk actually running in the red.

The ACN's deal is patterned on the SECN's deal and the SECN gets 50% of the NET profit meaning after ESPN has deducted overhead from the Gross profit. During normal operation the SEC essentially pays for some high dollar ESPN personalities that get rolled up in that, but during times like these we can only earn less. We can't run in red ink and neither can the ACC. The abiding question is not how many subscribers we keep as both the SECN and ACCN will keep subscribers. The question is will there be enough ad revenue to keep a NET profit to split.

Right, but there's a large difference between profit sharing and a true revenue split. The SEC and ACC receive 50% of net profit at the bottom line. In contrast, the Big Ten, as part owner, is receiving 49% of gross revenue at the top line (and the Pac-12 receiving 100% of gross revenue at the top line), which is quite different than net profit. That gross revenue amount is a significantly larger and direct figure. Now, you're correct that ownership comes with the sharing of expenses, as well, so there's risk for the Big Ten and Pac-12 on that front.

Right. And guess who isn't playing? That risk of running in the red is real, and it is a whopper. Since the SEC and ACC will attempt to play the odds are they will earn. Since the PAC and Big 10 are not playing it is virtually certain that real time advertising will disappear this Fall for those networks thereby reducing the Gross Profit significantly and leaving only subscription fees to cover the overhead, which subscription fees very well may fail to cover. That means a NET loss. The SEC and ACC aren't as profitable when all things are equal, but they will never lose money. The PAC and Big 10 are very well positioned by not playing to lose revenue this Fall.

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Frank, I remember reading somewhere that the PAC 12 Network only nets a couple of million dollars per team, and that was before the pandemic affected everything. Im willing to believe that the BIG can afford not to play because of the BIGN. But I wont believe at all that the PAC 12 has that same luxury with the PACN.

(08-27-2020 02:59 PM)Frank the Tank Wrote: [ -> ]

(08-27-2020 02:46 PM)JRsec Wrote: [ -> ]

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Actually Frank they still receive 50% of the cable subscriptions that remain in effect just the same as the Big 10 gets 49% of what FOX profits. All of them suffer if the overhead is not cut as NET profits are shared as is by process the overhead.

The real risk is still with the self owned companies as those absorb red ink if advertising drops are dramatic. The SEC and ACC can't run in red ink because they only share profits and aren't responsible for overhead which of course the Big 10 is 49% responsible for and for which the PAC is 100% responsible.

So you see, while all of them risk earning nothing, only the self owned entities risk actually running in the red.

The ACN's deal is patterned on the SECN's deal and the SECN gets 50% of the NET profit meaning after ESPN has deducted overhead from the Gross profit. During normal operation the SEC essentially pays for some high dollar ESPN personalities that get rolled up in that, but during times like these we can only earn less. We can't run in red ink and neither can the ACC. The abiding question is not how many subscribers we keep as both the SECN and ACCN will keep subscribers. The question is will there be enough ad revenue to keep a NET profit to split.

Right, but there's a large difference between profit sharing and a true revenue split. The SEC and ACC receive 50% of net profit at the bottom line. In contrast, the Big Ten, as part owner, is receiving 49% of gross revenue at the top line (and the Pac-12 receiving 100% of gross revenue at the top line), which is quite different than net profit. That gross revenue amount is a significantly larger and direct figure. Now, you're correct that ownership comes with the sharing of expenses, as well, so there's risk for the Big Ten and Pac-12 on that front.

Yes, and there's no question it's better to be in the B1G position of being a true co-owner as opposed to the SEC and ACC position of receiving revenue.

Of course, the reason that the B1G is in a better position is because of differing decisions made by Delany, Swofford, and Slive in the late 2000s, on the cusp of the media-rights boom. The SEC and ACC chose to sign long-term contracts with ESPN for what seemed like mega-money the day they signed but almost before the ink was dry was realized to be vastly undervalued, while the B1G smartly sold some of its rights but kept a sizable chunk in its own hands in the form of the BTN partnership with FOX.

And as the PAC would quickly prove, it is also possible to go to the other extreme (from the SEC/ACC) and go totally alone, but then you don't get to leverage the brand value and market reach of established sports networks like ESPN and FOX. You truly have to build the network from scratch, and that's tough. If anyone ever needed evidence that sports networks like ESPN are not merely parasitic "middlelmen" but actually add significant value to a conference, the PAC situation is Exhibit A refuting it.

The B1G basically got it just right.

(08-27-2020 04:26 PM)quo vadis Wrote: [ -> ]

(08-27-2020 02:59 PM)Frank the Tank Wrote: [ -> ]

(08-27-2020 02:46 PM)JRsec Wrote: [ -> ]

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Actually Frank they still receive 50% of the cable subscriptions that remain in effect just the same as the Big 10 gets 49% of what FOX profits. All of them suffer if the overhead is not cut as NET profits are shared as is by process the overhead.

The real risk is still with the self owned companies as those absorb red ink if advertising drops are dramatic. The SEC and ACC can't run in red ink because they only share profits and aren't responsible for overhead which of course the Big 10 is 49% responsible for and for which the PAC is 100% responsible.

So you see, while all of them risk earning nothing, only the self owned entities risk actually running in the red.

The ACN's deal is patterned on the SECN's deal and the SECN gets 50% of the NET profit meaning after ESPN has deducted overhead from the Gross profit. During normal operation the SEC essentially pays for some high dollar ESPN personalities that get rolled up in that, but during times like these we can only earn less. We can't run in red ink and neither can the ACC. The abiding question is not how many subscribers we keep as both the SECN and ACCN will keep subscribers. The question is will there be enough ad revenue to keep a NET profit to split.

Right, but there's a large difference between profit sharing and a true revenue split. The SEC and ACC receive 50% of net profit at the bottom line. In contrast, the Big Ten, as part owner, is receiving 49% of gross revenue at the top line (and the Pac-12 receiving 100% of gross revenue at the top line), which is quite different than net profit. That gross revenue amount is a significantly larger and direct figure. Now, you're correct that ownership comes with the sharing of expenses, as well, so there's risk for the Big Ten and Pac-12 on that front.

Yes, and there's no question it's better to be in the B1G position of being a true co-owner as opposed to the SEC and ACC position of receiving revenue.

Of course, the reason that the B1G is in a better position is because of differing decisions made by Delany, Swofford, and Slive in the late 2000s, on the cusp of the media-rights boom. The SEC and ACC chose to sign long-term contracts with ESPN for what seemed like mega-money the day they signed but almost before the ink was dry was realized to be vastly undervalued, while the B1G smartly sold some of its rights but kept a sizable chunk in its own hands in the form of the BTN partnership with FOX.

And as the PAC would quickly prove, it is also possible to go to the other extreme (from the SEC/ACC) and go totally alone, but then you don't get to leverage the brand value and market reach of established sports networks like ESPN and FOX. You truly have to build the network from scratch, and that's tough. If anyone ever needed evidence that sports networks like ESPN are not merely parasitic "middlelmen" but actually add significant value to a conference, the PAC situation is Exhibit A refuting it.

The B1G basically got it just right.

You have absolutely no business acumen if this is what you take away from this exchange. They are in position to actually lose money instead of simply making nothing like the SEC and ACC would should they not play.

They make slightly more when everyone plays, they lose more when they don't.

This is a give and take risk / reward matter straight down the line and this epidemic and their decision not to play exactly line up with the downside and there is no other way to paint it.

For all of the Big 10's allegedly business acumen they have not out earned the SEC in Gross Revenue yet.

Has it occurred to you the SEC chose less risk from their model precisely because they could afford to do so?

The SEC's deal with CBS was a boneheaded shortsighted deal. That's ending and the per school payouts will be in the 68 to 72 million dollar range by 2024 and sooner if ESPN managed to buy out the other 2 years of CBS's contract.

Furthermore Quo the cable conference model is on its lass gasp before the streaming options make it obsolete, at least in terms of how it is paid out. It should dawn on you what happens when a company folds and the shareholders still are invested. The biggest potential losses among the P5 are the losses of equity in a failed model of owning a network which no longer is viable. When technology and familiarity finally put the nail in the coffin of the Conference networks how much does the ACC and SEC lose when they switch to streaming contracts with advertising apportioned by the total numbers of those who watched on a given weekend? I'll tell you. They will lose nothing. The PAC will lose their arse! The Big 10 bought in shares will take a beating.

In fact I find it much more likely that the Big 10 moving forward starts to divest themselves from their model so as not to suffer the losses when the current model dies.

The SEC probably makes 2 to 3 million less on its T3 than the Big 10 has. But if the Big 10 loses revenue this year (meaning runs in the red) and they hang on too long and lose again on their equity, whose to say that difference was really that different, or that the risk averse model was even better. it is certainly more flexible.

So I don't see where this matter is even really debatable from a business perspective. The reward for the Big 10 has been slightly better, and the risk potentially worse. The PAC has been such an overwhelming flop that arguing its potential at this juncture of Conference Network performance is laughable.

I think the ACC got on board too late, but at least their model is much more flexible.

I would argue that all in all the difference by the time this model changes will be negligible between what the Big 10 chose and what the SEC chose. But clearly this year they stand to lose significantly more than the SEC should the SEC not play or not be able to finish the season.

(08-27-2020 04:26 PM)quo vadis Wrote: [ -> ]

(08-27-2020 02:59 PM)Frank the Tank Wrote: [ -> ]

(08-27-2020 02:46 PM)JRsec Wrote: [ -> ]

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Actually Frank they still receive 50% of the cable subscriptions that remain in effect just the same as the Big 10 gets 49% of what FOX profits. All of them suffer if the overhead is not cut as NET profits are shared as is by process the overhead.

The real risk is still with the self owned companies as those absorb red ink if advertising drops are dramatic. The SEC and ACC can't run in red ink because they only share profits and aren't responsible for overhead which of course the Big 10 is 49% responsible for and for which the PAC is 100% responsible.

So you see, while all of them risk earning nothing, only the self owned entities risk actually running in the red.

The ACN's deal is patterned on the SECN's deal and the SECN gets 50% of the NET profit meaning after ESPN has deducted overhead from the Gross profit. During normal operation the SEC essentially pays for some high dollar ESPN personalities that get rolled up in that, but during times like these we can only earn less. We can't run in red ink and neither can the ACC. The abiding question is not how many subscribers we keep as both the SECN and ACCN will keep subscribers. The question is will there be enough ad revenue to keep a NET profit to split.

Right, but there's a large difference between profit sharing and a true revenue split. The SEC and ACC receive 50% of net profit at the bottom line. In contrast, the Big Ten, as part owner, is receiving 49% of gross revenue at the top line (and the Pac-12 receiving 100% of gross revenue at the top line), which is quite different than net profit. That gross revenue amount is a significantly larger and direct figure. Now, you're correct that ownership comes with the sharing of expenses, as well, so there's risk for the Big Ten and Pac-12 on that front.

Yes, and there's no question it's better to be in the B1G position of being a true co-owner as opposed to the SEC and ACC position of receiving revenue.

Of course, the reason that the B1G is in a better position is because of differing decisions made by Delany, Swofford, and Slive in the late 2000s, on the cusp of the media-rights boom. The SEC and ACC chose to sign long-term contracts with ESPN for what seemed like mega-money the day they signed but almost before the ink was dry was realized to be vastly undervalued, while the B1G smartly sold some of its rights but kept a sizable chunk in its own hands in the form of the BTN partnership with FOX.

And as the PAC would quickly prove, it is also possible to go to the other extreme (from the SEC/ACC) and go totally alone, but then you don't get to leverage the brand value and market reach of established sports networks like ESPN and FOX. You truly have to build the network from scratch, and that's tough. If anyone ever needed evidence that sports networks like ESPN are not merely parasitic "middlelmen" but actually add significant value to a conference, the PAC situation is Exhibit A refuting it.

The B1G basically got it just right.

You have absolutely no business acumen if this is what you take away from this exchange. They are in position to actually lose money instead of simply making nothing like the SEC and ACC would should they not play.

They make slightly more when everyone plays, they lose more when they don't.

This is a give and take risk / reward matter straight down the line and this epidemic and their decision not to play exactly line up with the downside and there is no other way to paint it.

For all of the Big 10's allegedly business acumen they have not out earned the SEC in Gross Revenue yet.

Has it occurred to you the SEC chose less risk from their model precisely because they could afford to do so?

The SEC's deal with CBS was a boneheaded shortsighted deal. That's ending and the per school payouts will be in the 68 to 72 million dollar range by 2024 and sooner if ESPN managed to buy out the other 2 years of CBS's contract.

Furthermore Quo the cable conference model is on its lass gasp before the streaming options make it obsolete, at least in terms of how it is paid out. It should dawn on you what happens when a company folds and the shareholders still are invested. The biggest potential losses among the P5 are the losses of equity in a failed model of owning a network which no longer is viable. When technology and familiarity finally put the nail in the coffin of the Conference networks how much does the ACC and SEC lose when they switch to streaming contracts with advertising apportioned by the total numbers of those who watched on a given weekend? I'll tell you. They will lose nothing. The PAC will lose their arse! The Big 10 bought in shares will take a beating.

In fact I find it much more likely that the Big 10 moving forward starts to divest themselves from their model so as not to suffer the losses when the current model dies.

The SEC probably makes 2 to 3 million less on its T3 than the Big 10 has. But if the Big 10 loses revenue this year (meaning runs in the red) and they hang on too long and lose again on their equity, whose to say that difference was really that different, or that the risk averse model was even better. it is certainly more flexible.

So I don't see where this matter is even really debatable from a business perspective. The reward for the Big 10 has been slightly better, and the risk potentially worse. The PAC has been such an overwhelming flop that arguing its potential at this juncture of Conference Network performance is laughable.

I think the ACC got on board too late, but at least their model is much more flexible.

I would argue that all in all the difference by the time this model changes will be negligible between what the Big 10 chose and what the SEC chose. But clearly this year they stand to lose significantly more than the SEC should the SEC not play or not be able to finish the season.

(08-27-2020 04:26 PM)quo vadis Wrote: [ -> ]

(08-27-2020 02:59 PM)Frank the Tank Wrote: [ -> ]

(08-27-2020 02:46 PM)JRsec Wrote: [ -> ]

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Actually Frank they still receive 50% of the cable subscriptions that remain in effect just the same as the Big 10 gets 49% of what FOX profits. All of them suffer if the overhead is not cut as NET profits are shared as is by process the overhead.

The real risk is still with the self owned companies as those absorb red ink if advertising drops are dramatic. The SEC and ACC can't run in red ink because they only share profits and aren't responsible for overhead which of course the Big 10 is 49% responsible for and for which the PAC is 100% responsible.

So you see, while all of them risk earning nothing, only the self owned entities risk actually running in the red.

The ACN's deal is patterned on the SECN's deal and the SECN gets 50% of the NET profit meaning after ESPN has deducted overhead from the Gross profit. During normal operation the SEC essentially pays for some high dollar ESPN personalities that get rolled up in that, but during times like these we can only earn less. We can't run in red ink and neither can the ACC. The abiding question is not how many subscribers we keep as both the SECN and ACCN will keep subscribers. The question is will there be enough ad revenue to keep a NET profit to split.

Right, but there's a large difference between profit sharing and a true revenue split. The SEC and ACC receive 50% of net profit at the bottom line. In contrast, the Big Ten, as part owner, is receiving 49% of gross revenue at the top line (and the Pac-12 receiving 100% of gross revenue at the top line), which is quite different than net profit. That gross revenue amount is a significantly larger and direct figure. Now, you're correct that ownership comes with the sharing of expenses, as well, so there's risk for the Big Ten and Pac-12 on that front.

Yes, and there's no question it's better to be in the B1G position of being a true co-owner as opposed to the SEC and ACC position of receiving revenue.

Of course, the reason that the B1G is in a better position is because of differing decisions made by Delany, Swofford, and Slive in the late 2000s, on the cusp of the media-rights boom. The SEC and ACC chose to sign long-term contracts with ESPN for what seemed like mega-money the day they signed but almost before the ink was dry was realized to be vastly undervalued, while the B1G smartly sold some of its rights but kept a sizable chunk in its own hands in the form of the BTN partnership with FOX.

And as the PAC would quickly prove, it is also possible to go to the other extreme (from the SEC/ACC) and go totally alone, but then you don't get to leverage the brand value and market reach of established sports networks like ESPN and FOX. You truly have to build the network from scratch, and that's tough. If anyone ever needed evidence that sports networks like ESPN are not merely parasitic "middlelmen" but actually add significant value to a conference, the PAC situation is Exhibit A refuting it.

The B1G basically got it just right.

Originally the B1G owned 51% with FOX holding 49%, then in a business deal the ownership positions switched.
Obviously it is better to be the majority owner.

(08-27-2020 12:39 PM)Frank the Tank Wrote: [ -> ]Putting aside whether there will be layoffs, one critical thing to note is that the Big Ten and Pac-12 have direct ownership stakes in their networks. This means that they're still receiving cable subscriber income despite not playing any games. To be sure, it doesn't come close to replacing the revenue that they receive from the massive tier 1 deals that they have with ESPN and Fox, but the point is that those leagues are still going to receive *some* income even when games aren't being played. In contrast, the SEC, ACC and Big 12 all have straight rights deals and, in the cases of the SEC and ACC, don't have actual ownership stakes in their respective conference networks. If those 3 P5 leagues don't play, they're receiving zero TV revenue.

So, it's one more element as to why the Big Ten and Pac-12 were willing to postpone the football season while the SEC, ACC and Big 12 are hell bent on charging ahead. The Big Ten and Pac-12 have the financial buoy of cable subscriber revenue from their networks in a way that the other 3 P5 leagues don't have. This means that they can afford to bet on playing a season in the winter/spring. (Granted, not playing any football at all this entire year will be a financial disaster, as those tier 1 TV deals still drive the bulk of the conference revenue.)

Don't the carriage contacts require X number of football games?

Here's an interesting article from the Washington Post about how the OTC media companies (CBS, Fox, etc.) could actually be "OK" financially if there is no COLLEGE football season but in lots of trouble if there is no NFL season. There are also some comments regarding the problems no college football season would cause ESPN & Fox Sports, among others.

https://www.washingtonpost.com/business/...v-profits/

(08-27-2020 07:36 PM)ICThawk Wrote: [ -> ]Here's an interesting article from the Washington Post about how the OTC media companies (CBS, Fox, etc.) could actually be "OK" financially if there is no COLLEGE football season but in lots of trouble if there is no NFL season. There are also some comments regarding the problems no college football season would cause ESPN & Fox Sports, among others.

https://www.washingtonpost.com/business/...v-profits/

Thanks, but I blanch any time I see a WAPO link. They are always behind the Mother of All Paywalls, LOL.

(08-27-2020 07:36 PM)ICThawk Wrote: [ -> ]Here's an interesting article from the Washington Post about how the OTC media companies (CBS, Fox, etc.) could actually be "OK" financially if there is no COLLEGE football season but in lots of trouble if there is no NFL season. There are also some comments regarding the problems no college football season would cause ESPN & Fox Sports, among others.

https://www.washingtonpost.com/business/...v-profits/

I saw that on another site.

It's not surprising that the major OTA networks don't care about college sports on TV, as they won't reflect the same political messages that they (the networks) seem to support.