GoldenWarrior11
Heisman
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 10:59 PM)Fighting Muskie Wrote: (02-06-2019 09:15 PM)33laszlo99 Wrote: (02-06-2019 05:26 PM)Fighting Muskie Wrote: I think they are worth at least 8M/school.
I think NBC would be an excellent partner for T1 and has the capacity to air 2 games a week on network tv which is ideal exposure.
Don't sleep on Fox. They have very little presence in the Southeast but adding the AAC would change that.
Muskie, I don't know how you calculated $8 million per school. You may be right, or they may be worth twice that. But their "worth" is not the same thing as "how much can they get paid." I suspect that you are judging the quality of the teams and the intensity of the competition. That's what college football fans will do. But TV networks care much less about those criteria than they do about selling ads and earning profits.
ESPN will examine their current advertising footprint and figure how much, or how little, the AAC content contributes to the price they can exact from major advertisers. What AAC teams could ESPN just not do without? If they didn't renew the media deal, where would that leave a void in their geographical footprint? The entire conference footprint is smothered by P5 competition. If I'm a national advertiser, the only reason I would buy AAC ads is if they came cheaply bundled with the whole national package, or if I really, really needed to be seen in Houston, Philadelphia, Orlando, etc. For ESPN, they have to ask "How much incremental revenue do we get from our ad bundle by including the AAC?" The payout to the conference will depend on that incremental revenue.
If ESPN offered the AAC half of the current payout, the only recourse the conference has is to solicit other TV networks or broker their individual games through IMG or some other middleman. Interest from other networks is almost certain to exist, just as a matter of due diligence, but how enthusiastic will it be? All bidders will know that they will be competing to sell ads against P5 content all day, every Saturday. Weekday games may enter the discussion.
The Illinois Fighting Illini took down a $51 million media payout last season. They weren't "worth" that much, but they "got paid" that much.
My $8M figure is making an estimate of of what I think the networks would pay for a package of 12 off-brand P5 schools, scattered around similar sized markets as their ratings, and advertising revenue would be about the same.
Think of it as what you might pay to get:
BC
WF
UVA
Rutgers
Purdue
N'western
Vanderbilt
Miss St
Iowa St.
Kansas St
TCU
Baylor
I agree with you that programs like Illinois get paid way more than they're worth due to the tent pole programs they've latched themselves to. This is where I see their value when you pull out those poles.
Part of the value of the P5 is the association with other peer institutions, whether that is academic, athletic, historical and/or geographic. Northwestern, while not a major athletics program by any stretch, is associated academically, geographically and historically with the likes of Michigan, Ohio State, Wisconsin, Minnesota, Iowa, etc. Vanderbilt is in the same boat. As is Wake Forest. Power conferences need to be anchored by power program(s). The additional value comes in by the strength of the bottom. Vanderbilt, which will most likely never compete for SEC Football championships, still offers strong academics, historical affiliations within the conference and is within the geographic footprint.
In summary, I don't think it is accurate to take "the bottom" of the P5 and use it as a comparison, or example, for what the next AAC TV deal will be. The strength of the AAC are their athletic budgets, despite the lack of television revenue to support it, and the on-field success from the top of the league (in comparison to the other G5 conferences). The weaknesses are the substantially spread-out footprint, the likelihood of the league getting raided in the future and the perceived low-quality athletic performance from the bottom of the conference.
If you were to take the AAC package off of ESPN, and put it on an FS1, CBSSN or NBC Sports, it is guaranteed to have a significant drop off of ratings. Similarly, if the AAC left ESPN, and the network replaced the package with content from the MAC or Sun Belt, it is likely to still have above average ratings, but probably not the same as the AAC. In essence, and for equal value to both parties, it is in the best interest for the two sides to resign with each other. I think the $5-$6 million AAV per school is more than fair for both parties, with protections for each (i.e. ESPN having ability to lower the payouts if ever raided, and the AAC getting escalator bumps for each year the league remains intact).
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