(10-12-2017 11:40 AM)Frank the Tank Wrote:  

(10-12-2017 10:56 AM)orangefan Wrote:  You can't just look at gross numbers. The key is "VORP" - value over replacement programming (copied from the baseball stat value over replacement player"). The P12 and B12 football numbers are for 22 and 23 games respectively. How many AAC games contributed to its total? Assume that ESPN's option is showing a MAC or CUSA game, or another edition of SportsCenter. How many more viewers does the AAC game generate than this essentially free alternative? I have no idea what the answers are to these questions, and it may very well be that the AAC is tremendously undervalued. However, this is the kind of analysis that you'd have to perform to determine the answer.

This is true. Also, the most important thing with TV contract amounts that people MUST remember is that they actually are NOT valued in a proportional manner with respect to ratings.

For example, a football game with a 3.0 rating is NOT worth only 2 times more than another football game with a 1.5 rating. Instead, that 3.0 rating is actually worth 4 or 5 times as much as a game with a 1.5 rating. Why? Because of the VORP concept that you noted, the fact that there's scarcity of time (e.g. there are only a finite number of time slots available each Saturday, so the premium is much greater in order to maximize the value of each such time slot), and the fact that advertisers pay exponentially more for larger audiences because they're also scarce (e.g. there are lots and lots of programs across many different cable channels that can deliver a 1.5 ratings on a Saturday afternoon, but there are very few programs that can deliver a 3.0 rating).

Ultimately, we're not comparing widgets at a store where there are an infinite number of consumers that can buy such widgets at any time in many different ways. Instead, the market for college football is almost entirely based on the 3 to 4 timeslots that are available on ESPN and other sports networks for 13 Saturdays during the fall *specifically*. (Weeknight games are more about the leverage ESPN has over you to move games off of Saturday as opposed to how they value you financially.) ESPN isn't saying, "Well, we're fine with paying a G5 league 50%-75% of the rights fees of a P5 league in exchange for 50%-75% of the viewership in a timeslot." Instead, they look at the opportunity cost of giving up such a valuable timeslot to a lower rated program and apply a further discount (along with looking at the VORP and other factors).

The upshot is that getting 75% of the viewers doesn't (and will never) equate to 75% of the rights fees in the marketplace. Instead, it's more like 25%-30% of the rights fees when you take into account the advertiser premiums and opportunity cost noted above... and that's basically right in line with what the AAC is receiving today.

Plus, just look at ESPN's actions this year. Has the coverage of the G5 leagues on ESPN really changed at all after losing half of the Big Ten games? Honestly, what I mostly see is that Big Ten games that used to be on ESPNU are all gone, while the coverage on the mothership ABC/ESPN platforms (which are where the money is really made for conferences) haven't changed at all.

I think scarcity of timeslots is the key. Everyone is insisting on national games. That has reduced the number of available time slots. Really when you add it all up, ESPN and Fox are full. There is no space for the AAC on Saturdays on ABC, ESPN, ESPN2, Fox or FS1. With 2 ABC and 3 ESPN and ESPN2 games, ESPN only has 104 Saturday slots a year (or 112 if you count the August week they have allowed schools to play on). With 1 Fox and 3 FS1 most weeks and a 2nd Fox occasionally, its 52-63 Saturday slots for Fox. That is driving the start of the SEC and ACC networks. Not enough time slots.

There wasn't even any space for 2 out of BYU, UH and Cincinnati joining the Big 12. The networks fought that tooth and nail.

AAC's hope is additional competitors, either picking up the AAC or freeing space on Fox or ESPN. Maybe they ought to be working with the MWC and selling those numbers to CBS. For example:
CBS lead in game to SEC game of the week, doubling as pregame show. AAC/MWC pair of regional games on CBSSN, late Saturday night MWC game and Friday night AAC game on CBS and/or CBSSN. That would be 3 national games and 2 to 4 regional games in a week.