Article that hasn't made it to this board yet, pegs the value of the new CUSA TV deal at $6 million per year vs. the $14 million it once was.

On other boards this is cited as evidence of the sports bubble bursting but I disagree. Bear with me.

First the $14 million deal included Houston, SMU, Tulsa, Tulane, Memphis, UCF, ECU as members of CUSA. Those schools left joined the remainder of Big East football, Temple and Navy and garnered around $18 million a year.

So we aren't comparing apples to apples in the price of CUSA.

Second what was the established FBS television value of the schools now making up CUSA? If we make that bad assumption that a school's value is a pro-rata share of their conference television deal then the pre-CUSA value of the members was:
USM, Marshall, UTEP, Rice, UAB was $4.6 million (and we are also assuming UAB's restart has zero impact on value)
La.Tech was part of the WAC and based on the estimates of what that deal was worth, they brought $333,33
UNT, FIU, FAU, MTSU, WKU with a combined TV value of $500,000 in the Sun Belt.

Add those numbers up and the net value was $5.4 million and then only if USM, Marshall, UTEP, Rice, UAB were 1/12th of the old CUSA value.

I think all in all the evidence is that CUSA's deal is no worse than going sideways and maybe a rise in value.
http://pilotonline.com/sports/college/ol...a97ed.html

(05-04-2016 03:43 PM)arkstfan Wrote:  Article that hasn't made it to this board yet, pegs the value of the new CUSA TV deal at $6 million per year vs. the $14 million it once was.

On other boards this is cited as evidence of the sports bubble bursting but I disagree. Bear with me.

First the $14 million deal included Houston, SMU, Tulsa, Tulane, Memphis, UCF, ECU as members of CUSA. Those schools left joined the remainder of Big East football, Temple and Navy and garnered around $18 million a year.

So we aren't comparing apples to apples in the price of CUSA.

Second what was the established FBS television value of the schools now making up CUSA? If we make that bad assumption that a school's value is a pro-rata share of their conference television deal then the pre-CUSA value of the members was:
USM, Marshall, UTEP, Rice, UAB was $4.6 million (and we are also assuming UAB's restart has zero impact on value)
La.Tech was part of the WAC and based on the estimates of what that deal was worth, they brought $333,33
UNT, FIU, FAU, MTSU, WKU with a combined TV value of $500,000 in the Sun Belt.

Add those numbers up and the net value was $5.4 million and then only if USM, Marshall, UTEP, Rice, UAB were 1/12th of the old CUSA value.

I think all in all the evidence is that CUSA's deal is no worse than going sideways and maybe a rise in value.
http://pilotonline.com/sports/college/ol...a97ed.html

Maybe CUSA just isn't as valuable as some of their fans think they are...

Sent from my SM-G920P using Tapatalk

I read the article that you are talking about, or at least one similar. I agree with realignment C-USA is a poor example. I feel there are other signs to support the bubble is bursting; ESPN cutting staff, TWC losing massive amounts of money on Dodgers TV deal, Clippers getting low balled on their TV deal, and several less marquee sports/events recently taking pay cuts.

I'm not some cynic that cable TV is going away. I just feel the market is due for a correction.

(05-04-2016 04:03 PM)kreed5120 Wrote:  I read the article that you are talking about, or at least one similar. I agree with realignment C-USA is a poor example. I feel there are other signs to support the bubble is bursting; ESPN cutting staff, TWC losing massive amounts of money on Dodgers TV deal, Clippers getting low balled on their TV deal, and several less marquee sports/events recently taking pay cuts.

I'm not some cynic that cable TV is going away. I just feel the market is due for a correction.

I may miss this big, but I think most values are going to hold relatively steady. I don't expect in an apples to apples that we see rights fees crash.

Between ESPN, ESPN2, ESPNU, CBSS, NBCSN, FS1, and FS2 just in the 8pm eastern to 10pm pacific window M-F and noon eastern to 10pm pacific Sat-Sun you have 18,564 hours that need to mostly be filled with live sports content every year. That's not counting ABC, NBC, CBS, Fox, TNT, TBS, and regional sports nets.

I think the bigger issue is that CUSA is basically a new conference and therefore no need to risk that much money for a conference in which only 5 of 14 schools have been together for 5 or more years. Not to mention issues with UAB dropping football and then trying to restate it and UNCC and ODU having brand new football programs and not a large, strong fans base or one that hasn't been tested over the years.

(05-04-2016 04:16 PM)arkstfan Wrote:  

(05-04-2016 04:03 PM)kreed5120 Wrote:  I read the article that you are talking about, or at least one similar. I agree with realignment C-USA is a poor example. I feel there are other signs to support the bubble is bursting; ESPN cutting staff, TWC losing massive amounts of money on Dodgers TV deal, Clippers getting low balled on their TV deal, and several less marquee sports/events recently taking pay cuts.

I'm not some cynic that cable TV is going away. I just feel the market is due for a correction.

I may miss this big, but I think most values are going to hold relatively steady. I don't expect in an apples to apples that we see rights fees crash.

Between ESPN, ESPN2, ESPNU, CBSS, NBCSN, FS1, and FS2 just in the 8pm eastern to 10pm pacific window M-F and noon eastern to 10pm pacific Sat-Sun you have 18,564 hours that need to mostly be filled with live sports content every year. That's not counting ABC, NBC, CBS, Fox, TNT, TBS, and regional sports nets.

I agree.

Except the Big 10. They're the only P5 that didn't have their rights fees hit the market after the market took off. They're going to see a good sized bump, although probably not as big of a bump as the other P5s saw.

(05-04-2016 03:43 PM)arkstfan Wrote:  Article that hasn't made it to this board yet, pegs the value of the new CUSA TV deal at $6 million per year vs. the $14 million it once was.

On other boards this is cited as evidence of the sports bubble bursting but I disagree. Bear with me.

First the $14 million deal included Houston, SMU, Tulsa, Tulane, Memphis, UCF, ECU as members of CUSA. Those schools left joined the remainder of Big East football, Temple and Navy and garnered around $18 million a year.

So we aren't comparing apples to apples in the price of CUSA.

Second what was the established FBS television value of the schools now making up CUSA? If we make that bad assumption that a school's value is a pro-rata share of their conference television deal then the pre-CUSA value of the members was:
USM, Marshall, UTEP, Rice, UAB was $4.6 million (and we are also assuming UAB's restart has zero impact on value)
La.Tech was part of the WAC and based on the estimates of what that deal was worth, they brought $333,33
UNT, FIU, FAU, MTSU, WKU with a combined TV value of $500,000 in the Sun Belt.

Add those numbers up and the net value was $5.4 million and then only if USM, Marshall, UTEP, Rice, UAB were 1/12th of the old CUSA value.

I think all in all the evidence is that CUSA's deal is no worse than going sideways and maybe a rise in value.
http://pilotonline.com/sports/college/ol...a97ed.html

That's pretty much my view. CUSA is a unique situation where a media asset is being revalued based on its new conference membership. I think its NOT proof of a bubble burst. The reality is the vast majority of the CUSA membership is actually seeing a value increase over their former conference homes.

What is happening to CUSA is much more like what happened to the Big East/AAC. That group also saw about a 33% decrease in media value when they negotiated their contract as a virtually new conference in early 2013 (which was before fears of cord cutting had become significant). Big East football schools were making about 3 million a year in 2012. The new 2013 AAC/Big East contract paid them about 2 million a year. The cut was actually a resetting of the AAC media value based on its new membership, unstable nature, and unknown track record. Like CUSA, most of the new AAC members still saw increases in value over their old conference homes---only the 3 left behind Big East members saw a media revenue cut. It should be noted that the Big East/AAC value cut was really MUCH larger than it appears, as the cut is based on the old existing Big East agreement that had been in place for a number of years and only paid about 40 million a year. The Big East had just rejected a 140 million dollar a year deal that ESPN had offered in early renewal negotiations in the spring of 2012. I believe football schools would have each earned about 10 million a year under the $140 million deal. So the drop in value is actually more like an 80% drop.

What’s going to continue to increase the value of sports TV contracts is it’s one of the few things on television that advertisers are willing to pay top dollar to be a part of. You can’t Tivo it or watch it on demand because social media and on demand news and sports scores makes it almost impossible.

If the bubble was ready to burst CBS / Turner / TNT group wouldn’t have extended the NCAA tournament agreement an additional 8 years with 8 years still remaining on the contract pushing the rate to over 1 billion per year. The BIG is looking at potentially $500 million per year, a huge jump from where they are.

The bubble is definitely bursting for the filler conferences like CUSA, SBC, and MAC. People just don’t watch those games so there is no real value to the networks other than pure filler.

It will be interesting to see what happens to the AAC and MWC when there deals come due. Both conferences have decent teams with decent markets. If they can manage to stay together and continue to stay somewhat in the spotlight they have the potential to see a decent bump, but nothing even close to the P5. However if they lose a few key programs in some key markets they can find themselves taking a big hit as well.

(05-04-2016 04:03 PM)kreed5120 Wrote:  I read the article that you are talking about, or at least one similar. I agree with realignment C-USA is a poor example. I feel there are other signs to support the bubble is bursting; ESPN cutting staff, TWC losing massive amounts of money on Dodgers TV deal, Clippers getting low balled on their TV deal, and several less marquee sports/events recently taking pay cuts.

I'm not some cynic that cable TV is going away. I just feel the market is due for a correction.

A market correction is not a bubble bursting.

An asset bubble is when a significant part of demand for an asset are people buying it because of the expected ongoing increase in market valuation, rather than buying it because they think it's valuable in its own right, and then when the value eventually looks like it is not going to go up anymore, there is a rush for the exit as everyone tries to get out first.

So whether or not the networks or overpaying or underpaying for various media contracts, it's not a bubble, since it's not the kind of market where bubbles happen.

If they are over-valued, then there will eventually be a correction.

Of course, "bubble" makes a more link-bait-y subject line, because of the recent real estate bubble helping to fuel the deepest recession since the Great Depression and the Hoover recession and Roosevelt recession, so it's the kind of cataclysmic correction that people call to mind.

(05-05-2016 03:58 PM)NYCTUFan Wrote:  What’s going to continue to increase the value of sports TV contracts is it’s one of the few things on television that advertisers are willing to pay top dollar to be a part of. You can’t Tivo it or watch it on demand because social media and on demand news and sports scores makes it almost impossible.

If the bubble was ready to burst CBS / Turner / TNT group wouldn’t have extended the NCAA tournament agreement an additional 8 years with 8 years still remaining on the contract pushing the rate to over 1 billion per year. The BIG is looking at potentially $500 million per year, a huge jump from where they are.

The bubble is definitely bursting for the filler conferences like CUSA, SBC, and MAC. People just don’t watch those games so there is no real value to the networks other than pure filler.

It will be interesting to see what happens to the AAC and MWC when there deals come due. Both conferences have decent teams with decent markets. If they can manage to stay together and continue to stay somewhat in the spotlight they have the potential to see a decent bump, but nothing even close to the P5. However if they lose a few key programs in some key markets they can find themselves taking a big hit as well.

Saying the word "markets' when dealing with a league without a dedicated network means you aren't keeping up with how the marketplace works.

Drawing 50k viewers in LA and 100k in the rest of the nation is of less value to a national network than drawing 30k in Laramie, WY and 170k in the rest of the nation. Markets were shorthand in syndication of TV when far less viewing data was available.

As to the filler conferences, wrong on no one watches them, there is real value there for the sports networks (thus $10 million to MAC) there remain broadcast windows (networks, dates and times) that cannot be filled with P5 content.

There were 10 AAC games last year that drew less than 100k viewers for ESPN, most on ESPNews, doesn't mean they aren't profitable vs normal ESPNews programming. Seriously doubt ESPN had any complaints when NIU games were drawing a million viewers on odd week nights or when AState-App State hauled in 200k against NFL Thursday, Big XII on FS1 or SEC on ESPN. That was a good night for ESPNU and far better than a canned program would offer.

The real threat to the G5 is the P5 or NFL making the decision that former G5 window makes sense for them.

(05-07-2016 10:19 PM)arkstfan Wrote:  Saying the word "markets' when dealing with a league without a dedicated network means you aren't keeping up with how the marketplace works.

Exactly. "Markets" is about syndication. "Performing well in large markets" earns a premium over getting the same viewers at random across the country because of how crowded the large markets are for entertainment choices. But "being in" a large market is only relevant (1) if there are a threshold number of viewers who will switch subscription television providers to get your games and/or (2) you actually do do well enough in those large markets to attract that premium in valuation.

Quote:Drawing 50k viewers in LA and 100k in the rest of the nation is of less value to a national network than drawing 30k in Laramie, WY and 170k in the rest of the nation. Markets were shorthand in syndication of TV when far less viewing data was available.

Right in general. Now, "markets" are not just a shorthand, but drawing 50k viewers in LA is not a big enough share to generate any buzz in LA, so there is no premium at all attached to those viewers.

"Markets" were important for the Big Ten additions of Rutgers and Maryland in part because they leveraged on top of the existing Big Ten audience in those markets based on Big Ten Country expats. By contrast, "markets" at the CUSA level is not a relevant unit of analysis. What is the total audience? That is the question.

Quote: As to the filler conferences, wrong on no one watches them, there is real value there for the sports networks (thus $10 million to MAC) there remain broadcast windows (networks, dates and times) that cannot be filled with P5 content.

And there is no window on streaming distribution. That is why Netflix will pick up an English Language Countries exclusive on an anime that only a specific market niche cares about and which cable TV would not bother with ... what matters is whether that cutting down churn in Netflix subscriptions within that niche is worth the minimum guarantee that is required for that exclusive.

Which is why the $10m MAC contract extension included a requirement that all MAC schools offer the facilities required for all MAC home games to go streaming on ESPN3. Guaranteeing that all of the Wagon Wheel, Battle of the Bricks, Battle of I-75, Victory Cannon BBall get on cable would be a concession from ESPN to the MAC, requiring trading down the rights fee. But those same games on streaming become value-adding propositions for ESPN.

Quote: There were 10 AAC games last year that drew less than 100k viewers for ESPN, most on ESPNews, doesn't mean they aren't profitable vs normal ESPNews programming. Seriously doubt ESPN had any complaints when NIU games were drawing a million viewers on odd week nights or when AState-App State hauled in 200k against NFL Thursday, Big XII on FS1 or SEC on ESPN. That was a good night for ESPNU and far better than a canned program would offer.

And this is the exact value comparison that was made when scheduling that game on ESPNU rather than canned programming. 200K on ESPNU on an NFL Thursday is a win.

Quote: The real threat to the G5 is the P5 or NFL making the decision that former G5 window makes sense for them.

Indeed.

And, with respect to the topic of this thread, that does not mean that a "bubble" has burst, that just means that the A-list media tentpoles have decided it is worth their while to grab a space previously available for the C-list niche market properties.