(05-15-2017 02:39 PM)Attackcoog Wrote: (05-15-2017 01:45 PM)billybobby777 Wrote: I just want to point something out for those who think the ACC or SEC "own" any shares of the conference network. ESPN will own the ACC network 100%, just like ESPN owns 100% of the SEC network. ESPN does a (rumored) 70/30 revenue split with the SEC, but it's ESPN's network.
PAC 12 Network: Owned 100% by PAC 12.
Big 10 Network: Owned 49% by Big 10, 51% by Fox.
SEC Network: Owned 100% by ESPN. SEC receives 30% of the revenues (rumored)
ACC Network: Will be owned 100% by ESPN. Revenue splits are unknown.
That 100% ownership sounds like it would be awesome when it comes to revenue. But, the problem is--without a well connected network partner that can apply leverage to cable carriers--its a lot harder to get carriage---which negatively affects the number of subscribers and ultimately---revenue. If they stick with it, I think the Pac-12 100% ownership model will outperform the others---its just going to take significantly more time to build the subscriber base.
Concerning ownership: strictly in terms of money, it's better to own 30% of $100 million than 100% of $10 million. But on the other hand, it's better to own 100% of $10 million than 10% of $70 million. Or 50% of $15 million.
So no ownership split is ideal, in and of itself. The optimal value-creating synergy between you and a partner can theoretically be at any level of splitting (above zero for you, of course).
The problem the SEC has, and the ACC will have, is that their revenue splits with regards to the SECN and coming ACCN are not based purely on what is "optimal value creating synergy", rather, they are (in the case of the SEC) and will (in the case of the ACC) be heavily influenced by the fact that ESPN already has both conferences locked in to long-term contracts, giving ESPN much greater bargaining power in making the network deals.
IOW's, had the SEC not signed the disastrous 2008 contract with ESPN, and the ACC not signed their equally dumb 2010 contract with ESPN, each would get a much bigger share of the revenue pie than they are/will get, and that pie would be the same size as it otherwise would be.
So considering the SEC, sans that 2008 contract, rather than getting 30% of the $500m SECN revenue, they would likely (using the B1G/FOX deal as a benchmark) be getting 50% of $500m SECN revenue, an enormous loss of money as a legacy of the awful Slive 2008 contract.