(06-23-2017 08:32 PM)Attackcoog Wrote: (06-23-2017 08:17 PM)msm96wolf Wrote: The question, does ESPN truly want to create that big a difference between the G5 conferences? Unless the AAC has other bidders, why would they give 4x the current contract? I could see doubling it with the an extra million to create the AAC studios but I think ESPN keeps the next contract as low as possible. I would be curious as to the break points for G5 games. If you are only paying a teams less than a million per team for a game verse 8 million what is the rating break even point. I don't know how TV works but I am just thinking, ESPN is still going to want similar profit margins they have with the current AAC contract with the payouts. Is that possible? Maybe the AAC does bring in the money to the network with the new payout or can paying, lets say the sunbelt moves to 100K to 250K, what do the ratings need to be to make the same profit margin? Again, this be may a completely unrealistic TV business model, I am just using simple economics.
Aresco said something in several interviews recently that I thought was pretty revealing, especially coming from a guy that ran a television sports division. He said ESPN isnt looking to get rid of contracts that make them lots of money. I think Aresco knows exactly how much money the AAC makes ESPN and if Aresco knows----Im reasonably sure---other networks know. Given their ratings track record and low price when compared to the P5----I think its extremely likely the AAC will have multiple bidders if they get to the open market. They would be cheap programming for NBC to pair with Notre Dame. They would be a very reaonably priced entry point for streamers like Amazon. I dont think ESPN is going to let the AAC get to the open maket.
AAC gives them content for a crap channel that struggles to find viewers (ESPN News) that the big boys do not like to be shown on. I suspect AAC even with the higher cost to produce a game vs studio crap and regurgitated highlights still makes more off three hours of an actual football game than they do from their regular content.
They also sell content to CBSSN, I was told they were getting "somewhere between $150,000 and $250,000 per game". My understanding is AAC gets a piece of that action now whether it is $1 per game or $100,000 no idea.
Assuming 70% of the AAC contract is for football (the proposed ratio before the C7 departed) and ESPN is allocating it that way on their books (which I doubt) and everyone plays 2 home non-conference games, that's 72 regular season games plus the title game for 73 games. 70% of $18 million is $12.6 million, divided by 73 would mean ESPN is carrying AAC on the books at $172,602.75 per football game. So if we split the baby on the numbers I was told that's $200,000 per game from CBSSN a profit of $27,397.26 per game sold before having to share any with AAC. So 14 games would be $383,561.64 profit for reselling or basically CBSSN in buying 14 games would be paying ESPN's cost for 16 games.
Now I suspect ESPN is NOT carrying AAC football on the books at that cost.
I suspect their math looks more like this 73 football games @ 3 hours each 219 hours. Roughly 100 hoops telecasts @ 2 hours each 200 hours, one article says guarantee of 18 women's telecasts on real tv @ 2 hours each 36, so total hours of "real TV" would 455(ish) divided into $18 million per year for $39,560.44 per hour or $118,681.32 per football game and$79,120.88 per hoops game or 48% allocated to football. Even at the low end of CBSSN range given ($150,000) would be a declared profit of $31,318.68 per sold football game and on their books selling 14 games at $150,000 would $2.1 million and would represent CBSSN taking 14 games while paying ESPN's book cost of almost 18 games. At $200,000 per game that would on book value be equal to CBS taking 14 games but paying for 23.6 games.
That's the beauty of ESPN buying the whole banana rather than paying to show X number of games, it makes the books look a lot better. Add in that they are selling like 30 hoops games even if they are selling the basketball games at a book loss to CBS (let's say $70,000 instead of the $79,120.88 I estimated they are carrying it on the books for) ESPN is taking a book loss of $9,120.88 in this hypo per hoops game sold times 30 is a paper loss of $273,626.40 that depending on contract terms might be used to offset the revenue share to AAC.
Again just spitballing some numbers but at $150,000 per game for football and $70,000 for hoops, CBSSN would be paying just over 45% of ESPN's cost (before subtracting revenue share) but would be taking only 19% of the football content and 30% of the hoops content or 22.4% of the hours of programming.