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AAC and ESPN Exclusive Negotiating Window?
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RutgersGuy Offline
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Post: #21
RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 09:16 PM)johnbragg Wrote:  
(02-06-2019 07:55 PM)RutgersGuy Wrote:  
(02-06-2019 04:52 PM)usffan Wrote:  There are way too many moving parts for this to be as simple as people are making it out to be. Remember, the AAC has a deal with CBS as well that allows some of their live events (including, but not exclusive to, football and basketball). Plus, I'm sure there are discussions about numbers of games required to be carried on the air instead of on ESPN+ (and the compensation that goes with that, since ESPN is trying to build that platform). Furthermore, there's the sublicensing issue - what compensation could/should the conference expect if/when ESPN looks to sublicense rights to certain games to other outlets?

In 2012, there was a thought that NBC was trying to become a player in what was perceived to be the value of airing live sports. We now know that NBC really never got into that game, and Fox has only entered it in a limited capacity, since FS1 never really became a true ESPN competitor. Nobody really expects that to be the case in 2019.

USFFan

Never? Well they aren't done and no one expected them to be at ESPNs level by now. I think they are doing quite well seeing all the content they have gathered. They have taken the step as becoming a place people look for live sports.

But it's now pretty clear they're never going to be able to do what ESPN was able to do, charge 100M subscribers $6-7-8 a month. That was the end goal, that was the reason that Murdoch was willing to see Fox lay out big money for sports properties, whether or not they were profitable propositions on their own.

So now the calculus for Fox buying sports rights is very different. (And Comcast's dreams of doing the same thing with NBC-SN are equally shot)

But the goal wasn't to be what ESPN was because thats unrealistic since they have had a 30+ year head start and a monopoly. They can and are making money which is the goal and are growing every year. You think they are going to give up because they can never be the behemoth ESPN once was? They can be very successful being the Pepsi to ESPN's Coke. Having the MLB playoffs, B1G FB, Big XII/East BBall will keep bringing viewers around and advertisers dishing out cash for those eyeballs. Anyone who thinks that they expected to reach their goal in 5 years is very naive. Did Fox Co give up when Fox wasn't at the level of NBC after 5 years?
02-06-2019 09:35 PM
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johnbragg Online
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Post: #22
RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 09:35 PM)RutgersGuy Wrote:  
(02-06-2019 09:16 PM)johnbragg Wrote:  
(02-06-2019 07:55 PM)RutgersGuy Wrote:  
(02-06-2019 04:52 PM)usffan Wrote:  There are way too many moving parts for this to be as simple as people are making it out to be. Remember, the AAC has a deal with CBS as well that allows some of their live events (including, but not exclusive to, football and basketball). Plus, I'm sure there are discussions about numbers of games required to be carried on the air instead of on ESPN+ (and the compensation that goes with that, since ESPN is trying to build that platform). Furthermore, there's the sublicensing issue - what compensation could/should the conference expect if/when ESPN looks to sublicense rights to certain games to other outlets?

In 2012, there was a thought that NBC was trying to become a player in what was perceived to be the value of airing live sports. We now know that NBC really never got into that game, and Fox has only entered it in a limited capacity, since FS1 never really became a true ESPN competitor. Nobody really expects that to be the case in 2019.

USFFan

Never? Well they aren't done and no one expected them to be at ESPNs level by now. I think they are doing quite well seeing all the content they have gathered. They have taken the step as becoming a place people look for live sports.

But it's now pretty clear they're never going to be able to do what ESPN was able to do, charge 100M subscribers $6-7-8 a month. That was the end goal, that was the reason that Murdoch was willing to see Fox lay out big money for sports properties, whether or not they were profitable propositions on their own.

So now the calculus for Fox buying sports rights is very different. (And Comcast's dreams of doing the same thing with NBC-SN are equally shot)

But the goal wasn't to be what ESPN was because thats unrealistic since they have had a 30+ year head start and a monopoly.

The goal was to be a "baby ESPN", pulling in $2, 3, 5 a month for FS1. That's the goal that's now out of reach, with cord-cutting eating into ESPN's revenues.

Quote:They can and are making money which is the goal and are growing every year. You think they are going to give up because they can never be the behemoth ESPN once was?

Umm, yeah?

The business strategy was to possibly lose money in the short or medium term, in order to build a multibillion dollar business in the long term. That's what they did with the Fox network and the NFC package. Fox didn't make money on the NFC package--but the NFC package made them a "real live boy" network, not a fly-by-night operation like UPN or the WB or CW.

(I'm not saying that Fox will dump FS1, but they're not going to sink hundreds of millions into sports rights to build up FS1. Fox Sports contracts will have to be justified by ad revenues on Fox OTA and FS1, not by hoping to increase FS1 per month subscriber fees)

Quote:They can be very successful being the Pepsi to ESPN's Coke.

But truth be told, Coca-Cola has won the cola war. Coke controls 42% of the total carbonated soft drink market, compared with Pepsi's 30%, according to Beverage Digest.

Coke Has Won -- But Does It Matter For Investors?
Despite Coke's clear victory, I expect this will have little relevance going forward for investors.

Due to changing tastes and a healthier consumer, both cola brands have been in decline. Research firm IbisWorld has forecast that per-capita soda consumption's downward trend will continue with no end in sight. No matter how much money is spent on clever marketing, the overwhelming secular trend against sugary, calorie-filled carbonated beverages cannot be reversed.
https://www.nasdaq.com/article/coke-vs-p...s-cm337909

After reading that, would you sign off on a business plan to lose billions of dollars over 10 years to BECOME Pepsi?
(This post was last modified: 02-06-2019 10:17 PM by johnbragg.)
02-06-2019 10:14 PM
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Fighting Muskie Offline
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Post: #23
RE: AAC and ESPN Exclusive Negotiating Window?
(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.
02-06-2019 10:59 PM
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Pony94 Offline
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Post: #24
AAC and ESPN Exclusive Negotiating Window?
We only get $8,000,000 if we add Lamar and West Texas A&M
02-06-2019 11:01 PM
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33laszlo99 Offline
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Post: #25
RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 10:14 PM)johnbragg Wrote:  
(02-06-2019 09:35 PM)RutgersGuy Wrote:  
(02-06-2019 09:16 PM)johnbragg Wrote:  
(02-06-2019 07:55 PM)RutgersGuy Wrote:  
(02-06-2019 04:52 PM)usffan Wrote:  There are way too many moving parts for this to be as simple as people are making it out to be. Remember, the AAC has a deal with CBS as well that allows some of their live events (including, but not exclusive to, football and basketball). Plus, I'm sure there are discussions about numbers of games required to be carried on the air instead of on ESPN+ (and the compensation that goes with that, since ESPN is trying to build that platform). Furthermore, there's the sublicensing issue - what compensation could/should the conference expect if/when ESPN looks to sublicense rights to certain games to other outlets?

In 2012, there was a thought that NBC was trying to become a player in what was perceived to be the value of airing live sports. We now know that NBC really never got into that game, and Fox has only entered it in a limited capacity, since FS1 never really became a true ESPN competitor. Nobody really expects that to be the case in 2019.

USFFan

Never? Well they aren't done and no one expected them to be at ESPNs level by now. I think they are doing quite well seeing all the content they have gathered. They have taken the step as becoming a place people look for live sports.

But it's now pretty clear they're never going to be able to do what ESPN was able to do, charge 100M subscribers $6-7-8 a month. That was the end goal, that was the reason that Murdoch was willing to see Fox lay out big money for sports properties, whether or not they were profitable propositions on their own.

So now the calculus for Fox buying sports rights is very different. (And Comcast's dreams of doing the same thing with NBC-SN are equally shot)

But the goal wasn't to be what ESPN was because thats unrealistic since they have had a 30+ year head start and a monopoly.

The goal was to be a "baby ESPN", pulling in $2, 3, 5 a month for FS1. That's the goal that's now out of reach, with cord-cutting eating into ESPN's revenues.

Quote:They can and are making money which is the goal and are growing every year. You think they are going to give up because they can never be the behemoth ESPN once was?

Umm, yeah?

The business strategy was to possibly lose money in the short or medium term, in order to build a multibillion dollar business in the long term. That's what they did with the Fox network and the NFC package. Fox didn't make money on the NFC package--but the NFC package made them a "real live boy" network, not a fly-by-night operation like UPN or the WB or CW.

(I'm not saying that Fox will dump FS1, but they're not going to sink hundreds of millions into sports rights to build up FS1. Fox Sports contracts will have to be justified by ad revenues on Fox OTA and FS1, not by hoping to increase FS1 per month subscriber fees)

Quote:They can be very successful being the Pepsi to ESPN's Coke.

But truth be told, Coca-Cola has won the cola war. Coke controls 42% of the total carbonated soft drink market, compared with Pepsi's 30%, according to Beverage Digest.

Coke Has Won -- But Does It Matter For Investors?
Despite Coke's clear victory, I expect this will have little relevance going forward for investors.

Due to changing tastes and a healthier consumer, both cola brands have been in decline. Research firm IbisWorld has forecast that per-capita soda consumption's downward trend will continue with no end in sight. No matter how much money is spent on clever marketing, the overwhelming secular trend against sugary, calorie-filled carbonated beverages cannot be reversed.
https://www.nasdaq.com/article/coke-vs-p...s-cm337909

After reading that, would you sign off on a business plan to lose billions of dollars over 10 years to BECOME Pepsi?

Being the dominant player in your industry is fine, but being the most profitable player is far more important.
02-07-2019 12:17 AM
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quo vadis Offline
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Post: #26
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.

IMO, those schools are more valuable than the AAC schools. Only maybe UConn is on their average level in terms of brand name recognition.
02-07-2019 09:55 AM
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GoldenWarrior11 Offline
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Post: #27
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).
(This post was last modified: 02-07-2019 10:18 AM by GoldenWarrior11.)
02-07-2019 10:16 AM
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quo vadis Offline
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Post: #28
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 10:16 AM)GoldenWarrior11 Wrote:  
(02-06-2019 10:59 PM)Fighting Muskie Wrote:  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.

That's an excellent point. E.g., oftentimes we hear fans of upper-level G5 who see their school as athletically brand equal or even better than a bottom-rung P5 gnash their teeth about the "sheer luck" of the P5 and that it has an unearned golden ticket and being no more valuable.

But you are correct, that view is myopic and ignores history. E.g., from the point of view of a Houston or a Memphis, their fans might see their schools as just as valuable as a Ole Miss or a Mississippi State, it's just that the latter are lucky to be affiliated with LSU and Alabama.

But that ignores the fact that the "power" programs, LSU and Alabama, don't see Memphis and Houston as being interchangeable with Ole Miss and MSU. LSU/Alabama and Ole Miss/MSU have been playing each other since the 1890s. There are almost 400 games of history among them. Fans of all the schools involved, including LSU and Alabama, want those games and teams on the schedule, and in the same conference. They are all a part of each other's collective history and memory.

Since college athletics is steeped in history and tradition, that is very valuable. There is nobody at Alabama or LSU that wants to replace the Mississippi schools with say Houston or Memphis, so they aren't the same in value.
02-07-2019 10:24 AM
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quo vadis Offline
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Post: #29
RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 07:49 PM)Attackcoog Wrote:  
(02-06-2019 06:56 PM)quo vadis Wrote:  
(02-06-2019 03:25 PM)Wedge Wrote:  
(02-06-2019 02:57 PM)quo vadis Wrote:  Bottom line: Given that Aresco wants an ESPN deal, and given that as you say, ESPN runs risks if it doesn't sign the AAC during this window, if a deal is NOT signed during this time, that bodes poorly for the AAC getting a high-end deal.

Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.

I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.
(This post was last modified: 02-07-2019 10:32 AM by quo vadis.)
02-07-2019 10:31 AM
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Attackcoog Online
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Post: #30
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  
(02-06-2019 06:56 PM)quo vadis Wrote:  
(02-06-2019 03:25 PM)Wedge Wrote:  
(02-06-2019 02:57 PM)quo vadis Wrote:  Bottom line: Given that Aresco wants an ESPN deal, and given that as you say, ESPN runs risks if it doesn't sign the AAC during this window, if a deal is NOT signed during this time, that bodes poorly for the AAC getting a high-end deal.

Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.

I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN. We do know they just paid WWF and UCF about 150 million each to supply 15-20 events each to ESPN-Plus that get ratings in the same ballpark as the top 20 AAC football games. To me---thats probably the ceiling. I figure the floor is the MLS Soccer deal (75 million split between 3 networks). MLS Soccer gets lower ratings than the AAC. I think those are the boundaries and we we should end up between those high/low guide posts. Im guessing toward the low end of the range at about 75-100 million for the league---but I think there is a better than even chance for an upside surprise because the most recent deals represent the high end boundaries and the oldest contract is the low "comparable sale".
(This post was last modified: 02-07-2019 11:13 AM by Attackcoog.)
02-07-2019 11:02 AM
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MU88 Offline
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Post: #31
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 10:16 AM)GoldenWarrior11 Wrote:  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.

The strength of the AAC is the league has been pretty good overall and the ratings have been pretty good. The weakness is lack of subscribers they bring to the table. Ratings and advertising only make up something like 15%-25% of ESPN's revenue. The vast majority of their revenue comes from subscriber fees. The AAC does nothing for ESPN or any other network in regarding to adding or maintaining subscribers. But for maybe the UConn market, is there any other market that would cause a cable, streaming or dish company to add or keep ESPN on the basic tier? Would the Memphis, Houston, Orlando, or Phily cable providers drop ESPN if they lost rights to the AAC. The short answer is no. Hence, the value of the ACC contract is limited. Alternatively, if ESPN lost the Big 10 right, there would be irate subscribers all over the country wanting to drop ESPN from the basic tier. Hence, the value of the Big 10 contract is huge.

The AAC folks like to complain about the BE contract in view of the their ratings. But, the BE got FS1 onto a number of cable providers. The network launched in 90 million homes. That is where the value of the BE lies. Ratings are secondary.
02-07-2019 11:22 AM
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Post: #32
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  
(02-06-2019 06:56 PM)quo vadis Wrote:  
(02-06-2019 03:25 PM)Wedge Wrote:  Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.

I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN. We do know they just paid WWF and UCF about 150 million each to supply 15-20 events each to ESPN-Plus that get ratings in the same ballpark as the top 20 AAC football games. To me---thats probably the ceiling. I figure the floor is the MLS Soccer deal (75 million split between 3 networks). MLS Soccer gets lower ratings than the AAC. I think those are the boundaries and we we should end up between those high/low guide posts. Im guessing toward the low end of the range at about 75-100 million for the league---but I think there is a better than even chance for an upside surprise because the most recent deals represent the high end boundaries and the oldest contract is the low "comparable sale".

ESPN doesn't have a contract with WWE. WWE has huge deals with Fox and NBC/Universal (USA). Additionally, the brands/audiences of UFC and WWE are vastly different than that of the AAC. Even with WWE ratings at a present low, Raw still averaged over 3 million in viewership last month (Smackdown averaged over 2.6 million). To get both averages on a carrier like USA, when the product is currently down, is a remarkable achievement for them, IMO.

I've said it before, but I believe if you are comparing ratings of a UFC/WWE to a potential AAC deal, you are bound to be disappointed, IMO. They are just completely separate brands and audiences (not to mention content). WWE is a weekly production with a very strong streaming service (which offers a ton of content dating back years). I just don't think they are comparable.
02-07-2019 11:27 AM
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Attackcoog Online
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Post: #33
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 11:27 AM)GoldenWarrior11 Wrote:  
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  
(02-06-2019 06:56 PM)quo vadis Wrote:  I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN. We do know they just paid WWF and UCF about 150 million each to supply 15-20 events each to ESPN-Plus that get ratings in the same ballpark as the top 20 AAC football games. To me---thats probably the ceiling. I figure the floor is the MLS Soccer deal (75 million split between 3 networks). MLS Soccer gets lower ratings than the AAC. I think those are the boundaries and we we should end up between those high/low guide posts. Im guessing toward the low end of the range at about 75-100 million for the league---but I think there is a better than even chance for an upside surprise because the most recent deals represent the high end boundaries and the oldest contract is the low "comparable sale".

ESPN doesn't have a contract with WWE. WWE has huge deals with Fox and NBC/Universal (USA). Additionally, the brands/audiences of UFC and WWE are vastly different than that of the AAC. Even with WWE ratings at a present low, Raw still averaged over 3 million in viewership last month (Smackdown averaged over 2.6 million). To get both averages on a carrier like USA, when the product is currently down, is a remarkable achievement for them, IMO.

I've said it before, but I believe if you are comparing ratings of a UFC/WWE to a potential AAC deal, you are bound to be disappointed, IMO. They are just completely separate brands and audiences (not to mention content). WWE is a weekly production with a very strong streaming service (which offers a ton of content dating back years). I just don't think they are comparable.

My bad. Only UFC was picked up by ESPN. The WWE deal is a very recent FOX deal and represents a recent transaction of a property that is reasonably comparable to the top 20 AAC games. By the way---the AAC also provides MUCH more content than either the WWE or UCF deals. I'd also add that BOTH the WWE and UCF are suffering from declining ratings. AAC ratings continue to rise each year.

I'd also point out that you could also throw in the US Rights for Premier Soccer as an additional comparable for the AAC. The US rights for Premier League runs NBC 160 million a year.

Frankly, I do not expect the AAC to bring 150 million a year. As I stated, I think these transactions represent the ceiling for the AAC deal potential. I think the MLS Soccer deal represents the floor. My prediction has been somewhere in the 75-100 million a year range for the AAC. The fact that most of these deals are clustered at the high end of the range make me feel like an upside surprise (higher than my 75-100 million range) is more likely than a downside disappointment. 04-cheers
(This post was last modified: 02-07-2019 04:49 PM by Attackcoog.)
02-07-2019 11:40 AM
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33laszlo99 Offline
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Post: #34
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  
(02-06-2019 06:56 PM)quo vadis Wrote:  
(02-06-2019 03:25 PM)Wedge Wrote:  Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.

I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN. We do know they just paid WWF and UCF about 150 million each to supply 15-20 events each to ESPN-Plus that get ratings in the same ballpark as the top 20 AAC football games. To me---thats probably the ceiling. I figure the floor is the MLS Soccer deal (75 million split between 3 networks). MLS Soccer gets lower ratings than the AAC. I think those are the boundaries and we we should end up between those high/low guide posts. Im guessing toward the low end of the range at about 75-100 million for the league---but I think there is a better than even chance for an upside surprise because the most recent deals represent the high end boundaries and the oldest contract is the low "comparable sale".

ESPN does not need AAC content to fill those 32 slots each season. They own a truckload of SEC and ACC content that withers on the vine each Saturday in the Fall. So why do they want to spend any money at all on AAC content? AAC games can provide variety to the lineup. They give more density to the ad footprint and help sell cable in the large cities they occupy. When ESPN owns the AAC content, it means that no other network can air those games in competition to ESPN. Every game that appears in a particular timeslot consumes part of the pool of advertising dollars. These amount to what are marginal or supplemental effects and they will command a commensurate price.

I still contend that the incremental ad revenue derived from AAC content will be the limiting factor for the payout. And GoldenWarrior, fairness will not be a consideration.
02-07-2019 12:52 PM
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Post: #35
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 12:52 PM)33laszlo99 Wrote:  
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  
(02-06-2019 06:56 PM)quo vadis Wrote:  I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN. We do know they just paid WWF and UCF about 150 million each to supply 15-20 events each to ESPN-Plus that get ratings in the same ballpark as the top 20 AAC football games. To me---thats probably the ceiling. I figure the floor is the MLS Soccer deal (75 million split between 3 networks). MLS Soccer gets lower ratings than the AAC. I think those are the boundaries and we we should end up between those high/low guide posts. Im guessing toward the low end of the range at about 75-100 million for the league---but I think there is a better than even chance for an upside surprise because the most recent deals represent the high end boundaries and the oldest contract is the low "comparable sale".

ESPN does not need AAC content to fill those 32 slots each season. They own a truckload of SEC and ACC content that withers on the vine each Saturday in the Fall. So why do they want to spend any money at all on AAC content? AAC games can provide variety to the lineup. They give more density to the ad footprint and help sell cable in the large cities they occupy. When ESPN owns the AAC content, it means that no other network can air those games in competition to ESPN. Every game that appears in a particular timeslot consumes part of the pool of advertising dollars. These amount to what are marginal or supplemental effects and they will command a commensurate price.

I still contend that the incremental ad revenue derived from AAC content will be the limiting factor for the payout. And GoldenWarrior, fairness will not be a consideration.

Do tell----name off this secret treasure trove of un-televised ACC and SEC games that no network has bothered to buy. I'll wait while you find them. Meanwhile, the AAC filled 32 slots on ABC/ESPN/ESPN2/ESPNU. So, those slots will have to be filled by something else if the AAC goes elsewhere.

That said, I admit, I dont think ESPN needed the AAC at all when they signed them. However, since then, they have lost half of thier Big10 content, and the SEC Network and ACC Networks have begun operations. With all the conference networks, there really isnt any P5 inventory lying around unused anymore. I suppose ESPN could cobble together all the Big12 3rd tier content (that would take several years)---and even then---that only amounts to just 10 games a year.

Now, ESPN does have plenty of MAC, CUSA, Sunbelt, and MW inventory. They could use that---but the ratings on that stuff--even with similar window slotting--have not been close to AAC ratings. My theory is that ESPN already made its decision back when they realized it would cost more than 250 million to keep all the Big10 inventory. I think they figured they could plug in the best AAC games and those top AAC games would be more than adequate replacements for the mid-level Indiana vs Minnesota game. So, even if they pay the AAC 100 million a year---ESPN is still actually saving 150 million every year.
(This post was last modified: 02-07-2019 04:52 PM by Attackcoog.)
02-07-2019 01:07 PM
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Post: #36
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 01:07 PM)Attackcoog Wrote:  
(02-07-2019 12:52 PM)33laszlo99 Wrote:  
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN. We do know they just paid WWF and UCF about 150 million each to supply 15-20 events each to ESPN-Plus that get ratings in the same ballpark as the top 20 AAC football games. To me---thats probably the ceiling. I figure the floor is the MLS Soccer deal (75 million split between 3 networks). MLS Soccer gets lower ratings than the AAC. I think those are the boundaries and we we should end up between those high/low guide posts. Im guessing toward the low end of the range at about 75-100 million for the league---but I think there is a better than even chance for an upside surprise because the most recent deals represent the high end boundaries and the oldest contract is the low "comparable sale".

ESPN does not need AAC content to fill those 32 slots each season. They own a truckload of SEC and ACC content that withers on the vine each Saturday in the Fall. So why do they want to spend any money at all on AAC content? AAC games can provide variety to the lineup. They give more density to the ad footprint and help sell cable in the large cities they occupy. When ESPN owns the AAC content, it means that no other network can air those games in competition to ESPN. Every game that appears in a particular timeslot consumes part of the pool of advertising dollars. These amount to what are marginal or supplemental effects and they will command a commensurate price.

I still contend that the incremental ad revenue derived from AAC content will be the limiting factor for the payout. And GoldenWarrior, fairness will not be a consideration.

Do tell----name off this secret treasure trove of un-televised ACC and SEC games. I agree, I dont think ESPN needed the AAC at all when they signed them. However, since then, they have lost half of thier Big10 content, and the SEC Network and ACC Networks have begun operations. With all the conference networks, there really isnt any P5 inventory lying around unused anymore. I suppose ESPN could cobble together all the Big12 3rd tier content (that would take several years)---and even then---that only amounts to just 10 games a year.

Now, ESPN does have plenty of MAC, CUSA, Sunbelt, and MW inventory. They could use that---but the ratings on that stuff--even with similar window slotting--have not been close to AAC ratings. My theory is that ESPN already made its decision back when they realized it would cost more than 250 million to keep all the Big10 inventory. I think they figured they could plug in the best AAC games and those top AAC games would be more than adequate replacements for the mid-level Indiana vs Minnesota game. So, even if they pay the AAC 100 million a year---ESPN is still actually saving 150 million every year.

I don't think ESPN would view it that way.

They aren't, by default, going to give that substantial of a raise to the next AAC TV deal just because they aren't spending that money elsewhere. Again, if the AAC was on another service, those ratings aren't the same as they are on ESPN. ESPN, by default (and years of branding and name recognition), gives a significant bump to its content compared to other networks. ESPN knows this.

From my view, ESPN has routinely presented the AAC as a G5 conference, even having on-air talent disparage or talk down about the product (especially through all of the UCF/CFP talk). Now, one can either infer that this was a deliberate attempt to devalue the conference (in order for ESPN to keep it at a lesser value) or it can be taken as the network's true view towards the conference in terms of filler content/desirability. In either case, it does not bode well for ESPN graciously giving more money out of the kindness of its hearts to the AAC in its next TV deal.

I would just be careful about setting expectations too high. I know some are believing that it will be $10-$12 million per year, and declarations like that are just leading to be set up for disappointment.
02-07-2019 03:16 PM
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Post: #37
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 03:16 PM)GoldenWarrior11 Wrote:  
(02-07-2019 01:07 PM)Attackcoog Wrote:  
(02-07-2019 12:52 PM)33laszlo99 Wrote:  
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN. We do know they just paid WWF and UCF about 150 million each to supply 15-20 events each to ESPN-Plus that get ratings in the same ballpark as the top 20 AAC football games. To me---thats probably the ceiling. I figure the floor is the MLS Soccer deal (75 million split between 3 networks). MLS Soccer gets lower ratings than the AAC. I think those are the boundaries and we we should end up between those high/low guide posts. Im guessing toward the low end of the range at about 75-100 million for the league---but I think there is a better than even chance for an upside surprise because the most recent deals represent the high end boundaries and the oldest contract is the low "comparable sale".

ESPN does not need AAC content to fill those 32 slots each season. They own a truckload of SEC and ACC content that withers on the vine each Saturday in the Fall. So why do they want to spend any money at all on AAC content? AAC games can provide variety to the lineup. They give more density to the ad footprint and help sell cable in the large cities they occupy. When ESPN owns the AAC content, it means that no other network can air those games in competition to ESPN. Every game that appears in a particular timeslot consumes part of the pool of advertising dollars. These amount to what are marginal or supplemental effects and they will command a commensurate price.

I still contend that the incremental ad revenue derived from AAC content will be the limiting factor for the payout. And GoldenWarrior, fairness will not be a consideration.

Do tell----name off this secret treasure trove of un-televised ACC and SEC games. I agree, I dont think ESPN needed the AAC at all when they signed them. However, since then, they have lost half of thier Big10 content, and the SEC Network and ACC Networks have begun operations. With all the conference networks, there really isnt any P5 inventory lying around unused anymore. I suppose ESPN could cobble together all the Big12 3rd tier content (that would take several years)---and even then---that only amounts to just 10 games a year.

Now, ESPN does have plenty of MAC, CUSA, Sunbelt, and MW inventory. They could use that---but the ratings on that stuff--even with similar window slotting--have not been close to AAC ratings. My theory is that ESPN already made its decision back when they realized it would cost more than 250 million to keep all the Big10 inventory. I think they figured they could plug in the best AAC games and those top AAC games would be more than adequate replacements for the mid-level Indiana vs Minnesota game. So, even if they pay the AAC 100 million a year---ESPN is still actually saving 150 million every year.

I don't think ESPN would view it that way.

They aren't, by default, going to give that substantial of a raise to the next AAC TV deal just because they aren't spending that money elsewhere. Again, if the AAC was on another service, those ratings aren't the same as they are on ESPN. ESPN, by default (and years of branding and name recognition), gives a significant bump to its content compared to other networks. ESPN knows this.

From my view, ESPN has routinely presented the AAC as a G5 conference, even having on-air talent disparage or talk down about the product (especially through all of the UCF/CFP talk). Now, one can either infer that this was a deliberate attempt to devalue the conference (in order for ESPN to keep it at a lesser value) or it can be taken as the network's true view towards the conference in terms of filler content/desirability. In either case, it does not bode well for ESPN graciously giving more money out of the kindness of its hearts to the AAC in its next TV deal.

I would just be careful about setting expectations too high. I know some are believing that it will be $10-$12 million per year, and declarations like that are just leading to be set up for disappointment.

Again, Im more in the 6-8 million per team range.

I think what ESPN actually DOES is much more telling than what they SAY. I think we can agree that ABC and ESPN are the flagship Disney networks. I think we can also agree that Disney is going to place their best available content in their best broadcast windows.

The number of times the AAC appears on the two flagship Disney networks (ABC and ESPN) is very similar to the number of times the Pac12 and Big12 appear on those same networks. ESPN is placing those games on those networks for business reasons. They apparently believe those games were the best content option they had in those time slots.

This thread gives you the actual details. Also pay attention how many times the other G5 conferences appear on those same flagship networks.
https://csnbbs.com/thread-861586.html
(This post was last modified: 02-07-2019 03:41 PM by Attackcoog.)
02-07-2019 03:31 PM
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33laszlo99 Offline
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Post: #38
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 01:07 PM)Attackcoog Wrote:  
(02-07-2019 12:52 PM)33laszlo99 Wrote:  
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN. We do know they just paid WWF and UCF about 150 million each to supply 15-20 events each to ESPN-Plus that get ratings in the same ballpark as the top 20 AAC football games. To me---thats probably the ceiling. I figure the floor is the MLS Soccer deal (75 million split between 3 networks). MLS Soccer gets lower ratings than the AAC. I think those are the boundaries and we we should end up between those high/low guide posts. Im guessing toward the low end of the range at about 75-100 million for the league---but I think there is a better than even chance for an upside surprise because the most recent deals represent the high end boundaries and the oldest contract is the low "comparable sale".

ESPN does not need AAC content to fill those 32 slots each season. They own a truckload of SEC and ACC content that withers on the vine each Saturday in the Fall. So why do they want to spend any money at all on AAC content? AAC games can provide variety to the lineup. They give more density to the ad footprint and help sell cable in the large cities they occupy. When ESPN owns the AAC content, it means that no other network can air those games in competition to ESPN. Every game that appears in a particular timeslot consumes part of the pool of advertising dollars. These amount to what are marginal or supplemental effects and they will command a commensurate price.

I still contend that the incremental ad revenue derived from AAC content will be the limiting factor for the payout. And GoldenWarrior, fairness will not be a consideration.

Do tell----name off this secret treasure trove of un-televised ACC and SEC games that no network has bothered to buy. I'll wait while you find them.

That said, I admit, I dont think ESPN needed the AAC at all when they signed them. However, since then, they have lost half of thier Big10 content, and the SEC Network and ACC Networks have begun operations. With all the conference networks, there really isnt any P5 inventory lying around unused anymore. I suppose ESPN could cobble together all the Big12 3rd tier content (that would take several years)---and even then---that only amounts to just 10 games a year.

Now, ESPN does have plenty of MAC, CUSA, Sunbelt, and MW inventory. They could use that---but the ratings on that stuff--even with similar window slotting--have not been close to AAC ratings. My theory is that ESPN already made its decision back when they realized it would cost more than 250 million to keep all the Big10 inventory. I think they figured they could plug in the best AAC games and those top AAC games would be more than adequate replacements for the mid-level Indiana vs Minnesota game. So, even if they pay the AAC 100 million a year---ESPN is still actually saving 150 million every year.

Between the SEC and ACC ESPN gets 14 games per week (more during non-conference play) plus the B1G. They have made a good move to buy Ivy League content in an effort to find football fans in the Northeast and to sell ads there. Will it work out? It's a worthwhile experiment, for the price.

Are they willing to try an experiment of another kind in B1G territory? Do they believe they can break from the B1G and satisfy their national advertisers with G5 content in its place? ... risky.
The huge price they pay for B1G content will continue as long as the investment is rewarded with attrative ad revenue/profit. And AAC content will likely continue to attract a price that is below its "worth."
02-07-2019 03:38 PM
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quo vadis Offline
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Post: #39
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  
(02-06-2019 06:56 PM)quo vadis Wrote:  
(02-06-2019 03:25 PM)Wedge Wrote:  Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.

I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN.

Remember, my claim about the AAC and ESPN and this 30-day window doesn't imply that a deal must be for the whole AAC package. Even if you are correct that the AAC is probably looking to sell only a part of its package to ESPN, and that ESPN is looking to pay good money only for part of the package as well, with the rest to go to someone else, we should still - for the reasons given earlier - expect that deal to be made within this 30 day window.

If it isn't, then IMO that does bode poorly for the ultimate value the AAC will sign for, because it means that even for those 25 games that ESPN should really want, they aren't willing to pay what Aresco believes is a reasonable price for them.
(This post was last modified: 02-07-2019 03:47 PM by quo vadis.)
02-07-2019 03:45 PM
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Post: #40
RE: AAC and ESPN Exclusive Negotiating Window?
(02-07-2019 03:45 PM)quo vadis Wrote:  
(02-07-2019 11:02 AM)Attackcoog Wrote:  
(02-07-2019 10:31 AM)quo vadis Wrote:  
(02-06-2019 07:49 PM)Attackcoog Wrote:  
(02-06-2019 06:56 PM)quo vadis Wrote:  I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all.

I admit this makes sense, but I also admit I am not qualified to determine if it makes sense (LOL). My feeling is, if you or I really knew what the AAC has to do to maximize its value (bundles or all with one bidder) and what ESPN needs vs what it wants, then we'd be getting paid a million bucks a year to be involved in these kinds of negotiations. I suspect there are complexities and unknowns here that make those kinds of determinations by us laymen suspect.

lol...true. We are guessing---but ESPN isnt too hard to figure out. We currently fill 32 slots on ABC/ESPN/ESPN2/ESPN. They need enough AAC content to continue filling most of those slots. I think we can safely surmise they would prefer to have the top 25 or so AAC games in those slots.

We know ESPN-Plus is now up to 2 million subscribers. ESPN is going to want to get enough AAC content on ESPN-Plus to hopefully lure a crap load of AAC fans to subscribe to that service.

The only thing we dont know is how much that is worth to ESPN.

Remember, my claim about the AAC and ESPN and this 30-day window doesn't imply that a deal must be for the whole AAC package. Even if you are correct that the AAC is probably looking to sell only a part of its package to ESPN, and that ESPN is looking to pay good money only for part of the package as well, with the rest to go to someone else, we should still - for the reasons given earlier - expect that deal to be made within this 30 day window.

If it isn't, then IMO that does bode poorly for the ultimate value the AAC will sign for, because it means that even for those 25 games that ESPN should really want, they aren't willing to pay what Aresco believes is a reasonable price for them.

Again--not sure if thats true or not. The AAC might not want to commit to giving the best games to ESPN as that might devalue the second package of rights too much. A shared selection order where selection rights are more equally distributed would be better for getting max value. Additionally, it would make being "first pick" each week something that could spark bidding on the package values.

However, to be fair--there is one piece of data that might make your scenario more likely. Apparently, there is no right to match in this deal. However, the deal DOES say that the AAC MAY NOT accept a deal that is LESS than the ESPN offer. I dont know the details on how this would work in practice---but I would tend to think that contractual advantage might increase the likelihood of ESPN making a very competitive offer PRIOR to the end of the current exclusive period. 04-cheers
(This post was last modified: 02-07-2019 04:00 PM by Attackcoog.)
02-07-2019 03:57 PM
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