Frank the Tank
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RE: Financial breakdown of UConn's move to the Big East
(08-08-2019 03:11 PM)Attackcoog Wrote: (08-08-2019 02:57 PM)Frank the Tank Wrote: In these types of breakdowns, I feel like the truth is somewhere in the middle: Big East supporters seem to underestimate the drop in football revenue, but AAC supporters seem to underestimate the increase in basketball revenue. UConn isn't going to receive the conference distributions for the CFP and other bowls, which is a significant amount that the Big East-biased OP link glosses over. Those guaranteed annual amounts are almost certainly going to be lower and more variable.
At the same time, though, it drives me up the wall when AAC fans try to compare their new football/basketball TV contract with ESPN to the basketball TV contract with Fox because they're simply not the same. When it comes to basketball revenue, UConn is going to straight up make more money for that particular sport and, on a relative basis, the Big East TV contract for basketball is on par with what the Power Five conferences would assign as the basketball value of their TV contracts.
I keep racking my brain to think of the best analogy, but it's like comparing what's a more valuable housing market. Greenwich, CT has higher median home values than Manhattan, but that doesn't mean that real estate is more valuable in Greenwich per se. That median home in Greenwich is going to be a mansion with a lot of land and space, whereas the median home in Manhattan is a fairly small apartment/condo/co-op with no land at all. Manhattan has a much higher price per square foot, which means that a piece of real estate in that is the size of the median Greenwich home is going to be worth much more in Manhattan. By the same token, a condo in Greenwich is going to be less than the same-sized condo in Manhattan. Yet, Greenwich has a larger inventory of large-sized properties, so that drives the median home price upwards. So, is Greenwich or Manhattan the more valuable real estate market?
In this case, Greenwich = AAC and Manhattan = Big East. The AAC might be getting more overall TV money, but that's also because it's selling additional inventory in the form of football. In contrast, the Big East is getting a significantly higher price for what it's specifically selling (basketball) compared to the AAC.
(I'll grant that this is analogy is one of the weaker ones that I've come up with over the years, but it's hard to get across the concept of where you can have a total bundle package being sold by Company A being priced higher than a competing Company B with the smaller package, but the specific composition of Company B's smaller package is worth more compared to the corresponding sub-component of Company A's larger package. Too many people just look at $X > $Y and then don't break it down to an apples-to-apples comparison.)
As a result, the breakeven point for the UConn athletic department overall doesn't require its football program to replace the entire amount that it would have received from the AAC for football. UConn's basketball revenue is going to be higher just based on the Big East distributions for that sport alone (once again not mixing in the apples-to-oranges comparison of the football/basketball distributions of the AAC), much less any increases from ticket sales and donations at the individual school level. With that in mind, its football program doesn't *have* to make as much as it did in the AAC in order for the UConn athletic department to be better off.
Here is the problem with your analysis. It was always an interesting point that the Big East was making more media income (4 million) for JUST basketball than the AAC was making for everything PLUS football. However, the 990 Tax filings from 2016 have largely blown up that narrative. Turns out, due largely to the CFP pay outs, the AAC schools were always bringing home a bigger average per team conference paycheck than the Big East schools (roughly 4.5 million vs 3.5 million). Now that the Big East advantage on the media payout side (4 million vs 2 million) has not only been eliminated---but reversed (4 million vs 7 million)---common sense tells you that revenue gap about about to become much larger.
I am more than willing to stipulate that the Big East is a better basketball conference and a better fit for UConn. However, I have to call out the fake narrative that UConn, who will still have to pay all the costs associated with its football program, is going to make MORE money in the Big East they would have in the AAC. Any unbiased analysis will indicate thats simply not the case. That said, I dont think the difference will be big enough to deny the fan base what they really desired and I fully believe---the administration knows that the Big East is a viable long term final destination for UConn should they ever decide to pull the plug on football (where as the AAC would not be).
I understand your argument, but it's just an extension of what I was stating previously. I'm not arguing that the AAC conference payouts weren't higher than the Big East conference payouts, yet the same analysis applies. The AAC conference payouts *should* have been higher because they're including all of the football bowl revenue that the Big East isn't going to provide at a conference level. My point is that *basketball* conference revenue is higher in the Big East in all forms (TV, NCAA Tournament, etc.), which means that the break-even point for the UConn athletic department doesn't require *as much* football revenue as it did under the AAC. Now, UConn could certainly screw it all up - I'm not saying that UConn is going to magically make more money in the Big East. Instead, I'm just saying that people need to take into account that basketball revenue is almost certainly going to increase for UConn just looking at the conference distributions (not even taking into account ticket sales and donations), which gives a lot more cushion for the football side to figure things out than what a lot of UConn critics are giving them credit for here.
Maybe a better analogy is cars as opposed to houses. Let's say that a fully-loaded Toyota Camry costs slightly more than a bare bones Lexus IS without any extra features. However, the bare bones Lexus IS costs significantly more than the bare bones Toyota Camry. In this case:
Bare bones Lexus IS = Big East basketball
Bare bones Toyota Camry = AAC basketball
Fully-loaded Toyota Camry = AAC basketball + football
My whole point is that when it comes to apples-to-apples (pure basketball revenue), the Big East makes more (and honestly significantly more) than the AAC, just as the bare bones Lexus IS costs significantly more than a bare bones Toyota Camry. However, when you add in all of the extra features (football for the AAC), that pushes the cost of a fully-loaded Toyota Camry (the AAC with both basketball and football) past the cost of a bare bones Lexus IS (the Big East with basketball).
UConn doesn't need a fully-loaded Lexus IS of a football program to push past the cost of a fully-loaded Toyota Camry. All you need is a couple of extra features and then that IS becomes more expensive than the Camry (because all things being equal, a Lexus is an inherently more valuable brand than a Toyota, which you can argue is the same when comparing the brand of the Big East compared to the AAC). So, UConn just needs its football program to do the equivalent of adding a couple of extra features compared to a bare bones Lexus IS in order to get to break-even.
I don't know if that analogy makes sense to anyone here, but it makes sense in my own (admittedly strange) head.
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