(05-01-2023 06:19 PM)Stugray2 Wrote: No.
For the SEC to have a 24-school league they'd need to find $400M more per year to upgrade 8 ACC/B12 schools from their current ESPN contracts. This would not improve the reach of ESPN nor fill any vacant slots, nor add any first tier games. Basically, it would be $400M a year to fund JRsec's fantasy to see schools like NC State and VT move from the ACC to the SEC. There is also the secondary cost of upgrading AAC or SBC schools from low cost packages to ACC or Big 12 packages as backfill. This could well add $100M to the ESPN expenses, again without adding any additional desirable programming, maybe making what they have worse by breaking up some rivalries.
Same problem but even larger for Fox and the B1G. The upgrade costs is from $0 they would have in the Pac-12 and ACC to fund most of $80M per school, or find partners to take more games, while giving up some of the most premium games to make such additional partner packages work. In all $650M has to be found.
Basically, we are talking about an additional $1.3B going to the SEC and B1G from media companies, without adding a single Ohio State-Michigan, Alabama-Auburn, Texas-A&M, UCLA-USC level ball game to the combined inventories. In short paying a hell of a lot more for what they already have in cheaper packages.
The answer then is not no, but hell no.
1. Stu if you are going to call me out by name then get it right. I've consistently said 20 is much more likely than 24. A move of 4 more schools to the SEC some from the ACC and maybe one from the Big 12 could be handled at SEC pro rata which increases the total payout by ESPN at roughly 250 million over what they pay those schools. Should a similar move be made out of the ACC and PAC 12 to a 20 team Big 10, then ESPN would lose having to pay 2 of those schools at all so knock off 76 million. Any ACC schools moving then to the Big 12 would be split with FOX, so knock of half of 38 million x 10. If the ACC rebuilds its just ACC pro rata to make all the moves feasible (no damage financially, no damages).
2. It's not my fantasy. There was a marketing firm which published such a format, though I thought the arrangement was wonky, about 4 or 5 years ago and explained very clearly that it would be paid off to the networks with the expanded CFP.
The estimate on the total value of the 12 team CFP is 2.5 billion. Accounting for some overhead and splits with the conference teams it would be about 18 million to each school and the two networks (FOX and ESPN) would bank about 750 million each. Do that for the hoops tournament and they split about another 500 million, or 250 million each for the coverage. So FOX and ESPN would make about 1 billion each from the arrangement.
3. That particular study had 2 conferences of about 28 schools each in it.
4. The schools make more money by dividing conference overhead among more schools and eliminating 3 conferences in that model. Think of each conference's share being equal to one school's share and we are talking about eliminating in costs about 150 million on average, but that's not all. The commercial properties of the 3 conferences could be liquidated and split up by the old conference members presenting a one time windfall to each.
5. Since the post season setup and reduction in overhead covers the costs, and they aren't nearly as much as you suggest, yes, it is very possible. Especially without the NCAA syphoning off 70 million to add to their endowment every year and paying 2.5 million per share and spreading that out over 6 years so the NCAA collects the interest.
6. If the move was to 24 and you had a repository conference like the Big 12 is set up to be, moving schools into the Big 12 would run around 32 million so a reduction covered by exit fees in the ACC and a slight bump up for the PAC schools not taken by a 24 member Big 10. Let's say the Big 10 grew by 4 out of the PAC 12 and 4 out of the ACC. 4 x 75-38 million=148 million more to FOX Out of the PAC it would be 4 x 43 million= 172 million. So for FOX it would be total 320 million. For ESPN it would likely be 6 from the ACC, 1 from the Big 12, possibly 1 from the PAC or another ACC school. So, 37 million x 6 = 222 million for ACC schools to move, 43 million for the Big 12 school and 43 million for the PAC school so ~ 308 million, but they get to subtract 38 million x 4 for those ACC schools moving to the Big 10 so -152 million. They also get to subtract half the cost of those moving to the Big 12 so 5 at 19 million is another -95 million.
What ESPN would be doing is equalizing the volume of rights with FOX, and those working with FOX. This increases FOX's total inventory which they need to make the Big 10 split 3 ways, possibly 4, work smoothly. ESPN works its angles for about 61 million total. This doesn't account for added value in placement as more big-name contests happen raising rates for advertising on each one of those events.
FOX's investment is around 415 million for their moves and the added Big 12 inventory. Now FOX channel, FS1 and FS2 have more inventory to market, the BTN has more and a much larger subscriber base which raises in market rates (where FOX earns 70%), and there is more to choose from for CBS's T1 and NBC.
So, you are telling me that if FOX could make 600 million more on 415 million dollar outlay it's a bad deal? And we aren't counting better match up money or the profit made from an expanded BTN base. ESPN is Netting another 939 million for their efforts.
Yeah buddy, it's cray cray! FOX and ESPN get a nice to very nice profit, each has majority or exclusive rights to 1 of the Super 2 conferences and they split the third. The schools make more, or at least no less, and all have access plus 3 more are promoted from the G5.
Bad, bad, bad.
Seems one man's scoffing and another's accused fantasy, are miles apart in revenue and the fantasy is the one making the money through mostly the post season and some rearranged deck chairs.
The only snag is that it is good for only about a dozen more years, but then all of the current contracts are up by then so not much risk on the tail end by the networks.
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Will it be financially feasible for ESPN and Fox to pay for 2 mega FBS conferences?
