BTN: Over $27 MM per school by 2015?
Clay Travis just put out an article about the SEC going to 14 teams. He explains the economics, including why TAMU and Mizzou make so much sense. He also walks through the economics of BTN and provides projections (Kagan) of $333 million, or over $27 million per school, per year for BTN by 2015.* It is a very good article for anyone who is interested.
http://outkickthecoverage.com/sec-expansion-to-14-goal-its-own-network…
* The P12 just negotiated a new deal with ESPN and FOX for its tier 1 and 2 TV rights. That deal is north of $20 million per school per year. The B10's deals with ABC/ESPN and CBS come up for renewal in 2015/2016. Assuming a similar increase, it is likely the B10 will be generating more than $30 million per year from third party TV rights upon renewal. That will be in addition to the $27 million per school generated by BTN.
September 29th, 2011 at 12:44 AM ^
September 29th, 2011 at 1:01 AM ^
Lots of truckers singing, "close shave America, close shave Barbasol!"
September 29th, 2011 at 9:27 AM ^
Thanks a lot man. Now that freakin' jingle will be stuck in my head all day.
September 29th, 2011 at 1:31 AM ^
It's the Hass Avocados: America's favorite party food.
September 29th, 2011 at 9:58 AM ^
BUY OMAHA STEAKS or SUH WILL KILL YOU.
September 29th, 2011 at 11:23 AM ^
Let's have a good good time!
When I think of a good good time, I only think of drinking a case of Dr. Pepper now.
September 29th, 2011 at 1:05 AM ^
$57 million a year? The ND deal with NBC can't be worth anything like that, can it? Some old ESPN article indicates they may get 9 million per year from NBC.
57>>9.
September 29th, 2011 at 1:19 AM ^
September 29th, 2011 at 5:33 AM ^
I could see someone in Notre Dame's athletics department suggesting a Big Ten bid just so they could sip a more expensive whine.
September 29th, 2011 at 6:44 AM ^
September 29th, 2011 at 8:08 AM ^
... Selling Michigan jerseys is a good start.
September 29th, 2011 at 1:28 AM ^
The original deal between ND and NBC covering all of their home football games (tier 1, 2 and 3, effectively) paid $9 million per year. That deal expired in 2010, but was renewed for an additional five years at $15 million per year. It is very interesting that the B10 deals with ABC/ESPN and CBS come up for renewal at the same time the extended ND deal with NBC comes up for renewal: 2015. ND also has not accepted a bid to any conference yet for its hockey team beginning in 2013 (the year the B10 hockey league starts). If I had to bet, some serious negotiations are going on right now to try to bring ND into the B10 by 2016 (if not sooner). The real question IMO is who will be the 14th school (or 14th, 15th and 16th schools if the B10 goes all the way up to 16).
September 29th, 2011 at 6:26 AM ^
Stirictly looking at ND from a revenue perspective, if they only command 15 million now, if you port that number to added value to a contract for the B1G if ND were to join the B1G, ND's addition to our conference reduces what each team would get. Add to that ND's minimal research posture and maybe Delaney isn't having late night conversations with ND. The real value to expanding the B1G and other conferences is control of a playoff system and the revenue a playoff would generate. If, in a couple of years, the BCS contract is extended, I believe you may have a period of relative calm with respect to conference realignment.
September 29th, 2011 at 9:04 AM ^
Correct me if I am wrong, but I thought that outside B1G hotbeds, the BTN is not necessarily available on every cable service. Adding ND gives the B1G another national program to sway cable companies to offer BTN. That, in of itself, likely makes ND attractive.
September 29th, 2011 at 10:29 AM ^
The thinking is that ND, perhaps in combo with Rutgers, perhaps on their own, would allow the BTN to get on the basic tier of the NYC and NJ cable systems. That's a gold mine. (Right now, it's on the "sports tier" which means that the BTN only gets revenue from those who elect to receive it, or from the soccer fans who pony up for FSC. The real money is in the basic digitial tier, where people who don't even know they get the BTN pay for it monthly.)
I doubt very strongly that it's going to happen, though. ND fans hate the idea of Big 10 membership for a series of very silly reasons ranging from anti-Catholicism in the 1920s to the belief that Big 10 membership would constrain their "national reach." If forced into a conference, the fans at least seem to very much prefer the ACC. Maybe money wins out, but then we have to deal with their pathetic whining. I personally hope they remain independent.
September 29th, 2011 at 10:51 AM ^
It all adds up to the number of viewers, and perhaps there aren't as many watching ND football as some people might think. As far as the NYC and NJ market being a hotbed for football, I thought that the markets of which you speak are not as strong in college football as you might suspect. NBC also has a very small footprint for NCAA football - ND is the only team they cover, suggesting their coverage may be to keep themselves in the game and maybe not all too well at that. Note this article from 2009 - doubt much has changed.
http://www.aolnews.com/2009/06/15/as-notre-dames-tv-money-dwindles-so-t…
September 29th, 2011 at 11:02 AM ^
Living in NYC, you're absolutely right. It's first a baseball town, then NFL, then basketball.
ND, however, is the school that gets the most regular coverage and are on the radio every week on one of the local sports radio channels. The Big 10 schools are probably next after that, then the Big East, with the exception being the one very good season Rutgers had (don't remember much coverage of UConn, even last year. UConn just seems outside of the NYC media radar.) I'm sure that the BTN has had talks with Time-Warner and Cablevision about what it would take to get on the basic digital tier in the city.
September 29th, 2011 at 2:12 AM ^
If I did ad sales for BTN, I'd bookmark this page to pitch future clients. The first three posts are solid gold. Maybe that moves the projection up an exra Mil.
September 29th, 2011 at 8:57 AM ^
September 29th, 2011 at 9:17 AM ^
UMDrone, I believe, is right. It should be approximately half of that, with Fox taking the rest. So you are not taling $50 million, but closer to $30-35 million...still tops.
September 29th, 2011 at 9:33 AM ^
September 29th, 2011 at 10:54 AM ^
The $333 million number from Kagan is also a revenue number. The actual profit projection from Kagan. is more like $120 million.
September 30th, 2011 at 10:03 AM ^
$120 million in profit by 2015 can't be right. It's been widely reported that each big ten school pocketed $7.9 million from the BTN last year. Since the conference only takes about half of the profit, the BTN netted around $170 million last year. It should be significantly higher by 2015.
September 29th, 2011 at 10:54 AM ^
I will have to look at the Kagan report to find out if the $333 million is total or just the share paid to the B10 schools, but even assuming that it is gross and the schools get only half, the total amount per school from both third party contracts and BTN wold be closer to $45 million not $35 million. That clearly is less than the $57 million being discussed above, but it still is a huge number and should top the amount earned by any team/conference that does not have its own cable TV network.
September 29th, 2011 at 9:51 AM ^
Every ND fan will tell you that becuase of the billions of $$$ in endowment it is never about the money....$15 Mill on a downward trend after 2015 Vs. $50 Mill and an upward trend with no sky-Hmmmmm. Wonder if this will be about the money. ND needs to be rethinking it's posture and making moves to protect it's future in all sports.
September 29th, 2011 at 10:31 AM ^
That $15 million is only for home ND games. Their road games are televised on ABC/ESPN/CBS etc. like other schools. I'm not sure exactly what they get from third-party TV, but it probably is equivalent to their NBC deal or more.
September 29th, 2011 at 10:53 AM ^
I'm pretty sure that broadcast rights are owned by home teams/home conferences, thus ND doesn't receive any broadcast money from those stations (if that's what you mean by third party TV).
One big issue for ND is that because NBC has rights to all their home games, they don't have the third tier football rights that the BTN and the Longhorn network have packaged with basketball and non-revenue sports to create their own network. While ND might want to create their own network (though I doubt it has the economies of scale that the BTN has achieved and the LHN hopes for), they don't have the football games that would make it enticing to potential advertisers and cable systems. ND on NBC football ratings have been dropping as well, to the point that they draw fewer than half the viewers that ABC and CBS do for their packages.
Edit: the neutral site games that ND's been scheduling may be a way to garner a new revenue stream outside of their NBC contract. I'm not sure who's been televising those games (such as the game they played against Wazzou in San Antonio a few years ago).
September 29th, 2011 at 10:56 AM ^
I didn't know that about the home team having the rights. That does put ND in a quandry. Will NBC pay up to keep them competitive?
September 29th, 2011 at 10:59 AM ^
Exactly. The TV rights for away games are owned by the home team in each case. For example, if the Michigan v. ND game is played in South Bend, the TV rights fall under the ND agreement with NBC. Alternatively, if the game is played in Ann Arbor, the TV rights fall under the B10 third-party and BTN TV agreements.
September 29th, 2011 at 10:38 AM ^
Tauro said "Correct me if I am wrong, but I thought that outside B1G hotbeds, the BTN is not necessarily available on every cable service. Adding ND gives the B1G another national program to sway cable companies to offer BTN. That, in of itself, likely makes ND attractive."
I live in Alabama and we have the BTN.
September 29th, 2011 at 11:24 AM ^
This is true for California. I had to get a dish because the cable provider in my area (Charter) didn't offer the BTN at all. Charter carries the channel in the midwest, but not in my area. I wouldn't be surprised if that changes soon though, since BTN is becoming a much more popular and asked for network.
September 29th, 2011 at 9:14 PM ^
One of the main reason ND remains stubborn with regards to independence is merchandise revenue. Standing alone, ND's television contract cannot rival BTN revenues. On the other hand, all of ND's revenue generated from merchandise sales, use of their logo on games, etc... adds up. If they joined BIG, that pie is split 13 ways instead of 1.
September 30th, 2011 at 12:36 PM ^
I don't think merchandising or licensing revenue is split with the rest of the conference. Have a source for that?
September 30th, 2011 at 11:25 AM ^
ND vs Big Ten isn't an apples-to-apples comparison. The $15 Million number that has been reported is just for about six or seven football games only. It does not include bowl revenue, basketball revenue, etc. The numbers that are quoted for the Big Ten include the total distribution by the conference for all shared revenue. The conference distribution for the Big Ten for Michigan is budgeted at $20.2 MM for FY 2011. I'm told that's about 1/3 BTN, 1/3 football contract with ABC/ESPN, and 1/3 everything else.
Just to give you an idea of how much revenue is not being accounted for when looking at Notre Dame, the Sun Bowl paid out $1.9 Million to them last year. That's a shitty bowl game in a crappy time slot for mediocre teams. The Sugar Bowl paid out about $7.5 Million per team. All of these bowl revenues are accounted for in the conference distribution number for Michigan, but not in the $15MM per year number for Notre Dame. Which, by the way, is a pretty old number. Recent contracts by the ACC and PAC-12 hint that the value of TV contracts has exploded like crazy lately. The ACC increased their value despite the fact that Florida State and Miami have sucked recently. Revenues for all sports have been on an upward spiral for decades now. I'll bet that if ND renewed their deal, somebody would pay them over $25 MM for it. Easily.
September 30th, 2011 at 1:13 PM ^
Apples to apple-type-substance: "$16.6 million of Illinois’ $22.6 million check comes from television rights" ( http://collegefootballtalk.nbcsports.com/2011/07/19/illinois-swimming-in-pool-of-money-after-big-ten-network-check/ ). The BTN is producing basically as much revenue for the conference as the ABC/ESPN deal.
What I'm not sure about is how much of the BTN money to attribute to other sports (mainly basketball). I think it's safe to assume that the vast majority is from football, however, and that the revenue will continue to rise in coming years.
As for the bowls, both Michigan and Notre Dame make money from them. They both get a slice from the BCS (though Michigan's is usually a bit bigger). ND gets all the money from any bowl it plays in but nothing else. Michigan gets some extra money from the conference for making a bowl game ("travel budget") and surrenders the rest. However, it gets an equal share of all of the members' excess bowl revenue. I don't know whose take is more on average, but Michigan's is certainly more consistent. Watch out if ND starts making BCS bowls on the regular, though.