The ACC has more than doubled their TV revenue with their new contract. They now make $155 million a year, as opposed to $67 million a year previously. Unlike their previous contract, they sold all their rights to ESPN, who (thankfully) won a bidding war with Fox.
OT: ACC More than Doubles TV Contract
WOW. The ACC was definitely not expected to do that well. That's terrific news; it makes ACC teams a lot less likely to be a juicy SEC or Big Ten expansion target and it puts a lot less pressure on the ACC to keep up with the Big Ten Joneses.
Given this new TV contract, what do you, as someone who is more in touch with the ACC schools better than I am, think the chances are of FSU (or other schools like Virginia Tech and Miami) jumping to the SEC if given an invitation? I'm guessing Miami wouldn't for academic and cultural reasons, but I've no clue about the other two.
If anyone leaves I think it'd be FSU. I think VT is happy where it is, and the Va. politicians expended a ton of effort shoehorning VT into the ACC so they could reap the same big-conference benefits UVA was getting. I'd like to think the legislature wouldn't allow VT to jump to the SEC for the benefits and leave UVA behind (although you never know) and then I doubt you'd see UVA wanting very much to follow, so it'd be a weird situation. Just because you get more money from the conference in the SEC doesn't mean that won't be offset by pissed-off donors upset that we're now associating with Tennessee. (This is why any scenario involving Duke and/or UNC jumping ship to any conference is a nonstarter. Boosters would withhold money forever.)
I wouldn't miss FSU if it meant the ACC could replace them with Syracuse from a disintegrating Big East. But I sort of suspect the SEC is blowing smoke about expansion unless they can get Texas. They're in a different situation than the Big Ten. The SEC is already on in every household and ESPN isn't going to give them more money until it's time to renegotiate, which isn't for at least a decade. So expansion means watering down the money pool.
If the SEC decides that expansion would be good in the long-term, I wouldn't be surprised if they made a move now, when there is a lot of uncertainty and instability in some major conferences. Ten years down the line, the dynamics may well have changed, causing numerous opportunities available now to no longer be available. That said, it's an open question whether expansion without a team like Texas is in the SEC's long term interests. My instinct is that it wouldn't be unless the SEC is planning on forming their own network somewhere down the line.
The Big 12 has an unbalanced revenue distribution with Texas receiving by far the largest share. This is what pisses off Missouri. Why would Texas leave and go to a conference with an equal distribution?
Why would Nebraska leave when they take the largest share in the Big 12 North, especially with Missouri leaving? If the Big 12 adds TCU, Colorado State, etc., Nebraska's share is just going to go up.
According to Texas blog Barking Carnival, Texas, with the largest revenue share in the Big 12, makes about $10.2 million a year or so. The Big Ten schools make $20 million a year.
I would rather make less money, but more in comparison to the rest of my conference, than more money but the same as the conference. As long as it's not too small an amount, the whole point of the money is to have the resources to compete, and I'd definitely rather have more resources than my competition than the same resources. If we were talking about the difference between dominating the Sun Belt and being an equal player in the Big Ten, then yeah, jump; but the Big 12 is a high-major conference and Texas has all the resources it needs. Just because the Big Ten might be able to offer more doesn't mean it's a better situation, not when you have a ready-made advantage over your competition that you'd have to give up if you made the jump.
I think that Texas isn't going to make the jump because they do not want to join a conference with Michigan, Ohio State, and Penn State. Currently, the other powers in the Big 12 are at a massive disadvantage to Texas on an institutional basis, as Texas will always have the advantage in recruiting and finances. The recruiting advantage, of course, comes from competing in Texas. The financial advantage, however, has much more to do with donations to the athletic department than TV revenue. As such, if all other things were equal, I think Texas would choose to double its TV revenue and ensure itself a place in a stable, prosperous conference at the expense of a relatively small advantage in TV revenue.
That said, all things are not equal. Going to the Big Ten means going to a conference with football programs that are equals in pretty much every way. It would mean ceding conference supremacy and becoming an equal partner to a plethora of schools. While Texas would undoubtedly benefit financially and academically from such a move, it's an open question as to whether they would be willing to give up a dominant position born out of institutional advantages not related to TV revenue.
To summarize, while I agree that it is better to be in a conference in which you enjoy institutional advantages over your competition, I don't think that it makes sense to give up a chance to make $10 million more a year in TV revenue in order to keep a $1-3 million advantage in TV revenue over your competition. However, Texas has so many other advantages over the rest of the Big 12 that they would not have in the Big Ten, that it may not make sense for them to give up these net advantages in exchange for all around improvement.
And as we've seen with the ACC deal, so will Texas when the Big 12 renegotiates.
It's all a moot point anyway. the Texas state legislature will never let them leave Texas A&M and Texas Tech behind, as seen previously in Virginia.
The ACC had a significantly smaller contract than the Big 12, while having a much larger population base and a comparable alumni base. Furthermore, the ACC benefited this year from a bidding war between ESPN and Fox. Finally, ESPN, anticipating the likely collapse of the Big East, wanted to secure basketball rights for the ACC in order to make sure that they could keep up their number of high quality basketball games throughout the regular season, leading them to pay more for the basketball rights than they would otherwise.
The Big 12 has none of these advantages. A logical projection of their new TV contract ranges between $120-130 million (more than the projected value of the ACC, but not by much). This would net an average of $10-$10.8 million per year per team on average, about half of what the Big Ten will pay out. Texas is likely to get $14 million/year at best. Couple this with a lack of loyalty to the Big 12 by most of the teams in the conference and it is still a highly unstable situation.
You're making the mistake that Brian already debunked: the $20 million that the Big Ten teams get is TV money plus all the extras (bowls, licensing deals, etc.) About $2 million of that is the bowls; very rough calculation figures about $1-1.5 million comes from March Madness money, I'd guess about that much from licensing as well.....point is, it's all included in the Big Ten's revenue sharing and takes away from the $20 million that you're assuming comes from just TV.
And the Big 12 gets all that stuff too, so the larger point is, the Big 12 will pay out way more than half what the Big Ten does. It won't add up to as much, but it might for Texas if Texas gets an uneven share. And that doesn't take into account the costs of a move - T. Boone Pickens isn't the only booster that likes his school right where it is.
I should have mentioned this earlier. Bad oversight on my part.
My $20 million figure is based on relatively new projections for Big Ten revenue growth over the next few years due to rapidly increasing BTN ad revenue (sorry, but I can't find a link at the moment). If I remember correctly, Big Ten TV revenue is currently somewhere around $15-17 million a year. Also, It should be noted that the addition of another school (like Texas) would increase the revenue given on a school by school basis. So it is entirely possible that Texas could double it's TV revenue should they join the Big Ten.
Of course, these projections could wind up being well off base, especially as the original projections for BTN revenue were well below the mark. It is quite possibile that analysts are now overcorrecting for previous mistakes when analyzing the network, or taking the possibility of expansion into account when making their numbers, or any one of many things that could make them wind up being completely wrong.
Its amazing to me how long these contracts are for. 10 - 15 years is a long time in terms of big time collegiate sports. good for the conferences/schools. Now, can someone pease explaint to me where all this money goes and how any big time school can justify increasing tuition the way they do. Between TV contracts, tuition, sponsors, etc. , the amount of money frought in by universities is truly staggering.
Answer: Not to the universities' academic funds.
You're Michigan and your athletic department turns a profit.
I am guessing that basketball is the main reason that the ACC did so well. They also stand to gain if the Big East dominoes start to fall as a result of Big Ten expansion.
While basketball is undoubtedly the focus of the ACC, it should be noted that basketball revenue is nearly always far less than football revenue. Regular season basketball games do not get ratings nearly as high as regular season football games because they mean a lot less. This translates into contracts. For instance, the Big East, which generally produces more games and more tournament-caliber teams than the ACC over a larger population base makes $40 million a year on its basketball contract. While this number probably would jump today, it still can't really make up for the disparity between football and basketball television revenues.
The lesson here is don't underestimate the value of basketball.
Texas isn't joining the Big Ten and I think Nebraska is saber-rattling with the Big 12.
Any conference that has Miami, Florida State, and Virginia Tech will make it's fair share of money.