Does this mean we'll have to start hearing how ESPN wants the Pac in every BCS Championship because they have the biggest deal?
Pac-12 agrees to new TV "mega" deal with ESPN/FOX
Until there is more data on the revenue split between FOX and ESPN, the SEC Deal is still ESPN's golden nugget given the size of the investment and limited competition. They are therefore incentivized to use their network to promote the Conference, its teams, and players to form an inherent bias in College Football (which they do very well). For reference:
1) ESPN deal with SEC is $2bn amortized over 15 years, or $133mm/yr (link) representing 65% of the SEC's television income of $205mm as noted in the OP's article link and ESPN DOES NOT have to compete against FOX in the market, only CBS, whose presence is negligible both in syndication rights and economics.
2) Meanwhile, ESPN's deal with the B1G is $9mm/yr per school or $99mm/yr ex-Nebraska or an implied $107mm/year w/ Nebraska. This represents only 41% of B1G's television revenue of $22mm/yr per school (link). Meanwhile ESPN competes directly with the B1G network (ie. FOX through their JV). They are less incentivized to see the B1G be more successful than the SEC but need to compete for syndication rights purely for market share.
As noted, there is limited detail on the revenue split of the Pac -12 deal, ie. ESPN's investment. However, it is probable that ESPN detests having to share the success of the Conference with FOX, their biggest rival in College Football syndication, which they do not need to do in the SEC.
Further speculation (for anyone that's still reading):
* The bid of $225mm was partially due to an auction for a "control premium" over the Conference's syndication. Well played by Larry Scott, the Conference's commissioner. There is no evidence for this but markets where ESPN does not compete with a national syndication network for such a "control premium" have significantly less deal sizes, either in aggregate or by school, as per the OP's referenced article regarding the ACC, Big 12, etc... The only exception would be Texas well...because it's Freakin Texas and its always been an exception to everything since the Annexation of 1845.
* LA's major market status and ESPN's need to be the major sports syndication in LA, in conjunction with ABC/Disney, incentivize ESPN to focus on the success of USC...a la send Mark May to do a 10 - week countdown on Sports Center as to why the 2004/2005 Bush/Leinhart Trojans are the greatest College Football Team ever.
You're not looking at what's behind those numbers. The south, which the SEC represents in NCAA competition, cares more about football than people in the midwest. That explains the disparity between the two contracts (that and the SEC coming to theirs a few years after the Big Ten signed ours). It also describes the success of SEC teams recently, and the recruiting rankings of incoming classes.
Frankly, the SEC is playing at a higher level right now and has been rewarded with more interest. All the ESPN hype in the world will not change the fact that Auburn beat Oregon, McCoy got hurt in the worst possible time in his career and that Florida pistol whipped OSU.
There is no "machine" hyping the SEC. If the last five MNC's belonged to M, OSU, Wisconsin, Iowa and PSU, ESPN would be just as fond of the Big Ten. As to the 2005 Trojans, they were one of the best teams in history. They had the misfortune of playing one of the other best teams in history in Texas...they played possibly the greatest game in the history of the sport and lost with less than a minute on the clock. They were riding a wire to wire #1 AP ranking and a 34 game winning streak; what would your programming have focused on?
That's a pretty bold statement to claim that the South cares MORE about Football than the Midwest. Perhaps the members / viewers of this Board may disagree and I think at least 115K on Saturday's would also disagree with you. I think that both geographies care deeply about Football in an equal manner, which would nullify your argument above. Anyways, since "caring" is as evidential that this guy below actually exists I did not read the rest of your reply. Sorry.
The south does care more. You can cite youth participation numbers, television dollars, whatever you want. I haven't seen one single bit of evidence to suggest that the midwest cares more about NCAA football than SEC country. Selling out Michigan Stadium is great, but the SEC outpaces the B1G in attendance by a little more than 5,000 people per game.
No different than saying Canada cares more about hockey than the south does; it's a very easy to see when you look at any type of metrics.
Edited to add that I didn't see how douchy your statement was at first, so even though I didn't neg you originally, I will now. How the hell you think "caring" isn't quantifiable or relevant to a economic statement of demand is beyond me. You really must not understand anything I said if that's your reply.
SEC teams will get up 50,000 people to go to a spring game. Granted we have crappy weather but michigan being one of the more follwed northern team get 5-10k
Michigan is not a good measuring stick, considering that we're the winningest program ever. Of course we draw well. (And if we are honest, we have to acknowledge that we aren't the only fanbase that could fill a 110K-seat stadium. It just happens that Yost had the foresight to build a stadium with fittings that could hold that many. There are other schools that would like to have more seats than us, but their stadiums literally can't hold any more.)
Look at middle-of-the-pack schools. Ole Miss, Clemson, South Carolina - those schools attract a rabid following that their counterparts up here (Purdue? Illinois?) don't have.
And yes, people do play football at a considerably higher rate in the South. I read recently that Georgia had considerably more HS football players than Pennsylvania, even though PA has 2 million more residents. (And PA is considered a football hotbed by Northern standards.)
They were thrilled last year.
The entire state of California will continue to not give a crap about college athletics. Seriously... I hope advertisers do their research and realize that spending money on PAC-10/12 atheletics is not a prime investment. There's a reason LA can't keep a pro sports franchise.
the lakers are really struggling to gain any traction in that city
So true. I heard California also doesn't support 3 NFL franchises, multiple MLB teams, 4 NBA teams, etc.
No fans in that state at all.
He makes a good point about LA though. USC doesn't sell out when they're not world beaters, just like NYC doesn't have a big college football team in the immediate vicinity. Hell, there's no way (population wise) that NU shouldn't sell out every game.
In a market with alternatives, and winning alternatives like the Lakers, LA can afford to become disinterested in a way that Oklahoma or Nebraska or Alabama cannot.
i agree that california, and especially LA, has a relatively high level of apathy towards its college sports. you cannot make that same argument with pros though. the big 10, sec, and big 12 get the most out of their potential fan bases.
I agree. Any big market is going to stop showing interest when their team isn't a contender. Also, once you get past the mentality that "I live in Ann Arbor, Michigan is my team" it's hard to generate local support. In a big city like LA with hundreds of thousands of college grads, probably a majority of whom went to school at someplace other than USC or UCLA, you lose the local support that allows the B1G and SEC to sell out every game. If A2 had pro alternatives just down the street from the Big House, attendance and interest might well dip in a down year too.
I'd say that we do have pro alternatives down the road, in Detroit, and while it doesn't affect us in football, it does probably affect our basketball attendance (we averaged 10,600 fans per game, and that's paid attendance). Iowa, by contrast, has no pro teams and the Hawkeyes averaged over 13,000 fans per game to see a 4-14 Big Ten team.
I think the distinction is that Ann Arbor is clealy seperate from Detroit. The thinking isn't, "I could go to either with the same amount of effort, so I'll go to the better one" I think it's more along the lines of "is it worth it to make the trip to Detroit?"
I'm not saying there's no competition, because obviously there is. I just think it's different in Ann Arbor than LA. Expectations probably have something to do with Iowa's numbers as well; M fans aren't going to show up in huge numbers to watch a team that isn't dominant.
Penn State is in the middle of nowhere. Heck, there are pastures visible from campus but they still sellout 100k+ seats...even in down years. People drive from Philly and Pittsburgh, both of which have thriving pro football teams.
(Just being Devil's Advocate)
That would semi-support my conclusion though; PSU being in the middle of nowhere (and wow, it definitely is. Good times from my road trip from Pitt to PSU, but I digress) means it faces less competition from anywhere else. When you say that people travel out from Pittsburgh and Philly, that would be evidence that I was incorrect in that assumption, but I think you're more getting into the cultural differences between PA and CA. In PA, PSU isn't seen as a commodity in the same way that USC is in CA. Much like people in Michigan will sell out the Big House for years going 0-12, people in PA would do the same for PSU.
It obviously isn't a perfect analysis, but I think anecdotally, the bigger the city, the less interest in down years.
As a 10 year L.A. resident who grew up in MI and attended UofM, I could care less about USC or UCLA. Most people who live here are not from here, so unless you are an alum, people don't have the tie to the universities. And the ones that are from here, I will generalize a bit but they are bat-sh*t crazy and have some funky priorities, which tend not to include college sports.
In my mind, the biggest alternative is the weather.
doesn't LA keep other cities' pro sports franchises. Minnesota Lakers, Brooklyn Dodgers, San Diego Clippers.
The Clippers were in Boston before that. Though that's true of other Cali teams. The Giants, Warriors, etc. (And it was Minneapolis).
the clippers were in buffalo before san diego, not boston
i have 99 points. it's a verrry slow news day. and i am desperate to reach that magical 100 point plateau.
in summary, this post is meaningless to everyone but me.
This isn't only about advertising revenue on Saturdays. With a payout that big on top of all the overhead required just to produce a college football broadcast (tech crews, camera equipment, announcers, etc) it wouldn't surprise me if they are barely breaking even with this deal. I think the goal is for the network to draw in larger audiences for their weekly programming. For example, Fox may not make a profit on the Oregon-USC game on Saturday, but if they advertise Family Guy enough before its airing on Sunday, they may capture a larger audience and drive up the value of their advertising space on that show.
But I do agree that LA is not a college sports city.
Wow, they roared by the ACC and BigXII. The deal is especially remarkable considering:
- The down economy
- How late some of the games are played
Although as a West Cost native I am happy for the Pac 10-->12 and wouldn't mind some more pub for the league...
Just awesome involving the economics, but really, who cares.
I'm surprised. Pac-10 fans don't seem that rabid, given how their stadiums (aside from Oregon's) generally don't come close to selling out. That's a questionable deal.
Oregon, Oregon State and Washington regularly sell-out their stadiums. By comparison the Big Ten can probably depend on Michigan, Ohio State, Penn State and Wisconsin to regularly sell-out. I agree that the Big Ten has more rabid fans, but it's not that lop-sided.
But Pac-10 stadiums also aren't that big. Our conference has some real behemouths. The Pac-10 has a lot of smallish stadiums that really shouldn't be that hard to fill.
I'm pretty sure Iowa sells out all the time, too.
you can also count on the teams that are not michigan, ohio state, penn state, wisconsin and nebraksa to sell out their stadiums when michigan, ohio state, penn state, wisconsin or nebraska come to town.
If the PAC 12 can get $225 million/yr, what is the ceiling for the Big 10? $300 million? more? It's gonna be a monster.
With the success of the DVR, no one watches commercials anymore. The exception is live event programming (mostly sports). Demand has skyrocketed and pricing is at a premium. It will be very interesting to see how the B10 responds to this because our ABC/ESPN deal technically is not up for renewal for another five years. I assume we will at least see some sort of "adjustment" to reflect the addition of Nebraska to the conference, if not an entirely new deal.
You read Frank the Tank too
I don't agree with him on everything (boy did he have that whole Lebron to Chicago thing wrong), but yeah he is very good on anything related to the economics of sports. And he writes well too.
I guess my point is that, when parroting his posts, it would be nice to give him credit or link to the post
I am hardly paroting anything. I work in media to some degree and Frank is not the only person who writes on this stuff. Presumably Frank reads other people's stuff too. If I were citing some unique ideas or specific statements, from Frank or anyone else, I would have provided the source. These are my thoughts not his. Get off your box.
We're already at $220M and that number is NOT locked in. This is where the BTN comes into play and is the conference's wildcard.
Fast forward to 2018 (or whenever). At that point the SEC's deal will be worth $205/year, and the PAC 12's $225/year. Keep in mind that those numbers will actually be worth less than they are now, inflation and what not.
Then, take the B1G's contract (I actually don't know the details, but let's say it's $150M from ESPN and X From the BTN). That $150M won't change, but X will change dramatically. The value of the Big Ten Network and it's subsequent payouts has risen exponentially in its first few years of existance. If we assume continued growth it's not out of the realm of possibility that in 2018 the numbers will be: SEC $205, PAC $225, B1G $300+
You're exactly right, the BTN is the key to the B1G staying ahead of everyone else. Where all the other conferences are locked into these decade-long deals, the Big Ten's payout can increase without bound. $225 M per year looks good now, but it might not near the end of the current deal, when all the other conferences have just signed deals worth billions.
I don't see why the conferences like getting into these long-term deals. It seems to me that they would be better off negotiating 4-5 years at a time, ensuring that they always get the best deal from ESPN, FOX, VS, or whoever.
I believe our current third-party deals (before any adjustment for Nebraska and not including the championship game) are as follows:
- ABC/ESPN: 10 years, $1 billion through 2016
- CBS: 10 years, $20 million for basketball through 2018-19
That is $120 million per year, or less than half what the Pac-12 just got, though it sounds like the new Pac-12 deal includes their championship game.
B10 recently announced a separate deal through 2016 with Fox for our championship game. I have not seen any official numbers, but it is likely very comparable to the SEC's deal (i.e. $15 - $18 million per year range).
Fox's BCS coverage was awful...
Not sure what the ceiling is for new B1G and SEC deals. Mike Slive is a very shrewd guy and will likely wait and see what the B1G gets to be a topper. The thing that really gets Slive worked up is that no matter what he does the B1G will be more profitable unless he can get his own SEC network started. Example:
* All Conferences will receive revenues from issuing syndication rights equivalent to their deal size. Pac-12 will get $225mm and SEC will get $205mm/yr, etc...
* The only exception is B1G which actually owns 51% of the JV with Fox (JV worth $8mm/school/year x 11 schools = $88mm/year) which equates to approx $45mm. Hence, the B1G actually gets: $99mm/year from ESPN + $88mm/year from B1G/FOX JV + $33mm/year from BCS and other bowls + 0.51(Revenues from Sponsors/TV Ads - $45mm)/year = $220mm/year + revenue from sponsors that is the envy of ever other conference.
Note: The numbers above exclude Nebraska and the $45mm/year is actually paid by B1G to their JV w/ Fox and reflected in the equation above.
This year, the number will probably be approaching $250 million due to the addition of the Big Ten Championship game. Based on the new B12 and P12 deals, our ABC/ESPN deal will likely more than double in 2016. Add to that a new deal for the championship game and continued growth of BTN, and the B10 should be pulling $400 - $500 million per year by 2018.
Is the Big Ten's deal with ESPN/ABC for both football and basketball or do they have seperate deals for each sport with ESPN/ABC?
B10 has a separate deal with CBS for basketball.
The Pac 10/12 Commissioner seems to be a smart guy. He almost had the coup in the last re-alignment round, managed to get two decent teams and a championship game and now this TV contract. Thats a good run.
I am surprised that conferences are getting locked into multi year contracts rather than pursusing BTN type arrangements when BTN has now been shown to be quite a success.
is still a very different approach than anyone's. The concept of the entire programming schedule being about the B1G schools is still very unique.
I would bet that even IU, NW and Minnesota talk to their recruits about the TV exposure the B1G Network provides. Try to tell that to a Vanderbilt football recruit ... sorry the SEC contract rewards the elite and does very little for the lower tier teams.
I know when the B1G Network started, there were many fans that thought it was worthless. I doubt many B1G fans feel that way now. I'm always flipping by (in the off-season) just to see what might be on. I still think its a great concept ... and still unmatched by any other conference.
Go Blue !
will force them to add more HD channels like FSD does for big games. It was obnoxious when a game you wanted to see was "secondary" in your market and all you got was the standard definition version.
I find it hard to believe that anybody is still putting stuff on in SD these days. HD is standard, and I think it has something better than 70% saturation. It doesn't cost any more to broadcast in HD, does it? I'm not sure what the business model is for ESPN, but they must somehow get a better deal from the cable companies if they put some games on SD rather than HD. The Stanford-USC game is the one I can think of last year that was inexplicably on ESPN2 SD.