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Rose Bowl - New Contract With ESPN

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July 16th, 2012 at 3:07 PM
#1
Everyone Murders
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Rose Bowl - New Contract With ESPN

According to the Sport Business Journal we get some insight as to why the B1G was so protective of the Rose Bowl during the playoff negotiations this summer.  (Hint - it wasn't nostalgia or a desire to play in the Granddaddy of Them All.)

The payoff has increased 167% to an average of $80M a year over the 12-year deal beginning in 2015 and ending in 2026.  Link here http://www.sportsbusinessdaily.com/Journal/Issues/2012/07/16/Colleges/BCS-playoffs.aspx via Kyle Meinke here  http://annarbor.com/sports/um-football/report-rose-bowl-more-than-doubles-revenue-in-latest-espn-deal/[email protected] . 

Deals for the Orange and Outback bowls are pending per the SBJ, so we'll see if the Rose Bowl deal is a market-maker.

 

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July 16th, 2012 at 3:16 PM
#2
justingoblue
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Joined: 11/16/2010
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Well, there's the money for

Well, there's the money for the marquee and Mattison's salary for a year. It's crazy how much money there is to be made in college football these days.

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July 16th, 2012 at 3:19 PM
#3
Blazefire
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Joined: 04/17/2009
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It's still possibly a little short sighted

Any good playoff deal was likely to draw close to that, Rose Bowl or not.

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July 16th, 2012 at 4:46 PM
(Reply to #3) #4
Everyone Murders
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Distribution of Proceeds

Interesting point.  I think the potential difference is, in part, what happens to the TV deal money.  Per the SBD article:

The Rose Bowl’s partners, the Pac-12 and Big Ten, keep all of that media revenue, except in years when the Rose Bowl is a semifinal game in the playoffs.

I'm not sure how the money is distributed under various playoff scenarios that were under consideration, but that would have to go into the equation.  One advantage of the newly-announced regime is that in years the Rose Bowl is not a playoff game the B1G is guaranteed a payout, whereas under a larger field playoff system the B1G may not have a participant. 

These are squirrely agreements, because they are negotiated so far in advance of the bowls.  It's almost like landing a blue chip recruit.  It is satisfying to do so, but you have to wait a few years to know how well you've done. 

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July 16th, 2012 at 7:04 PM
(Reply to #5) #5
LSAClassOf2000
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Joined: 01/07/2011
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Market-Setting Deal

Here's an article that describes some of the current formula and mentions that it may not change much, which would definitely leave the AQ conferences in the old system still taking home a majority of the revenue.

Considering that the revenue bump is projected to be 4 times the current system (which is in the neighborhood of $150 million or so each year, I believe), then I predict similar deals for the other bowls, but on the other hand, this is untested water - particularly with the valuation of the playoff games themselves, so I wonder if ESPN is basing their figures on closest analogous situation, which might be the NFL conference championships. It would be interesting to know how ESPN is valuing each bowl. This might be the deal that sets the tone for the initial valuation of these games though. 

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July 16th, 2012 at 3:59 PM
#6
maizenbluenc
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Joined: 07/21/2009
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See, the Bowl guys down the street

were slipping notes under the door with $$$$$ on the outside the entire time.

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July 16th, 2012 at 6:22 PM
#7
Tater
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Joined: 08/13/2008
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Remember this?

One of the biggest arguments against a playoff was that "it's gonna kill the bowls."

Uh, right...

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