Article: Big Ten Network defies early skeptics as audience, profits rise

Submitted by oriental andrew on July 7th, 2010 at 12:40 PM

From Crain's Chicago Business:

http://www.chicagobusiness.com/cgi-bin/mag/article.pl?articleId=33627

The Big Ten Network, the all-collegiate sports channel, prompted chuckles when it launched in 2007. But no one's laughing at it now: The network has pumped up viewership and ad dollars — and has caught the eye of schools considering defecting from their own conferences.

[BTN CEO Mark] Silverman says the Big Ten Network's profit more than doubled this year over 2009; ad revenue rose 30% as the audience expanded to 40 million homes. He wouldn't provide specific numbers, but the conference's IRS filing for the year ended June 2009 — the most recent data available — showed the network paid the conference $72 million.

Interesting notes about the BTN having great timing, influencing other conferences to explore their own networks.  Also, a couple of IA senators are trying to force the big 6 conferences to share their financials, questioning their non-profit, tax-exempt status.  The article suggests it's bitterness over ISU being left behind in the old big XII. 

"The Big Ten's arrangements do set a very high and new benchmark," Mr. Weiberg says. "There will be some catching up."

Comments

BlockM

July 7th, 2010 at 12:44 PM ^

I'll admit, I'm a little surprised, but I guess I shouldn't be. Big Ten fans are going to watch programming about their school as much as possible, and BTN provides that. The commentary is usually pretty boring or downright bad, but it's content nonetheless.

UM Indy

July 7th, 2010 at 3:46 PM ^

The studio shows for both football and basketball look like something filmed in Wayne and Garth's basement.  Several of the talking heads are complete dorks.  The on campus segments or whatever they're called on Friday nights are rather lame attempts to capture the atmosphere before football games.  Yet with all that said, they have games (live and classic) that people want to watch so the advertising dollars are rolling in.  Go for it Big Ten (11 . . . 12).

Search4Meaning

July 7th, 2010 at 7:14 PM ^

with you completely agreeing...

I have posted openly about how I believe that the BTN completely misses the mark on the national level when competing with the SEC/ESPN.  That has been a great relationship as I believe that BTN cannot possibly compete with ESPN on marketing its product - the SEC.  ESPN's reach (usually a free channel) and professionalism is unparalleled. 

How many times does a 17 year old recruit have to hear that the SEC is the BEST?  The SEC has a great product, but ESPN does a great job hyping it too.

My concern is that we are winning the dollars battle, but losing the recruiting war.

That being said, my hat is off to BTN for bringing in the money.  Way to go Big Ten Network!!!

backusduo

July 7th, 2010 at 1:01 PM ^

It helps to have some of the largest alumni bases in the nation with UofM and OSU.  I've seen notes stating both have over 400,000 living alumni, but I'd like to make a case for the winged helmet. 

Helmets matter.  When I was a kid I was a Raider fan, until I met actual fans of the team.  I was a Tampa Bay Buccaneer fan until I had been a fan for 2 years and still not seen a win, and finally I was a lion fan, because the Lion on their helmet seemed to come alive and roar when Barry was slashing through defenses.

Kids grow up seeing the Maize and Blue helmet and can't help but want to be a fan.  It is a great advantage in recruiting, and a great advantage for the Big Ten and our network. 

backusduo

July 7th, 2010 at 1:30 PM ^

But probably warranted.

It doesn't get better there. I was born a Tigers fan and we all know how long it has been since 1984, when I was barely old enough to remember.   I was a St. Louis Cards fan when they were no good because my dad brought me a hat from there when I was young.  I've been a Phx Suns fan since I moved to AZ in the 80's and had nothing but heartbreak, but there is one redeemer, the Red Wings.  Coolest logo in NHL and never let me down.

BigBlue02

July 7th, 2010 at 1:04 PM ^

I think a big part of the success is all of the old games they play.  Where else are you going to be able to sit down and watch the entire UM-OSU game from 1969? Now all they need to do is show some of the old Fab Five games. I am guessing they can't (for obvious reasons), but I would love to see that game against Mashburn and Kentucky in the final 4 or that invitational in Hawaii where, if my memory serves me correctly, we beat 3 top 10 teams in 3 or 4 days.

MGoShoe

July 7th, 2010 at 1:04 PM ^

...2009, 2010 profits doubled and ad revenue was up by 30%. Those are ridiculous numbers in this economy.

BTN = Big Ten Platinum Mine

MGoRob

July 7th, 2010 at 1:19 PM ^

As much as I enjoy watching shows about the Wolverines from pre-game, replays, and spring practice game to name a few, I still am a little bitter over not being able to get several games on television in its first year.  Blame Comcast, I know, but I tend to think the blame could be shared by both parties involved.  But, alas, what I'm trying to get to is that for as well as the BTN is doing, they need to drastically improve their programming.  Friday Night Tailgate or whatever its called isn't worth my time to watch.  I think a good term for it is "cheeky".  Anyway, beyond that the color commentary during the games is also sub-par for my tastes, and also the million Rotel commercials often interrupt the game (even during plays!).  There were several times last year where I didn't get to see a punt or first down or the like because they had cut away and didn't come back in time.  So, yes, thank you BTN for making our conference rich and super-powerful, but with that success I'd like to see some progress.  Thank you.

CarrIsMyHomeboy

July 7th, 2010 at 11:09 PM ^

Speak for yourself, man. I really get into following the camera follow Jennifer White around campus. You say Michigan has a student organization tasking itself with the constuction and operation of a one-manned and man-powered submarine in national contests? Really? Tell me more. Please and thank you.

Maybe, I'm in the minority, but I happen to dig "Out of the Blue: The Michigan Difference." That show well feeds my shamelessly self-aware ventures in University of Michigan-aggrandizement.

WolvinLA2

July 7th, 2010 at 1:20 PM ^

No doubt the BTN is turning into a genius idea by Delany and Co.  If only my GODDAMN CABLE PROVIDER WOULD PICK IT UP.  Honestly, it's f-ing pathetic, every other cable provider in LA has the BTN, except the only cable provider that covers my section of Burbank.  If my apartment didn't face the wrong way I'd have a dish by now, for that reason alone.

HAIL 2 VICTORS

July 7th, 2010 at 1:40 PM ^

Recently Direct TV did some program changes and moved ESPN Classic to channel 614.  The Big Ten Network is on channel 610 on Direct TV however before the ESPN move the BTN also had some supplemental channels.  Once football season starts will Direct TV have more then one BTN channel and play multiple BTN games?

bluebyyou

July 7th, 2010 at 1:23 PM ^

Ad revenue is one thing, but the success may have been from adding new cable/distribution systems.  Their costs are fixed, but now they have a new revenue source.

StephenRKass

July 7th, 2010 at 1:55 PM ^

Why do you care about your parent's home? You're living in your own place, right? So you can watch what you want, when you want? Oh you're living at your folk's house? Easy solution:  offer to pay for the increase in the cable bill to add the BTN . . . I'm sure they'll be fine adding whatever you're willing to pay for out of your own pocket. Oh, you don't have a job? And your folks are paying for your college? And putting you up rent and food free in the summer? Hmmm, yes, that's a problem. My heart bleeds. Not.

HAIL 2 VICTORS

July 7th, 2010 at 1:58 PM ^

Has anyone else heard anything along the lines of concern that these numbers might not be sustainable as the population shifts away from Big Ten schools and the children of parents who are B10 alums attend other in state schools? 

Sounds like crapola to me but curious what anyone else might think.

jmblue

July 7th, 2010 at 2:13 PM ^

Those trends are overblown.  Even with the population shifts to the Sun Belt, the Big Ten region still contains the fifth (Pennsylvania), sixth (Illinois) seventh (Ohio) and eighth (Michigan) largest states in the union.  The region's population may not be growing very quickly at the moment, but it's not actually shrinking.  There will always be a lot of people here. 

As for children of alums going to other in-state schools, I don't see that as a big issue.  Pretty much every sports fan at a MAC school is also a follower of a Big Ten school.  You don't have to turn in your U-M fandom just because you ended up going to WMU or whatever.

WolvinLA2

July 7th, 2010 at 2:35 PM ^

Yes, I agree with this, the Big Ten will not have a problem with subscribers any time soon.  People also forget that the Big Ten fanbase crosses regional lines more so than any other conference.  NYC isn't in the Big Ten "footprint" but has more Big Ten alums than almost any city outside of Chicago, I would argue. 

Also, keep in mind that the Big Ten schools have the largest enrollment and alumni of any other conference.  Take a look at the top 10 universities by enrollment in the US:

http://en.wikipedia.org/wiki/List_of_largest_United_States_university_campuses_by_enrollment

In this list, we have 4 of the top 10, the Big 12 has 2, and no other conference has more than 1.  If you scroll to the list from 2 years ago, we have 5 of the top 10.  If the list went to 20, schools like Illinois, Michigan, Indiana and Purdue would all be on the list as they all have 40k+ students.  Iowa, the smallest Big Ten school outside of NW, boasts an enrollment over 30k students. With the size of the Big Ten student body, and how nationwide the alumni base it, we will never have a problem with fanbase.

WolvinLA2

July 7th, 2010 at 3:00 PM ^

As an addendum (without making my original post any longer), many of the Big Ten schools are elite schools nationwide, and have high out of state enrollments.  So even though the populations of these states aren't growing as fast as some other areas (and who knows how long that will continue anyway) these schools will maintain these enrollments based on reputation.

MGoRobo

July 7th, 2010 at 3:31 PM ^

Actually, they're only paying a small fraction of what I'm going to have to pay when I get out of school.  They happen to be poor, like some families whose kids attend Michigan.  So shut up if you don't know family circumstances...

And I'm only home for the summer, so I understand why they don't get it.  It just sucks that they don't.

aaamichfan

July 7th, 2010 at 3:27 PM ^

I'm glad to see that BTN is turning a healthy profit. Hopefully some of this money makes its way into increasing the production quality of football broadcasts.

Tauro

July 7th, 2010 at 4:13 PM ^

The Big Ten network is even carried on Shaw cable in Canada.  Our local company was bought out by Shaw last fall and I was extremely pleased to see BTN get added.  Got it free for the first 6 months, which included the entire football season.

blueak

July 8th, 2010 at 10:51 PM ^

Would love to get the BTN up here. However, DISH refuses to carry it do SAT 119, pretty much the only satellite that can be accessed from here. I've written to every bigwig at Dish including CEO Charlie, but no luck.

cutter

July 8th, 2010 at 10:36 PM ^

Back in December 2009, ESPN's Outside the Lines (OTL) program stated that the television revenue for the Big Ten Confernce was $242M.   You can see the program (titled " Television Impact on College Sports) at this location:

http://espn.go.com/video/clip?id=4757335&categoryid=3286128

Divide $242M by 11 programs and you get the total of $22M per program.  This figure has been used in countless newspaper articles and blogs since ESPN reported it seven months ago.  The problem is that the sum isn't correct per the FY 2011 budget for the Michigan Athletic Department located at:

http://www.regents.umich.edu/meetings/06-10/2010-6-X-17.pdf

The budget clearly indicates that the television revenue for football and basketball was $14.89M for Michigan in FY 2010 (ending 30 June).  The total distribution to UM by the Big Ten Conference was $19.97M--this total included television revenue, bowl revenue ($1.88M), NCAA basketball tournament proceeds ($2.85M) and other revenue ($350K). 

For FY 2010, the contracts from ABC/ESPN (football) and CBS (basketball) paid Michigan $8.43M and the Big Ten Network (BTN) paid $6.46M.  Note that this is nowhere near the $14M from the networks (ABC/ESPN/CBS)/$8M from the BTN claimed in the article.  For a good summary of the various contracts, go to http://www.sportsbusinessjournal.com/article/58254

Despite the incorrect numbers I think were used in this article, the Big Ten Network has still been a windfall for the conference and for all its members (along with the ten-year contracts signed in 2006 with ESPN/ABC and CBS).  Going back into the past Michigan Athletic Department budget documents, here's the conference distributions through the years with the television revenue in brackens over the last ten years:

FY 2002 - $8.93M ($5.65M)

FY 2003 - $10.08M ($5.75M)

FY 2004 - $10.70M ($6.12M)

FY 2005 - $10.66M ($6.27M)

FY 2006 - $10.68M ($6.14M)

FY 2007 - $14.04M ($9.37M)

FY 2008 - $18.79 ($13.93M)

FY 2009 - $19.17M ($14.43M)

FY 2010 - $19.97M ( $14.89M)

FY 2011 (projected) - $22.20M ($16.60M)

The change in revenues is pretty dramatic between FY 2006 and FY 2008 with the launch of the BTN and the new contracts with ABC/ESPN/CBS.  In FY 2007, the BTN provided $6.13M and the major networks added in about $7.74M.  In FY 2008, the numbers were $6.31M and $8.09M, respectively. 

Has the Big Ten Network been a success?  If you look at the date provided by the Michigan Athletic Department, then the answer is a very solid yes.  The overall conference distribution (which includes television revenue from football and basketball)  will project to more than double between FY 2006 and FY 2011.  Compare the most recent numbers with what Michigan was receiving ten years ago and the difference is even more dramatic.

It will be interesting to see what the athletic department's budget and revenue projections look next year at this time.  With the additon of Nebraska to the conference and a conference championship game, could the FY 2012 projection for Big Ten conference distributions be in the $25M range?   Or will having a 12th member in the conference (and more slices to the pie) moderate the growth somewhat?  We'll know more in a year's time.