Nate Silver on B1G expansion

Submitted by dnak438 on November 20th, 2012 at 10:08 AM

The article is here on his NYT blog.

Some highlights:

 

Maryland and Rutgers are not necessarily poor choices compared with some of the other logical alternatives.

I count five other universities that are A.A.U. members, that play in a major college football conference, and that are either within a current Big Ten state or border one.

And the conclusion:

It is probably no coincidence that the two most popular college football conferences – the Southeastern and the Big Ten – have until now been the most conservative about expansion. The most recent additions to the Big Ten, Penn State and the University of Nebraska, ranked as the 3rd and 18th most popular football programs in the country. The newest additions to the Southeastern Conference, Texas A&M and Missouri, were ranked 6th and 23rd.

Rutgers and Maryland are outstanding public universities – but they are just not in the same league in terms of football.

The Big Ten may have expanded the size of its revenue pie, but it will be dividing it 14 ways rather than 12, and among family members that have less history of sitting down at the table with one another. In seeking to expand its footprint eastward, the conference may have taken a step in the wrong direction.

Comments

1464

November 20th, 2012 at 10:13 AM ^

All you need to know, courtesy of our MGoOwn:

http://mgoblog.com/diaries/why-maryland-and-rutgers-and-whats-next

It's a great read, and will talk people off the ledge.

To expand, money equals facilities, recruits, marketing.  In the long run, media markets will strengthen the conference as a whole.  Short run, Maryland has to bring recruits in by rickshaw.  They will improve.

Attacking the ACC strategically puts us at an advantage as the B12 and SEC fight for smaller markets.  The Big 10 and Pac 12 will re-emerge as the dominant conferences, IMHO.

maizenbluenc

November 20th, 2012 at 10:34 AM ^

in Maryland and Rutgers recruiting sphere, would you rather play in the ACC, the Big East, or the B1G? I think as they get money on campus, and their facilities improve, so will their programs. (Syracuse - have you seen the basketball dome they play football in?)

Being from DC, between Maryland, UVA, and Va Tech, there is probably more latent fandom in the Maryland fanbase. Tech are already active, and UVA are an arms length steeplchase sort of bunch (people that think Michigan fans are arrogant have to witness UVA grads first hand).

FWIW, the first ever college football game was played at Rutgers. So there is some legacy to latch onto there. Oh, and Rutgers has hockey.

French West Indian

November 20th, 2012 at 10:26 AM ^

..would be estimated number of OSU, U of M, PSU, etc fans in the NYC and DC metro areas.  And once the Big Ten can get a foothold there, it will grow.  More people will become interested in Maryland & Rutgers football once they start to upgrade.

robpollard

November 20th, 2012 at 10:43 AM ^

I don't get this line of thinking at all. You take two historically (and I mean historically -- like, for decades) programs and just by mixing them with the Big 10, they are supposed to get magically better?  As bad as the B1G is this year in football, it's still not as bad as the Big East, and that's the only reason Rutgers is 9-1 this year.  By playing OSU, Michigan, Nebraska, Penn State, Wisconsin, etc on a regular/semi-regular basis, Rutgers (and UMD) are supposed to have a better record and thus get more fans for their overbuilt stadiums?

Instead, the far more likely option is they will be Purdue or Minnesota - occasionally have 8 or 9 win seasons, but most years putter along with 4-7 wins (with a good portion of those wins coming from the nonconf).

With that recipe, I have no idea why Time Warner in NYC, or any other cable system in that NYC area or Philly area, will add the BTN on anything more than a "sports tier" (i.e., pay $7.99 and get these channels); it won't be basic cable, which is what he needs.

I hope for Delany's sake he has some inside info on the cable systems in NYC and Philly (who have historically been very combative about adding sports - they've fought adding channels that effect the Giants and the Rangers -- you think they're going to care about the Scarlet Knights?). Because otherwise, he is suffering from delusions of grandeur.

blueindy

November 20th, 2012 at 10:50 AM ^

Yes. Because so many B1G alums live in the DC and NY area, when their schools come to play Maryland and Rutgers, you can expect that Maryland and Rutgers' attendance and season ticket sales will rise accordingly.

I think adding Maryland means the BTN is a lock for basic tier status in Maryland and the DC area. I think adding Rutgers means the BTN is likely going to get basic tier status in NJ. When you add UM, OSU, RU, PSU, NW, etc all together, and have them playing in the shadow of NYC, then I think basic teir status in NY becomes possible, but I don't think even that is necessary for this to be a net positive move for the B1G, financially speaking.

robpollard

November 20th, 2012 at 11:26 AM ^

I agree that UMD will likely get BTN added to a basic package for Comcast (or whomever) in DC. That may certainly bring bucks, but I'm curious to see how much hardball those systems play - if Maryland continues to stink, Delany may not get as much per subscriber as he hopes. Cable systems are getting fed up with programming costs and have to hold the line as much as possible, otherwise people will just cut the cord on cable.

However, I completely disagree with a couple of your points:

- As shown by the leaked divisions, Michigan & MSU will likely play in College Park literally once a decade. And while adding Penn State and Ohio State will help, is the net difference that much more than Clemson, Virginia Tech or FSU?  Is it perhaps 1-5,000 more people? That's not a big revenue gain. As said by MD's President Loh, this move is not about people attending games.

- Delany, and others, have talked about Rutgers bring NYC, not NJ.  NYC is where the big money is, and there is very little chance (approaching zero) BTN will get added to the basic package there, in my opinion. As I noted, those cable systems fought long and hard about adding, even to sports tiers, packages that affected the Giants and the Rangers -- they are not going to be swayed by Jim Delany and Rutgers.

Expatriate Duck

November 20th, 2012 at 12:12 PM ^

Carriage fees are also a big issue here. While the BTN gets only 5 cents for an out of footprint subscriber, the hope is that with the additions and the push for basic cable inclusion that the carriage fees will go to in footprint prices (35 cents) and higher.

If it's one thing I trust, I trust FOX News Corp. to make money because they love money as Brodie said.

STW P. Brabbs

November 20th, 2012 at 1:06 PM ^

And we (Michigan, remember) get a significantly bigger chunk of money we'll do ... exactly what with it?  Transfer it over to the University's general fund?  Pardon me while I chuckle for a bit.

So yes: what good will more money than we already make be for Michigan? Someone please explain. 

UMRecruitingFannatic

November 20th, 2012 at 1:39 PM ^

More $40 million dollar indoor rowing facilities?

Yes, please.  You need to spend a little money to stay competetive people.  What the athletic department makes is its own money, it is a relatively separate entity.  Why should the academic side of the university get to steal the athletic department's success?

Brodie

November 20th, 2012 at 3:35 PM ^

yeah
seriously

as much as I like the idea of college football teams as representing states and cities and the like (seriously, I love how we belong to the state of Michigan and how Nebraska belongs to that state, etc.), the teams exist to benefit the school. And as an alum and a Michigan taxpayer, I want to know what the benefits are to the school. And if there are none, I'm failing to see the point.

robpollard

November 20th, 2012 at 1:11 PM ^

I assume you are reffering to this article.

http://sportsillustrated.cnn.com/2012/writers/pete_thamel/11/18/big-ten…

I agree it's possible that since Fox now owns most of YES (which is very valuable in NYC) they will have leverage to get their other channels e.g., BTN, carried. However, it's a HUGE leap to think they're going to be able to force Time Warner and Cablevision to pay $1.25 per subscriber for BTN, in order for those cable companies to have YES. It will be ugly if they try that - politicians will get involved and everything.

Cable companies can't just keep allowing their prices to skyrocket.  Their growth has maxed out and people will just (continue to) leave if you force them to pay more for stuff they don't want. They'll just cut the cord. BTN, a network I would guess literally 99% of NYC residents could do without, is not going to get added to basic cable w/o a fight. Look at how hard they battled over the NFL Network, which is product NYC residents actually care about.

Expatriate Duck

November 20th, 2012 at 1:16 PM ^

I think that at the end of the day, we won't be able to judge these decisions for another 5-6 years. By then we'll know who the 15th and 16th teams are (ugh, shoot me!) and what the 2017 tier one tv rights contract looks like, plus how much growth there has been in the BTN.

I don't like the super conference idea, but it looks like it's going to happen. Sad times.

admiraltrees

November 20th, 2012 at 10:33 AM ^

Just wanted to throw this out there.. Nate Silver is a genius!  Dead on with the election details, so pretty sure he'll be dead on with everything else he said.  Insane statician.. I'm jealous, I lack basic math fundamentals.

Captain Scumbag

November 20th, 2012 at 10:36 AM ^

However, I think Silver's analysis is pretty flawed here. How many avid college football fans are really googling for "X college football"?

The validation is that he claims Georgia Tech has a bigger fanbase than Georgia, which is just crazy talk.

I love stats and numbers and believe in man caused climate change! I just think Silver is off base here and is using flawed data for his methodology.

neoavatara

November 20th, 2012 at 10:55 AM ^

The reality is, the Big 10 DOES NOT CARE IF RUTGERS OR MARYLAND REBUILD.

All they are interested in is the fact that there are enough fans there to demand universal access to BTN, which means tens of millions of dollars.  Along with future TV contracts, that makes this worthwhile.

So football-wise, we diluted the conference, in order to make more money. 

NYWolverine

November 20th, 2012 at 12:27 PM ^

Never lose sight of the fact it's only dilution from the B1G business perspective if it dilutes each colleges's network share. These moves expand the market, and have the likelihood of making the brand must-see-TV across at least two sports. Take home in the short-term won't be diluted much. These moves make the future a cash-cow.

Think about it. Maryland by itself is not must-see TV. Maryland football vs. Michigan at the Big House? Only Michigan alums are buying a B1G package to see that. Rutgers football vs. MSU? Again, only Rutgers alums are paying a subscription fee to watch that. But what if Rutgers and Maryland were playing new and established B1G basketball powers? That would definitely light up the BTN in CT, DC and NY, right?!

Delaney will add a couple east-coast basketball powers to the mix before all is said and done. The NCAA Tourney is the most lucrative cable-television event out there, not BCS football.

So I'm looking at you 'Cuse, UNC, Pitt, and Duke. You're the univiersities that best fit the B1G's academic and athletic profile. For a basketball fan, which NY, CT and DC are full of, you'd all be must-see TV. So, two of you, come on down! Merry Christmas, BTN shareholders!

STW P. Brabbs

November 20th, 2012 at 1:11 PM ^

Is it supposed to make me, as a Michigan fan, feel better that this MIGHT make sense from a long-term business perspective?  Is the expectation that I'm sitting at home cheering for the conference's balance sheets?  

Who. The fuck. Cares. 

 

NYWolverine

November 20th, 2012 at 2:35 PM ^

Umm.

I guess I care, a little, that the conference is setting itself up to be the most attractive bet for major basketball powers as they abandon the ACC and Big East. It's still a big "if" with no guarantees, but IF teams like UNC, Duke, Syracuse and Pitt are looking around, the B1G has to look like the best landing spot right now.

Also, I kind of like watching the savvy business moves and seeing things happen that can likely create a competitive and entertaining Titan Conference across the two major sports.

People who are excited about the prospect of UNC, Duke, 'Cuse and Pitt playing B1G basketball, LAX, football and baseball might care. The hypothetical match-ups and potential new rivalries are intriguing and fun to think about, for people like me. For people like you, not so much.

blacknblue

November 20th, 2012 at 10:58 AM ^

I would just like to point out that I can not tell you the last time I did a Google search for Michigan football. I have however done searches for other B1G schools while researching tickets or trips to away games.

TrppWlbrnID

November 20th, 2012 at 11:13 AM ^

currently, michigan gets 1/12 of the B1G pie, 8.3%. with new members, that goes to 1/14 or 7.1%. for michigan to get back to the 8.3%, the revenues have to grow by 16.8% since you have to raise 1.2% for all 14 teams now.

essentially, michigan just too a pay cut of 15% from the conference for the forseeable future to rescue maryland and rutgers.

this is how my brain works, business folks, speak up.

robpollard

November 20th, 2012 at 11:35 AM ^

If revenues don't grow by the figure you listed BECAUSE of this addition (not an increase that would have happened anyway), Michigan (and the other 11) gave up money.

Based on recent sports TV/media deals, it seems like an easy target. However, it would be interesting to see how much BTN would have gotten with the current 12 vs. the new setup. The incremental amount is what matters - otherwise this addition causes a dilution in earnings. You'd need Delany break out how much they got from DC, Baltmore, North NJ, NYC, etc cable systems to start to figure that out, but my guess is that won't happen. BTN will just announce a deal in a few years that is 50% larger than the previous one and credit Delany's genius of those two additions as being a big part of the reason, with little evidence to back it up.

In short, I can see it being accretive for UMD (I don't think this is the slam dunk others do, but it certainly is possible, perhaps even likely they will be "worth it" financially); for Rutgers, I think Delany looks like a rube starstruck by the lights of the big city of NYC, of which Rutgers has hardly any claim (certainly not enough for the dilution in earnings that adding them will cause).

TrppWlbrnID

November 20th, 2012 at 12:19 PM ^

from the sound of it, RU and MU are deeply in debt, so i assume the bulk of their ticket sales stays with them. their bowl payouts would get divided up, but those will be minimal. so the only uptick they can supply is in terms of value to the television network and the extra added commmercial cost it can demand from advertisers.

if michigan went from being a 1/12 sharehold to a 1/14, they are taking less of a share and therefore the pot has to grow for them to recapture their previous revenue. even so, i think it will work out financially, or else the DBs of the conference would not have been ok with it.

do people in the bronx buy a lot of nitrogen entrainment supplements?

Steve in PA

November 20th, 2012 at 11:42 AM ^

If the B10 is now splitting the pie 14 ways instead of 12, then if these two schools bring in a net of greater than 1% each it's a win.  Ignore the fact that we've just gotten Purdue and Indiana Pt2 from a quality standpoint. I also don't buy ino the arguement they will get better because they are in the B10.

Nearly evry major sport has over expanded in the past 20 years and it has only diluted the quality of the product.  see: mlb, nhl.  I don't think the B10 is immune t those forces.  There are only so many coaches and players who can make an impact at the major D1 level.  The only way this improves quality is if the NCAA lowers the scholarship number again.  Maybe that's in the works with the talk of legitimately paying players.

*Please excuse me if my numbers are off.  My insomnia-wracked brain is trying to understand the logic of adding two mediocre schools.

justingoblue

November 20th, 2012 at 11:46 AM ^

but this means we should be adding two more middle-tier bowl tie ins, right? So far it's looking like:

Rose
Orange (sometimes)
Capital One
Outback
Gator
BWW
Meinike
Dallas
Pizza

for fourteen teams. I wonder if this means we'll look to start something out west, maybe below the Outback or the Gator.
 

B-Nut-GoBlue

November 20th, 2012 at 12:10 PM ^

Good point.  Didn't the Big Ten have a tie in with the Insight Bowl, out  in Tempe, the past few years, though?  Maybe that's been replaced by "name"/corporate logo by one of the bottom ones you listed.  But it'd be nice to have/keep something out West versu the Southeast heavy/East heavy bowl lineup we now have.

justingoblue

November 20th, 2012 at 12:23 PM ^

still in Tempe with the Big Ten 4/5 and the BXII 4. I agree about trying to get out west; playing a 5 or 6 game with the Pac would be pretty cool. I also think you could get a Big Ten 8 with a MWC 2 or 3, which could be fun. Playing SDSU or AFA is pretty much the same as playing a 6-6 BXII team or an equivalent MAC school.

Brodie

November 20th, 2012 at 12:00 PM ^

I don't believe New York has a bigger college football fanbase than Chicago, that's not borne out by the situation on the ground.

Silver is great when he has the data to compile accurate predictions. There's no accurate or undeniably credible data in this case. 

Brodie

November 20th, 2012 at 12:24 PM ^

The problem with that is there's no hard, empirical data to back it up. You can only go by things like self identification (by which metric there are well over 50 million NHL fans in the US, sound accurate to you?) or data like Google searches which are obviously deeply flawed (when was the last time you googled "michigan college football"?)

Empirically, it would be very hard to suggest there's anywhere near the interest in college sports in New York as opposed to Chicago, even when adjusted for population. 

LSAClassOf2000

November 20th, 2012 at 12:52 PM ^

You don't really need to go much further than the article Silver did last year for some interesting perspective on the issue - (LINK)

Granted, when it comes to survey data, which much of this is, there is always some error, but the data he has shows that 14% of the NYC Metro area says they follow college football, so a little more than 2.9 million. Now, while Rutgers is the most popular team in that market with a reported 20.9% share, that's only about 607,000 people following Rutgers in a huge market - Notre Dame, Penn State and Michigan are among Big Ten schools that have substntial fanbases in the NYC area, totalling close to Rutgers per the survey data. Throw Notre Dame in the mix and the Big Ten and Notre Dame outperform Rutgers in the NYC market already.