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  1. #1
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    Why adding more conference members is not that easy..

    Here is why is not that easy to just simply add more members to the Big 12:

    If the idea is to create more value and income for the current members, you would have to assume that ESPN would have to be willing to pay more for new members, so there would be additional revenues for current members. Otherwise, why mess with it?

    For example, in round numbers, if each member of the Big 12 is getting $20 mill per year for TV (under the new contract), that is a total cost of $200 million for the TV contract.

    If two teams are added, ESPN would need to pay more than $20 million per team added, so there are extra revenues for the current members to split. Assuming a reasonable number is around an additional $2 million in added revenues for each current Big 12 member, two new members would cost ESPN $80 million dollars.

    Remember, the total package is $200 million, and it's an additional $80 million to add just two more teams!

    That is why only a high value target like ND could demand those kind of numbers. I don't know what will happen, but adding 40% in expense for a 20% increase in members is not easy to do for any network. (again, I'm only speculating on the numbers, but this seems to be based on some reality)



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    Re: Why adding more conference members is not that easy..

    In before "we landed on the moon!"



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    Re: Why adding more conference members is not that easy..

    What if the existing members don't need that extra $2M? What if the extra money from the championship game covers that? That means each team only needs to be worth $20M.

    Also, I don't understand where you got $80M? I see $20M (new team #1) $20M (new team #2) and $20 (2M for each existing member) would be $60M total.

    If you factor in the champ game the math isn't so cut and dry.



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    Re: Why adding more conference members is not that easy..

    Or they can just up it 40.


    Follow this guy on Twitter @Daddy_Rusty

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    Re: Why adding more conference members is not that easy..

    Quote Originally Posted by driegner View Post
    What if the existing members don't need that extra $2M? What if the extra money from the championship game covers that? That means each team only needs to be worth $20M.

    Also, I don't understand where you got $80M? I see $20M (new team #1) $20M (new team #2) and $20 (2M for each existing member) would be $60M total.

    If you factor in the champ game the math isn't so cut and dry.
    You get the $80 this way:

    The new two teams each get $20 million, that's $40 million per year. And the conference gets $40 to split among the 10 teams, that's an additional $40 to total $80 million. (It would actually be $88 million if the new members get the same cut as the existing members)

    I'm not factoring in a Championship Game, but I doubt it is worth these kind of numbers. But I don't know that. (my numbers are speculation, but they do make a point I believe.

    I personally hope we do add two teams with a playoff, better for I State I think. But the numbers are tough.


    Last edited by ketelmeister; 07-01-2012 at 09:52 PM.

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    Re: Why adding more conference members is not that easy..

    Quote Originally Posted by ketelmeister View Post
    Here is why is not that easy to just simply add more members to the Big 12:

    If the idea is to create more value and income for the current members, you would have to assume that ESPN would have to be willing to pay more for new members, so there would be additional revenues for current members. Otherwise, why mess with it?

    For example, in round numbers, if each member of the Big 12 is getting $20 mill per year for TV (under the new contract), that is a total cost of $200 million for the TV contract.

    If two teams are added, ESPN would need to pay more than $20 million per team added, so there are extra revenues for the current members to split. Assuming a reasonable number is around an additional $2 million in added revenues for each current Big 12 member, two new members would cost ESPN $80 million dollars.

    Remember, the total package is $200 million, and it's an additional $80 million to add just two more teams!

    That is why only a high value target like ND could demand those kind of numbers. I don't know what will happen, but adding 40% in expense for a 20% increase in members is not easy to do for any network. (again, I'm only speculating on the numbers, but this seems to be based on some reality)

    Thank you, Mr. Obvious.



  7. #7
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    Re: Why adding more conference members is not that easy..

    Quote Originally Posted by cyatheart View Post
    Thank you, Mr. Obvious.
    Apparently not obvious to some. Just making a point. But thanks for the compliment.



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