Difference between 1st, 2nd and 3rd Tier TV?
- Thread starter Chad
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The way I understood it (and I may be wrong), but whoever has 1st tier has first choice at the game, then it goes to 2nd tier, then 3rd.
So say ESPN has 1st tier, they can choose to air that game, and if they choose not to then it goes to 2nd tier (say FSN). If whoever has 2nd tier also doesn't want to air it then it goes to third tier.
Correct me if I'm wrong, because that could be way off.
So say ESPN has 1st tier, they can choose to air that game, and if they choose not to then it goes to 2nd tier (say FSN). If whoever has 2nd tier also doesn't want to air it then it goes to third tier.
Correct me if I'm wrong, because that could be way off.
what i would like to know is if the big 12 agrees to split the tv revenue equally how much are we going to get
Sounds about right, the big 12 goes ABC/ESPN, then fox, then things like LHN, CZ etc.. The networks paid for the privilege of those games, so the tier 1 has the biggest paycheck for the school/conference, I'm not sure exactly how the payouts work though.
1st tier is ABC, 2nd tier is FX, FSN, FCS and ESPN (games sublicensed from Fox), 3rd tier is the school's local network (LHN, KState.HD, CTN/CloneZone, etc.)
The way I understand it-
Tier 1 is the primary contract and has first choice on Football and Men's Basketball. Espn and ABC would be tier 1. You can tell because ABC and ESPN get first pick of X number of football games each week. The same with Men's BB but the number of games per week varies, but this would include the Monday night game on ESPN and when there is a national game on ABC at 1:00 pm on Saturday's during conference season.
Tier 2 is what is left after tier 1 for football and would include all of the Fox network football games, and then whatever men's BB and Women's BB games they included in the contract.
Tier 3 is actually a very large catch all that can inlcude anything from Mediacom picking up a football or MBB game to the Cyclone Network, to Women's BB and all olympic sports. This can also include the signage at Jack Trice and Hilton and can go all the way down to the concessions at football and at Hilton.
If ESPN picks up a women's game for example they might have that in the tier 1 contract ior they might have to buy the rights from the tier 2 contract with Fox. It depends on how many WBB games they have contracted for each year.
Anything not picked up by Tier 1 or Tier 2 then falls down to Tier 3 and the school can sell the rights to anyone. Iowa State has sold most of its Tier 3 rights to Learfield, I think.
Tier 1 is the primary contract and has first choice on Football and Men's Basketball. Espn and ABC would be tier 1. You can tell because ABC and ESPN get first pick of X number of football games each week. The same with Men's BB but the number of games per week varies, but this would include the Monday night game on ESPN and when there is a national game on ABC at 1:00 pm on Saturday's during conference season.
Tier 2 is what is left after tier 1 for football and would include all of the Fox network football games, and then whatever men's BB and Women's BB games they included in the contract.
Tier 3 is actually a very large catch all that can inlcude anything from Mediacom picking up a football or MBB game to the Cyclone Network, to Women's BB and all olympic sports. This can also include the signage at Jack Trice and Hilton and can go all the way down to the concessions at football and at Hilton.
If ESPN picks up a women's game for example they might have that in the tier 1 contract ior they might have to buy the rights from the tier 2 contract with Fox. It depends on how many WBB games they have contracted for each year.
Anything not picked up by Tier 1 or Tier 2 then falls down to Tier 3 and the school can sell the rights to anyone. Iowa State has sold most of its Tier 3 rights to Learfield, I think.
Re: Difference betw%een 1st, 2nd and 3rd Tier TV?
A critical aspect of the tiers is how the revenue from each is distributed. On another board, MRED posted this link to an explanation. In a nutshell tier 2 is shared equally; 76% of tier 1 is shared equally and I think the televised team gets the other 24%; each institution keeps the tier 3 moneys. One of the irks from UT, if I understand it correctly was not only the content of LHN, but, LHN was threatening to take games off of tier 2. As far as it goes, this statement from the commish sounds fair:
A critical aspect of the tiers is how the revenue from each is distributed. On another board, MRED posted this link to an explanation. In a nutshell tier 2 is shared equally; 76% of tier 1 is shared equally and I think the televised team gets the other 24%; each institution keeps the tier 3 moneys. One of the irks from UT, if I understand it correctly was not only the content of LHN, but, LHN was threatening to take games off of tier 2. As far as it goes, this statement from the commish sounds fair:
"That's more like the American way in some ways," Beebe said. "A merit pool and also a tremendous amount that's shared equally as consideration for all members being in this together."
Read more: Big 12 changes revenue-sharing policy
Read more: Big 12 changes revenue-sharing policy
One of the problems that this conference has with ESPN controlling both first tier rights as well as ownership of the LHN is that they can play games to shift content to the LHN in order to make more money off that network.
That may help Texas and ESPN but it may be at the expense of other conference members. For example, the Texas OSU basketball game has traditionally been picked up by ESPN, but this year they passed on it so that they could carry it on the LHN. Passing that type of content to the LHN may help ESPN get more subscribers, but it surely doesn't benefit OSU's exposure.
This is only the beginning of the games that ESPN will play as they try to maximize their return on investment in the LHN, and is a big part of the source of instability that will continue as a result of this network.
That may help Texas and ESPN but it may be at the expense of other conference members. For example, the Texas OSU basketball game has traditionally been picked up by ESPN, but this year they passed on it so that they could carry it on the LHN. Passing that type of content to the LHN may help ESPN get more subscribers, but it surely doesn't benefit OSU's exposure.
This is only the beginning of the games that ESPN will play as they try to maximize their return on investment in the LHN, and is a big part of the source of instability that will continue as a result of this network.
So, when ESPN passes on the it's T1 right, and Fox passes on it's T2 rights, then LHN will pick it up on it's T3 rights. So, ESPN has to gamble a bit, but for the most part would win. Because there are only so many games it can play.
I have to say, that may have lawsuit spelled all over it.
I have to say, that may have lawsuit spelled all over it.
I want to say this is correct, but I might be a little off on my numbers its just off the top of my head.
The Big12 gets a combined 60 million a year for our first tier contract(it expires and will be reworked in 2016).
We get a combined 90 million for our second tier contract(was just done last year, so obviously our first tier one will be a lot more in a few years).
Then third tier which wont be equal revenue sharing gives ISU like 2 million a year, which I'm pretty sure projects to give us fourth place in the Big12? I know Mizzou, KU, and Texas will be ahead of us. I actually think OU is in last there with only about a half million.
The Big12 gets a combined 60 million a year for our first tier contract(it expires and will be reworked in 2016).
We get a combined 90 million for our second tier contract(was just done last year, so obviously our first tier one will be a lot more in a few years).
Then third tier which wont be equal revenue sharing gives ISU like 2 million a year, which I'm pretty sure projects to give us fourth place in the Big12? I know Mizzou, KU, and Texas will be ahead of us. I actually think OU is in last there with only about a half million.
Tier 1 (ESPN): expires in 2016, $60MM/year, $6MM per school
Tier 2 (Fox): expires in 2025, $90MM/year, $9MM per school
Money each school gets from TV if they don't make a dime on Tier 3: $15MM/year
Tier 3 (owned by each school): 2009-2010 school year
Texas: ~$15MM/yr (not 09-10, based on future from LHN)
Kansas: ~$7.3MM
OSU: ~$6.4MM
MU: ~$4.1MM
KSU: ~$3.3MM
ISU: ~$2.6MM
OU:~$300k
TTech and BU: basically zero
average: ~$4.3MM
Tier 2 (Fox): expires in 2025, $90MM/year, $9MM per school
Money each school gets from TV if they don't make a dime on Tier 3: $15MM/year
Tier 3 (owned by each school): 2009-2010 school year
Texas: ~$15MM/yr (not 09-10, based on future from LHN)
Kansas: ~$7.3MM
OSU: ~$6.4MM
MU: ~$4.1MM
KSU: ~$3.3MM
ISU: ~$2.6MM
OU:~$300k
TTech and BU: basically zero
average: ~$4.3MM
Thats assuming we start splitting tier one money like we currently are tier two money. Sounds like thats whats going to happen and tier three is the only one we don't spit.
We are not entirely dependent on tv contracts. We have some control over what we do in attendance. There's a boatload of money on game day, if a program pulls in paying fans. In round numbers 50,000 seats at 100@ is 5 million dollars for each home game. 10 bucks @ for refreshments is another half million. Six home games has a potential for 33 million dollars. We don't get that now, because of the level of demand, we have a lot of discounted seats, but, we soon should be getting that average factoring in the premiums some pay through the clubs. A full paying MBB fan probably lays out 700 for tix and concessions, again not counting club contributions. Again, there are a lot of discounted seats, but, selling out Hilton for the season has a potential in the neighborhood of 10 million.
How come OU's tier 3 rights are so low? One reason I could see them being somewhat less is because their games are usually picked up on tier 1 or 2. Why would someone pay a lot for tier 3 rights if football is only on for one crappy game a year?
The conference bottomfeeders have the potential of having many more games on their tier 3 network which would increase the value. If tier 1 and tier 2 revenue is split equally among all schools and tier 3 is kept by each school, could ISU potentially make more total TV money from football than OU since ISU could have 6 or 7 of their games on their tier 3 and OU only have 1?
Ideally I would like ISU's tier 3 to look like this- Two or three broadcast stations in Iowa. You probably couldn't have any ABC, CBS, or NBC affiliates since they are already showing football. This would leave FOX or CW affiliates. In areas of the state not served by a station Mediacom could pick it up and put on connections 22. For out of state viewers perhaps a deal could be made with Direct TV and Dish for pay per view and also make games available on Clonezone.
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"How come OU's tier 3 rights are so low? One reason I could see them being somewhat less is because their games are usually picked up on tier 1 or 2. Why would someone pay a lot for tier 3 rights if football is only on for one crappy game a year?"
I think you're right - if OU is playing anybody of consequence, it is likely to be picked up on tier 1 or 2. Their tier 3 opportunities are limited. The game with MAC powerhouse Ball State is not on tv so OU is putting that out on pay per view. They expect 10,000 at $30 @. I don't know if PPV counts toward tier 3.
Actually Ball State might not be all bad - they did beat Big 10 powerhouse Indiana.
I think you're right - if OU is playing anybody of consequence, it is likely to be picked up on tier 1 or 2. Their tier 3 opportunities are limited. The game with MAC powerhouse Ball State is not on tv so OU is putting that out on pay per view. They expect 10,000 at $30 @. I don't know if PPV counts toward tier 3.
Actually Ball State might not be all bad - they did beat Big 10 powerhouse Indiana.
I have not checked the validity of this but it seems very close to what i've seen in articles before on 3rd tier rights. As far as TX getting 15 mil for the LH network...I have no problem with that..as long as they're not pulling in tier 2 games or showing hs games. We've been making more off of 3rd tier for years than the big dogs for precisely the reason mentioned earlier....none of the big dogs' games make it to 3rd tier.
http://businessofcollegesports.com/2011/05/06/school-specific-broadcasting-revenue/ not sure why it clipped that address.
http://businessofcollegesports.com/2011/05/06/school-specific-broadcasting-revenue/ not sure why it clipped that address.
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