Big Ten about to get paid

[CarrollCyclone]

http://www.sportsbusinessdaily.com/Daily/Closing-Bell/2016/04/19/Big-Ten.aspx

Fox is close to signing a deal that gives it half of the Big Ten’s available media rights package, according to several sources. Deal terms still are flexible – both in terms of money and rights. However, the two sides have agreed on basic terms that will give Fox the rights to around 25 football games and 50 basketball games that it will carry on both the broadcast channel and FS1 starting in the fall of '17. The deal runs six years and could cost Fox as much as $250M per year, depending on the amount of rights the Big Ten conference puts in its second package.

The Fox deal essentially is half of the package of games that had been with ESPN (as part of a 10-year, $1B deal that expires next spring) and CBS (as part of a 6-year, $72M basketball-only deal that also expires next spring). The Big Ten will return to the market to solicit bids on the second half of the package. The conference has the flexibility to allow for another network or two to pick up that half. ESPN will be one of several TV networks engaged for the second half of the Big Ten’s package, along with the usual suspects of CBS, NBC and Turner.

The second package also is expected to include around 25 football and 50 basketball games. The package also could include rights to the football championship games every other year, though sources caution that the rights in the second package are flexible and could include more – or less – games.

In summary, FOX/FS1 would get half of the Big Ten's Tier 1 television rights for 6 years at $250 million a year. The other half of the Tier 1 rights are still up for bid, likely will go to ESPN. At the same market rate, the Big Ten could earn as much as $500 million a year in just Tier 1 money. Currently the league earns $100 million for all of its Tier 1 content from ESPN. This does not include revenue that would be earned by the Big Ten Network. This would work out to $35 million per school per year for Tier 1 TV money.

For some comparison, FOX is willing to pay $250 million a year for 25 football and 50 men's basketball games. In 2019 the Pac-12 will earn $250 million a year from both FOX and ESPN in total for 45 football games and 68 men's basketball games.

 

[Wesley]

SEC will be enviouss when they watch Fox show Minny vs Illinois football games.

 

[Gonzo]

http://www.sportsbusinessdaily.com/Daily/Closing-Bell/2016/04/19/Big-Ten.aspx



In summary, FOX/FS1 would get half of the Big Ten's Tier 1 television rights for 6 years at $250 million a year. The other half of the Tier 1 rights are still up for bid, likely will go to ESPN. At the same market rate, the Big Ten could earn as much as $500 million a year in just Tier 1 money. Currently the league earns $100 million for all of its Tier 1 content from ESPN. This does not include revenue that would be earned by the Big Ten Network. This would work out to $35 million per school per year for Tier 1 TV money.

For some comparison, FOX is willing to pay $250 million a year for 25 football and 50 men's basketball games. In 2019 the Pac-12 will earn $250 million a year from both FOX and ESPN in total for 45 football games and 68 men's basketball games.

Not really, since Rutgers and Maryland are getting a reduced share of the pie still for awhile. Everyone else will get more.

 

[Judoka]

How does this compare to their current deals? Based on quick math from the article it looks like they're getting a couple million more per team for half the games as they are currently getting for all of them. However, it doesn't indicate if this is for first pick at those games, which I would think would make this half a lot more valuable than the other half, or if the other half is for the same level of games.

 

[im4cyclones]

Man this **** is so out of whack. Revoke tax exempt status. Pay players.

 

[CarrollCyclone]

The other line of thinking is that the second half of media rights may see its value increase as it will be the last major college football rights package available for quite some time. It's believed that the Big Ten is looking to spread these rights across many different platforms and may split the second half of rights among multiple broadcast partners. They could sell a "primetime" package to one network and another package of games to another network, and so forth. CBS, NBC, ESPN/ABC and Turner (who is supposedly looking for some basketball content to lead into March Madness) are all interested.

http://collegefootballtalk.nbcsport...m-big-ten-closing-in-on-media-rights-bonanza/

 

[Clark]

Man this **** is so out of whack. Revoke tax exempt status. Pay players.

okay, I believe that the players should be able to earn money off their name but revoking the tax exempt status is laughably pointless. For Instance, the u of I athletic department actually lost a little money last year, so their tax amount owed would be...zero.

So you want to revoke the conferences tax exempt status too? Guess how much tax they'll owe after distributing the income to the member schools? If you guessed zero, you'd be correct.

 

[LivntheCyLife]

okay, I believe that the players should be able to earn money off their name but revoking the tax exempt status is laughably pointless. For Instance, the u of I athletic department actually lost a little money last year, so their tax amount owed would be...zero.

So you want to revoke the conferences tax exempt status too? Guess how much tax they'll owe after distributing the income to the member schools? If you guessed zero, you'd be correct.

Do you know how much less tax corporations and individuals pay because of the deduction when they donate to athletic departments that are defined as tax-exempt charities? If you guessed zero, you'd be incorrect.

 

[mctallerton]

okay, I believe that the players should be able to earn money off their name but revoking the tax exempt status is laughably pointless. For Instance, the u of I athletic department actually lost a little money last year, so their tax amount owed would be...zero.

So you want to revoke the conferences tax exempt status too? Guess how much tax they'll owe after distributing the income to the member schools? If you guessed zero, you'd be correct.

That is sad.

 

[Clark]

Do you know how much less tax corporations and individuals pay because of the deduction when they donate to athletic departments that are defined as tax-exempt charities? If you guessed zero, you'd be incorrect.

so you want to revoke their tax exempt status, not because they're making a profit, but because you want to punish those who donate to them? Seems odd, but while that would certainly reduce the number of very large donations (actually it wouldn't, if the schools were looking for donations to build a new stadium upgrade, they'd just run it through the school rather than the athletic department) but for the most part it wouldn't change much because a lot of the donations are required.

 

[Judoka]

The other line of thinking is that the second half of media rights may see its value increase as it will be the last major college football rights package available for quite some time. It's believed that the Big Ten is looking to spread these rights across many different platforms and may split the second half of rights among multiple broadcast partners. They could sell a "primetime" package to one network and another package of games to another network, and so forth. CBS, NBC, ESPN/ABC and Turner (who is supposedly looking for some basketball content to lead into March Madness) are all interested.

http://collegefootballtalk.nbcsport...m-big-ten-closing-in-on-media-rights-bonanza/

It's half of their first tier rights, but there's a pretty steep drop even for even at 14 team conference after the 1-2 premier games of the week. If that first half included the rights to picking the #1 and #2 games of the week then the second half would presumably be worth significantly less. Nobody is going do drop much more money for Purdue at Northwestern than they would for G5 filler games. But if the other half includes half of the premier games than you'd assume the other contract would be comparable.

 

[CarrollCyclone]

It's half of their first tier rights, but there's a pretty steep drop even for even at 14 team conference after the 1-2 premier games of the week. If that first half included the rights to picking the #1 and #2 games of the week then the second half would presumably be worth significantly less. Nobody is going do drop much more money for Purdue at Northwestern than they would for G5 filler games. But if the other half includes half of the premier games than you'd assume the other contract would be comparable.

I would assume that FOX would get first choice of so many games (weeks) and whomever wins the other half of Tier 1 rights would also get some first choice games. Similar to how top games are split now in the Big 12 between ABC and FOX.

 

[LivntheCyLife]

so you want to revoke their tax exempt status, not because they're making a profit, but because you want to punish those who donate to them? Seems odd, but while that would certainly reduce the number of very large donations (actually it wouldn't, if the schools were looking for donations to build a new stadium upgrade, they'd just run it through the school rather than the athletic department) but for the most part it wouldn't change much because a lot of the donations are required.

I don't want to punish people, I just don't want to help other schools build their stadiums by giving them a tax break. This article is a little old from 2012, but it found of 34 schools surveyed, $373.7 million was donated. Ohio State was the largest with $38.7 million. That's a big chunk of lost tax revenue the rest of the taxpayers have to make up for. Does it really make sense for taxpayers to be helping to pay for renovations to the Horseshoe?

Enforcement would be an issue but presumably the tax laws would be written where general university donations couldn't be used for athletic facilities if athletic departments were not tax-exempt. And I guarantee some donors, especially companies, would change their donor level or number of seats depending on its effect on their tax budget. Required donations set by the athletic department would not stay the same if the market changed.

http://www.bloomberg.com/news/articles/2012-10-25/got-college-football-tickets-take-a-tax-break

 

[erikbj]

Seems like a bad investment with the cord cutting

 

[cytown]

Ridiculous. Most of those schools should be thanking Michigan and OSU for that.

 

[Wesley]

The BIG teams are beginning to become obese with all that money. They will be fat and happy in Champaign.

 

[Judoka]

Seems like a bad investment with the cord cutting

]

I imagine that was part of why it is only for 6 years (the other part being so it syncs up with other conference media deals).

 

[CarrollCyclone]

]

I imagine that was part of why it is only for 6 years (the other part being so it syncs up with other conference media deals).

I believe the Big Ten is also negotiating (or withholding some rights) for agreements with digital media outlets, as streaming options become more robust by the year it seems.

Some sources online are suggesting that FOX may have gotten the cheap half of the media rights, saying that depending on how competitive the bidding is and how many partners are at stake the other half could be worth as much as $300 million a year or more.

 

[cytown]

Does each scoll get the same amount? Or is there a tier for the schools that bring the TV sets?

 

[Gonzo]

Does each scoll get the same amount? Or is there a tier for the schools that bring the TV sets?

Established members get equal share. Nebby, Maryland, Rutgers get partial share and are working their way up to full.