Could this happen during expansion?

[mikesright]

The Big Ten received $32.4 million per school in 2015. Reportedly the Tier 1 contract paid $9 million of that per school. Now they are going to receive $30 million (if you divide between 15 equal shares incl 14 schools plus the conference dist) per school from the tier 1 contract, plus certain schools like Rutgers and Maryland are buying in and the BTN is now starting to revenue share (BTN pays a rights fee to the conference and thats where most of the money came from in the past).

Basically if you do the math its about $54 million per school not counting the extra BTN money, inflation built into NCAA credits for CFP and MBB, or the money from Rutgers and Maryland buying in. There probably won't be a big escalator clause built in such a short contract. $55 to $60 million per school excluding MD and RU is a fair estimate.

 

[timinatoria]

I'm sorry but you are incorrect sir..You have given 2017 projected revenue...THere is no Tier 3 in BIG it is all Tier 1 and Tier 2. Unless I missed something completely. and the big 12 from that article didn't even come close to $23 mil..lol. The big 12 just had a payout of $31 mil without TIER 3!! it is a contract that increases every year based on numerous factors but does until 2023..

Let's wave a flag for a second..Lets agree that Big 12 and BIG both made a crap load of money and the difference isn't that much but for Texas it is..

No need for a white flag, I'm just trying to help put correct info (or at least what I thought was correct based on multiple links) out there. I'm not trying to run down the Big 12 or talk up the Big Ten.

And yes I was looking at 2017 payouts. That was because the discussion is about IF Texas could/would make more money in the Big Ten. I think it's very possible. And if they were to join it obviously wouldn't be this year, it would be under the new B1G contracts.

One scenario that I haven't seen discussed would be this.
- Big 12 expands by 4, Texas hates the 4 teams and won't sign a GOR.
- In 2023 right as the Big Ten goes into negotiations with TV partners, Texas announces they are leaving for the Big Ten when the current GOR expires in 2025.
- The Big Ten now makes even more money from the TV networks as their content just added Texas.
- The Big Ten Network goes into Texas and every household that has it will pay $12 annually to the network.

In summary, the Big Ten would make MUCH more money from both the networks AND much more money from the BTN if Texas joined. I think that is a scenario where Texas could easily make more than they make now, with or without the LHN.

This is NOT a prediction. Someone asked for a scenario how Texas could make more money. I think they would if it played out like this.

 

[mikesright]

To piggyback my last post, there's a couple key thoughts I have about Texas - first of all politically they are a castrated steer tied to the Texas treepost that is Baylor, TCU, and Tech.

While the B1G payout would probably dwarf the Big XII / Longhorn deal when you include the economics of the BTN in 26 million homes in Texas plus the fact TX would probably not be a prorata Tier 1 member - it makes no sense to the power brokers of that school to give up the power they hold in the Big XII (and the fact they are on unequal footing $ wise with the rest of the league). Even a really ginormous equal check is still an equal check. Expect them to go independent like Notre Dame if they do anything.

 

[timinatoria]

While the B1G payout would probably dwarf the Big XII / Longhorn deal when you include the economics of the BTN in 26 million homes in Texas plus the fact TX would probably not be a prorata Tier 1 member - it makes no sense to the power brokers of that school to give up the power they hold in the Big XII (and the fact they are on unequal footing $ wise with the rest of the league). Even a really ginormous equal check is still an equal check. Expect them to go independent like Notre Dame if they do anything.

There aren't 26 million TV households in Texas, that's the population.

Still, I've seen estimates of an increase of about $3M-$4M per school for the B1G if Texas joins the conference.

 

[KnappShack]

This thread shows me why I'm losing interest in college sports. $$$ talk and not talk about the sport.

NCAA basketball lost me....football is getting close

 

[ShopTalk]

Why is it so hard for people to due math?

What is the due math that you speak of? Teach us o wise wizard of the due.

 

[ShopTalk]

Oh, this is getting very interesting:

The Big 12 just doused the sports rights bubble in gasoline and lit it on fire as it floats across the sky.



And here's the crazy thing, what's to stop the Big 12 from expanding and adding ten new schools? Then they could double their existing TV contract overnight. That would mean the Big 12 would make more money than any conference in America. It wouldn't be supported by any tangible economic reality, but it's possible.


From Yowza's link:
http://www.outkickthecoverage.com/big-12-auctions-off-league-membership-for-big-money-072016

 

[ShopTalk]

B12 takes the above $25Mil/year/school addition clause and if there is no stated upward limit to the number of additional members that can be added under this clause, does as follows:

50 non-P5 teams have applied. Tell ESPN/FOX we're adding all 50, going to 6 10 team divisions and a 6 game play-off for the league title. Or, you can guarantee the B12 contract will exceed all other NCAA conference contracts on the per school payouts by 25% in perpetuity. Your move.

 

[CyFy]

Personally I thought this article was garbage. The reason the big 12 doesn't have a network is because of Texas but for some reason they are going to give that up to join another conference where they would have far less power?....not going to happen in my opinion. Especially for a couple million more a year. Texas' athletic department is not going to lose power for 3-4 mil a year which is actually unlikely to happen since they would have to drop their current tv deal which is very large.

 

[cymonw1980]

Oh, this is getting very interesting:

The Big 12 just doused the sports rights bubble in gasoline and lit it on fire as it floats across the sky.



And here's the crazy thing, what's to stop the Big 12 from expanding and adding ten new schools? Then they could double their existing TV contract overnight. That would mean the Big 12 would make more money than any conference in America. It wouldn't be supported by any tangible economic reality, but it's possible.


From Yowza's link:
http://www.outkickthecoverage.com/big-12-auctions-off-league-membership-for-big-money-072016

This is exactly what I am afraid of.... if the B12 is going to fall apart in 2025 how do you maximize the money until then? add schools. any schools. Who cares if they add value, the contract gives the existing members a lot of money (assuming you don't distribute all of the new money to the new schools). this is a 10 year deal. Find a way to maximize your revenue for the next 10 years. After that everyone is going to try to find the best landing spot... if your texas or ou. No problem. If your anyone else... good luck. no garuantees. but this looks more like the beginning of the end than a conference trying to build it's brand and create stability.

I think you probably end up with 4 power conferences, with 16 teams. who knows for sure... but if so, you end up with:

ACC + ND: 1 spot left
SEC: 2 spots
b10: 2 spots (probably 0 for ISU - want to extend network footprint)
Pac: 4 spots

OU, OSU, Tex are 3 of the 9. there are 6 left.... hope this works out some how for ISU.

 

[yowza]

Also poking around for more info on this(it's hard to find good reliable info) I found this.

http://blogs.mercurynews.com/colleg...t-addresses-the-revenue-gap-with-big-ten-sec/

One thing everyone can agree on, the Pac-12 is kinda screwed right now.

From the link -

First, let’s address the exact nature of the revenue gap. Since the discussion, there have been two relevant developments:

1) The Big 12 announced its latest distribution: $30.4 million per school, which was higher than anticipated. (No specifics were given, but my understanding is the increase can be traced to the terms of the Tier 1 contract.)

2) The second piece of the Big Ten’s new deal came into focus with the SportsBusiness Daily reporting that ESPN would purchase the B1G’s remaining rights for $190 million annually. Add $240 million from Fox, another $10 million from CBS, and the conference’s TV revenue is astronomical.
The double-whammy of news from the Big 12 and Big Ten will place the Pac-12 in worse shape a few years from now (relative to its peers) than it has been at any point since the start of its $3 billion Tier 1 deal with ESPN and Fox.

Here are expected distributions per-school for TV rights in 2017-18, when the Big Ten deal kicks in.
Note I: Figures do not include revenue from College Football Playoff, March Madness, etc. This isonly TV rights.

Note II: Figures are estimated, largely because of uncertainty regarding the exact income amounts from conference TV networks.

Big Ten: $41 million per school
(Includes Tier 1 deal, annual Big Ten Network distributions and BTN profit sharing)

SEC: $34 million per school
(Includes Tier 1 and SEC Network revenue)

Big 12: $23 million
(Includes Tier 1 deal and rights fee for football championship game but not Tier 3 rights, which are owned by the schools and vary greatly)

Pac-12: $22.5 million
(Includes Tier 1 deal and $2.5 million per school in Pac-12 Networks distributions)

So ….
That’s a monumental gap, especially with regard to the Big Ten. And as we’ve noted before, the Big Ten is viewed as the true peer conference by Pac-12 presidents and chancellors — partly because of the academic reputation of its schools, partly because of the long on-field relationship via the Rose Bowl.

(Yes, yes, yes: DirecTV would add a few millions dollars annually to the coffers of each Pac-12 school, but it wouldn’t come close to eliminating the gaps with the SEC and B1G.)

*** Although we didn’t talk specific numbers and didn’t have the new Big 12 and Big Ten data, Scott acknowledged the existence of a gap and said (DTV aside) that there is “no silver bullet†for the Pac-12 on the revenue front.

Correct on the PAC12. Their biggest problem is they are 2 to 3 hours behind everyone else also. Watching an Oregon State game at 10pm after an already long Saturday isn't a great option. I just don't see the level of excitement by those fan bases. It is like putting an NFL team in LA. Its been tried. People just don't show up. Oregon was on the way of trying to build a national fan base with their success and weird uniforms but all others are doing uniform stuff now and success has been a little harder to come by on their part. If the Big 12 and the PAC12 could somehow pair up and play each other for a week that would raise interest.

Iowa State's problem is about 10 years down the road. This will fall apart then if not sooner. The question is what the plan is to get to safer waters having that much time to formulate a plan. Staying tied to Texas is not going to be a winner very long term.

 

[yowza]

Personally I thought this article was garbage. The reason the big 12 doesn't have a network is because of Texas but for some reason they are going to give that up to join another conference where they would have far less power?....not going to happen in my opinion. Especially for a couple million more a year. Texas' athletic department is not going to lose power for 3-4 mil a year which is actually unlikely to happen since they would have to drop their current tv deal which is very large.

What do you mean by "power"? I take it to mean first money at the expense of others and second the ability to promote themselves with the support of ESPN. And that is going to play out nicely long term with everyone else in the Big 12?????

 

[Cycsk]

You're forgetting the academic $$$ that come from B1G membership and its CIC academic membership. The money saved from opportunities for joint collaboration and ridiculous amount of research funding awarded to B1G schools make $54 million, literally, a drop in the bucket. UT would be positioned to make massive, massive dollars as a part of the CIC.

I don't think academic conference affiliation has much, if anything, to do with academic research funding. Nobody gives academic money to the Ivy League, but to Ivy League schools who may be in partnership with other Ivy League schools or non-Ivy League schools.

 

[CyCy]

I remember the good old days when college athletics was about who won the game rather than who made the most money.

 

[yowza]

This thread shows me why I'm losing interest in college sports. $$$ talk and not talk about the sport.

NCAA basketball lost me....football is getting close

Sorry but that $$$$ train left the station long ago. Ticket prices up big, seat premiums, cable fees, etc. All rocketing up and I am sure ad space has gone up big also. It will hit a wall but when. I go to games. I just subscribed to Sony Vue so I could get the sports channels at a lower price than Direct TV, although we will have data overage charges from the internet connection it won't add up to the Direct TV normal bill. That is the way everything is headed now and I would suspect will get even more ala carte much farther out. I can see the day we will all be able to "attend" a game in person by putting on a virtual headset and choosing where you want to sit "in the stadium" to watch the game all while sitting on your sofa. It might be 15 or 20 years out but it will get there. I can see premium fees for that experience. I am with you though, when NCAA football becomes just like the NFL then I probably tap out and go find something better to do on a nice Saturday afternoon in the fall. And the concussion issue still looms. I still see that making a dent in the level of participation at the lower levels.

 

[FarminCy]

Yeah but the benefits provided by the consortium, the collaboration, the shared resources, do benefit the individual institutions in attracting federal grants. They're more attractive and receive more funding, because of their membership. That's how UT would benefit and stand to land much more research $$$.

Quite a stretch of a statement. Since a good portion of the B1G is land grant institutions ISU has joint research with essentially every one of them. UT can stand on its own research just fine. They already have many joint research programs. Plus federal grants are diminishing and universities are having to focus more on industry directed research. The research model of the past that benefitted things like the CIC is essentially dead.

 

[yowza]

I am so tired of just completel misinformation...Show me a single scenerio where Texas makes more $$ going to the BIG? Show me one..There are the facts and they are published on the Internet for anyone who knows how to use google:

2015 TV revenue:
1- Every single BIG team= $30 million

2- Texas= $48 million

Now fast forward 5 years where the new BIG tv deal is in place and has been and each team is making let's say $50 mil (some reports say closer to $45 mil but let's go high)...The big 12 contract is set up to increase every single year in payout to a max of $43 mil per team in 2024..So let's say 5 years from now Texas makes $39 million from big 12 payout+ the LHN (remember you have to add LHN and Tier 3 which isn't included in Big 12 Tv revenue payout by the conf.) = $39 mil+$15 mil= $54 million Texas roughly makes 5 years from now. So basically by staying in the big 12 Texas is making probably $50-$70 million more than any other BIG team over a 5 year period...But yea Texas will make more in the BIG.

How many times does this have to be explained?

But they are watching at least 2 trains barreling quickly at them and when do they make the jump? The teams being suggested to add realistically are not adding any excitement level. The big names aren't there. If you added a USC and UCLA then yeah that would add, but not the ones being discussed. This is a maneuver to boost money for the next 10 years or so and the rats will jump ship. That'd be my prediction.

 

[Beyerball]

But they are watching at least 2 trains barreling quickly at them and when do they make the jump? The teams being suggested to add realistically are not adding any excitement level. The big names aren't there. If you added a USC and UCLA then yeah that would add, but not the ones being discussed. This is a maneuver to boost money for the next 10 years or so and the rats will jump ship. That'd be my prediction.

And Rutgers does...Cinncinati is no diff thAn Louisville..I mean you can't have a league full of top programs..sec still has KY and Vandy don't they? TCU people said same..TCU is now a decent football power. Houston in a P5 win 10 years will be a very very strong fball program..to think otherwise is just naive. BYU, whether people believe it or not, is a national brand. Everyone knows who BYU football is. Btw..those schools I just listed have had more football success than prob 15+ current P5 teams. It's ridiculous to say some of these teams bring nothing.

 

[yowza]

And Rutgers does...Cinncinati is no diff thAn Louisville..I mean you can't have a league full of top programs..sec still has KY and Vandy don't they? TCU people said same..TCU is now a decent football power. Houston in a P5 win 10 years will be a very very strong fball program..to think otherwise is just naive. BYU, whether people believe it or not, is a national brand. Everyone knows who BYU football is. Btw..those schools I just listed have had more football success than prob 15+ current P5 teams. It's ridiculous to say some of these teams bring nothing.

Didn't say they bring nothing, but how does adding Houston add any additional $ ? Aren't Big 12 games on tv there already all over Texas and they don't have a following outside the state. I do remember them being good back in the early 90s I believe when they had a couple good QBs back to back. One was Andre Ware I believe. I just see this as a bandage. Get more money over next 10 years or whatever and someone else will come calling to take away Texas and Oklahoma (if they are still there). Maybe there is something left of the conference thereafter but it definitely won't be the same.

 

[Gunnerclone]

Didn't say they bring nothing, but how does adding Houston add any additional $ ? Aren't Big 12 games on tv there already all over Texas and they don't have a following outside the state. I do remember them being good back in the early 90s I believe when they had a couple good QBs back to back. One was Andre Ware I believe. I just see this as a bandage. Get more money over next 10 years or whatever and someone else will come calling to take away Texas and Oklahoma (if they are still there). Maybe there is something left of the conference thereafter but it definitely won't be the same.

It's not really about what any team brings, it's just about inventory at this point. The Big 12 needs numbers to collect on the big payment from Fox and ESPN and they need more teams to have more games to drive bigger TV deals in the next contract negotiation.

The more I look at it I think the Big 12 is really pulling a fast one here and could come out pretty rich.