Everyone on TV/ESPN is celebrating the move.
Of course, it's obvious why ESPN is celebrating, but they are convincing the casual fans as well.
What if AD's value regional rivalires this time around...
- Thread starter cymonw1980
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Of course, it's obvious why ESPN is celebrating, but they are convincing the casual fans as well.
As a partner in the firm, I'm not adding another whose contribution reduces my compensation, unless not making the addition somehow threatens the firm's existence.
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This is actually one of the better realignment threads I've seen here, and I'll add my $0.02 worth.
Yep, it's all about money. The B1G doesn't NEED to expand. But the wild card in all of this is Fox. Because of their relationship with the B10, I can see a path where they would want to add to the conference to help build the overall value and could put their thumb on the scale. If they deem it a worthwhile long term investment, It could certainly happen...especially if a school like ISU will accept a revenue share for the first decade that is 50-60% of what the new TV deal is. This to me seems plausible because their relationship owning half of the B1G network kind of gives them a protective moat and a reason to want to enhance the brand beyond what it currently is. If streaming is where it's at 10 years from now, it would be good for them to lock down schools when they can get them.
As for those ******* at ESPN, even though 8 schools just got crapped on, there is no reason not to believe they don't have a long term plan to build the AAC brand into a solid Tier 1 league. We know how they can hype up games to drive viewership. Their goal was to get it on the cheap with Big12 eyeballs to help grow it.
Point being in all of this, I think Fox is going to be the ultimate king maker and decide whether the Big 12 stays together or the B1G/PAC 12 expands. Even though the remaining pieces on the chess board are not as valuable as OU and UT, they still have value. Like Campbell said, keep winning and everything takes care of itself.
Yep, it's all about money. The B1G doesn't NEED to expand. But the wild card in all of this is Fox. Because of their relationship with the B10, I can see a path where they would want to add to the conference to help build the overall value and could put their thumb on the scale. If they deem it a worthwhile long term investment, It could certainly happen...especially if a school like ISU will accept a revenue share for the first decade that is 50-60% of what the new TV deal is. This to me seems plausible because their relationship owning half of the B1G network kind of gives them a protective moat and a reason to want to enhance the brand beyond what it currently is. If streaming is where it's at 10 years from now, it would be good for them to lock down schools when they can get them.
As for those ******* at ESPN, even though 8 schools just got crapped on, there is no reason not to believe they don't have a long term plan to build the AAC brand into a solid Tier 1 league. We know how they can hype up games to drive viewership. Their goal was to get it on the cheap with Big12 eyeballs to help grow it.
Point being in all of this, I think Fox is going to be the ultimate king maker and decide whether the Big 12 stays together or the B1G/PAC 12 expands. Even though the remaining pieces on the chess board are not as valuable as OU and UT, they still have value. Like Campbell said, keep winning and everything takes care of itself.
I actually happen to know one of them. You know how much she cares about her alma mater? Not one iota. The only reason why I even know she’s a Rutgers grad is because it was mentioned in passing one time. And with how much people care about college athletics in NY and NJ, I would expect that to be the rule, not the exception.
That is correct... I lived in NY for a while after college. It was almost impossible to find anyone who cared about college sports. I listened to sports radio every day for hours (spent between 1.5-3 hrs a day driving back and forth to work, 25 mi, brutal). But, all they talked about was NFL, MLB almost all yankees, red sox. I actually started watching baseball for the first time in my life.
It is just a very different market. rutgers could win the b10 and most of the sports fans (not population, SPORTS FANS) would not care and would barely notice.
ESPN also has a lot of motivation though....
Overall, the B12 pays out about $400M per year. These were about to be renegotiated and would have increased since these deals were signed almost 10 yrs ago. So, the value is UNDERSTATED at $400M/yr. Over the next 4 yrs that is ~$1.6B+ in league value. This is split between ESPN and Fox.
Bowlsby estimated that 50% of the value came from tx/ou. So, let's use that number... roughly $200M/Yr in value for tx.ou in the B12. ESPN wants them in the sec to consolidate brands further and create more value to the inventory (tx vs. tamu, ou vs. bama, tx vs. uga, etc.). So, how much does that add to the value? I don't know... I would say the value is probably at least between $250M-$300M (remember the $400M was about to increase in the next round of media deals and does not include ~$15M/yr in rev OU, Tx get from their school networks that now go to espn on the sec network). It will only cost espn about $120M/yr (payout is expected to be ~$60M/yr for each). So I would guess that is AT LEAST somewhere between $130M - $180M in value to ESPN ($300M - $120M = $180M).
However, if the B12 does not dissolve, the benefit is delayed and they also must continue to pay out the remaining years on the contract. So, ESPN wants to end the league asap. Ideally, everyone is moved to the aac and you pay the schools ~$10M each vs. $25M ($200M/8 = $25M, saving another $15M per school). But B8 were not interested in that. So, now you need to get life rafts for at least 4 more schools in order to end the conf...
Some options below. Net is, ESPN would need to make the other leagues whole if they were going to add teams. So, ESPN could offer deals that would make the other P4 conference members whole (pay as much to new teams as they distribute to current teams)
ISU/KU to b10: Cost +$25M per school, $50M/yr ($50M b10 conf pay - $25M B12 estimated pay after 50% of B12 value is split 8 ways)
WVU to ACC: Cost $10M/yr (roughly $35M in ACC - $25M/yr B12)
TT/OSU to PAC: Cost +$10M/school, or about $30M/yr (roughly $35M in PAC - $25M/yr B12)
Others: Savings of $15M/school or savings of $45M/yr ($25M B12 vs. $10M AAC)
So, very rough numbers... for about $35M-$45M /yr in cost they can dissolve the B12 and cash in on the SEC investment worth upward of $180M/yr. So, over the next 4 yrs that could be about $500M.
These are just estimates based on the numbers reported by conferences... this is not intended to be exact but to illustrate that ESPN has a lot of value they believe is coming their way. They want to cash in now. They are motivated to move quickly and it likely would not cost them a lot to do so. Lowest cost option? Get enough teams in the B12 new homes so the league can be dissolved.
Right... so, the media network (that decides how much the new partner is worth) pays their way.
If it is worth it to ESPN for the B12 to dissolve and it will only mean paying ISU $10M - $15M more than they currently do in the B12 than why not? The B12 media rights were set to increase in a few years anyway so the $15M is probably not even accurate... There is a very straight forward business case to be made that ESPN wants the B12 dissolved quickly to get ou/tx away from fox and max the value of the sec inventory they already own.
And, before you say ISU's current payout is with tx/ou they will be playing with osu, psu, mich, neb, wisc, etc. in the B10... so, those games have a lot of value too. Every team's value is a function of who they play... Take the brands off of any schedule and the value is diminished, add them and it increases.
Point is, ISU's value is not 0 and it is a lot closer to the B10 value if they are put in that conf than most would admit. Most importantly, even if espn has to over pay a bit (maybe $10M/yr?), that is nothing compared to the windfall they get from dissolving the B12 now and moving ou/tx to the SEC.
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I probably should have clarified my remarks about ESPN. I don't disagree with anything that you said. My point was that by breaking up the Big 12, they could start over with a much lower cost basis and make even more money by raising the profile of the AAC brand.. The savings associated with breaking up the Big 12 was assumed.
And to tie that back into what Fox's next move is going to be, they went from having 1/2 of OU/UT to none. They can't be happy with that. They need to replace the content and can't allow the B1G brand as to not become secondary to the SEC. Some believe they already are, but IMO that's temporary and ends with Saban's retirement. There was a time not very long ago when 75% of the SEC was meh.
I used to listen to Mike and Mike on my morning commute and no matter how bad they were, a big part of the conversation was about the Yankees, Knicks and Jets and it didn't seem to matter what else was happening in the sports world.
There's a case to be made for your ESPN strategy. It makes sense. However, ESPN shares the B12 contract with Fox. It's not a standalone deal. And the B10 Network is a Fox property, not ESPN.
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There's a case to be made for your ESPN strategy. It makes sense. However, ESPN shares the B12 contract with Fox. It's not a standalone deal. And the B10 Network is a Fox property, not ESPN.
Understand... my point was not that the b10 would make more through the b10 network... the b10 would need to be compensated (by ESPN) for any decrease in per member payouts at the b10 network/fox level. So, if the rest of the b10 makes $10M less in total (making it up), then ESPN would need to increase their payout to the b10 by $10M in order to keep everyone whole. Side note, Rutgers will not receive a full rev share until 2027(!) so, doubtful the media partners need to make up the whole gap since the payout to new members would be reduced for a while.
I am not saying this WILL happen. Only that the calculation is not at the school level (is ISU worth $50M? is not the question) but at the overall college football conf landscape level (how much does it cost to dissolve the B12? what is the benefit?)...
Is it better to keep the B12 in tact until 2025? Or move to a new conf landscape in 2022? It is clear ESPN would prefer to be in the new model ASAP... question is cost to get there. If one way to do that is to pay a small premium for 4 of the 8 schools to find homes that may be what they do.
I think kan/ISU to b10 and wvu to ACC make sense on paper. But not sure there is a 4th fit that is easy to do... maybe OSU/TT to the PAC? Not sure that would make sense... I think they need to get at least 4 more out though.
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Its gonna be REALLY FUNNY ......when the two and maybe just maybe... three mini NFL,s get all this money from espn.....AND NOBODY WANTS TO WATCH THE SAME TEAMS, PLAYING THE SAME TEAMS, EVERY FRICKING WEEKEND!!!
I FOR ONE WILL SIT BACK AND LAUGH MY ARSE OFF!!
I really hate to write this SURLY (well not really) BUT I REALLY DO LIKE THIS POST!!
IMHO the remaining big 12ers will align first and then join the Pac12 Conference
WELL WHAT ABOUT STREAMING THE NEXT GREAT THING? WON'T THAT SAVE US FROM COMPLETE FINANCIAL RUIN?
THATS WHY I NEVER LISTEN TO NATIONAL SPORTS....NO INTEREST AND WAAAYYYY TOOOOOOO ..."BORING"!
I believe you're making a lot of assumptions and connecting dots on ISU's behalf that are illogical from a business perspective. It is "on paper" that ISU and WVU do not make sense if you're speaking about finance for the B10 and academics for the ACC. They might bring some value as a defensive play. I don't know. But Fox is not going to help ESPN solve a financial problem.
Again, the business dealings resulting in the collapse of a conference are 'anti trust'. That won't go well for ESPN.
Yeah, I hope the DOJ takes Sen. Marshall's lead and looks into this whole affair. It just smells of collusion and anti-trust to high heaven.
I don't understand why OU and Texas didn't bring along 2 more schools to the SEC. It would have helped spur the dissolution of the Big 12 and given them a couple more natural rivals (maybe Texas Tech and OSU) or allowed the SEC to expand its footprint (KU and ISU). Would the SEC have said no? The money would obviously still be there.
