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Big 10 revenue exceeds expectations. $54 million per team
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JRsec Offline
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Post: #41
RE: Big 10 revenue exceeds expectations. $54 million per team
(05-27-2019 05:34 AM)XLance Wrote:  
(05-26-2019 11:07 PM)JRsec Wrote:  It's real simple. With no expansion at all the Big 10 will be sitting at 54 million a year plus escalators with another contract renewal in 2024. The SEC will be sitting at 58 million (possibly a bit more) when the new T1 contract is announced.

If either of them attract Texas and/or Oklahoma it goes up roughly 5 million in value for each one they land (content and market values baked in).

The ACCN will likely payout about 3 million per school the first year and based on your current viewer numbers max out around 7 million plus escalators within a few years following. That would put the ACC in the low 40's while both the SEC and Big 10 will be pushing 60 million.

So if OU which is making around 41-2 currently, or Texas which is making around 51 currently see where their presence in another conference could net the a 20 million a year gain (Oklahoma) or a 13 million a year gain (Texas) then that gap grows to over 20 million with no more game changing pieces on the board.

I don't think the ACC will be poachable until 2035 but if the revenue gap is over 20 million at that time anything becomes possible, especially with state and federal funds continually getting harder to get.

So 2025 won't impact the ACC now. But it might very well impact the ACC in another 10 years following.

Football championships are largely due to Jimbo Fisher and Dabo and Clemson and F.S.U.'s sports objectives being football first. UNC and UVa will hold academic value for the Big 10 and market significance for the Big 10. Likewise their value is the same for the SEC, but with the SEC Virginia Tech might actually be of a bit more potential value than Virginia.

When Nole talks about a select few schools he's really talking about F.S.U., Clemson, North Carolina and Virginia/Virginia Tech. Georgia Tech not so much for either the SEC or Big 10. In 2012 GaTech would have held much more value market wise than today. N.C. State isn't the prize in North Carolina. Duke would be preferable to the academically minded Big 10.

So really there are 4 ACC schools that would be of interest to the Big 10 and 5 of interest to the SEC.

It's why I stated earlier the trick would be for the ACC to try to move to 20 by taking 5 from the Big 12 and cherry picking them at that. UT / OU / KU / and likely OSU and TTU as the cost.

That move adds catch up value to the ACC and denies the Big 10 and SEC the ability to really widen the gap dramatically while leaving no school of particular value to either the PAC or ACC.

That's the ball game. If the SEC and Big 10 add the cream of the Big 12 its game over for the P5, P4, and P3 and what Nole has predicted is the likely outcome. I figure for competitive reasons more of a P2 of 24 teams each rather than a P2 of 20 teams each.

I don't see the PAC being positioned or financed in a manner to be able to pull off a coup of the Texa-homa sized plan in 2011. The ACC is better positioned, but also not in quite the financial position to lure Texas or Oklahoma. But by creating a division and taking little brothers too you might be positioned to strike a bargain even at less of a financial windfall and in so doing prevent what is certain to be the creation of a insurmountable gap.

Your numbers are, as usual, all over the place JR.
TEXAS and Oklahoma are now up to 5 million each when for years it's been 2.5. The ACCN only earning 3 million the first year when the FSU AD predicted 15 (the truth is probably somewhere in between) .
The ACC will survive and thrive if ESPN deems it their most profitable route to take.

Let's look at a fact that is relevant: FOX has bailed on the Big 12. ESPN bought 3 championship game broadcasts and the T3 (six seasons/8 schools) content (which they will move to ESPN+) for $40 million and there is no chatter about the renewal of the Big 12's T1 and T2 contracts at all.

If ESPN wants the ACC to work, they can promote it into success (as long as there is successful product, which the ACC has delivered in spades).
Why would they want the ACC to be successful? Leverage against other conferences from becoming too powerful and demanding and ESPN is obligated to pay the ACC a lot of money for the next 15 years. No smart businessman wants dead inventory that becomes an expense rather than an asset (the Mouse is smart, we aren't worried).

No X as usual your thinking is centrist to the ACC position and not up to current circumstances. Under the market model from 2012 Texas would have been worth about 3.5 to the Big 10 and about 2 million to the SEC which already had A&M. Now that approach only has value to the conference networks. Content is being rewarded much more due to the ability of two brands playing drawing a much larger national audience. So Texas has the ability to multiply the content values of conferences and the value is dependent upon the number of national draws within that conference (in football). Now Texas is worth more in the SEC as opposed to the Big 10 but in either they are worth a lot more than they are in any of the other 3 P conferences. Oklahoma doesn't have the T3 value of Texas to the Big 10 and only the value of a potential 4 million people figure 1.3 million households to the Big 10, SEC or anybody. But they do have the content multiplier value going for them as well. And it is that brand power that has the potential to hit another 5 million in value in either the Big 10 or SEC vs a higher number of other national brands.

So the question is if they leave the Big 12 where are they worth the most to ESPN and that answer is pretty simple.

You are obviously not a farmer or rancher. ESPN cobbled together a herd of schools they wanted to save from their competition. They fed them and kept them alive until time to take them to market. Then they parse them out according to their value placing the choicest animals in herds where the breeding produces even higher values.

Realignment has been following this course for every conference. They are not emotionally attached to any of us and will always act in their self interest. They are a corporation with quarterly reports to file to shareholders. That is their only concern and this myth that ESPN will save us that is repeated by many posters here reminds me of the inmates at Dachau who believed if they worked harder the Nazis wouldn't kill them in the end. It's kind of the beginning of Stockholm syndrome.

And ESPN isn't concerned with a conference's leverage. The market isn't that competitive. What they are concerned with is product placement and the % of yield they get from having school x playing school y & z.

Eventually they will cull every conference. The college model is more profitable when only quality plays quality and much cheaper to maintain because the overhead of producing the product is the cost of each school.

If Texas and Oklahoma wind up in either or both of the Big 10 and SEC the pathway to two leagues of high national interest grows. The desire due to profit to be in one of those 2 leagues grows as well.

ESPN isn't collecting schools to get get more profit, they are slowly rearranging the schools (product placement) and culling them to get more profit.

Virginia Tech and Miami, Syracuse and Pittsburgh were worth more in the ACC than in the Old Big East. Texas A&M was worth more in the SEC than the Big 12 and under the market model so was Missouri, Rutgers, and Maryland worth more in their new homes.

The ACC will be vulnerable when more can be made off of Clemson and Florida State in a football rich conference and more off of Duke, Syracuse, and North Carolina in a basketball rich conference.

City schools like Georgia Tech, Louisville, Pittsburgh, and Miami would be of more value in streaming mode.

And when the two leagues eventually emerge pressure will begin to mount to shed the SEC and Big 10 schools that can't keep up and which don't have a large national following.

But the issue corporately X is that a journey of a 1000 miles must be accomplished step by step and we are in the first couple of hundred miles so those eventualities are not yet due to be discussed as doing so may get in the way of the next few steps.

And X when we get there it will be sold and assured that it will only impact football. Basketball, baseball, softball, etc, will still be broad in number of schools and likely still tied to some form of the old conference structure and that will be the soft soap for selling the more extreme position on football.
(This post was last modified: 05-27-2019 02:49 PM by JRsec.)
05-27-2019 11:26 AM
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RE: Big 10 revenue exceeds expectations. $54 million per team - JRsec - 05-27-2019 11:26 AM

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