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ACC Network financial prospects
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orangefan Offline
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Post: #1
ACC Network financial prospects
Found this report while surfing the web -- SNL Kagan's Economics of Basic Cable Networks, 2016 Edition: https://ofccolo.snl.com/Cache/CBC3AA560637320340.PDF

Some stats for the various conference networks:

SEC Network has 60 million subscribers at an average fee per subscriber of 71 cents/month. Its projected revenues for 2017 are $571 million. It is projected to have $226 million in expenses in 2017, giving it operating income of $345 million. In its first partial year of operation (2014), it generated $184 million in revenues. In its first full year of operation (2015), it generated $523 million in revenues and $313 million in operating income.

BTN has 65 million subscribers at an average fee per subscriber of 41 cents/month. Its projected revenues for 2017 are $401 million. It is projected to have $242 million in expenses in 2017, giving it operating income of $159 million.

Pac-12 Network has 15 million subscribers at an an average fee per subscriber of 36 cents/month. Its projected revenues for 2017 are $27.1 million. It is projected to have $19.5 million in expenses in 2017, giving it operating income of $7.6 million.

The SEC and B1G split the profits from their networks with their partners, ESPN and FOX, respectively. The P12 owns its network 100%.

ESPN had huge success in launching the SEC Network. If they can do something similar for the ACC, it will obviously be a game changer for all of us.
(This post was last modified: 09-18-2017 12:04 PM by orangefan.)
09-18-2017 08:05 AM
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Wolfman Offline
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RE: ACC Network prospects
I think you meant the P12 revenue to be $27 million.

IIRC the P12 owns their networks outright while the SEC and B1G share theirs. That means net income per school per year looks like:

P12 $633,333
B1G $11,357,142
SEC $22,357,142

Assuming a 50/50 split on BTN and SECN.
09-18-2017 08:26 AM
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orangefan Offline
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RE: ACC Network prospects
(09-18-2017 08:26 AM)Wolfman Wrote:  I think you meant the P12 revenue to be $27 million.

IIRC the P12 owns their networks outright while the SEC and B1G share theirs. That means net income per school per year looks like:

P12 $633,333
B1G $11,357,142
SEC $22,357,142

Assuming a 50/50 split on BTN and SECN.

Correct. Fixed it. Thanks.

Also, the split would be of the operating income, not the revenues, so the net income per school would be:

SEC (50%): $12,321,000/school
B1G (50%): $5,679,000/school
P12(100%): $633,333/school
(This post was last modified: 09-18-2017 08:31 AM by orangefan.)
09-18-2017 08:27 AM
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RE: ACC Network prospects
(09-18-2017 08:05 AM)orangefan Wrote:  Found this report while surfing the web -- SNL Kagan's Economics of Basic Cable Networks, 2016 Edition: https://ofccolo.snl.com/Cache/CBC3AA560637320340.PDF

Some stats for the various conference networks:

SEC Network has 60 million subscribers at an average fee per subscriber of 71 cents/month. Its projected revenue for 2017 is $571 million. It is project to have $226 million in expenses in 2017, giving it operating income of $345 million. In its first partial year of operation (2014), it generated $184 million in revenue. In its first full year of operation (2015), it generated $523 million and $313 million in operating income.

BTN has 65 million subscribers at an average fee per subscriber of 41 cents/month. Its projected revenue for 2017 is $401 million. It is project to have $240 million in expenses in 2017, giving it operating income of $159 million.

Pac-12 Network has 15 million subscribers at an an average fee per subscriber of 36 cents/month. Its projected revenue for 2017 is $27.1 million. It is project to have $19.5 million in expenses in 2017, giving it operating income of $7.6 million.

The SEC and B1G split the profits from their networks with their partners, ESPN and FOX, respectively. The P12 owns its network 100%.

ESPN had huge success in launching the SEC Network. If they can do something similar for the ACC, it will obviously be a game changer for all of us.

Good find. Thanks for putting the numbers together and sharing, as I am too lazy to read the report.. 04-bow
09-18-2017 08:50 AM
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Wolfman Offline
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RE: ACC Network financial prospects
(09-18-2017 08:27 AM)orangefan Wrote:  
(09-18-2017 08:26 AM)Wolfman Wrote:  I think you meant the P12 revenue to be $27 million.

IIRC the P12 owns their networks outright while the SEC and B1G share theirs. That means net income per school per year looks like:

P12 $633,333
B1G $11,357,142
SEC $22,357,142

Assuming a 50/50 split on BTN and SECN.

Correct. Fixed it. Thanks.

Also, the split would be of the operating income, not the revenues, so the net income per school would be:

SEC (50%): $12,321,000/school
B1G (50%): $5,679,000/school
P12(100%): $633,333/school

So you are saying I got 1 of my 3 figures correct? That means I'm still eligible to play in the SEC!
09-18-2017 05:47 PM
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billybobby777 Offline
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RE: ACC Network financial prospects
SEC doesn't get 50% split with ESPN. That's a fan board fantasy. The true number is probably 30%, though it's not known officially.
09-18-2017 06:06 PM
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XLance Offline
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RE: ACC Network financial prospects
link worked yesterday morning.....now it doesn't
09-19-2017 04:59 AM
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RE: ACC Network financial prospects
I got a copy of the PDF and spent some time analyzing it. I posted my first take, along with some other info I found, here:

http://accfootballrx.blogspot.com/2017/0...91917.html

Basically cable is NOT dying, but some people ARE switching to streaming alternatives

There's no reason to think the ACC Network won't get about 50 to 60 million subscribers at a rate between $0.40 and $0.75 per month. ESPN needs the new revenue as much as the ACC does, and they are working hard behind the scenes to make it happen.

I'll try to put together a spreadsheet from that humongous PDF in a day or two.
(This post was last modified: 09-19-2017 07:24 AM by Hokie Mark.)
09-19-2017 07:16 AM
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orangefan Offline
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RE: ACC Network financial prospects
(09-19-2017 04:59 AM)XLance Wrote:  link worked yesterday morning.....now it doesn't

Like ACCrx, I did download it. I've uploaded it to my Google cloud account. I'm not sure whether others can access it there, but I'll leave it up for now. https://drive.google.com/file/d/0B32iZmY...U2bFU/view
09-19-2017 08:19 AM
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Hallcity Offline
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Post: #10
RE: ACC Network financial prospects
(09-18-2017 06:06 PM)billybobby777 Wrote:  SEC doesn't get 50% split with ESPN. That's a fan board fantasy. The true number is probably 30%, though it's not known officially.

What split will the ACC get?
09-19-2017 08:35 PM
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billybobby777 Offline
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RE: ACC Network financial prospects
(09-19-2017 08:35 PM)Hallcity Wrote:  
(09-18-2017 06:06 PM)billybobby777 Wrote:  SEC doesn't get 50% split with ESPN. That's a fan board fantasy. The true number is probably 30%, though it's not known officially.

What split will the ACC get?

My guess is 15%
09-19-2017 08:54 PM
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RE: ACC Network financial prospects
(09-18-2017 06:06 PM)billybobby777 Wrote:  SEC doesn't get 50% split with ESPN. That's a fan board fantasy. The true number is probably 30%, though it's not known officially.

You are incorrect. By contract we get a 50/50 split of the NET profit. The Big 10 is split 50.1 for FOX and 49.9 for the Big 10. They too split the profits and the overhead. It amounts to about the same kind of split the SEC gets but technically the Big 10 has to cover their share of the overhead. In the SEC only our start up costs were paid by the schools, as it will be with the ACC. But technically, and although I don't see it happening, if the BTN were to run in the red the schools would be on the hook for their share of the overhead. The SEC and ACC won't be. The Big 10 does however build equity value in their network, whereas the SEC and ACC will not.

The PAC keeps 100% of the profits after expenses but it amounts, after the conference share, to less than 2 million per year per school.

Also SNL Kagan gave an average of .71 cents for the SEC's per subscriber fee. That's really inaccurate. In the member states of the SEC schools we earn 1.25 in some and 1.30 in others. In all areas extraneous to our natural footprint we earn .25 cents.

And I'm pretty sure the average is a bit inaccurate for the Big 10 as well. Inside their footprint I believe they get .90 cents and outside their footprint something like .11 cents.

You would really have to see accurate subscriber lists to figure the actual incomes.
(This post was last modified: 09-19-2017 11:20 PM by JRsec.)
09-19-2017 11:10 PM
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XLance Offline
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RE: ACC Network financial prospects
(09-19-2017 11:10 PM)JRsec Wrote:  
(09-18-2017 06:06 PM)billybobby777 Wrote:  SEC doesn't get 50% split with ESPN. That's a fan board fantasy. The true number is probably 30%, though it's not known officially.

You are incorrect. By contract we get a 50/50 split of the NET profit. The Big 10 is split 50.1 for FOX and 49.9 for the Big 10. They too split the profits and the overhead. It amounts to about the same kind of split the SEC gets but technically the Big 10 has to cover their share of the overhead. In the SEC only our start up costs were paid by the schools, as it will be with the ACC. But technically, and although I don't see it happening, if the BTN were to run in the red the schools would be on the hook for their share of the overhead. The SEC and ACC won't be. The Big 10 does however build equity value in their network, whereas the SEC and ACC will not.

The PAC keeps 100% of the profits after expenses but it amounts, after the conference share, to less than 2 million per year per school.

Also SNL Kagan gave an average of .71 cents for the SEC's per subscriber fee. That's really inaccurate. In the member states of the SEC schools we earn 1.25 in some and 1.30 in others. In all areas extraneous to our natural footprint we earn .25 cents.

And I'm pretty sure the average is a bit inaccurate for the Big 10 as well. Inside their footprint I believe they get .90 cents and outside their footprint something like .11 cents.

You would really have to see accurate subscriber lists to figure the actual incomes.

What ever happened to the assertion that the B1G was paying out the equity of the BTN to keep up with the SECN? Will the schools have cashed in y the time the ACCN launches? Will ESPN buy an equity stake in the BTN?
The next two years should be really interesting.
09-20-2017 04:47 AM
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Lenvillecards Offline
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ACC Network financial prospects
(09-19-2017 08:54 PM)billybobby777 Wrote:  
(09-19-2017 08:35 PM)Hallcity Wrote:  
(09-18-2017 06:06 PM)billybobby777 Wrote:  SEC doesn't get 50% split with ESPN. That's a fan board fantasy. The true number is probably 30%, though it's not known officially.

What split will the ACC get?

My guess is 15%


I believe that the SEC gets 50% of the profit & has the opportunity to buy more %'s. Where's JR?


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09-20-2017 08:11 AM
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orangefan Offline
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RE: ACC Network financial prospects
From these two articles, I offer the following info about SEC revenues that may help understand the impact of the SEC Network.
https://www.cbssports.com/college-footba...c-network/
https://www.usatoday.com/story/sports/nc.../97400990/

2013-14 (Pre-SECN, Pre-CFP)
TV/Radio Rights: $210.4 million
Postseason Revenue: $98.6 million

2014-15 (SECN Y1, CFP Y1)
TV/Radio Rights: $311.8 million
Postseason Revenue: $162.8 million

2015-16 (SECN Y2, CFP Y2)
TV/Radio Rights: $420.0 million
Postseason Revenue: $180.6 million

Basically, since the launch of the SEC Network, its television rights have increased by about $210 million/year. Although they probably also got a jump for the addition of TAMU and Mizzou, its Tier 1 contract with CBS did not change at all, so the vast majority of the increase can be assumed to be from the SECN. This appears consistent with an assumption that the SEC is getting around 50% of the profits of the SECN, which are between $310 and $345 million.

The reports distinguish TV revenues from Postseason revenues, and show a huge increase of over $80 million per year between 2013-14 and 2015-16. This would appear to be CFP related. Thus, it is reasonable to assume that the increase in TV revenues is unrelated to the CFP.
(This post was last modified: 10-03-2017 08:28 AM by orangefan.)
09-20-2017 09:30 AM
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RE: ACC Network financial prospects
(09-19-2017 11:10 PM)JRsec Wrote:  
(09-18-2017 06:06 PM)billybobby777 Wrote:  SEC doesn't get 50% split with ESPN. That's a fan board fantasy. The true number is probably 30%, though it's not known officially.

You are incorrect. By contract we get a 50/50 split of the NET profit. The Big 10 is split 50.1 for FOX and 49.9 for the Big 10. They too split the profits and the overhead. It amounts to about the same kind of split the SEC gets but technically the Big 10 has to cover their share of the overhead. In the SEC only our start up costs were paid by the schools, as it will be with the ACC. But technically, and although I don't see it happening, if the BTN were to run in the red the schools would be on the hook for their share of the overhead. The SEC and ACC won't be. The Big 10 does however build equity value in their network, whereas the SEC and ACC will not.

The PAC keeps 100% of the profits after expenses but it amounts, after the conference share, to less than 2 million per year per school.

Also SNL Kagan gave an average of .71 cents for the SEC's per subscriber fee. That's really inaccurate. In the member states of the SEC schools we earn 1.25 in some and 1.30 in others. In all areas extraneous to our natural footprint we earn .25 cents.

And I'm pretty sure the average is a bit inaccurate for the Big 10 as well. Inside their footprint I believe they get .90 cents and outside their footprint something like .11 cents.

You would really have to see accurate subscriber lists to figure the actual incomes.

Thanks for this post JR. Would you please link an article saying the SEC gets a 50/50 split with ESPN. The Big 10 info you posted is correct; it's public knowledge. I've never seen that the SEC gets a 50/50 split on SECN anywhere but from SEC fans on fan boards. Please provide the link to that if possible. Thanks!
09-20-2017 10:36 AM
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orangefan Offline
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RE: ACC Network financial prospects
(09-19-2017 11:10 PM)JRsec Wrote:  Also SNL Kagan gave an average of .71 cents for the SEC's per subscriber fee. That's really inaccurate. In the member states of the SEC schools we earn 1.25 in some and 1.30 in others. In all areas extraneous to our natural footprint we earn .25 cents.

And I'm pretty sure the average is a bit inaccurate for the Big 10 as well. Inside their footprint I believe they get .90 cents and outside their footprint something like .11 cents.

You would really have to see accurate subscriber lists to figure the actual incomes.

I'm guessing that SNL Kagan blended the in and out of market area subscription fees to come up with single average numbers for the BTN and SECN, respectively.

Also, preparing analyses like these is what SNL Kagan does as their business. I'm guessing that their historical subscriber counts and revenue estimates are extremely accurate. Their projections must make some assumptions though, for instance about the change in number of subscribers and ad revenue, in addition to relying on any known changes, possibly including changes in subscriber fees.
(This post was last modified: 09-20-2017 10:44 AM by orangefan.)
09-20-2017 10:42 AM
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JRsec Offline
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RE: ACC Network financial prospects
(09-20-2017 04:47 AM)XLance Wrote:  
(09-19-2017 11:10 PM)JRsec Wrote:  
(09-18-2017 06:06 PM)billybobby777 Wrote:  SEC doesn't get 50% split with ESPN. That's a fan board fantasy. The true number is probably 30%, though it's not known officially.

You are incorrect. By contract we get a 50/50 split of the NET profit. The Big 10 is split 50.1 for FOX and 49.9 for the Big 10. They too split the profits and the overhead. It amounts to about the same kind of split the SEC gets but technically the Big 10 has to cover their share of the overhead. In the SEC only our start up costs were paid by the schools, as it will be with the ACC. But technically, and although I don't see it happening, if the BTN were to run in the red the schools would be on the hook for their share of the overhead. The SEC and ACC won't be. The Big 10 does however build equity value in their network, whereas the SEC and ACC will not.

The PAC keeps 100% of the profits after expenses but it amounts, after the conference share, to less than 2 million per year per school.

Also SNL Kagan gave an average of .71 cents for the SEC's per subscriber fee. That's really inaccurate. In the member states of the SEC schools we earn 1.25 in some and 1.30 in others. In all areas extraneous to our natural footprint we earn .25 cents.

And I'm pretty sure the average is a bit inaccurate for the Big 10 as well. Inside their footprint I believe they get .90 cents and outside their footprint something like .11 cents.

You would really have to see accurate subscriber lists to figure the actual incomes.

What ever happened to the assertion that the B1G was paying out the equity of the BTN to keep up with the SECN? Will the schools have cashed in y the time the ACCN launches? Will ESPN buy an equity stake in the BTN?
The next two years should be really interesting.

Well their distributions from the equity have been ongoing and co-mingled with the Big 10 payouts which have various components other than TV revenue in them. But suffice it to say they did devalue the BTN last year by 39.2% which was in line with distribution to the 11 oldest members of roughly 32 million per. If they are divesting the total value will continue to drop when the payouts for this past year become public the first of next year.

I don't think they will be fully divested by 2019, but they certainly could be by 2021.
09-20-2017 01:29 PM
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JRsec Offline
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RE: ACC Network financial prospects
(09-20-2017 10:42 AM)orangefan Wrote:  
(09-19-2017 11:10 PM)JRsec Wrote:  Also SNL Kagan gave an average of .71 cents for the SEC's per subscriber fee. That's really inaccurate. In the member states of the SEC schools we earn 1.25 in some and 1.30 in others. In all areas extraneous to our natural footprint we earn .25 cents.

And I'm pretty sure the average is a bit inaccurate for the Big 10 as well. Inside their footprint I believe they get .90 cents and outside their footprint something like .11 cents.

You would really have to see accurate subscriber lists to figure the actual incomes.

I'm guessing that SNL Kagan blended the in and out of market area subscription fees to come up with single average numbers for the BTN and SECN, respectively.

Also, preparing analyses like these is what SNL Kagan does as their business. I'm guessing that their historical subscriber counts and revenue estimates are extremely accurate. Their projections must make some assumptions though, for instance about the change in number of subscribers and ad revenue, in addition to relying on any known changes, possibly including changes in subscriber fees.

That was my assumption as well. But I just wanted to put the real numbers out there before it got into a confused mess which these things tend to do on chat rooms.
09-20-2017 01:31 PM
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RE: ACC Network financial prospects
The SEC does not get a 50-50 split for the SECN with espn. I've looked all over the Internet and I cannot find anything. I thought I once saw 30/70 but that was probably on here. It could be 10%. ESPN will not reveal what they are paying the SEC for it.
09-22-2017 06:51 AM
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