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"Pac-12 TV windfall is sweet, but not what you might think" - Printable Version

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"Pac-12 TV windfall is sweet, but not what you might think" - BIgCatonProwl - 03-22-2014 11:21 PM

These 2 reports indicate the PAC12 will be getting much less than previously reported at least early in their contracts.


Report1



Report2


RE: "Pac-12 TV windfall is sweet, but not what you might think" - Kittonhead - 03-22-2014 11:30 PM

Would UH still accept a PAC invite?


RE: "Pac-12 TV windfall is sweet, but not what you might think" - BIgCatonProwl - 03-22-2014 11:33 PM

(03-22-2014 11:30 PM)Kittonhead Wrote:  Would UH still accept a PAC invite?

You know the answer to that.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - Wedge - 03-22-2014 11:48 PM

The writer is trying to do the Oregon schools a favor by sending the message, "Please don't stop donating money just because we have a big TV deal," but it's still a lot of money even though he's trying to make it look like less. It's understandable. Someone mentioned on one of the Cal message boards that when the athletic department has been making those calls asking people to increase their donation level, some have been saying things like, "You've got $20 million/year in TV money, why do you need $1,000 more from me?"

Canzano writes that OSU has "$4.3 million in new money" -- he means $4.3 MM more than the $6 MM they got from TV in the last year of the new contract, so they netted $10.3 MM this year after they made $7.8 MM in one-time payments (repaying money loaned by the university and paying off Learfield ) -- which means their TV check from the Pac-12 was $18.1 MM this year, and will get bigger every year because the ESPN/Fox payments get bigger and there are more cable/satellite subscribers for PTN.

But don't let the $1,000 donors know.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - Dasville - 03-23-2014 12:04 AM

Pretty important quote from report 2:



Further, the contract now resets all the Pac-12 Network carriage fees should the network agree to a deal with DirecTV that is below what others are currently paying. The others would get a lower negotiated rate that matches DirecTV. While I blame both sides, I'm now wondering if the conference's claim that DirecTV doesn't want to come to the table is really just the conference's way of saying they don't want to give up money already in the bank chasing wider distribution.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - quo vadis - 03-23-2014 07:01 AM

(03-22-2014 11:21 PM)BIgCatonProwl Wrote:  These 2 reports indicate the PAC12 will be getting much less than previously reported at least early in their contracts.

What a silly article. First, he moves the goalposts by talking about "new money" that the schools will be getting (all the previous articles he cites just mention the value of the new contract, not the net amount over the old), and then he uses some really ridiculous accounting by subtracting out the value of the existing contracts (meaningless) and of the "paybacks" that school admins demanded from their athletic departments (which is just another way for the school to use NEW money, but it is still NEW money for the university).

The only legitimate figure he includes is the cost of buying out the old marketing deals, since that really is a new cost that otherwise would not have been incurred. But that is a paltry sum in the overall contract, about $1.3m per year.

So the new deal "only" averages about $20 million per year per school, not $21.3 million. God, that's a tragedy for the PAC, LOL ...


RE: "Pac-12 TV windfall is sweet, but not what you might think" - TerryD - 03-23-2014 08:58 AM

(03-22-2014 11:48 PM)Wedge Wrote:  The writer is trying to do the Oregon schools a favor by sending the message, "Please don't stop donating money just because we have a big TV deal," but it's still a lot of money even though he's trying to make it look like less. It's understandable. Someone mentioned on one of the Cal message boards that when the athletic department has been making those calls asking people to increase their donation level, some have been saying things like, "You've got $20 million/year in TV money, why do you need $1,000 more from me?"

Canzano writes that OSU has "$4.3 million in new money" -- he means $4.3 MM more than the $6 MM they got from TV in the last year of the new contract, so they netted $10.3 MM this year after they made $7.8 MM in one-time payments (repaying money loaned by the university and paying off Learfield ) -- which means their TV check from the Pac-12 was $18.1 MM this year, and will get bigger every year because the ESPN/Fox payments get bigger and there are more cable/satellite subscribers for PTN.

But don't let the $1,000 donors know.

I think that the highlighted is a very relevant and reasonable question.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - TodgeRodge - 03-23-2014 09:09 AM

actually this has been well known for a while and posted on here many times

http://www.goducks.com/ViewArticle.dbml?DB_OEM_ID=500&ATCLID=205705405

you can see what Oregon is making right there plain and simple and it is not even close to 20 million per year

and while the articles are not well written he has a point that it is not as simple as 6 million in old money and now 20+ million for a net gain of 14+ million

as he points out the PAC 12 DID NOT have equal revenue sharing prior to this contract they had UNEQUAL revenue sharing just like the Big 12 did so it is laughable that people talk about "greedy UT" and unequal revenue sharing killing the Big 12 and the PAC 12 not wanting any part of that when the PAC 12 had 100% of that prior to this contract and also USC and UCLA demanded extra money of the TV contracts did not come in high enough just like it was reported that A&M, UT and OU did and OU and UT publicly stated they would not take unequal revenue while A&M said they would

next as this article states many teams had 3rd tier buy backs that cost a lot of money and that was largely ignored in the new "windfall" and it is a factor

after that the PAC 12 cost money to run and that has been an expense for the PAC 12 instead of a payout from the PAC 12 network

and most importantly it shows that even now the PAC 12 network pays out about $800K per school which shows that it is not close to the $10 million per year in additional money generator many thought it would be when they were talking about $30 million per year PAC 12 payouts and it shows why UT (and OU and OkState) were firmly in the right to stay in the Big 12 because the Big 12 has as good or better of a TV deal for first and second tier and the 3rd tier deals make them much higher in value VS what the PAC 12 has

and it also shows why talk of the SEC network making payouts equal to $35+ to $40 million per year is a joke.....there are already CREDIBLE reports that estimate the SEC network will pay out about $1.2 million per year and that would be a 50% increase over what the PAC 12 is doing and I will be the first to admit that the SEC has a stronger fan base that would pay for that while the PAC 12 and their fans and more importantly their "casual markets" and people that are just cable TV subscribers are not nearly as dedicated as SEC fans are that is still a huge difference in estimated between bumping to $35+ million VS a more realistic 50% increase over what the PAC 12 network pays out at about $1.2 million per year

so the article has important information that is clouded by the failed writing and poor attempt to show that there was not a massive windfall of new money to take a treasure bath in......but of course Oregon has had that information readily available for a while now on the above link


RE: "Pac-12 TV windfall is sweet, but not what you might think" - quo vadis - 03-23-2014 09:09 AM

(03-23-2014 08:58 AM)TerryD Wrote:  
(03-22-2014 11:48 PM)Wedge Wrote:  The writer is trying to do the Oregon schools a favor by sending the message, "Please don't stop donating money just because we have a big TV deal," but it's still a lot of money even though he's trying to make it look like less. It's understandable. Someone mentioned on one of the Cal message boards that when the athletic department has been making those calls asking people to increase their donation level, some have been saying things like, "You've got $20 million/year in TV money, why do you need $1,000 more from me?"

Canzano writes that OSU has "$4.3 million in new money" -- he means $4.3 MM more than the $6 MM they got from TV in the last year of the new contract, so they netted $10.3 MM this year after they made $7.8 MM in one-time payments (repaying money loaned by the university and paying off Learfield ) -- which means their TV check from the Pac-12 was $18.1 MM this year, and will get bigger every year because the ESPN/Fox payments get bigger and there are more cable/satellite subscribers for PTN.

But don't let the $1,000 donors know.

I think that the highlighted is a very relevant and reasonable question.

It is, but as someone living in Baton Rouge, and having heard LSU fans who don't like ticket price increases and seat-license "donations" ask the same question, you and I also know what the school's answer is, and it always works: "Because that's what they are doing at Alabama and Florida, so ...".


RE: "Pac-12 TV windfall is sweet, but not what you might think" - TerryD - 03-23-2014 09:16 AM

The tap will eventually run dry. Eventually.

Already, I know of quite a few Tigah fans who have given up their season tickets held for several generations in their family.

The Personal Seat Licenses, etc...are pricing out some working class folks who are the most rabid fans.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - 10thMountain - 03-23-2014 09:32 AM

SECN is going to be just fine and will be one of many deals that keeps the SEC in the top elites of conference money makers.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - Tbringer - 03-23-2014 01:27 PM

We know from Oregon's release of financial info they aren't making all that much so far.

Here is what SEC officials, not fans, think of SECN projections:

Vanderbilt Athletics Director David Williams said he is budgeting about a 30 percent increase in revenue for 2014-15 -- but the bulk of that comes from the new College Football Playoff. He estimated a $2.5 million revenue increase from the playoff and about a $300,000 increase from broadcast networks.

"We did a best-case scenario, worst-case scenario and average," Williams said. "The best case is this thing just goes off like a rocket and it's 50 percent (increase in revenue). The worst case is you put nothing under broadcasting. Our number we came up with is very conservative."


http://www.al.com/sports/index.ssf/2014/03/sec_networks_great_unknown_how.html

So right now the SECN isn't going to be paying out all that much to SEC members. Maybe years down the road it will, but going from around $300,000 to the millions the BTN is paying isn't going to happen anytime soon.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - quo vadis - 03-23-2014 02:00 PM

(03-23-2014 01:27 PM)Tbringer Wrote:  So right now the SECN isn't going to be paying out all that much to SEC members. Maybe years down the road it will, but going from around $300,000 to the millions the BTN is paying isn't going to happen anytime soon.

SEC is still tormented by the fundamentally bad deal it signed with ESPN in 2008. Slive did not foresee the huge leap in value that college sports properties were about to make and he signed the SEC on for what quickly turned out to be too little money and, most crucially, too many years. Slive is called a genius but his 2008 deal is, in terms of dollars foregone, probably the worst single decision any commissioner has ever made.

ESPN knows it took Slive to the cleaners on that deal and of course will not let that windfall slip away. SEC and ESPN can repackage that deal six ways to Sunday and call it the "SEC Network" so the SEC can act like it is in charge of it, and ESPN can let the SEC publicly crow about how many untold Billions that the SEC will make so Slive and the schools can put a happy face on it, but at the end of the day it is still ESPN holding the rights to all that SEC property for decades, and at a price that is WAY below what the SEC could be making had Slive not signed the 2008 deal.

The real bottom line is this: Thanks to Delany smartly creating the BTN in 2006 and Slive stupidly signing on with ESPN for 15+ years in 2008, the B1G will make LOTS more money from media deals between now and 2035 than will the SEC. SEC will be badly underpaid for its media for the next quarter-century.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - XLance - 03-23-2014 02:43 PM

(03-23-2014 09:32 AM)10thMountain Wrote:  SECN is going to be just fine and will be one of many deals that keeps the SEC in the top elites of conference money makers.

The SECN is going to be great. But as the lesser people (which are the most rabid fans) are priced out of the marketplace, will the "spectacle" which is SEC football start to wane?
The SEC sells the sizzle better than any other conference, but when the hoopla that is SEC football isn't carried on by the button-down corporate types it won't be special anymore.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - Dasville - 03-23-2014 03:25 PM

(03-23-2014 02:00 PM)quo vadis Wrote:  
(03-23-2014 01:27 PM)Tbringer Wrote:  So right now the SECN isn't going to be paying out all that much to SEC members. Maybe years down the road it will, but going from around $300,000 to the millions the BTN is paying isn't going to happen anytime soon.

SEC is still tormented by the fundamentally bad deal it signed with ESPN in 2008. Slive did not foresee the huge leap in value that college sports properties were about to make and he signed the SEC on for what quickly turned out to be too little money and, most crucially, too many years. Slive is called a genius but his 2008 deal is, in terms of dollars foregone, probably the worst single decision any commissioner has ever made.

ESPN knows it took Slive to the cleaners on that deal and of course will not let that windfall slip away. SEC and ESPN can repackage that deal six ways to Sunday and call it the "ESPN Network", and ESPN can let the SEC publicly crow about how many untold Billions that the SEC will make so Slive and the schools can put a happy face on it, but at the end of the day it is still ESPN holding the rights to all that SEC property for decades, and at a price that is WAY below what the SEC could be making had Slive not signed the 2008 deal.

The real bottom line is this: Thanks to Delany smartly creating the BTN in 2006 and Slive stupidly signing on with ESPN for 15+ years in 2008, the B1G will make LOTS more money from media deals between now and 2035 than will the SEC. SEC will be badly underpaid for its media for the next quarter-century.

I'm starting to wonder if ESPN will just let the B1G have their way? Spend $ on the NBA instead. Sure they will package with Fox for some B1G, but not much.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - ChrisLords - 03-24-2014 02:54 AM

(03-23-2014 03:25 PM)Dasville Wrote:  
(03-23-2014 02:00 PM)quo vadis Wrote:  
(03-23-2014 01:27 PM)Tbringer Wrote:  So right now the SECN isn't going to be paying out all that much to SEC members. Maybe years down the road it will, but going from around $300,000 to the millions the BTN is paying isn't going to happen anytime soon.

SEC is still tormented by the fundamentally bad deal it signed with ESPN in 2008. Slive did not foresee the huge leap in value that college sports properties were about to make and he signed the SEC on for what quickly turned out to be too little money and, most crucially, too many years. Slive is called a genius but his 2008 deal is, in terms of dollars foregone, probably the worst single decision any commissioner has ever made.

ESPN knows it took Slive to the cleaners on that deal and of course will not let that windfall slip away. SEC and ESPN can repackage that deal six ways to Sunday and call it the "ESPN Network", and ESPN can let the SEC publicly crow about how many untold Billions that the SEC will make so Slive and the schools can put a happy face on it, but at the end of the day it is still ESPN holding the rights to all that SEC property for decades, and at a price that is WAY below what the SEC could be making had Slive not signed the 2008 deal.

The real bottom line is this: Thanks to Delany smartly creating the BTN in 2006 and Slive stupidly signing on with ESPN for 15+ years in 2008, the B1G will make LOTS more money from media deals between now and 2035 than will the SEC. SEC will be badly underpaid for its media for the next quarter-century.

I'm starting to wonder if ESPN will just let the B1G have their way? Spend $ on the NBA instead. Sure they will package with Fox for some B1G, but not much.

I think ESPN has seen from the ratings how little the rest of the country cares about Big 10 football and will let them go to Fox without a serious bid.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - Lou_C - 03-24-2014 09:10 AM

(03-23-2014 02:00 PM)quo vadis Wrote:  
(03-23-2014 01:27 PM)Tbringer Wrote:  So right now the SECN isn't going to be paying out all that much to SEC members. Maybe years down the road it will, but going from around $300,000 to the millions the BTN is paying isn't going to happen anytime soon.

SEC is still tormented by the fundamentally bad deal it signed with ESPN in 2008. Slive did not foresee the huge leap in value that college sports properties were about to make and he signed the SEC on for what quickly turned out to be too little money and, most crucially, too many years. Slive is called a genius but his 2008 deal is, in terms of dollars foregone, probably the worst single decision any commissioner has ever made.

ESPN knows it took Slive to the cleaners on that deal and of course will not let that windfall slip away. SEC and ESPN can repackage that deal six ways to Sunday and call it the "SEC Network" so the SEC can act like it is in charge of it, and ESPN can let the SEC publicly crow about how many untold Billions that the SEC will make so Slive and the schools can put a happy face on it, but at the end of the day it is still ESPN holding the rights to all that SEC property for decades, and at a price that is WAY below what the SEC could be making had Slive not signed the 2008 deal.

The real bottom line is this: Thanks to Delany smartly creating the BTN in 2006 and Slive stupidly signing on with ESPN for 15+ years in 2008, the B1G will make LOTS more money from media deals between now and 2035 than will the SEC. SEC will be badly underpaid for its media for the next quarter-century.

This is absolutely true. Everyone knows the ACC is under a bad deal from 2010, because the PAC deal came immediately after it, and because the ACC deal was less than the SEC deal.

But the SEC deal is even worse, relative to the value of the SEC. Yes, the SEC was was for a little more than the ACC's, but the SEC's value is sky high.

Waiting to see how it plays out, but that's the thing that has always tempered SEC Network projections in my mind. The SEC had very little leverage. ESPN owned all the content they wanted (minus the CBS games) and the 2008 contract specifically precluded an SEC Network.

The SEC Network will certainly be successful and profitable to the SEC, but at all times you have to keep in mind that it was on ESPN's terms, which to me limits the upside compared to the BTN or even potentially the PAC Networks.

It also would be the same with any potential ACC network obviously.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - quo vadis - 03-24-2014 09:22 AM

(03-24-2014 09:10 AM)Lou_C Wrote:  
(03-23-2014 02:00 PM)quo vadis Wrote:  
(03-23-2014 01:27 PM)Tbringer Wrote:  So right now the SECN isn't going to be paying out all that much to SEC members. Maybe years down the road it will, but going from around $300,000 to the millions the BTN is paying isn't going to happen anytime soon.

SEC is still tormented by the fundamentally bad deal it signed with ESPN in 2008. Slive did not foresee the huge leap in value that college sports properties were about to make and he signed the SEC on for what quickly turned out to be too little money and, most crucially, too many years. Slive is called a genius but his 2008 deal is, in terms of dollars foregone, probably the worst single decision any commissioner has ever made.

ESPN knows it took Slive to the cleaners on that deal and of course will not let that windfall slip away. SEC and ESPN can repackage that deal six ways to Sunday and call it the "SEC Network" so the SEC can act like it is in charge of it, and ESPN can let the SEC publicly crow about how many untold Billions that the SEC will make so Slive and the schools can put a happy face on it, but at the end of the day it is still ESPN holding the rights to all that SEC property for decades, and at a price that is WAY below what the SEC could be making had Slive not signed the 2008 deal.

The real bottom line is this: Thanks to Delany smartly creating the BTN in 2006 and Slive stupidly signing on with ESPN for 15+ years in 2008, the B1G will make LOTS more money from media deals between now and 2035 than will the SEC. SEC will be badly underpaid for its media for the next quarter-century.

This is absolutely true. Everyone knows the ACC is under a bad deal from 2010, because the PAC deal came immediately after it, and because the ACC deal was less than the SEC deal.

But the SEC deal is even worse, relative to the value of the SEC. Yes, the SEC was was for a little more than the ACC's, but the SEC's value is sky high.

Waiting to see how it plays out, but that's the thing that has always tempered SEC Network projections in my mind. The SEC had very little leverage. ESPN owned all the content they wanted (minus the CBS games) and the 2008 contract specifically precluded an SEC Network.

The SEC Network will certainly be successful and profitable to the SEC, but at all times you have to keep in mind that it was on ESPN's terms, which to me limits the upside compared to the BTN or even potentially the PAC Networks.

It also would be the same with any potential ACC network obviously.

Good that you mentioned the ACC: As you note, Swofford's much-ballyhooed (at the time) $155 million a year deal in 2010 is probably the second-worst deal a commissioner has signed, and the ACC is stuck with that for a long time, too. They have gone through the same contortions as the SEC of "revisiting" it and adding new schools to up the value, and ESPN has been willing to throw a few more peanuts their way as a result, but the same fundamental dynamic is in place: thanks to the 2010 deal ESPN has the ACC, like the SEC, by the balls and won't give away much of the huge value it captured in that deal.

But as you note, relative to what a conference could have gotten on the open market these days, the SEC deal is even worse, because it is the more valuable conference.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - Tallgrass - 03-24-2014 11:16 AM

(03-22-2014 11:48 PM)Wedge Wrote:  The writer is trying to do the Oregon schools a favor by sending the message, "Please don't stop donating money just because we have a big TV deal," but it's still a lot of money even though he's trying to make it look like less. It's understandable. Someone mentioned on one of the Cal message boards that when the athletic department has been making those calls asking people to increase their donation level, some have been saying things like, "You've got $20 million/year in TV money, why do you need $1,000 more from me?"

Canzano writes that OSU has "$4.3 million in new money" -- he means $4.3 MM more than the $6 MM they got from TV in the last year of the new contract, so they netted $10.3 MM this year after they made $7.8 MM in one-time payments (repaying money loaned by the university and paying off Learfield ) -- which means their TV check from the Pac-12 was $18.1 MM this year, and will get bigger every year because the ESPN/Fox payments get bigger and there are more cable/satellite subscribers for PTN.

But don't let the $1,000 donors know.

Excellent post.


RE: "Pac-12 TV windfall is sweet, but not what you might think" - quo vadis - 03-24-2014 12:33 PM

(03-24-2014 11:16 AM)Tallgrass Wrote:  
(03-22-2014 11:48 PM)Wedge Wrote:  The writer is trying to do the Oregon schools a favor by sending the message, "Please don't stop donating money just because we have a big TV deal," but it's still a lot of money even though he's trying to make it look like less. It's understandable. Someone mentioned on one of the Cal message boards that when the athletic department has been making those calls asking people to increase their donation level, some have been saying things like, "You've got $20 million/year in TV money, why do you need $1,000 more from me?"

Canzano writes that OSU has "$4.3 million in new money" -- he means $4.3 MM more than the $6 MM they got from TV in the last year of the new contract, so they netted $10.3 MM this year after they made $7.8 MM in one-time payments (repaying money loaned by the university and paying off Learfield ) -- which means their TV check from the Pac-12 was $18.1 MM this year, and will get bigger every year because the ESPN/Fox payments get bigger and there are more cable/satellite subscribers for PTN.

But don't let the $1,000 donors know.

Excellent post.

The problem with the "downplay the contract for the big donors" angle is that the school has an easy answer for it: 'All of our PAC rivals are getting the same new TV money, plus hitting their donors up for the same amounts as before, so if we don't do the same we'll fall behind'.