quo vadis
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RE: Big Ten's Rights Deal Threatens To Widen Financial Gap Between Even The Biggest Confe
(04-19-2018 11:35 AM)JRsec Wrote: (04-19-2018 08:52 AM)quo vadis Wrote: (04-19-2018 08:40 AM)BadgerMJ Wrote: (04-19-2018 08:29 AM)stever20 Wrote: from the article-
According to Wilner’s projections for 2018, distributions of more than $50 million would give the Big Ten a sizable revenue advantage over schools from the SEC (approximately $43 million each), the Big 12 ($36.5 million), the Pac-12 ($32 million) and the ACC ($28 million).
Can't imagine FSU being happy about making half what Northwestern does.....
Like I said, should be some "interesting" negotiations in the next few years....
This is old news, as we've already been made aware of the Michigan letter projecting $50m + payout next year. Nothing new in this article.
Of course it does remain important news, because if those projections do come true, everything the author says about revenue gaps will be correct, which could lead to instability within the P5 from schools in under-paid conferences.
There are a couple of things to note. The SEC could realize some more money in 2024, when its deal with CBS expires. That could bring in some new dollars, though not huge dollars. Also, the Comcast- NYC stuff being talked about here could impact the B1G negatively.
But, that said, what appears most likely is that, thanks to Delany's foresight, the B1G will be making a good $10m more than the SEC. To me, that's the comparison that irks the most. You can't really blame Swofford for the ACC not making as much, because the ACC just isn't as inherently valuable as the B1G. But, the B1G should not be making any more than the SEC does. If it does, that's due to bad SEC leadership.
Call me crazy, but I could see even the SEC be threatened - if the B1G is making $10m + a year more than the SEC, the B1G could be tempting to a Kentucky.
The figures for the Big 10 in 2018 are correct. Where Wilner missed the boat, conveniently for his tease line of swamping the SEC in revenue, is in two places.
1. 2017 the SEC didn't receive Sugar Bowl money due to the CFP rotation. Last year's earnings would normally have been around 43.7 million instead of 40.9 million. The SEC contract accrues at a rate of about 2 million a year. Hence we appeared stagnant because of the bowl money. Next year 2018 the SEC will be earning closer to 46 million and that is without factoring in the Altice deal and the spread of our carriage.
2. Wilner touts the Big 10's ability to renew a contract in 2023. But Wilner fails to mention that the most undervalued contract still in existence, the contract between CBS Sports and the SEC for the SEC's T1 rights is up in 2024. So it is the SEC that will be stepping up to the plate a year after the new Big 10 numbers are known.
Agree with point #1: All of the conferences have these big $40m deals with the Sugar and Rose Bowls (and the ACC, at $27.5m, for the Orange Bowl), which are missed when they are playoff games, and as you say that comes to almost $3m per school, so when talking about year to year, you have to adjust for that.
Also, I agree about CBS, that will be an important re-up in 2024 for the SEC that often gets overlooked. CBS doesn't have a lot of SEC games but it has the very cream, and that will likely be more valuable than it was when the deal was signed in 2009, though we have to remember that thanks to the SECN, the terms of the deal aren't as favorable to CBS as they were in 2009, which is we even though the SEC added TAMU and Mizzou, the dollars stayed the same when they made the 2013 adjustment for the SECN. The per-team money from CBS actually went down, because CBS continued paying $55m to the SEC even though two new schools were added.
That said, I disagree with your point about SEC teams still making $15m more in overall athletic revenue, because that is "home grown" money that the school generates on its own, it's not directly conference-related, and the issue here is the desirability of being in a conference.
E.g., if the ACC payout is $30m and the B1G payout is $60m, it won't make FSU feel any better that its overall athletic revenues are $110m and Purdue's are $100m, because FSU will be thinking, "if we were in the B1G, we'd be making $140m".
The only way that logic doesn't hold is if you believe that joining another conference will cause home-grown revenue to drop. E.g., let's say somehow the Big 12 suddenly was getting a $60m payout compared to $45m for the SEC, and so LSU was thinking about leaving the SEC for the Big 12. But, if market research showed that LSU "home grown" revenue would drop by $20m, because fans have no interest in attending games vs Texas Tech and Iowa State compared to Alabama and Florida, well then they would quickly lose interest in leaving.
But that's very rarely the case.
(This post was last modified: 04-19-2018 12:01 PM by quo vadis.)
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