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From SBD "Collegiate realignment, round 2?"
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HHOOTter Offline
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Post: #21
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 12:26 PM)33laszlo99 Wrote:  
(12-19-2018 12:41 AM)Attackcoog Wrote:  But only in the Big 12 is the disparity so extreme and the financial incentives so promising for the top programs.

EGGxactly.......

Who controls da' Big 12?
Shorthorns & Little Bloomers
Why would they give that up?
The other 8 Big 12 teams "hang' on OU/Tex coattails

But don't forget,
Kansas "Blueblood' B-ball $$$$ is a HUGE Big 12 asset
Easily a Top 5 school in NCAA B-ball revenue alone
IF Big 12 donimo's began 2 tumble
"Lawrence" might B the first to rumble

Da' Bigger schools
will always/continue 2 want a bigger piece of the pie
Future broadcast rights will increasely move towards
those schools that CAN DEMAND more control/$$$$$
the Notre Dame, BYU, Navy, & Shorthorn Networks
is just the beginning.........

What exactly is it that "Shorthorns & Little Boomers" control in the Big 12 that they would not want to give up? Can you be specific? Because I see this point often repeated, but I don't know what it means. [/quote]

On 3rd tier TV rights alone:
Tex makes almost 15 million more than the other Big 12 schools
OU makes almost 7 million more than the rest
that's over and above
the 33-35 million each Big 12 team earned in TV revenue

OU/Tex will not give up their TV rights
Why?
The value of their product is only going to go up
In the future, more OU/Tex’s home games
Will B televised by their own network
that’s more revenue/income they keep on their own w/out sharing

Big 12 allow home teams to keep higher gate %’s
This “unequal” revenue sharing Heavily favors OU/Tex
Both whom play in stadiums that seat over 85K

OU/TEX game:
Each team keeps ALL its Tix sales (No Big 12 Split)
Around 8-10 million per team per yr
Plus City of Dallas gives each team 500K per yr
What conference is going to allow that sort of favoritism?
(Imagine what kind of $$$$ TV contract IF OU/Tex game was bid independently of Big 12)
That could easily happen in next round of Big 12 TV negotiations

In alot of ways
OU/Tex are already operating very independently w/n a conference structure
And they can hold the rest of the Big 12 “financial” hostage
And watch,
They will gain even more $$$$$ leverage
During the next TV negotiations for the Big 12

The rest of the Big 12 teams have to agree to their terms
Or they will B left in the desert
w/ the rest of the G5 wanna B P5 schools
(This post was last modified: 12-21-2018 01:31 PM by HHOOTter.)
12-21-2018 01:25 PM
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Hokie Mark Offline
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Post: #22
RE: From SBD "Collegiate realignment, round 2?"
(12-20-2018 03:03 PM)UTEPDallas Wrote:  I think the success or lack of the ACC Network will be the factor on the next realignment.

If the ACCN is successful, nothing will happen unless Texas decides to go independent and get a Notre Dame type of deal with the ACC. Unlikely but if there’s something we’ve learned in realignment is to expect the unexpected. Texas values its Olympic sports so I can’t see them flying the softball or golf team all over the Eastern seaboard. A successful ACCN will keep everybody happy and perhaps they’d pass on Texas if it comes to that. Two prima donnas in one conference are a lot to stomach. For the ACCN, it’s success or bust.

If the ACCN fails, expect football schools with options such as Clemson and Florida State to start sending signals how unhappy they are. One thing is to be behind the top B1G and SEC schools monetarily. Another thing is to be behind Minnesota and Missouri. One or two schools (perhaps more) will start challenging the GOR. The B1G and SEC would strike first and the Big XII would get the leftovers. Good news if you’re a fan of a school in North Carolina, Virginia, Florida, South Carolina and Georgia. Bad news if your school is in Kentucky, New York, Pennsylvania and Massachusetts. Notre Dame could get a similar ACC type of deal with the Big XII or join the Big East and keep their independence.

Most people think the next round of realignment will start in the Big XII. I think it’ll start in the ACC.

If the ACC Network flops as bad as the Pac-12 Network has, you may be right. If it brings in an extra $10 million per team, probably everyone stays. Somewhere in between -- who knows?
12-21-2018 01:37 PM
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Hokie Mark Offline
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Post: #23
RE: From SBD "Collegiate realignment, round 2?"
(12-20-2018 03:03 PM)UTEPDallas Wrote:  I think the success or lack of the ACC Network will be the factor on the next realignment.

If the ACCN is successful, nothing will happen unless Texas decides to go independent and get a Notre Dame type of deal with the ACC. Unlikely but if there’s something we’ve learned in realignment is to expect the unexpected. Texas values its Olympic sports so I can’t see them flying the softball or golf team all over the Eastern seaboard. A successful ACCN will keep everybody happy and perhaps they’d pass on Texas if it comes to that. Two prima donnas in one conference are a lot to stomach. For the ACCN, it’s success or bust.

If the ACCN fails, expect football schools with options such as Clemson and Florida State to start sending signals how unhappy they are. One thing is to be behind the top B1G and SEC schools monetarily. Another thing is to be behind Minnesota and Missouri. One or two schools (perhaps more) will start challenging the GOR. The B1G and SEC would strike first and the Big XII would get the leftovers. Good news if you’re a fan of a school in North Carolina, Virginia, Florida, South Carolina and Georgia. Bad news if your school is in Kentucky, New York, Pennsylvania and Massachusetts. Notre Dame could get a similar ACC type of deal with the Big XII or join the Big East and keep their independence.

Most people think the next round of realignment will start in the Big XII. I think it’ll start in the ACC.

If the ACC Network flops as bad as the Pac-12 Network has, you may be right. If it brings in an extra $10 million per team, probably everyone stays. Somewhere in between -- who knows?
12-21-2018 01:37 PM
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ICThawk Offline
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Post: #24
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 01:25 PM)HHOOTter Wrote:  
(12-21-2018 12:26 PM)33laszlo99 Wrote:  
(12-19-2018 12:41 AM)Attackcoog Wrote:  But only in the Big 12 is the disparity so extreme and the financial incentives so promising for the top programs.

What exactly is it that "Shorthorns & Little Boomers" control in the Big 12 that they would not want to give up? Can you be specific? Because I see this point often repeated, but I don't know what it means.

On 3rd tier TV rights alone:
Tex makes almost 15 million more than the other Big 12 schools
OU makes almost 7 million more than the rest
that's over and above
the 33-35 million each Big 12 team earned in TV revenue

OU/Tex will not give up their TV rights
Why?
The value of their product is only going to go up
In the future, more OU/Tex’s home games
Will B televised by their own network
that’s more revenue/income they keep on their own w/out sharing

Big 12 allow home teams to keep higher gate %’s
This “unequal” revenue sharing Heavily favors OU/Tex
Both whom play in stadiums that seat over 85K

OU/TEX game:
Each team keeps ALL its Tix sales (No Big 12 Split)
Around 8-10 million per team per yr
Plus City of Dallas gives each team 500K per yr
What conference is going to allow that sort of favoritism?
(Imagine what kind of $$$$ TV contract IF OU/Tex game was bid independently of Big 12)
That could easily happen in next round of Big 12 TV negotiations

In alot of ways
OU/Tex are already operating very independently w/n a conference structure
And they can hold the rest of the Big 12 “financial” hostage
And watch,
They will gain even more $$$$$ leverage
During the next TV negotiations for the Big 12

The rest of the Big 12 teams have to agree to their terms
Or they will B left in the desert
w/ the rest of the G5 wanna B P5 schools
[/quote]

Though I think much of what you say is "true", it should be noted:

Texas gets $15M for it's Tier 3 but they have to pay about 3M to the agency (IMG if IIRC) that set up the agreement with ESPN so they "net" about $12M a year. AND, that is not MORE than the other B12 schools, since all of them receive "something" for their Tier 3 rights....OU about 6M net ($7-8M gross before expenses) from Fox, about $5M net for KU from ESPN and WV about $4M net. So, UT receives about $5-8M net ABOVE the other top earners in the B12, though still a noteworthy sum. A lot of that will always be the case though....the Texas TV markets have more people than the total of all other B12 markets combined. However, Tier 3 rights for most of the teams in the B12 are coming up for renewal around the time of the GOR expiration (the LHN not until 2031 however) so that difference may narrow. Additionally, there is some question whether ESPN would like to "renew" the LHN given its rather dismal performance vs. initial projections. But 2031 is a long way away and things can certainly change, positively or negatively.
12-21-2018 02:37 PM
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Statefan Offline
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Post: #25
RE: From SBD "Collegiate realignment, round 2?"
I think most people have learned from what happened at the U of Maryland that a little more money does not offset a lot more costs. FSU and Clemson has absolutely no legitimate reason to leave the ACC, even if they made $20 million a year less in the ACC. The reason is that their opportunity cost to occupy the top 20% of the league in sports is so much lower. They need only compete against the budgets of UNC, UVa, Louisville, NC State, VT, etc.

A move means direct competition with either Bama, Auburn, Florida, Tennessee, LSU, and TAMU or direct competition with PSU, OSU, UM, MSU, and Nebraska.

FSU is still a "young lady" in the world of academia and in multi-generational university endowment and power accrual. Clemson is a small, military farmer in his early 30's.


Milton wrote about this very dilemma centuries ago.


But lets reverse the premise of the original questions - what would Kansas, Purdue, Indiana, Illinois, Mississippi State, Ole Miss, Arkansas, Vandy, and Northwester GAIN if they played in the ACC? Would their revenue gap between the top quartile and themselves contract or expand?


It's like living in the nicest home in a neighborhood where the houses make out at 500K, versus having the smallest house in a neighbor where the worst house is worth 1M.
(This post was last modified: 12-21-2018 02:42 PM by Statefan.)
12-21-2018 02:38 PM
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HHOOTter Offline
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Post: #26
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 02:37 PM)ICThawk Wrote:  Texas gets $15M for it's Tier 3 but they have to pay about 3M to the agency (IMG if IIRC) that set up the agreement with ESPN so they "net" about $12M a year. AND, that is not MORE than the other B12 schools, since all of them receive "something" for their Tier 3 rights....OU about 6M net ($7-8M gross before expenses) from Fox, about $5M net for KU from ESPN and WV about $4M net. So, UT receives about $5-8M net ABOVE the other top earners in the B12, though still a noteworthy sum. A lot of that will always be the case though....the Texas TV markets have more people than the total of all other B12 markets combined. However, Tier 3 rights for most of the teams in the B12 are coming up for renewal around the time of the GOR expiration (the LHN not until 2031 however) so that difference may narrow. Additionally, there is some question whether ESPN would like to "renew" the LHN given its rather dismal performance vs. initial projections. But 2031 is a long way away and things can certainly change, positively or negatively.

U R right
Many Big 12 teams
Might see lower bidding 4 their Tier 3 TV rights next time around
Gooners? (They want more pay for view games, like Army this last yr)
Texas? (Shorthorn Network till 2031)

4 any conference to “add” them Shorthorns
& ask them Burnt Orange Heifer’s 2 drop their individual TV network?
Who would B willing to pay on that 15 million difference?

Also, most $$$$ Texas alumni & donars
Like Texas playing a few road games, per yr, in the state of Texas’
Texas isn’t willing 2 give up its identity, nor its base

The Big 12 is the perfect Capitalistic Conference
The Rich get Richer, the Rich call the shots, Revenues favor the Rich

Many on this board have speculated
What IF Tex/OU split Big 12?
I’d image,
Big 12 TV revenue would drop by @ least 15 million or more
per team per yr w/ the loss
of their 2 Stalwart f-ball dominate institutions

It’s pretty obvious in Big 12 country
Texas/OU run da’ show
What they say goes
& the rest of the Big 12 knows
There would B a major drop in TV revenue & funding,
Plus loss of P5 stature.
IF Shorthorns/Bloomers bolt

When it comes to the next rd of TV negotiations
U might b surprised how open
The little “8” will B N2 compromising OU/Tex demands
Just to keep the Big 2 happy
And the Big 12 intact
12-21-2018 03:59 PM
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33laszlo99 Offline
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Post: #27
RE: From SBD "Collegiate realignment, round 2?"
(12-19-2018 12:41 AM)Attackcoog Wrote:  I think the line about diminishing returns rings very true. I think this is something that has changed dramatically with the advent of the CFP. In the BCS era, the BCS dropped about 25 million into each conferences coffers (less than 2 million a team for the 14 team conferneces). But the CFP is FAR more lucrative. In 2016 for instance, the Big10 brought in 55 million in the base CFP payout, 6 million for Ohio St.s Fiesta Bowl berth, 4 million for Wisconsins Cotton Bowl berth, 27.5 million for Michigans Orange Bowl berth, and a whopping 40 million for the Rose Bowl. The Big10 brought in 133 million in CFP money that year. That's 9.5 million a team. Now--admittedly, thats a pretty good year for the Big10 CFP payout. Your not going to do that every year----but your going at get at least 60-80 million every year.

So why is that significant to realignment? When you add a team the media deal increases, but "other revenue streams" like the CFP do not increase. These "other revenue streams" just get split more ways when you add teams. The total payout for a Big12 team last year was over 33 million. So, any addition has to be worth around 33 million in media income alone (becasue thats the only revenue stream that will increase with their addition) just to keep every existing members cut of the pie unchanged. For any existing member to actually realize a revenue INCREASE---the new teams must bring in MORE than 33 million in media value (again, because the media revenue stream is the only revenue source that will significantly increase with the addition of 2 more teams).

The universe of teams truly worth 33 million or more in media value is probably fairly small. The universe of teams worth 33 million or more in media value looking to jump conferences is even smaller. The article may very well be correct that we may have reached a time where conference size and conference values are at the point of diminishing returns---thus creating realignment stability.

This is entirely sound reasoning in a generic realignment move. I think the case of Texas and Oklahoma transcends the limitations of diminishing returns. Here's why:

While post-season revenue would be split by two additional teams, these two particular teams are perennial bowlers. Could be a net gain per team. ( maybe)

If/when these two exit the Big 12, they take their own earning power with them as well as a substantial majority of the earning power of the other eight teams. The remaining schools will be demoted to near-G5 status and their media dollars will fall accordingly. ESPN/FOX will have that much more money to throw at Texas & Oklahoma in their new conference. (unfair but sadly true)

ESPN does not want these two to join the B1G. They already begrudge the high price of advertising in the B1G footprint. But the best chance they have to avoid it might be to overpay the Big 12 for staying intact. In response FOX would have to offer mind-boggling money to incentivize TX & OK. That's why I think the next round of media negotiations will be stunning. If the FAANG companies decide to enter the fray, fasten your seatbelts.

Oklahoma has more to consider than football media revenue. They may see an opportunity for better academic associations if they go B1G. Texas academics needs no boost of that kind, but the Adminstration and professoriate might find the move worthwhile nonetheless. The SEC offers attractions related to football that no other conference can match. Can they and ESPN find a way ($) to lure the two teams in question?

If we see Oklahoma and Kansas as the two candidates for realignment, your diminishing returns argument comes back into play.
12-21-2018 07:12 PM
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Stugray2 Offline
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Post: #28
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 07:12 PM)33laszlo99 Wrote:  
(12-19-2018 12:41 AM)Attackcoog Wrote:  I think the line about diminishing returns rings very true. I think this is something that has changed dramatically with the advent of the CFP. In the BCS era, the BCS dropped about 25 million into each conferences coffers (less than 2 million a team for the 14 team conferneces). But the CFP is FAR more lucrative. In 2016 for instance, the Big10 brought in 55 million in the base CFP payout, 6 million for Ohio St.s Fiesta Bowl berth, 4 million for Wisconsins Cotton Bowl berth, 27.5 million for Michigans Orange Bowl berth, and a whopping 40 million for the Rose Bowl. The Big10 brought in 133 million in CFP money that year. That's 9.5 million a team. Now--admittedly, thats a pretty good year for the Big10 CFP payout. Your not going to do that every year----but your going at get at least 60-80 million every year.

So why is that significant to realignment? When you add a team the media deal increases, but "other revenue streams" like the CFP do not increase. These "other revenue streams" just get split more ways when you add teams. The total payout for a Big12 team last year was over 33 million. So, any addition has to be worth around 33 million in media income alone (becasue thats the only revenue stream that will increase with their addition) just to keep every existing members cut of the pie unchanged. For any existing member to actually realize a revenue INCREASE---the new teams must bring in MORE than 33 million in media value (again, because the media revenue stream is the only revenue source that will significantly increase with the addition of 2 more teams).

The universe of teams truly worth 33 million or more in media value is probably fairly small. The universe of teams worth 33 million or more in media value looking to jump conferences is even smaller. The article may very well be correct that we may have reached a time where conference size and conference values are at the point of diminishing returns---thus creating realignment stability.

This is entirely sound reasoning in a generic realignment move. I think the case of Texas and Oklahoma transcends the limitations of diminishing returns. Here's why:

While post-season revenue would be split by two additional teams, these two particular teams are perennial bowlers. Could be a net gain per team. ( maybe)

If/when these two exit the Big 12, they take their own earning power with them as well as a substantial majority of the earning power of the other eight teams. The remaining schools will be demoted to near-G5 status and their media dollars will fall accordingly. ESPN/FOX will have that much more money to throw at Texas & Oklahoma in their new conference. (unfair but sadly true)

ESPN does not want these two to join the B1G. They already begrudge the high price of advertising in the B1G footprint. But the best chance they have to avoid it might be to overpay the Big 12 for staying intact. In response FOX would have to offer mind-boggling money to incentivize TX & OK. That's why I think the next round of media negotiations will be stunning. If the FAANG companies decide to enter the fray, fasten your seatbelts.

Oklahoma has more to consider than football media revenue. They may see an opportunity for better academic associations if they go B1G. Texas academics needs no boost of that kind, but the Administration and professoriate might find the move worthwhile nonetheless. The SEC offers attractions related to football that no other conference can match. Can they and ESPN find a way ($) to lure the two teams in question?

If we see Oklahoma and Kansas as the two candidates for realignment, your diminishing returns argument comes back into play.

For the comment I made purple and bold, I think some comparison with the old Big East before it imploded is in order.

The Big East in 2011 rejected a 9 year ESPN deal (link) that would have netted each full Football member $13.8 million a year. Fourteen years later (i.e., 2024) a comparable number is perhaps 50% higher, or roughly $20.7 million per school -- a number pretty close to what I estimated the rump would be worth. And I think we are looking at comparable set of schools, even a bit stronger for the remaining Big XII:

Big XII "little 8":
West Virginia, KU, K State, Oklahoma State, TCU, Iowa State, Baylor, Texas Tech

2011 Big East "full members":
West Virginia, Louisville, Cincy, USF, Connecticut, Rutgers, Pitt, Syracuse

Those are pretty comparable. TCU was headed to the Big East, while UCF, Houston, Cincy and maybe USF or Memphis are seen as front runners for replacements to keep the higher inventory of the Big XII. I don't think adding the strongest two of these to the little 8 has much impact on the per school payout. Yes it will be far short of the ACC and Pac-12 (probably looking at $40M) B1G and SEC (both looking at $60M). But still considerably higher than any G5, including the American.

Anyway that 2011 contract offer for a Big East with 5 current P5 members, but no headline school, is the best comparison when adjusted for the higher payout world of today.
12-21-2018 08:06 PM
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Post: #29
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 08:06 PM)Stugray2 Wrote:  
(12-21-2018 07:12 PM)33laszlo99 Wrote:  
(12-19-2018 12:41 AM)Attackcoog Wrote:  I think the line about diminishing returns rings very true. I think this is something that has changed dramatically with the advent of the CFP. In the BCS era, the BCS dropped about 25 million into each conferences coffers (less than 2 million a team for the 14 team conferneces). But the CFP is FAR more lucrative. In 2016 for instance, the Big10 brought in 55 million in the base CFP payout, 6 million for Ohio St.s Fiesta Bowl berth, 4 million for Wisconsins Cotton Bowl berth, 27.5 million for Michigans Orange Bowl berth, and a whopping 40 million for the Rose Bowl. The Big10 brought in 133 million in CFP money that year. That's 9.5 million a team. Now--admittedly, thats a pretty good year for the Big10 CFP payout. Your not going to do that every year----but your going at get at least 60-80 million every year.

So why is that significant to realignment? When you add a team the media deal increases, but "other revenue streams" like the CFP do not increase. These "other revenue streams" just get split more ways when you add teams. The total payout for a Big12 team last year was over 33 million. So, any addition has to be worth around 33 million in media income alone (becasue thats the only revenue stream that will increase with their addition) just to keep every existing members cut of the pie unchanged. For any existing member to actually realize a revenue INCREASE---the new teams must bring in MORE than 33 million in media value (again, because the media revenue stream is the only revenue source that will significantly increase with the addition of 2 more teams).

The universe of teams truly worth 33 million or more in media value is probably fairly small. The universe of teams worth 33 million or more in media value looking to jump conferences is even smaller. The article may very well be correct that we may have reached a time where conference size and conference values are at the point of diminishing returns---thus creating realignment stability.

This is entirely sound reasoning in a generic realignment move. I think the case of Texas and Oklahoma transcends the limitations of diminishing returns. Here's why:

While post-season revenue would be split by two additional teams, these two particular teams are perennial bowlers. Could be a net gain per team. ( maybe)

If/when these two exit the Big 12, they take their own earning power with them as well as a substantial majority of the earning power of the other eight teams. The remaining schools will be demoted to near-G5 status and their media dollars will fall accordingly. ESPN/FOX will have that much more money to throw at Texas & Oklahoma in their new conference. (unfair but sadly true)

ESPN does not want these two to join the B1G. They already begrudge the high price of advertising in the B1G footprint. But the best chance they have to avoid it might be to overpay the Big 12 for staying intact. In response FOX would have to offer mind-boggling money to incentivize TX & OK. That's why I think the next round of media negotiations will be stunning. If the FAANG companies decide to enter the fray, fasten your seatbelts.

Oklahoma has more to consider than football media revenue. They may see an opportunity for better academic associations if they go B1G. Texas academics needs no boost of that kind, but the Administration and professoriate might find the move worthwhile nonetheless. The SEC offers attractions related to football that no other conference can match. Can they and ESPN find a way ($) to lure the two teams in question?

If we see Oklahoma and Kansas as the two candidates for realignment, your diminishing returns argument comes back into play.

For the comment I made purple and bold, I think some comparison with the old Big East before it imploded is in order.

The Big East in 2011 rejected a 9 year ESPN deal (link) that would have netted each full Football member $13.8 million a year. Fourteen years later (i.e., 2024) a comparable number is perhaps 50% higher, or roughly $20.7 million per school -- a number pretty close to what I estimated the rump would be worth. And I think we are looking at comparable set of schools, even a bit stronger for the remaining Big XII:

Big XII "little 8":
West Virginia, KU, K State, Oklahoma State, TCU, Iowa State, Baylor, Texas Tech

2011 Big East "full members":
West Virginia, Louisville, Cincy, USF, Connecticut, Rutgers, Pitt, Syracuse

Those are pretty comparable. TCU was headed to the Big East, while UCF, Houston, Cincy and maybe USF or Memphis are seen as front runners for replacements to keep the higher inventory of the Big XII. I don't think adding the strongest two of these to the little 8 has much impact on the per school payout. Yes it will be far short of the ACC and Pac-12 (probably looking at $40M) B1G and SEC (both looking at $60M). But still considerably higher than any G5, including the American.

Anyway that 2011 contract offer for a Big East with 5 current P5 members, but no headline school, is the best comparison when adjusted for the higher payout world of today.

It's all guesswork and anybody's guess is likely to be way off. I just look at those schools that might be left behind, most of them fine schools with worthy athletic programs, and wonder how they make it. From a network point of view they are expendable. ESPN complained in the last round of realignment that "Every time somebody moves we lose money." They were referring to the G5's being added to P5 payrolls. I think they would like to reduce the number of p5 schools if the opportunity arises. What remains of the Big 12 (if there is realignment) will need to get interest from multiple networks if they are to exceed G5 money.

Talking about the next realignment makes me think there is too much complexity to iron out for Texas and/or Oklahoma. But the status quo
is not very interesting to discuss.
12-21-2018 09:24 PM
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Post: #30
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 01:25 PM)HHOOTter Wrote:  
(12-21-2018 12:26 PM)33laszlo99 Wrote:  
(12-19-2018 12:41 AM)Attackcoog Wrote:  But only in the Big 12 is the disparity so extreme and the financial incentives so promising for the top programs.

EGGxactly.......

Who controls da' Big 12?
Shorthorns & Little Bloomers
Why would they give that up?
The other 8 Big 12 teams "hang' on OU/Tex coattails

But don't forget,
Kansas "Blueblood' B-ball $$$$ is a HUGE Big 12 asset
Easily a Top 5 school in NCAA B-ball revenue alone
IF Big 12 donimo's began 2 tumble
"Lawrence" might B the first to rumble

Da' Bigger schools
will always/continue 2 want a bigger piece of the pie
Future broadcast rights will increasely move towards
those schools that CAN DEMAND more control/$$$$$
the Notre Dame, BYU, Navy, & Shorthorn Networks
is just the beginning.........

What exactly is it that "Shorthorns & Little Boomers" control in the Big 12 that they would not want to give up? Can you be specific? Because I see this point often repeated, but I don't know what it means.

On 3rd tier TV rights alone:
Tex makes almost 15 million more than the other Big 12 schools
OU makes almost 7 million more than the rest
that's over and above
the 33-35 million each Big 12 team earned in TV revenue

OU/Tex will not give up their TV rights
Why?
The value of their product is only going to go up
In the future, more OU/Tex’s home games
Will B televised by their own network
that’s more revenue/income they keep on their own w/out sharing

Big 12 allow home teams to keep higher gate %’s
This “unequal” revenue sharing Heavily favors OU/Tex
Both whom play in stadiums that seat over 85K

OU/TEX game:
Each team keeps ALL its Tix sales (No Big 12 Split)
Around 8-10 million per team per yr
Plus City of Dallas gives each team 500K per yr
What conference is going to allow that sort of favoritism?
(Imagine what kind of $$$$ TV contract IF OU/Tex game was bid independently of Big 12)
That could easily happen in next round of Big 12 TV negotiations

In alot of ways
OU/Tex are already operating very independently w/n a conference structure
And they can hold the rest of the Big 12 “financial” hostage
And watch,
They will gain even more $$$$$ leverage
During the next TV negotiations for the Big 12

The rest of the Big 12 teams have to agree to their terms
Or they will B left in the desert
w/ the rest of the G5 wanna B P5 schools
[/quote]

You're numbers aren't right on 3rd tier. That is their total revenue on 3rd tier TV, not their excess over the other schools. Now pretty much every school keeps their 3rd tier other than TV rights. Some schools make over $10 million on licensing and other tier 3.

I believe every conference but the Big 10 has the home team keep the gate. And there is only limited revenue sharing in the Big 10.

Georgia Florida play a neutral site game in Jacksonville. I'm sure the SEC doesn't get any share.

Only in the Pac 12 did any school get a guarantee. USC and UCLA got a $17 million guarantee regardless of what the contract was. As it turned out, the contract was high enough there was no need for a guarantee.

So you really didn't answer his question.
12-21-2018 10:18 PM
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Stugray2 Offline
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Post: #31
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 09:24 PM)33laszlo99 Wrote:  
Quote: .... (lots of stuff said, but who cares) ...

It's all guesswork and anybody's guess is likely to be way off. I just look at those schools that might be left behind, most of them fine schools with worthy athletic programs, and wonder how they make it. From a network point of view they are expendable. ESPN complained in the last round of realignment that "Every time somebody moves we lose money." They were referring to the G5's being added to P5 payrolls. I think they would like to reduce the number of p5 schools if the opportunity arises. What remains of the Big 12 (if there is realignment) will need to get interest from multiple networks if they are to exceed G5 money.

Talking about the next realignment makes me think there is too much complexity to iron out for Texas and/or Oklahoma. But the status quo
is not very interesting to discuss.

This is one of the stupidest responses ever. The first underlined comment basically says, I, 33laszlo99, have no idea what is going on or what I am talking about, so rather than refute you, which I cannot, I am going to just declare because it's too complicated for me (your second underlined comment) ergo, the same must be true not only for you but the schools involved.

This is an amazing statement. You are at once claiming to not know anything, and yet at the same time have as much if not more insight that the people running major Universities.

I did nothing more that pull historical data points (old Big East) and make a straight up comparison of the two sets of schools. Every assumption I made I gave a reason for it and provided the evidence. There was no "claim and declare correct" as you have done, no appeal to "ignorance" as you have masterfully done. 01-ncaabbs
12-21-2018 10:47 PM
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33laszlo99 Offline
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Post: #32
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 10:47 PM)Stugray2 Wrote:  
(12-21-2018 09:24 PM)33laszlo99 Wrote:  
Quote: .... (lots of stuff said, but who cares) ...

It's all guesswork and anybody's guess is likely to be way off. I just look at those schools that might be left behind, most of them fine schools with worthy athletic programs, and wonder how they make it. From a network point of view they are expendable. ESPN complained in the last round of realignment that "Every time somebody moves we lose money." They were referring to the G5's being added to P5 payrolls. I think they would like to reduce the number of p5 schools if the opportunity arises. What remains of the Big 12 (if there is realignment) will need to get interest from multiple networks if they are to exceed G5 money.

Talking about the next realignment makes me think there is too much complexity to iron out for Texas and/or Oklahoma. But the status quo
is not very interesting to discuss.

This is one of the stupidest responses ever. The first underlined comment basically says, I, 33laszlo99, have no idea what is going on or what I am talking about, so rather than refute you, which I cannot, I am going to just declare because it's too complicated for me (your second underlined comment) ergo, the same must be true not only for you but the schools involved.

This is an amazing statement. You are at once claiming to not know anything, and yet at the same time have as much if not more insight that the people running major Universities.

I did nothing more that pull historical data points (old Big East) and make a straight up comparison of the two sets of schools. Every assumption I made I gave a reason for it and provided the evidence. There was no "claim and declare correct" as you have done, no appeal to "ignorance" as you have masterfully done. 01-ncaabbs

Sir, I'm sorry that I wrote somethig so stupid. Clearly it was I who was flinging reckless guesswork, not you. I have pored over your thorough research a few times and in reviewing my annotations and graphics, I can see now that you have laid out the correct case. It's quite humbling.

Seriously, Stu, did I offend you? I openly admit my ignorance of the future events in college athletics realignment. I'm guessing, speculating, thinkin' out loud. Do you claim to be doing otherwise? Your "data points" are not really that exhaustive, are they? You decided that the answers we seek could be found by comparing an almost identical realignment move, in an almost identical conference, among a group of almost identical schools, in an almost identical media situation, set in almost identical geographical and demographic circumstances. You made a precise financial extrapolation based on... well... precision.

I my gave "guesswork" response in order to avoid lampooning your reseach." But Noooooooo... you wanted your work to receive it's due recognition. SO HERE IT IS! HAPPY?
12-22-2018 02:01 AM
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DawgNBama Offline
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Post: #33
RE: From SBD "Collegiate realignment, round 2?"
(12-21-2018 09:24 PM)33laszlo99 Wrote:  
(12-21-2018 08:06 PM)Stugray2 Wrote:  
(12-21-2018 07:12 PM)33laszlo99 Wrote:  
(12-19-2018 12:41 AM)Attackcoog Wrote:  I think the line about diminishing returns rings very true. I think this is something that has changed dramatically with the advent of the CFP. In the BCS era, the BCS dropped about 25 million into each conferences coffers (less than 2 million a team for the 14 team conferneces). But the CFP is FAR more lucrative. In 2016 for instance, the Big10 brought in 55 million in the base CFP payout, 6 million for Ohio St.s Fiesta Bowl berth, 4 million for Wisconsins Cotton Bowl berth, 27.5 million for Michigans Orange Bowl berth, and a whopping 40 million for the Rose Bowl. The Big10 brought in 133 million in CFP money that year. That's 9.5 million a team. Now--admittedly, thats a pretty good year for the Big10 CFP payout. Your not going to do that every year----but your going at get at least 60-80 million every year.

So why is that significant to realignment? When you add a team the media deal increases, but "other revenue streams" like the CFP do not increase. These "other revenue streams" just get split more ways when you add teams. The total payout for a Big12 team last year was over 33 million. So, any addition has to be worth around 33 million in media income alone (becasue thats the only revenue stream that will increase with their addition) just to keep every existing members cut of the pie unchanged. For any existing member to actually realize a revenue INCREASE---the new teams must bring in MORE than 33 million in media value (again, because the media revenue stream is the only revenue source that will significantly increase with the addition of 2 more teams).

The universe of teams truly worth 33 million or more in media value is probably fairly small. The universe of teams worth 33 million or more in media value looking to jump conferences is even smaller. The article may very well be correct that we may have reached a time where conference size and conference values are at the point of diminishing returns---thus creating realignment stability.

This is entirely sound reasoning in a generic realignment move. I think the case of Texas and Oklahoma transcends the limitations of diminishing returns. Here's why:

While post-season revenue would be split by two additional teams, these two particular teams are perennial bowlers. Could be a net gain per team. ( maybe)

If/when these two exit the Big 12, they take their own earning power with them as well as a substantial majority of the earning power of the other eight teams. The remaining schools will be demoted to near-G5 status and their media dollars will fall accordingly. ESPN/FOX will have that much more money to throw at Texas & Oklahoma in their new conference. (unfair but sadly true)

ESPN does not want these two to join the B1G. They already begrudge the high price of advertising in the B1G footprint. But the best chance they have to avoid it might be to overpay the Big 12 for staying intact. In response FOX would have to offer mind-boggling money to incentivize TX & OK. That's why I think the next round of media negotiations will be stunning. If the FAANG companies decide to enter the fray, fasten your seatbelts.

Oklahoma has more to consider than football media revenue. They may see an opportunity for better academic associations if they go B1G. Texas academics needs no boost of that kind, but the Administration and professoriate might find the move worthwhile nonetheless. The SEC offers attractions related to football that no other conference can match. Can they and ESPN find a way ($) to lure the two teams in question?

If we see Oklahoma and Kansas as the two candidates for realignment, your diminishing returns argument comes back into play.

For the comment I made purple and bold, I think some comparison with the old Big East before it imploded is in order.

The Big East in 2011 rejected a 9 year ESPN deal (link) that would have netted each full Football member $13.8 million a year. Fourteen years later (i.e., 2024) a comparable number is perhaps 50% higher, or roughly $20.7 million per school -- a number pretty close to what I estimated the rump would be worth. And I think we are looking at comparable set of schools, even a bit stronger for the remaining Big XII:

Big XII "little 8":
West Virginia, KU, K State, Oklahoma State, TCU, Iowa State, Baylor, Texas Tech

2011 Big East "full members":
West Virginia, Louisville, Cincy, USF, Connecticut, Rutgers, Pitt, Syracuse

Those are pretty comparable. TCU was headed to the Big East, while UCF, Houston, Cincy and maybe USF or Memphis are seen as front runners for replacements to keep the higher inventory of the Big XII. I don't think adding the strongest two of these to the little 8 has much impact on the per school payout. Yes it will be far short of the ACC and Pac-12 (probably looking at $40M) B1G and SEC (both looking at $60M). But still considerably higher than any G5, including the American.

Anyway that 2011 contract offer for a Big East with 5 current P5 members, but no headline school, is the best comparison when adjusted for the higher payout world of today.

It's all guesswork and anybody's guess is likely to be way off. I just look at those schools that might be left behind, most of them fine schools with worthy athletic programs, and wonder how they make it. From a network point of view they are expendable. ESPN complained in the last round of realignment that "Every time somebody moves we lose money." They were referring to the G5's being added to P5 payrolls. I think they would like to reduce the number of p5 schools if the opportunity arises. What remains of the Big 12 (if there is realignment) will need to get interest from multiple networks if they are to exceed G5 money.

Talking about the next realignment makes me think there is too much complexity to iron out for Texas and/or Oklahoma. But the status quo
is not very interesting to discuss.

This confirms a suspicion I had about ESPN. Although it would be nice to expand the playoffs by an additional four teams, I don’t think ESPN has the $$’s for it. That’s why the playoff committee wants to keep the status quo, IMO. However, if ESPN and a really big OTA network(s) can work out something (like CBS sharing March Madness with ESPN), the playoffs will expand. Didn’t someone say that ESPN makes the majority of its $$’s off subscribers and not advertisers?? That is why a deal with a big OTA is needed. Then things might get interesting on the Big 12’s front.
(This post was last modified: 12-23-2018 04:08 AM by DawgNBama.)
12-23-2018 03:54 AM
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