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May 12, 2010

Expansion Daily Report

Filed under: Conference,Money,Rumors — Chas @ 10:25 am

As promised, Part 2 of the Big East Expansion Roundtable is available at On the Banks. Go take a read.

Big 11 commish Delany sent e-mails to all of the Big 11 athletic directors to let them know that no offers were made to other schools at this time.

Florida State has decided to make sure the SEC knows that if the SEC just happens to look into expansion, FSU might be willing to think about it.

FSU Athletic director Randy Spetman told the Sentinel’s Andrew Carter from the ACC meetings, “You have to look at all the different things out there,” Spetman said. “I hope we maintain [the ACC] where it is — the structure it is right now. But I don’t know if that’s going to happen.”

When the ACC expanded it was about trying to grab a bigger share of BCS money, getting a conference championship game and improving a conference TV deal. This time, expansion is about being in the conference that pulls in as much money as possible — period. The greed is a little more naked and individual.

Speaking of greed, the feeling that Missouri is gone to the Big Something has Kansas City a little on edge.

What becomes of the Border War? The annual Missouri-Kansas football skirmish at Arrowhead Stadium has become a can’t-miss affair that generates more than $1 million a year for the game’s visiting team. But KU athletic director Lew Perkins told The Kansas City Star on Tuesday it would be difficult to continue an athletic relationship with a team that had left the conference.

Could the Big 12’s basketball tournaments and football championship games be conducted in a state that no longer had a member school? It hasn’t happened in any sport in the conference’s 14-year history. And would the city welcome Big Ten schools the way it does the Big 12?

Part of what has made Kansas City an attractive destination for Big 12 events is that it is one of the more central locations for all members. That would still be true, but when you consider how aggressively Jerry Jones and other Texas cities have been going after college sports events, the loss of Mizzou and probably Nebraska only grows the Texas (and Oklahoma) schools influence in the decision making.

Interesting. The Mountain West may need to invite Boise State this summer.

The Mountain West Conference presidents meet next month, and there’s at least a decent chance that they will formally invite BSU — if not immediately after the gathering, then before July 1.

Here’s why:

If the MWC wants Boise State’s performance in the 2008-10 seasons to be included in the formula that determines whether the MWC receives an automatic BCS bid for the next cycle of games — and it sure as heck does —  then the Broncos must be a member of the MWC in 2011.

And for them to be a member in 2011, they must be invited by July 1, 2010.

To say nothing of acting proactively before the other conferences start picking things apart. Conference expansion and realignement may be initiated by the Mountain West firing the first real shot.

A Louisiana-centric look at expansion including the hope that La Tech can get out of the WAC and to C-USA.

The Clemson blog, Shakin’ the Southland, has a really solid piece on ACC media contracts and Clemson’s place in them. He seems to be of the opinion that the ACC will need to look beyond ESPN for the money. This jibes with my thoughts that ESPN is so tied in with the Big Something and SEC that the other conferences are going to struggle to get the money and exposure they really crave.

A story claiming “sources” that the Big Something is planning for 16 teams.

Here’s what is happening today with Big Ten expansion, which is almost certainly headed for a 16-team conference, based upon sources who can be trusted and who prefer that their names not be revealed.

The Big Ten within a couple of years will likely be one of four 16-team national super conferences, with Big 12 football and Big East football the casualties.

Missouri and Nebraska are the best bets to join the Big Ten and begin the break-up of the Big 12. Rutgers and either Syracuse or Pitt are the most likely schools to leave a dissolving Big East and join the Big Ten, although Connecticut is a possibility, as is Maryland from the Atlantic Coast Conference.

The article gives no timeframe for this scenario. And frankly, like any other story citing sources — I scoff a bit. Just because this one comes from Detroit rather than Kansas City does not make it more trustworthy.

Finally, let’s end this with something familiar to me. When the ACC expanded to 11 and then 12, there was much gnashing in the media over the destruction of traditions and history in the ACC and their traditional round-robin of basketball home and homes. It is already starting in Big Something country.

If you consider the pervasive influence of money in big-time college athletics these days, you can’t help but conclude that expansion is inevitable and that the Big Ten will kick off the festivities by absorbing one, three or five schools.

But at what cost?

In addition to rendering the conference’s name even more mathematically incorrect, there will be some downside to a 14 or 16-team Big Ten, much of which has been buried deep in the discussion.

First and foremost will be the loss of traditional rivalries.

And these predictable stories is why I want the Big Something to expand to 16 with Pitt in there. It’s all about the money, and nothing else.





I learned something the other day from a pal who knows sports finance. He says RU to B 10 is a no-brainer for the following reason.

Big 10 network can get 70 cents/month(or more)from three million-plus NJ cable homes vs only 10 cents from non-Big 10 area homes.

Figure that’s worth up to $25M/yr in subscriber fees from Jersey.

Big 10 already gets Pgh home subscribers because of PSU. Syracuse doesn’t provide much in subscriber revenue the way RU does.

ND may give them more leverage with more cable operators outside of Indiana and existing Big Ten markets.

Comment by steve 05.12.10 @ 11:37 am

Your pal who knows sports finance probably read this article:

link to blog.pennlive.com

What he didn’t mention, of course, is that BTN won’t automatically get 70 cents/month per subscriber just because Rutgers joins the Big Whatever. The BTN will have to negotiate a new fee/access structure with the cable companies, the outcome of which would be based on how much the cable companies think their subscriber base wants to watch Rutgers games.

All that said, this decision will be made by university presidents who know nothing about sports or the cable TV business, and they’ll probably buy the most optimistic assumptions about the revenue that Rutgers will bring in. Their pupils will turn into little dollar signs, just like in the old cartoons, after they see that powerpoint slide that says RU could bring in an additional $25M per year.

So, yeah, Rutgers is probably in, but I doubt they’ll deliver anywhere close to $25M per year.

Comment by maguro 05.12.10 @ 12:06 pm

Jersey does have a lot of cable households, but I doubt the BTN gets $0.70 per subscriber per month. Maybe per year.

Comment by Patrick 05.12.10 @ 12:55 pm

Screw the Big Whatever: “An ESPN.com survey of NFL drafts from 1979 to 2009 revealed USC, Miami,
Pittsburgh and Florida State produced the most fertile NFL draft
pipelines over the past three decades.”

link to sports.espn.go.com

Comment by Ohio 05.12.10 @ 1:51 pm

Ohio – that was a great article showing Pitt at #3 and a good ad for the program. Anyone have any word on how this years draftees and FA’s are fairing in minicamps?

Comment by Pitt it IS 05.12.10 @ 2:21 pm

Patrick, I said “Big 10 network CAN get 70 cents/month.” You’re right, they’re not getting it now from Joisey subscribers.

Comment by steve 05.12.10 @ 2:43 pm

I believe the BTN currently averages about 40 cents/MO per subscriber. There is no way RU, or Neb or MIZZO drives that number any higher. I doubt even ND could bump up that number and if so, then only by a small amount if the BTN wants to stay on the non-sports (i.e. basic package) of the major cable networks. I live in the heart of PSU country and believe me, Comcast played serious hard ball with the BTN. The BTN wanted $1.00 (I belive some accounts had it closer to $2) per subscriber and were quite litterally shown the door by Comcast. The BIG 10 was not and is not in a power position when negotiating with the cable companies, no matter how many teams they have. It more like the Cable companies telling them “This is what we will pay, take it or leave it”. The problem is this, while all of us love College FB and BB, the vast majority of Comcast customers (or any other cable company) could care less and are not willing to pay one penney more to have the BTN on their basic package. The BTN hinges their big money (advertising revenue) on having their product on the cable companies basic package. If they went to the “Sports” package, where you would have to pay say $7 bucks a month for a package of sports channels that included the BTN (as I do on my Satellite package), their number of “subscribers” would drop significantly. In fact, if they expand to 16 teams, their average price per subscriber may in fact go down. Comcast could say “Hey Big 10, I’m giving you access to 10 million new homes, why should you be the only one that benefits? Tell you what, we’ll pay you an average of 25 cents per subsriber. You say your product is so great, then you know your ratings will be high and your advertising revenues should go through the roof…take it or leave it!”

Comment by HbgFrank 05.12.10 @ 6:10 pm

My point is, if it’s all about money, Pitt isn’t it.

Comment by steve 05.12.10 @ 8:28 pm

Think about how much you pay for cable/month, then divide by # of channels. Then think about the profit the cable co gets, and the actual cost of running the company (maintenance, marketing, billing, etc)
Then think how much CNN, ESPN, and other cable channels people actually watch might get per subscriber. Then think about whatever the BTN gets is divided in two, with FOX getting half.

The BTN has live football on 14 to 15 saturdays per year. It has mens b-ball on more, but let’s face it, no one is watching Big10 b-ball. The rest of the year it’s women’s volleyball replays at 3am. There is NO WAY they could ever get $1 per month from cable – not to mention satellite, which charges less and has more channels. I think $0.25/month is generous, and you have to cut that in half.

Comment by Patrick 05.13.10 @ 12:28 am

Patrick, interesting you brought up the topic of subscriber viewing habits ’cause I had the same question of my pal:

“Don’t subscribers actually have to watch the games?

Nope. That’s why only about 800,000 households watch an average primetime show on ESPN, but 100 million households are paying almost $5/month for access to ESPN.”

Comment by steve 05.13.10 @ 8:27 am

Very misleading to say “only about 800,000 households” watch an average ESPN show – that is a very large number in cable TV terms. What does the average primetime show on BTN draw? Probably a tenth of that.

And even besides its ratings, which are very good, the reason that ESPN can charge a lot of money to cable companies is that a lot of people simply won’t buy a cable package that doesn’t include ESPN. Can the same be said of BTN in New Jersey?

The cable companies just are not going to pay high per-subscriber fees to BTN unless they think there’s a large audience for the product, and I don’t think it’s clear that there’s that much demand in NJ. It’s very optimistic, if not delusional, to think that just because BTN is worth 70 cents/subscriber in traditional Big 10 areas like Ohio and Wisconsin, it will be worth the same amount in New Jersey, where the Big 10 brand isn’t established and people care mainly about pro sports.

Comment by maguro 05.13.10 @ 9:21 am

primetime

Comment by steve 05.13.10 @ 9:50 am

I think the estimates of what the BTN generates for the member universities have been way overblown in a lot of these “news” articles. The Big10 does share a lot of revenue, but the numbers in the articles often include the revenue from ESPN/ABC games, CBS, and some NBC money for the away games at ND. They often include the bowl money, which is also divided up among the member teams.

They are swimming in it over there in the Big10, but the BTN does not produce the kind of money that it’s getting credit for producing. And remember – FOX gets half right off the top.

Comment by Patrick 05.13.10 @ 3:18 pm

You really wanna extrapolate? How about this scenario: Google successfully expands its ad service to cable. They become able to accurately gague how many people are viewing the ads that appear during – among others things – college football games. Ad rates drop as a result and suddenly ABC decides to starting raising rates to make up for the lost revenue. The college gravy train dries up.

How reaslistic is this scenario?

Comment by Shawn 05.13.10 @ 3:35 pm

That is, ABC raises SUBSCRIPTION rates for its games. Gotta edit these posts better.

Comment by Shawn 05.13.10 @ 3:39 pm

How is Google going to know whether you were actually watching an ad during a football game or not? Some kind of artificial eye that knows when you get up to take a piss?

Comment by maguro 05.13.10 @ 4:39 pm

“I think the estimates of what the BTN generates for the member universities have been way overblown in a lot of these “news” articles.”

The conference takes in approximately 70 cents per subscription each month from within the Big Ten footprint, a figure that’s been widely reported and confirmed by Mediaweek Senior Editor Anthony Cruppi. Outside the footprint, in states such as Missouri and Nebraska, BTN subscriptions deliver about a dime per month to the conference.

Comment by steve 05.13.10 @ 4:43 pm

I recall reading that the BTN itself adds about $4M per school to the Big Ten Payout of $22M per school. Thats a significant amount of money given that I think the BE averages about $4M to 5M per school from all of it’s revenue sources (TV, bowls, etc.) There is no question that the BTN has been a huge success. I will admit that I did not see that coming. For most of the year we are talking about programming that only the most die hard fan would watch. So the Big ?? must increase that $22M per shcool number in order to justify brining in new schools.

Comment by HbgFrank 05.13.10 @ 5:00 pm

Living in Western Pa , Comcast gave me no choice on receiving the B10 Network its part of my basic cable. When I complained about paying for it Comcast provided me a breakdown of what I was paying for by channel , as it turns out I pay 36 cents for the B10 network a month, a channel I never view. My place of employment has 2500 people (mostly college educated) and I have yet heard anyone around the plant ever comment about watching anything on the B10 network. Ratings must be bad.

Comment by Marty 05.13.10 @ 5:24 pm

Maguro, Google could conceivably develop the necessary software to monitor t.v. viewing habits by way of the digital boxes that come with most cable subscriptions.

Comment by Shawn 05.13.10 @ 10:59 pm

Wonder how long it will take Butgers, tOSU, Michigan, and ups to use the fact that Pitt [may] will be left out of the big-pre10 in recruiting???? If Pitt gets into the God awful B-10, they should keep some WPIAL players who like the B-10 home.

Comment by joel 05.14.10 @ 12:39 am

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