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Posted on 5/10/16 at 9:14 am to UpToPar
Does the SECN receive more per subscriber in Mississippi, Alabama, and Tennessee?
The answer is no.
Obviously, the SECN would get a bump in per subscriber revenue in the State of Oklahoma. However, it isn't enough to justify the additional payout and would therefore decrease overall payouts per school. They simply do not have the population to drive incremental revenue.
The answer is no.
Obviously, the SECN would get a bump in per subscriber revenue in the State of Oklahoma. However, it isn't enough to justify the additional payout and would therefore decrease overall payouts per school. They simply do not have the population to drive incremental revenue.
This post was edited on 5/10/16 at 9:17 am
Posted on 5/10/16 at 9:18 am to The Balinese Club
So let's say that SECN subscribers increase by 5 million subscribers after OU is added to the conference. The SECN does not profit from this at all? I am legitimately asking because I am not familiar with the contract.
Posted on 5/10/16 at 9:26 am to The Balinese Club
I just looked it up. The SECN receives $1.40 per subscriber per month within the SEC footprint and $0.25 per subscriber per month outside the SEC footprint. So, to answer my own question, if the addition of OU and Ok St add and additional 5 million subscribers in Texas, that's an additional $7 million per month in revenue or an additional $84 million per year.
Posted on 5/10/16 at 9:27 am to shotcaller1
quote:Suicide is painless
Missouri is a clusterfrick all on it's own. I don't know how much more that school can handle
Posted on 5/10/16 at 9:32 am to UpToPar
Absolutely we profit, but only if it drives subscribers. The per subscriber payout, both in and outside the footprint, is divided up equally among the membership. The per subscriber payout in the footprint is substantially higher than that outside the footprint. Because cable and satellight subscribership would probably remain flat in Oklahoma if we added them, our only increase in revenue would be those folks paying "in the footprint rates" versus what they are paying now. There simply isn't enough population to incrementally increase revenue enough to offset an additional payout.
This is why expansion has to drive additional in footprint subscribers, not viewers.
This is why expansion has to drive additional in footprint subscribers, not viewers.
Posted on 5/10/16 at 9:34 am to UpToPar
You numbers are off. How many more people in Texas would suddenly subscribe to cable or dish simply because OU joined the SEC?
Probably not many. So, that revenue you calculated is already being paid to the SEC.
Probably not many. So, that revenue you calculated is already being paid to the SEC.
This post was edited on 5/10/16 at 9:35 am
Posted on 5/10/16 at 9:39 am to The Balinese Club
Right, I understand the 5 millions additional subscriber number is likely off, I just threw a number out there.
I guess it would come down to how many OU and Ok St fans in Texas already have SECN, but surely Texas subscribers would increase some.
I guess it would come down to how many OU and Ok St fans in Texas already have SECN, but surely Texas subscribers would increase some.
Posted on 5/10/16 at 10:12 am to UpToPar
I don't know if new subscriber-ship would really change that much. A good percentage of XII games are on FOX, requiring the same cable platform that the SECN is on. So, while viewership may increase some, those folks already subscribe to the SECN. The same dilemma exists for hypothetically adding Florida State to the SEC. They might increase viewership in the State of Florida, but I doubt they would drive additional subscribers to cable and dish.
In contrast, take the states of North Carolina and Virginia. All subscribers that get the SECN are paying the outside the footprint rate.
If they suddenly paid the in footprint rate, that would be significant. Probably enough so to add teams from those states, because the increase in revenue would offset the additional payouts. It is simply a function of population and is why those two states are so important.
In reality, Texas A&M moving to the SEC really helped out the league on subscriber footprint, but it also fricked OU, OSU, and Texas royally. And what really sucks for OU is that they would have been #14 instead of Missouri but were unable and unwilling to separate with OSU. Now that the SECN is in place and dependent on Missouri's population, that ship has sailed for them.
In contrast, take the states of North Carolina and Virginia. All subscribers that get the SECN are paying the outside the footprint rate.
If they suddenly paid the in footprint rate, that would be significant. Probably enough so to add teams from those states, because the increase in revenue would offset the additional payouts. It is simply a function of population and is why those two states are so important.
In reality, Texas A&M moving to the SEC really helped out the league on subscriber footprint, but it also fricked OU, OSU, and Texas royally. And what really sucks for OU is that they would have been #14 instead of Missouri but were unable and unwilling to separate with OSU. Now that the SECN is in place and dependent on Missouri's population, that ship has sailed for them.
This post was edited on 5/10/16 at 10:18 am
Posted on 5/10/16 at 10:40 am to BHMKyle
OU signed a GOR that lasts until 2025. That means that whatever conference took OU wouldn't own its media rights. OU could try to buy those rights back, but at $20 million a year on average for ten more years (including this calendar year) the cost for OU to leave the Big 12 right now would be $200 million dollars.
Even if the settled for half of that, so $100 million, it will still be way too huge for OU to afford. They are stuck. They should have made better decisions years ago.
Even if the settled for half of that, so $100 million, it will still be way too huge for OU to afford. They are stuck. They should have made better decisions years ago.
Posted on 5/10/16 at 10:42 am to cardboardboxer
quote:
OU signed a GOR that lasts until 2025. That means that whatever conference took OU wouldn't own its media rights.
LINK
Posted on 5/10/16 at 10:53 am to Lonnie Utah
Exactly
Posted on 5/10/16 at 10:55 am to cardboardboxer
At the end of the day, it really is about the GoR. I mentioned that on the previous page. That renders all other speculation moot.
Posted on 5/10/16 at 10:58 am to cardboardboxer
quote:
OU signed a GOR that lasts until 2025. That means that whatever conference took OU wouldn't own its media rights. OU could try to buy those rights back, but at $20 million a year on average for ten more years (including this calendar year) the cost for OU to leave the Big 12 right now would be $200 million dollars.
Even if the settled for half of that, so $100 million, it will still be way too huge for OU to afford. They are stuck. They should have made better decisions years ago.
A good team of lawyers will find loopholes in a contract like that.
Such as, Texas hoarding all the money from its television contract and not wanting to go forward with a Big 12 network when given the opportunity.
The thing OU has on its side is the arrogance of Texas.
Posted on 5/10/16 at 11:01 am to The Balinese Club
quote:
At the end of the day, it really is about the GoR. I mentioned that on the previous page. That renders all other speculation moot.
What people don't realize is every conference but the SEC has a GOR. The reason why is having one (in theory) increases the conference payout because the TV partner (like ESPN) has stable inventory they can count on. No one outside the SEC wants to challenge GORs because they depend on them.
The SEC on the other hand is a very conservative league. It pretty much dropped adding A&M for a second there when Baylor threatened to sue for a situation where A&M didn't have to deal with the GOR. We had to promise to indemnify the SEC from the suit, which they believed we could do, to move forward. No one believes OU can indemnify the SEC from $200 million in potential GOR damages (or double that if OSU comes too). It's a nonstarter.
Posted on 5/10/16 at 11:04 am to Hawgeye
For those interested The Sports Animal mid day show just came on out of Tulsa and this is all they're talking about.
Im listening on tune in app.
Im listening on tune in app.
Posted on 5/10/16 at 11:05 am to Hawgeye
quote:
A good team of lawyers will find loopholes in a contract like that.
Here is the thing- the GOR contract is VERY simple. In fact it was designed to be simple to prevent the creation of loopholes. From Frank the Tank:
quote:
What’s most instructive about the GOR contract is what it doesn’t say. There isn’t a termination provision. There isn’t a liquidated damages clause. There isn’t any mechanism to calculate potential damages for a member leaving early. In fact, there isn’t any procedure at all about what would occur in the event that a member leaves the conference other than a couple of flat statements that the GOR is in effect for such member until 2025 no matter what. The Grant of Rights agreement is intentionally ambiguous.
As someone that served some hard time in the slammer of a large corporate law firm, fighting over ambiguous contracts can rack up mountains of billable hours more than virtually any other type of litigation. When you have a 200-page contract that covers every single scenario possible, that document might have been complex to draft but it’s usually a fairly straight-forward process in terms of applying it. However, when hundreds of millions of dollars are at stake, as there are in the GOR agreement, and it’s covered by a 4-page contract that is a simple grant without any termination or dispute resolution procedures, that in and of itself is a massive deterrent to anyone challenging the agreement. It’s almost impossible to determine the legal and financial exposure that a school that is contemplating leaving a GOR arrangement would have. There could be no exposure at all or it could be a large enough amount to literally bankrupt a school, and there’s very low confidence in assessing what’s more likely. In contrast, a school dealing with an exit fee understands its exposure immediately and can balance whether the worst case scenario (i.e. Maryland having to pay the full amount of its $50 million exit fee to the ACC) is still worth risking a defection over.
LINK
quote:
Such as, Texas hoarding all the money from its television contract and not wanting to go forward with a Big 12 network when given the opportunity.
There is no provisions for that in the GOR. And I don't think a judge will be sympathetic to OU because they signed the GOR already knowing Texas would have the LHN.
quote:
The thing OU has on its side is the arrogance of Texas.
A judge and a court of law cares nothing about that.
Posted on 5/10/16 at 11:06 am to BHMKyle
Everything I saw had OU FOR expansion.
Posted on 5/10/16 at 11:07 am to cardboardboxer
If OU and OSU leaves, the Big 12 is done, which then makes the contract void if there is no longer a league to pay it to, correct?
Texas will fight tooth and nail, but OU and OSU can file enough appeals to make the case last years beyond the Big 12 being abolished.
Texas will fight tooth and nail, but OU and OSU can file enough appeals to make the case last years beyond the Big 12 being abolished.
Posted on 5/10/16 at 11:07 am to jb4
quote:
Missouri must be thrilled not dealing with this soap opera
Yep....and Neb, Colo & A&M agree as well.
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