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re: Pac-12 zooms past Big Ten, SEC in college sports revenue

Posted on 5/25/14 at 6:54 pm to
Posted by Tigersessed
Member since Feb 2012
498 posts
Posted on 5/25/14 at 6:54 pm to
Grits, how do you know the SEC will get none of the advertising profit from the network? I'm curious because it seems to me everything is worded as the SEC will get a share of profits. Is there somewhere that says the SEC only negotiated for part of the subscriber fees? Since the financial details have not been provided yet, where are you getting your info from?
Posted by Cheese Grits
Wherever I lay my hat is my home
Member since Apr 2012
54723 posts
Posted on 5/25/14 at 7:02 pm to
quote:

I'm curious because it seems to me everything is worded as the SEC will get a share of profits.


Devil is in the details and ESPN is ESPN.

Even if SEC got a share of ad revenue, ESPN could just inflate their expenses so there were no net profits from advertising. Part of why Delany went away from ESPN when forming the BTN. Without B1G owning the majority of BTN 51% they could not demand full disclosure from FOX on real revenues and expenses.

I view ESPN the same way Frank Pentangeli viewed Hyman Roth

Frank Pentangeli: Your father did business with Hyman Roth, he respected Hyman Roth... but he never *trusted* Hyman Roth!

Posted by Raoul_Duke
Denton, TX
Member since Nov 2012
235 posts
Posted on 5/25/14 at 7:02 pm to
quote:

quote: They own all their network, correct? Correct 100% of carriage + 100% of advertising. Of all the Big 5 they have the biggest upside by the time contracts renegotiate around 2024. Having only 12 teams also means fewer slices of the pie. Unlike the B12, they have a solid footprint with growing states, a natural moat, and monopoly pricing power.


This is why we shouldn't have done the deal with ESPN. The coverage and immediate guaranteed money in the short term will be great, but 10 years from now we will know we signed a deal with the devil and wish we owned 100% of SEC network
Posted by Tigersessed
Member since Feb 2012
498 posts
Posted on 5/25/14 at 7:12 pm to
quote:

Even if SEC got a share of ad revenue, ESPN could just inflate their expenses so there were no net profits from advertising


That is not how the real world works. Especially when dealing with big business. Until some details are provided it does no good to guess. Keep trying to stir up the internet though.

Even if the SEC currently has no ad dollars share, in the next 20 years it will not surpass subscriber fees. At that point if ad dollars are trending up, the current deal will expire and anything is open to negotiation.
Posted by Cheese Grits
Wherever I lay my hat is my home
Member since Apr 2012
54723 posts
Posted on 5/25/14 at 7:12 pm to
quote:

The coverage and immediate guaranteed money in the short term will be great, but 10 years from now we will know we signed a deal with the devil and wish we owned 100% of SEC network


While I agree about 90% here the problem is the 3 issues that are problems for the footprint.

#1 no moat
#2 no monopoly in big states
#3 smaller footprint compared to B1G and PAC
Posted by Cheese Grits
Wherever I lay my hat is my home
Member since Apr 2012
54723 posts
Posted on 5/25/14 at 7:37 pm to
quote:

Even if the SEC currently has no ad dollars share, in the next 20 years it will not surpass subscriber fees.


Not sure why you think it will take 20 years for ad revenue to match carriage?

BTN has seen the gap narrow to around 50 / 50 or 60 / 40 and the BTN launched in 2007. It is now 2013 (academic year) so that is well below a decade.
Posted by Guess
Down The Road
Member since Jun 2009
3773 posts
Posted on 5/25/14 at 7:46 pm to
quote:

they have a solid footprint with growing states, a natural moat, and monopoly pricing power.


I will agree that they potentially have the biggest upside, but at least right now: They have a big lack of enough content problem, carriage problem, and lack of exposure east of the Rockies problem.

The Pac Network only paid out $800,000 to member schools, where as the Big Ten Network was paying out $7.2 million in 2012
Posted by Tigersessed
Member since Feb 2012
498 posts
Posted on 5/25/14 at 8:08 pm to
quote:

Not sure why you think it will take 20 years for ad revenue to match carriage? BTN has seen the gap narrow to around 50 / 50 or 60 / 40 and the BTN launched in 2007. It is now 2013 (academic year) so that is well below a decade.


Here is the 2013 data: real data, not made up BS

quote:

In 2013, BTN is projected to bring in $270 million in total net revenue, of which $234 million is from license fees charged to cable and satellite distributors to carry the network, according to SNL Kagan.


quote:

Net advertising revenue has grown to a projected $29 million this year, despite a conference ban on alcohol ads.


I'll let you decide how revenue of $234M and $29M is considered 50/50.
Posted by Zamoro10
Member since Jul 2008
14743 posts
Posted on 5/25/14 at 9:08 pm to
I'm curious what the SEC content would be outside of football season?

Because all I've ever heard from SEC fan - is, it's football, football, football...and sometimes baseball and now rarely, basketball...and pansies out west follow softball, volleyball, track and field, water polo, etc.

So how is this going to work?

Pac-12 network follows the seasons and shows highlights of football games. Is the SEC network just going to show highlights of the football season during the off-season?

Because a lot of SEC schools don't even play year round sports and Olympics sports - and if they do - they don't do it well. What is to watch? The Auburn/Bama football game on continuous loop?

I don't understand these so-called networks...even Pac-12 - which has a fanbase for these sports no one really gives a shite about. SEC has no fanbase for these year round sports and they suck at it.

I don't get it. SEC Network might as well be called SEC Football/Kentucky basketball Network and just show highlights...because that's the only sport the SEC is really competitive at.

Golf, volleyball, tennis, track, water polo???

Who outside of the Pac is going to watch this shite?

It's usually Pac vs. Pac in the finals.
This post was edited on 5/25/14 at 9:11 pm
Posted by Ross
Member since Oct 2007
47824 posts
Posted on 5/25/14 at 9:11 pm to
Well SEC softball is apparently better than the west coast brand so maybe we can show a little bit of that.
Posted by Zamoro10
Member since Jul 2008
14743 posts
Posted on 5/25/14 at 9:24 pm to


Touche (for this year) the Pac-12 has won 25 of the last 30 softball championships.

Same kind of dominance with volleyball, water polo, track and field, golf, baseball, tennis, etc...list goes on and on. Pac-12 owns sports outside of football.

But I'm asking legitimate questions.

Even the Pac network - which thrives on these non-football sports...is a curious question whether it can survive.

Since this board has always told me that Olympic sports are a joke - collegiate - what is the SEC Network going to show to survive in a football only mad region??

I'm not flaming, that's a real question. Where is the audience?
This post was edited on 5/25/14 at 9:26 pm
Posted by Cheese Grits
Wherever I lay my hat is my home
Member since Apr 2012
54723 posts
Posted on 5/25/14 at 9:31 pm to
Thanks for the link

B1G operates on fiscal year ending June 30th if memory serves

Article is from fall 2013 which means numbers are probably from July 1, 2012 to June 30. 2013 fiscal year. So that would be around 15% / 85% from a year or 2 from this point in time. Did that jump significantly in the past year or so is part of the question. The bigger question is which will be the growth engine going forward.

I was speaking to some B1G folks and they seemed to think long term the ad revenue would be the bigger deal. Maybe the 60 carriage / 40 advertising after Maryland and Rutgers integrated and the B1G expanded into the east coast advertising footprint. If the B1G added Johns Hopkins it certainly was not for football. Lacrosse is a big deal in the eastern corridor even if not as popular elsewhere.

Football drives the bus now but the top tier where the real money resides is already cherry picked. Content and growth is the domain of the other sports. In that area the dollars seem less restricted going forward.
Posted by Mohican
Member since Nov 2012
6179 posts
Posted on 5/25/14 at 9:36 pm to
quote:

I'm not flaming, that's a real question. Where is the audience?



The reality is Georgia vs Auburn or A&M vs Bama for the 15th time in the month of July will in all likelihood outdraw the Pac-12 Water Polo championships threefold.
Posted by Cheese Grits
Wherever I lay my hat is my home
Member since Apr 2012
54723 posts
Posted on 5/25/14 at 9:45 pm to
quote:

I don't get it. SEC Network might as well be called SEC Football/Kentucky basketball Network and just show highlights...because that's the only sport the SEC is really competitive at.


When realignment was starting to roll in 2010, 3 of the top 5 Tier III deals in place were teams with primary college basketball teams (North Carolina, Kentucky, and Kansas). Florida was in the top 5 but not sure how much was football and how much was basketball. The issue being that basketball content is valuable in the off season and the only thing holding back even bigger revenue for basketball is the NCAA tournament.

In the early 70's the NCAA controlled the TV rights for both football and basketball. Along came Oklahoma / Georgia vs the NCAA and football was taken from the NCAA and split between the CFA schools (mostly everybody but the B1G and PAC) and the non CFA schools (B1G + PAC + ??) and those TV media values went from the NCAA to the schools.

If the Big 5 (and maybe someday just 4) left the NCAA tournament and formed its own, that billion or so each year would then go to the schools and not the NCAA. The monetary gap between football and basketball would narrow considerably overnight. People still watch March Madness so those dollars would just switch and not the demand. Folks forget in the past the NIT was the big tournament and the NCAA was the upstart.

In a more simplistic view, football provides the bulk of the money but everything else provides the bulk of the content. There is a place for both in a conference specific network.
Posted by Zamoro10
Member since Jul 2008
14743 posts
Posted on 5/25/14 at 9:56 pm to
I understand you argument and you provide good facts.

I just don't believe or know that SEC fan will tune in considering what I've read on this board that last 6 years of denigrating every other sport that wasn't football.

I'm not sure a fanbase is there.

Maybe it is...maybe once the SEC gets good in these other sports people will take pride. I don't know. Will the Unis...invest in these year round sports to support the Network?

Football can only do so much. And unlike the Pac - there isn't a long long history of winning or support for Olympic sports in the SEC.
This post was edited on 5/25/14 at 9:58 pm
Posted by Guess
Down The Road
Member since Jun 2009
3773 posts
Posted on 5/25/14 at 9:59 pm to
quote:

I'm curious what the SEC content would be outside of football season?


Same content as the Pac 12 network for the most part and if I had to venture a guess, even the minor sports will be as popular as anywhere else, which isn't saying much. Basketball will be more popular for the other conference networks, but it's still very popular here. Baseball is actually a revenue sport to a few schools down here and will carry live sports well into June.

Football, the real money driver in this whole thing is just bigger in SEC country than anywhere else, and the SEC will have 10 more games in it's inventory than the Pac. Also, The SEC Network will only have the national network, not 6 other regional networks to provide content for. That's huge. Content is problem for all of these conference networks, but in reality it should be less of a problem for the SEC network especially because of the popularity of baseball. Nobody else has an equivalent to carry into the summer. Hockey is big for some up north, but it's season is the same time as other seasons.
Posted by Zamoro10
Member since Jul 2008
14743 posts
Posted on 5/25/14 at 10:09 pm to
Football and baseball will carry the day.

And then - like the midwest - if the SEC gets some juggernaught in a sport nobody watches - like Penn State and Nebraska in volleyball - maybe people will tune in.

But if the SEC remains non-competitive in a lot of those other sports...what then?

I don't know...the Pac is really good at a lot of shite and still nobody watches. We all focus on football and basketball. Pac can build a network and pretend people will watch these other sports because of a long history of winning - but so what? Nobody really watches anyways.

I just don't see how these networks work longterm - I know the SEC and Pac and Big10 got great initial money deals. But most of the sports are just bragging rights that nobody watches. Even college baseball.

Like I said, if the Pac can't make it work, I doubt anyone else can...because the Pac is supposed to be the conference where everyone loves these other sports...but they don't really.
Posted by Cheese Grits
Wherever I lay my hat is my home
Member since Apr 2012
54723 posts
Posted on 5/25/14 at 10:15 pm to
quote:

I just don't believe or know that SEC fan will tune in considering what I've read on this board that last 6 years of denigrating every other sport that wasn't football.


This board is often far out of touch with fans of schools. If 15,000 folks show up for a gymnastic meet at Alabama or 24,000 show up for a women's basketball game at Kentucky it seems pretty obvious there is a fan base.

quote:

Maybe it is...maybe once the SEC gets good in these other sports people will take pride. I don't know.


I think that is part of it, but the bigger part will be long term fans who have been priced out of football by the corporate folks moving in. Say you have been Alabama football fan all your life but can no longer afford to go. You probably don't stop being a fan but maybe you start attending basketball or baseball because it is easier to afford. My guess is that is where the growth will come from.
Posted by nebraskafaninwi
Member since Mar 2013
2655 posts
Posted on 5/25/14 at 10:16 pm to
quote:

If the B1G added Johns Hopkins it certainly was not for football


Yes, Johns Hopkins and some other schools are going to be apart of the B1G for Lacrosse. It is a money making sport for many schools in the northeast.
Posted by Guess
Down The Road
Member since Jun 2009
3773 posts
Posted on 5/25/14 at 10:21 pm to
Well, I'd say as a conference the SEC is near the top of indoor/outdoor track and field, golf, gymnastics, softball, and women's basketball. Even with all the talk on this board, the minor sports should be pretty close to the same as any other conference. If nothing else is on a lot of people will watch something that there school is participating in even if they aren't that good.
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