B1G TV Revenue Could Go to $40 Million Per School

Iceland12

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The top ranked Ohio State Buckeyes traveled as far east for a conference game as they have this weekend as they made the 510 mile journey to Piscataway to face Rutgers. While the historic visit was much hyped, the game turned into a rout as the Buckeyes trounced the Scarlet Knights 49-7 in a game that was never in doubt from the opening whistle.

In many ways, it was symbolic of Rutgers’ brief tenure in the Big Ten – little competition on the field, but plenty of attention (and generated revenue) off the field.

In spite of a predicted blowout coming to fruition, Rutgers-Ohio State was played in primetime within a stone’s throw of the largest media market in the country. (For now, let’s continue with the Big Ten’s theory that the Empire State Building is catching hold of Scarlet Knights and Big Ten fever.) And to this point, that’s Rutgers’ biggest contribution to the Big Ten – television eyeballs.

Well, scratch that. It’s not even necessarily television eyeballs. It’s just televisions… whether they’re actually being watched or not.

The biggest victories Rutgers and Maryland have provided the Big Ten since east coast expansion have not been in football or basketball, but in television revenue. BTN has upped their subscriber base and their advertising revenue thanks to getting clearance on cable systems back east. Keep in mind that just one carriage agreement in New York is going to net about $50 million annually to the conference.

Even their Big Ten compatriots are aware of the real reasons why Rutgers and Maryland are in the conference. Just check out this Urban Meyer quote via the New York Times:

The reasoning has a lot to do with geography. Ohio State Coach Urban Meyer, who will lead his top-ranked Buckeyes into Piscataway on Saturday night for a nationally televised game, said that New Jersey had “as good high school football as anywhere in the country, and obviously a ridiculous amount of TV sets.”

Those TV sets may help the Big Ten negotiate a blockbuster new television deal in the next year, and they have already helped the Big Ten Network, according to its president, Mark Silverman. The network, which is now in more than 60 million homes nationally, added eight million subscribers in the New York metropolitan area in the past year, a period that coincided with Rutgers’s first year as an associate member of the Big Ten. It also experienced a 20 percent year-over-year rise in advertising revenue — more than twice what would have been expected without conference growth.

Just how much will those “ridiculous amount of TV sets” help the Big Ten and its member institutions? We all know Big Ten TV rights are one of the last fishes out there to catch in the sports media landscape with most of the other major properties well locked up into the next decade. With rights fees still exponentially increasing across sports, and with an expanded Big Ten looking to cash in thanks to their eastward expansion into more homes and more markets, the conference is setting up for a huge payday.

Just how huge? Payouts to each school could well exceed $40 million dollars:

But Rutgers will fully vest as a Big Ten member in 2022, and will then start receiving a conference and N.C.A.A. payout estimated at $35.5 million a year. But that figure, too, is conservative: The Big Ten is set to sign a new deal for national broadcast rights next year, which, combined with continued growth at the Big Ten Network, is expected to establish annual payouts exceeding $40 million for each program.

Barchi, echoing a criticism he himself has made, said, “Right now, at Rutgers, athletics is siphoning dollars away from the academic mission.” He added: “That is why we have a plan to eradicate that imbalance. I am fully convinced that if we stay the course, that is what’s going to happen.”

Forty. Million. Dollars.

Traditionalists might still cringe at the thought of Ohio State visiting Rutgers or Michigan visiting Maryland. With the conference superiority debate at such a premium these days, the two east coast schools aren’t exactly helping the Big Ten’s reputation and winning any extra bragging rights. One school suspended their coach while the other was fired just this season. It’s going to take an awful lot for longtime Big Ten fans to ever get excited about the on-field prospects of the two schools and what they might contribute to the conference.

But this is what makes Jim Delany the mad genius that he is – the addition of Rutgers and Maryland was never about increasing the Big Ten’s New Year’s Day bowl victories or odds at a national championship. They were about the increase in dollars that would come by expanding east. At least in that category, Rutgers and Maryland have provided one victory that is worth its weight in gold.
 

Well if they want fans to swallow the **** sandwich of Rutgers and Maryland, the least they can do is reduce season ticket prices so that those games are free.
 


It will be interesting to see what happens given ESPN layoffs. The storyline was that it was because people were unplugging. HBO and Showtime are now offering direct streaming services and the writing is in the wall for everyone else. ESPN/BTN is now the only reason I have cable.
 

It will be interesting to see what happens given ESPN layoffs. The storyline was that it was because people were unplugging. HBO and Showtime are now offering direct streaming services and the writing is in the wall for everyone else. ESPN/BTN is now the only reason I have cable.

At the rate the orchestrated monopolies of cable are charging exorbitant amounts monthly, it is no wonder people are dropping cable.

Corporate greed will be the undoing of college football. The B1G commish better be careful how far he looks into the crystal ball. Don't get too sucked into the greed trend. Leave some B1G meat in the bone for ABC/CBS/NBC and not give total exclusive rights to ESPN in case cable implodes.

CONcast wouldn't let you have BTN unless you up your subscription level. Sooner or later when I have to pay $200 monthly, I am dropping cable.
 


Hopefully soon, the B1G follows the WAC. Mid 90s the core 8 met at an airport and wondered why they were splitting the pie 16 ways. The Mountain West was born. Get the 10 Big Ten members at MSP and get us a real Big Ten, split 10 ways.
 

I am one without cable/dish...it sucks trying to follow sports, but since it has been about 5 years, I find myself missing it less all the time. It's nice not having that bill. I'm hearing more and more dropping all the time
 

I dropped cable at the begging of the year and it's so nice saving $100 month. I've use my parents or brothers BTN2Go and WatchESPN logins a few times to watch gopher games and it works okay, other than a few sports i never even think about wanting cable TV. If I could just subscribe and just get ESPN, ESPN2, B1G Network, and FOX Sports North I would be SOOOO happy, but no. I need to pay $100 a month for a million channels I don't and wont watch ever and pay all those stupid rental fees for HD service boxes for each room and crap.
 

I dropped cable at the begging of the year and it's so nice saving $100 month. I've use my parents or brothers BTN2Go and WatchESPN logins a few times to watch gopher games and it works okay, other than a few sports i never even think about wanting cable TV. If I could just subscribe and just get ESPN, ESPN2, B1G Network, and FOX Sports North I would be SOOOO happy, but no. I need to pay $100 a month for a million channels I don't and wont watch ever and pay all those stupid rental fees for HD service boxes for each room and crap.

what do you pay for internet service?
 



I'm almost on the other side of the fence here.

For the last 5 or so years I haven't had cable or dish and have just relied on online links to watch local sports. Although much cheaper than a cable bill you run the risk of the links being terrible and missing the game. This last weekend was a prime example as I tried finding a stream of the Vikings game. It was so choppy and hard to watch I swore that I would start looking at cable/dish plans. Complete waste as I would only use it for sports but having the peace of mind that I will get to watch every game may be worth an extra 100 a month.
 


It will be interesting to see what happens given ESPN layoffs. The storyline was that it was because people were unplugging. HBO and Showtime are now offering direct streaming services and the writing is in the wall for everyone else. ESPN/BTN is now the only reason I have cable.

http://awfulannouncing.com/2015/espn-make-3-billion-lost-revenue-increased-fees.html

Why, just the increase in the rights fee to the college football playoff (+$483 million annually) would be enough to cover what ESPN needs to cut over the next two years. It may not be a one-to-one comparison, but we’re seeing the price ESPN is paying not just in dollars, but in human resources too, to have the right to televise those three games.

Add on top of that the roughly $800 million extra ESPN has to pay to the NFL and the NBA each in their new rights deals taking effect and we’re talking about an extra $2 billion that ESPN has to come up with somehow just in those three contracts. That’s not to mention what ESPN may have to pay the Big Ten coming up or the other smaller increases for sports like MLS and other conferences. It’s insane. Add in everything else that’s on this list from SBJ’s John Ourand and it comes to $2.8 BILLION in increased fees from new deals signed over the past few years.

But on the other side, ESPN is also being hurt by lost revenue from cable and satellite subscribers from people cutting the cord or reducing their cable packages down to the bare minimum. It’s not as much as the increased rights fees, but it certainly has an impact.

In Ourand’s great piece from this week talking about the financial realities ESPN is facing, he wrote this about ESPN’s diminishing subscriber base (bold emphasis added):

ESPN’s business model — the dual revenue streams of advertising revenue and affiliate fees — always has been its strength. It still is. But that model has had some challenges, mainly due to a decision ESPN made several years ago that has come back to hurt it. ESPN had several cable carriage renewals in 2012, including big ones with distributors Comcast, Cablevision and Cox.

At the time, ESPN wanted to increase the license fee distributors pay it to $6 per subscriber per month. So its executives cut deals that made sure that ESPN and ESPN2 would be on the highest-penetrated tiers of service — expanded basic. At the same time, ESPN lowered penetration benchmark levels from more than 90 percent of all subscribers to a number closer to 80 percent.

“That’s part of every cable negotiation I’ve done,” said one industry executive. “If you want to negotiate a higher rate, you have to have more flexibility on penetration.”

Over the ensuing few years, cable operators discovered the low-cost, skinny bundles and started marketing them without ESPN. Expanded basic still is the most popular tier, but the mini-tiers without ESPN have been gaining traction. As a result, ESPN wound up with a rate that was higher than they thought they would get. But they left themselves more vulnerable to subscriber losses than other cable networks.

ESPN’s subscriber losses, which have seen it lose nearly 8.5 million homes in the last 4 1/2 years, according to Nielsen estimates, or down about 8 percent, are at a rate that is declining faster than the rest of the industry.

“It’s not cord cutting; it’s cord shaving,” said one executive familiar with ESPN’s strategy. “ESPN is losing subscribers at a faster rate than others.”..
 

Comcast now wants to charge for internet data usage now that cable subscribers are dropping like flies, or cutting down to the bare minimum package just to get the internet services.

Their greed and exorbitant fees with ESPN/ESPN2 &BTN will be passed down to all their bundled customers will let to mass exodus from Comcast altogether.

It is about $200 plus/month for a bundled Phone/Internet/Cable service now. They are going to be victims of their own success.
 






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