FromTheInside:
Sooner/ B12 fan here. Interested on your take on the following questions (secondarily relevant to UConn fans, given possible impacts on ACC):
1. Whether 2012 valuations are doing any discounting of B12 due to perceived instability, or is that perception no longer a factor?
2. If the selection of the next B12 commissioner is linchpin in B12 expansion success, who moves the needle the most: ND AD Jack Swarbrick, Conf. USA Commissioner Britton Banowsky, NCCA guru Greg Shaheen or former NBC Sports Chairman Dick Ebersol?
3. Regarding tier III rights, why would an OU game that Fox did not in previous years select for tier II broadcast and which would then fall to PPV status, now become attractive enough to pay to put on FSW or FOK? In other words, how does Fox’s valuation of Oklahoma’s available games differ from that of Learfield Sports, so as to justify paying more for the new deal to put OU content on Fox regional networks?
4. Regarding tier III rights, how are valuations done for agreements to carry games on the internet, such as the K-State model? And do you see this type of model becoming profitable for schools with available tier III rights, in the foreseeable future?
5. Do you have any information whether the ABC/ESPN-B12 tier I contract extension requires the B12 schools to extend their assignment of media rights to the conference for the duration of the extension, or at least beyond the current six year period?
6. You stated in the other thread that the new B12 tier I contract has provisions for increasing the payout, if certain schools are added to the conference. You also speculated on who the B12 is or may be approaching. Are all of these schools included in the contract clause, and are there any more included that you did not mention? (Louisville and BYU are notably absent).
(1) We do the valuations, but we're not involved in the negotiations. So, I don't know if ESPN applied anything like that to our numbers. But, I said on page 1, nearly a week before the contract was announced that the ABC/ESPN contract would put the Big XII in the $19M - $23M payout range, and they came in towards the lower end of my expectations. So, there doesn't appear to have been any discounting. And, I never got the sense that ESPN considered the Big XII to be unstable. Once their TV rights were assigned to the conference, they were locked in. And, I know that members are open to the idea of extending that granting of rights if need be.
(2) I really have no idea on who moves the needle the most with regards to the next Big XII commissioner. I haven't heard anything with regards to who's being interviewed or how those candidates are perceived by potential target programs, etc.
(3) There are a lot of reasons why an OU game that would get passed on by FSN for Tier 2 would suddenly have value as a Tier 3 program. But, you have to understand Tier 2 contracts. They are not for "all" games not selected by a conference's Tier 1 partner. They're for a set number of games. And, every conference has stipulation on how many games the provider must select from each university. So, as is/was the case with a handful of OU games each year, there are games that are passed from almost every university......not b/c the Tier 2 partner doesn't want to broadcast them, but b/c they can only broadcast so many games, and they have to broadcast a certain # of games from every program. If they didn't do that, then smaller drawing teams like Baylor would never make it on TV, and that would put them at a competitive disadvantage. Tier 3 broadcasts have a lot of value, and it isn't very hard to turn a serious profit. Take the OU contact for instance. They're going to provide FSN with 1,000 - 1,500 hours of programing a year. Because the number of hours are huge, it doesn't take a ton of ad revenue to make a serious profit.
(4) Internet based media valuations are almost always done in house, b/c the formula is much more simplistic. You generally have a straight-forward subscription based service + targeted ad placements - operating costs, which are generally minimal. Internet based Tier 3 programing is a very profitable model, b/c it doesn't require carrier negotiations (ala DirecTV, etc). It's hard for me to imagine a time when we watch TV on the internet. But, w/ the direction of technology & the continuing increase in computer screens, I could easily see this type model being highly lucrative in 5 years or so. Just think about it.......if you sold 50k subs for $5/mo, you're looking at $3M/yr in revenue, not counting ad revenue. It's not hard to imagine a day when technology allows the internet to be monetized to a significant degree w/ regards to Tier 3 broadcasts.
(5) I don't believe the ABC/ESPN contract requires an extension of their assignment of their TV rights. But, I do know that the topic has been discussed, especially if the Big XII moves forward w/ expansion plans (an extension is something FSU has mentioned as wanting in conversations w/ unofficial Big XII representatives).
(6) I do not know with certainty which schools are on the list. But, the schools that I know are of interest to the Big XII are: FSU, Clemson, GA Tech, Miami, NC State, VA Tech, Maryland, Pitt, Louisville, Arkansas, and BYU. That doesn't mean there aren't more, or that all of them would be considered acceptable expansion targets. But, I know they have come up during internal Big XII meetings/discussions. There are others that have as well, such as Cincy & Rutgers, but not w/ as much fanfare.
