Big East shopping for new TV deal - Game on (or no games on).

[huskymedic]

Big East shopping for new TV deal

Updated: October 26, 2012, 11:59 AM ET
By Brett McMurphy | ESPN


The Big East will not agree to a media rights deal with ESPN before the end of next week's 60-day exclusivity window, allowing the conference to negotiate with other networks, according to league sources.

The Big East now will be free to negotiate its media rights deal with other networks, specifically NBC Sports Network/Comcast, which has shown the most interest in the league, and Fox.

In April at the Big East's spring meetings in Ponte Vedra Beach, Fla., NBC Sports/Comcast and Fox provided in-depth "pitches" to the league's athletic directors. Sources said the league's AD's were most impressed by the presentations from NBC Sports.

The Big East may still end up re-signing with ESPN, but the league is banking on multiple networks bidding on its media rights deal to drive up its worth, league sources said.

"We've been having productive discussions with the Big East and hope to continue our longstanding relationship," ESPN spokesperson Josh Krulewitz said.

At last week's basketball media days in New York, Big East commissioner Mike Aresco said he was "optimistic about getting something done" with ESPN. "We're talking," Aresco said. "Talks have been good and constructive. They value our product immensely. We value them. We're continuing to talk. We'll see. "If something else develops, we'll see. We have a lot of interest from other networks and you would expect that because our product is so good and so plentiful."

In the past year, the Big East had West Virginia, TCU, Syracuse, Pittsburgh and Notre Dame announce they were leaving the league. The Big East has responded by adding Temple this year and will add Boise State, San Diego State, Memphis, UCF, Houston and SMU next year and Navy in 2015.

Aresco has said the league also will add another football-only member by at least 2015.

The Big East's current basketball media rights deal with ESPN and CBS expires after the 2012-13 academic year, while the football deal with ESPN expires after the 2013-14 academic year.

The Big East's current six-year media rights deal is worth $3.12 million annually for each of the eight full members and $1.5 million annually for each of the eight non-football members. The eight football members split $13 million; the 16 basketball members split $24 million.

In April of 2011, former Big East commissioner John Marinatto recommended the Big East accept a nine-year deal from ESPN worth $1.17 billion, an average of $130 million annually. That deal would have earned full members $13.8 million a year and non-football members $2.43 million a year. However, the league's presidents voted to turn it down.

At that time, that offer was comparable to the ACC's media rights deal (then worth $155 million annually), but the Big East's presidents gambled they could get a better deal by waiting until now.

It's uncertain what the Big East's new media rights deal will bring. Media estimates have varied drastically, putting the Big East's media rights worth between $60 million to $130 million annually.

Based on a 14-team football league (with four football-only members) and a 17-team basketball league, a $60 million deal per year would be worth $4.06 million each for the 10 full members; $3 million each for the four football-only members (Boise State, San Diego State, Navy and TBA); and $1.06 million each for the seven non-football members.

A $130 million deal per year would be worth $8.8 million each for the 10 full members; $6.5 million each for the four football-only members and $2.3 million each for the seven non-football members.

By comparison, last month the Big 12 signed a 13-year media rights deal with ESPN and Fox worth $20 million annually per school.

The other current BCS AQ conferences -- the Pac-12, Big Ten, SEC and ACC -- each have media rights deals worth between $18 million and $21 million annually per school.

Brett McMurphy covers college football for ESPN

 

[ctchamps]

In April of 2011, former Big East commissioner John Marinatto recommended the Big East accept a nine-year deal from ESPN worth $1.17 billion, an average of $130 million annually. That deal would have earned full members $13.8 million a year and non-football members $2.43 million a year. However, the league's presidents voted to turn it down.
Which presidents voted it down? How is this Marinatto's fault?

A $130 million deal per year would be worth $8.8 million each for the 10 full members; $6.5 million each for the four football-only members and $2.3 million each for the seven non-football members
If the highest projections turn out to be correct, the non football schools will have a slight decrease in revenues, whereas the full members will see revenues drop from $13.8 million to $8.8 million.

Can anyone explain why schools getting $21 million dollars/school vs. schools in the BE potentially "only" getting $8.8 million is significant? Relative to a universities overall budgets how is $13 million that significant? Is this issue primarily about pride and bragging rights? And no I'm not dismissing the value of millions of dollars to reduce budget outlays.

Why can't the BE compete with this budget against other conferences if they get good exposure? In baseball none of the four top teams with revenues is playing in the world series and only one made it into the post season.

 

[nelsonmuntz]

McMurphy, or whoever from ESPN's business side is writing these articles, keeps arguing that the old $130MM/year bid is somehow relevant now. The bid is going to be higher than that one. How much is the question.

 

[nelsonmuntz]

I think NBC will come on strong and quick, because Fox and ESPN hustled NBC on the Pac 12 deal. I would not be surprised if NBC came in with an early bid on 10/31 or 11/1 that was jaw dropping by Big East expectations and told the Big East to take it or leave it. NBC knows Fox and ESPN don't want NBC into their sandbox, so why would NBC try to split the league with them?

 

[zls44]

ESPN has the right to match any offer made. Including outside the window.

 

[UConnDan97]

ESPN has the right to match any offer made. Including outside the window.

I'm not sure I understand this comment. Sure, ESPN has the right to match any offer made. Are you saying that the Big East doesn't have the right to refuse it???

 

[jbdphi]

I'm not sure I understand this comment. Sure, ESPN has the right to match any offer made. Are you saying that the Big East doesn't have the right to refuse it???

If it is a true right of first/last refusal then yes, the Big East would be forced to accept ESPN' offer if it was deemed to be substantially similar (or some legal definition) to the offer from any other party on the table. These kinds of clauses rarely go to litigation though since all parties typically lose in such an action.

 

[RS9999X]

I think NBC will come on strong and quick, because Fox and ESPN hustled NBC on the Pac 12 deal. I would not be surprised if NBC came in with an early bid on 10/31 or 11/1 that was jaw dropping by Big East expectations and told the Big East to take it or leave it. NBC knows Fox and ESPN don't want NBC into their sandbox, so why would NBC try to split the league with them?

There's also the Comcast angle and the new management commitment to Regional Sports. The Comcast Regionals need content and have some aggressive execs looking to shake up the NBC hierarchy. The usual merger and acquisition dynamics. If NBC walks away I'd read it as a win by the old guard and a loss by new management (Comcast) to change culture and vision

 

[RS9999X]

Can anyone explain why schools getting $21 million dollars/school vs. schools in the BE potentially "only" getting $8.8 million is significant? Relative to a universities overall budgets how is $13 million that significant? Is this issue primarily about pride and bragging rights? And no I'm not dismissing the value of millions of dollars to reduce budget outlays. .

At lest half of that money will make its way into coaches and AD salaries over the lifetime of the contract. That's reality. It means teams like Wake Forest can offer ridiculous sums of money to a coach as compared to a BE program. It also helps to keep football with its travel expenses in the black. Div I football is always controversial due to expenses. Many make the same argument UConn did: They can break even in Div I or post small losses making it a better financial deal than Div II (FCS). Coaching salaries are a significant expense.

In theory some programs that use student fees to finance athletics could lower fees and freeze them which always plays well among the critics of Div I sports. This isn't an issue in the top 25 programs that make buckets of money between tickets, alumni, and media and merchandise sales. It's the teams like UConn where its a big factor.

 

[zls44]

I'm not sure I understand this comment. Sure, ESPN has the right to match any offer made. Are you saying that the Big East doesn't have the right to refuse it???

They could refuse it, too. Just saying it isn't as simple as someone makes them a big offer and they just take off. Ask C-USA about that.

 

[upstater]

It is hugely significant.

What most people don't understand about university budgets is that they have fixed costs (i.e. grants, much of the endowment, etc.) They are not fungible.Only small part of a school's budget can be moved around. Of the tuition and taxpayer money that is fungible, you still have fixed costs (i.e. faculty salaries, health care, etc.)

$10 million represents a huge amount in a school with a billion dollar budget. In the last 4 years, most schools have been getting $10-20 million in cuts per year from their states, and this has caused closure of departments, increased class sizes, cancelled courses, etc.

In April of 2011, former Big East commissioner John Marinatto recommended the Big East accept a nine-year deal from ESPN worth $1.17 billion, an average of $130 million annually. That deal would have earned full members $13.8 million a year and non-football members $2.43 million a year. However, the league's presidents voted to turn it down.
Which presidents voted it down? How is this Marinatto's fault?

A $130 million deal per year would be worth $8.8 million each for the 10 full members; $6.5 million each for the four football-only members and $2.3 million each for the seven non-football members
If the highest projections turn out to be correct, the non football schools will have a slight decrease in revenues, whereas the full members will see revenues drop from $13.8 million to $8.8 million.

Can anyone explain why schools getting $21 million dollars/school vs. schools in the BE potentially "only" getting $8.8 million is significant? Relative to a universities overall budgets how is $13 million that significant? Is this issue primarily about pride and bragging rights? And no I'm not dismissing the value of millions of dollars to reduce budget outlays.

Why can't the BE compete with this budget against other conferences if they get good exposure? In baseball none of the four top teams with revenues is playing in the world series and only one made it into the post season.

 

[ctchamps]

At lest half of that money will make its way into coaches and AD salaries over the lifetime of the contract. That's reality. It means teams like Wake Forest can offer ridiculous sums of money to a coach as compared to a BE program. It also helps to keep football with its travel expenses in the black. Div I football is always controversial due to expenses. Many make the same argument UConn did: They can break even in Div I or post small losses making it a better financial deal than Div II (FCS). Coaching salaries are a significant expense.

In theory some programs that use student fees to finance athletics could lower fees and freeze them which always plays well among the critics of Div I sports. This isn't an issue in the top 25 programs that make buckets of money between tickets, alumni, and media and merchandise sales. It's the teams like UConn where its a big factor.

Thanks. And this is certainly the way things have to be considered from a football centric perspective. In order to break into the big time there is a need to offer monies to get or keep the best coaching staffs and although there are the situations where some unknown can come along and elevate a program for lot less monies (Calhoun in his initial hire in bb for instance) that's a difficult path to take and one with low probabilities.

I had already factored your explanation when I asked my question. The thing to consider, albeit I'm postulating a position with people who are primarily considering the goal of making the UConn football program competitive if not elite, is when does the cycle of money driving things destroy the beauty of the sport itself? And how much of that destruction is the result from our own less than healthy need to get satisfaction from something outside of ourselves, something in this case, which we have no or minimal control over?

I'll put it another way. If UConn gets "only" $8 million from a contract and some Pac team gets $21 million should we look at this as a failure of $13 million? Perhaps we could consider the concept that the bb schools will only get $2.5 million and that's a plus for the football schools. Or perhaps the $8 million is way more than the WAC or Mountain West or the preponderance of all the other conferences that have football are getting. And maybe we may want to add some perspective and consider that somehow the students, faculty, alumni and fans at these schools are not jumping off cliffs as a result of the differential in numbers.

I'm not advocating against the conference trying to survive and elevate itself to elite status. I'm recommending to those of us who are driven to attain that goal that there is a difference between wanting something badly and being able to accept circumstances vs. insisting things change to meet our expectations, particularly when we have no control over the outcomes. The former is healthy, the latter isn't.

There were a lot of mistakes people made within the BE and at UConn regarding football from the beginning of the conferences creation until now. But there were many positives as well. And somehow I think some of us too focused on the negatives. And that may be something flawed within us as opposed to the BE conference.

 

[upstater]

Thanks. And this is certainly the way things have to be considered from a football centric perspective. In order to break into the big time there is a need to offer monies to get or keep the best coaching staffs and although there are the situations where some unknown can come along and elevate a program for lot less monies (Calhoun in his initial hire in bb for instance) that's a difficult path to take and one with low probabilities.

I had already factored your explanation when I asked my question. The thing to consider, albeit I'm postulating a position with people who are primarily considering the goal of making the UConn football program competitive if not elite, is when does the cycle of money driving things destroy the beauty of the sport itself? And how much of that destruction is the result from our own less than healthy need to get satisfaction from something outside of ourselves, something in this case, which we have no or minimal control over?

I'll put it another way. If UConn gets "only" $8 million from a contract and some Pac team gets $21 million should we look at this as a failure of $13 million? Perhaps we could consider the concept that the bb schools will only get $2.5 million and that's a plus for the football schools. Or perhaps the $8 million is way more than the WAC or Mountain West or the preponderance of all the other conferences that have football are getting. And maybe we may want to add some perspective and consider that somehow the students, faculty, alumni and fans at these schools are not jumping off cliffs as a result of the differential in numbers.

I'm not advocating against the conference trying to survive and elevate itself to elite status. I'm recommending to those of us who are driven to attain that goal that there is a difference between wanting something badly and being able to accept circumstances vs. insisting things change to meet our expectations, particularly when we have no control over the outcomes. The former is healthy, the latter isn't.

There were a lot of mistakes people made within the BE and at UConn regarding football from the beginning of the conferences creation until now. But there were many positives as well. And somehow I think some of us too focused on the negatives. And that may be something flawed within us as opposed to the BE conference.

Were it not for the country's financial straits, this might not be a problem. But we are talking about this stuff while school budgets are being cut. If a school budget is being cut while the athletic side's budget is rising to keep up with the Joneses, that's a problem. Think Rutgers.

This is why the Vitale's and Wetzel's and Forde's of the world who lecture the presidents on having lost perspective when it comes to doing right by the athletes are somewhat off kilter. These guys are perfectly fine working for the media side of the operation, but the people being hurt in thi instance are athletes from elite sports. The presidents however are looking after the academic side. People at places like Virginia and Vanderbilt and Northwestern are thinking: less money being sucked from the academic side.

I do think the presidents are kidding themselves, however, since they end up servicing the facilities build-out.

 

[ctchamps]

It is hugely significant.

What most people don't understand about university budgets is that they have fixed costs (i.e. grants, much of the endowment, etc.) They are not fungible.Only small part of a school's budget can be moved around. Of the tuition and taxpayer money that is fungible, you still have fixed costs (i.e. faculty salaries, health care, etc.)

$10 million represents a huge amount in a school with a billion dollar budget. In the last 4 years, most schools have been getting $10-20 million in cuts per year from their states, and this has caused closure of departments, increased class sizes, cancelled courses, etc.

I understand this concept, primarily from things you have written in the past in these forums. And I want to personally thank you for taking the time to inform us of how universities work.

I wrote a response to RS9999X which emphasizes some of my thoughts. I'll continue with my response to you. There is a visious cycle playing out in college sports imo. This has always been the case but now the situation is getting critical.

It's great to be driven to succeed and surpass others. A lot of things get accomplished as a result of that drive. But there are also many examples of serious negative consequences when those drives exceed some critical point. That critical point can be debated as to if or when it gets crossed, but sooner or later it does get crossed. And most of us are either oblivious to our own contributions in helping that point get crossed or underplay our significance in the process.

There are several players in the scenario of college football - the media, the universities, the immediate programs (in this case primarily football and basketball), the fans, and the peripheral programs (all other sports and academics). There is a lot of cooperation amongst these various components but there is also a lot of competition. When it runs well, all the components recognize the value of the system and all the components work together to keep the system going in a fair and compromising manner. But that seldom happens because each component (and within each component) their is a different idea of what is fair and compromising.

The media has probably plateaued in the profits it can make over college sports, at least for the foreseeable future. Part of that plateau is because of the recent trend by the conferences and universities to insist on a greater share of those profits along with a plateau in the general economy.

The question is where have those gains by the universities gone? Certainly monies have gone in helping to keep the various sports programs running. This is the assertion you and others have made with regards to the fixed costs component of athletics and is one of the positive arguments for this cycle of monies that has evolved. And peripheral university programs have benefited, the very least because there would be less debate to sacrifice academic programs to keep athletic programs going.

But a significant portion of the increases that the universities received from the media has gone to the coaching staffs. With that decision, there has been a greater insistence on performance on the part of the coaching staffs. From that insistence there has been a greater pressure than ever to game the system. The players are not oblivious to the monies and the pressures on the programs. Like all other parties that are driven for success, they want a piece of the monetary action. And they have more leverage than ever with this regard so more of them are receiving these rewards.

College football has gotten better performance wise on the playing field particularly with the elite programs. The price for this has been a greater corruption and compromise of those things we consider moral and ethical behaviors. Our part as fans is to recognize this process, and decide if we want to continue it.

 

[ctchamps]

Were it not for the country's financial straits, this might not be a problem. But we are talking about this stuff while school budgets are being cut. If a school budget is being cut while the athletic side's budget is rising to keep up with the Joneses, that's a problem. Think Rutgers.

This is why the Vitale's and Wetzel's and Forde's of the world who lecture the presidents on having lost perspective when it comes to doing right by the athletes are somewhat off kilter. These guys are perfectly fine working for the media side of the operation, but the people being hurt in thi instance are athletes from elite sports. The presidents however are looking after the academic side. People at places like Virginia and Vanderbilt and Northwestern are thinking: less money being sucked from the academic side.

I do think the presidents are kidding themselves, however, since they end up servicing the facilities build-out.

LOL. We are saying the same thing. You're just a smarter dude than I am and it takes me a longer time and a greater number of words to say similar things.

 

[RS9999X]

I do think the presidents are kidding themselves, however, since they end up servicing the facilities build-out.

Sadly this is where I think Div I has gone astray. When there are dedicated facilities for the Basketball teams and gootball teams and games are played at the XL and the Rent there's the question of whether the facilities benefit the whole university. I'm firmly behind the need to add to facilities; I'm not at all convinced these islands being created for a small eltie group on the university is a good thing. It plays to the critics and plays to them in a big way.

 

[Husky68]

If there is a right to match contract, NBC can pull a "Linn" on ESPN to make it "unmatchable". Could put in contract "BE has right to chose any time slot for games on any associated network where games are shown for the 1st 3 years of contract". NBC ok as have no other CFF, ESPN just couldn't match.

 

[UConnDan97]

If it is a true right of first/last refusal then yes, the Big East would be forced to accept ESPN' offer if it was deemed to be substantially similar (or some legal definition) to the offer from any other party on the table. These kinds of clauses rarely go to litigation though since all parties typically lose in such an action.

But is the Big East currently under such a mandate of "right of last refusal" with ESPN? This is the first that I am hearing about this, and I would have expected someone to report on it, especially as the 60-day window closes. Does anyone have any info on whether or not the Big East has this clause in its current contract??

 

[UConnDan97]

They could refuse it, too. Just saying it isn't as simple as someone makes them a big offer and they just take off. Ask C-USA about that.

Oh, okay. I agree with you. Also, why would the commissioner of the Big East want to just "run off" with a big offer in hand without trying to get a counter-offer from someone else? That's the whole point of us "going to market"; to try to get the best deal possible.

I've said it before and I'll say it again. I don't like the way ESPN has treated the Big East, particularly over the past 12 months, but if they are the highest bid, the Big East would be foolish not to stay with them. I just want the highest bid possible to make UConn the most competitive institution possible...

 

[upstater]

LOL. We are saying the same thing. You're just a smarter dude than I am and it takes me a longer time and a greater number of words to say similar things.

Well, I'd say it has little to do with being smart; it's just being inside a university and being able to take a look at how it operates.

The real problem is the culture. The reason why Presidents want to offload athletics even if it means allowing the AD to become a goiter is that they are not allowed to take a proper budgetary approach to athletics. The BOT and the alumni would kill them for doing so. This is why Presidents do the next best thing for the school-->go for the $$$.

 

[Marty Jackson]

ESPN has the right to match any offer made. Including outside the window.

That isn't going to happen because ESPN won't be able to match any offer.
If it came down to $'s only then sure ESPN could match. But there will be items that will clearly prevent ESPN from matching.

Bottom line, Not an issue. If be wants to go with NBC or other network they will.

 

[UConnDan97]

That isn't going to happen because ESPN won't be able to match any offer.
If it came down to $'s only then sure ESPN could match. But there will be items that will clearly prevent ESPN from matching.

Bottom line, Not an issue. If be wants to go with NBC or other network they will.

I'm not sure what you mean by "items that will clearly prevent ESPN from matching." Unless you are referring to the fact that NBC will likely be a much more positive promoter of the Big East, everything else is in ESPN's favor at this point. The question is which network will offer the best financial deal possible, because let's be honest; THAT is what this will come down to at the end of the day...

 

[CL82]

They could refuse it, too. Just saying it isn't as simple as someone makes them a big offer and they just take off. Ask C-USA about that.

Then I'm not sure how much that is really worth, since anyone has the right to match (or beat) an offer at any time. Actually, I wouldn't mind ESPN having a right to match an NBC offer and keep the Big East since it would then be in NBC's interests to make an offer that ESPN couldn't match. That mean's more money and better time slots for the Big East (and time slots and broadcast network access are tools that the NBC has that ESPN doesn't given the plethora of product already available to it).

It has been a pain in the butt getting here, but at long last the Big East has an opportunity to get market value for it's TV rights. I think they are in for a windfall, but we will know soon enough.

 

[nelsonmuntz]

They could refuse it, too. Just saying it isn't as simple as someone makes them a big offer and they just take off. Ask C-USA about that.

I don't think any sports programming of any type has ever been successful unless it was broadcast on ESPN.

 

[WestCoastHusky]

I don't think any sports programming of any type has ever been successful unless it was broadcast on ESPN.

Hockey isn't doing horrible on NBC. I would take chances with NBC if it means BE will get coverage on their over the air network. ESPN won't be able to provide that. ESPN might be able to provide money but there is no way they can match it coverage wise. I seriously think BE needs to walk way from ESPN due to its constant attack on the BE.