CUSA TV deal could get interesting (Charleston Gazette)

[UConnJim]

I wrote "academics" above. Schools are shuttering departments.

You looked at a database of mostly D1 schools that are bringing in more money than ever because of TV deals. Of course on average they are increasing spending. But then look at the have-nots. They are in revenue decline.

This whole thread is about the cratering of the CUSA TV deal. Less revenue = less spending.

Schools that are in places like CUSA are getting the double whammy. Huge cuts from state funding, a cut in federal funding, and now a cut in sports funding.

Can't last.

No, you wrote "people are divesting from athletics" which is just not true. In fact, the opposite is still happening as schools are still investing as most schools understand the marketing aspect of their athletics program. The CUSA media rights deal was nothing to begin with so getting nothing in a new deal is about what they were getting anyway. And a decline of $500k is 1.2% to 2.3% of CUSA member revenues, so it is not game changing.

You also said the "have nots" are in revenue decline. In 2015, the 178 non-P5 Public schools in Division 1 increased spending by an average of $1.22 million per school and increased revenues ~1.1 million per school. Aren't FGCU, Binghamton, UNH, Vermont, Maine, Central Connecticut, and UMass-Lowell the have nots? Well, their revenues are increasing and none of them have consequential media deals.

The issue for the non-P5 schools is that their revenues are not growing as fast as the P5 schools. And, if UConn hopes for a P5 invite, we have to figure out a way to grow revenues to continue to invest in athletics.

As for universities shuttering academic departments, that is a demographic problem primarily in the Northeast and Midwest as the number of high school graduates in these states are declining. And it's a problem for high priced small private colleges. The exact opposite is happening in the Sun Belt where public universities are experiencing growth. Look at UCF. Student enrollment has grown by ~40k in 20 years! And, the growing universities are investing in athletics.

 

[upstater]

No, you wrote "people are divesting from athletics" which is just not true. In fact, the opposite is still happening as schools are still investing as most schools understand the marketing aspect of their athletics program. The CUSA media rights deal was nothing to begin with so getting nothing in a new deal is about what they were getting anyway. And a decline of $500k is 1.2% to 2.3% of CUSA member revenues, so it is not game changing.

You also said the "have nots" are in revenue decline. In 2015, the 178 non-P5 Public schools in Division 1 increased spending by an average of $1.22 million per school and increased revenues ~1.1 million per school. Aren't FGCU, Binghamton, UNH, Vermont, Maine, Central Connecticut, and UMass-Lowell the have nots? Well, their revenues are increasing and none of them have consequential media deals.

The issue for the non-P5 schools is that their revenues are not growing as fast as the P5 schools. And, if UConn hopes for a P5 invite, we have to figure out a way to grow revenues to continue to invest in athletics.

As for universities shuttering academic departments, that is a demographic problem primarily in the Northeast and Midwest as the number of high school graduates in these states are declining. And it's a problem for high priced small private colleges. The exact opposite is happening in the Sun Belt where public universities are experiencing growth. Look at UCF. Student enrollment has grown by ~40k in 20 years! And, the growing universities are investing in athletics.

Sports are being chopped. It's happening at a lot of places.

And, no, the academic programs are being shuttered because of the massive withdrawal of state support. There are countless studies that have been done on this.

 

[huskymedic]

STADIUM will televise 15 Conference USA football games, including at least one involving ODU

>>Adam Anshell, vice president of sports properties for STADIUM, also said that contrary to media reports, STADIUM may televise Conference USA football and basketball after its contract with the league expires in 2018. "We're very interested" in discussing a new contract with Conference USA, said Anshell, who is attending league meetings this week in Destin, Fla.<<

>>Anshell said negotiations between C-USA and STADIUM haven't yet begun, but should shortly. C-USA's TV revenue dropped from an estimated $1.1 million per school to $200,000 when the league signed new broadcast agreements last spring. C-USA officials are hoping that the money, and national profile, get a little better once the new agreements are signed.<<

 

[UConnJim]

Sports are being chopped. It's happening at a lot of places.

And, no, the academic programs are being shuttered because of the massive withdrawal of state support. There are countless studies that have been done on this.

How do you explain the rapid growth of some of the sun belt universities? They certainly aren't cutting academic programs. And at many of the established Northeast and Midewest schools, they are cutting some academic programs, but not others. Look at the enrollment of the various schools at UConn. Engineering is growing and adding resources. English majors are declining and resources should be cut.

Are schools cutting some sports? Yes, even though revenues are increasing. But, they are taking those resources and investing in other sports.

Finally, states have been cutting state support of higher education for years and that trend has not changed, yet athletic spending has been steadily increasing.

 

[upstater]

How do you explain the rapid growth of some of the sun belt universities? They certainly aren't cutting academic programs. And at many of the established Northeast and Midewest schools, they are cutting some academic programs, but not others. Look at the enrollment of the various schools at UConn. Engineering is growing and adding resources. English majors are declining and resources should be cut.

Are schools cutting some sports? Yes, even though revenues are increasing. But, they are taking those resources and investing in other sports.

Finally, states have been cutting state support of higher education for years and that trend has not changed, yet athletic spending has been steadily increasing.

A lot of southern schools are cutting departments. I don't think some of them can call themselves universities if they keep cutting them. The Louisiana schools have totally cratered. Florida also has been cutting departments. As for English, those departments run university writing and the entire school would likely be up you know what creek without them.

Let me just give a few examples in Louisiana. ULLafayette cut Humanities departments like philosophy, ULL-Monroe cut Economics, SE Louisiana cut many programs, all of its languages. Other schools responded by taking departments entirely online.

Even Florida is not immune. FAU cut Humanities departments. FSU eliminated 10 departments, including Anthropology, Oceanography, etc.

As for the big money coming into sports, that's acknowledged. It is a result of the huge rights fees from TV. But--the G5 schools are bleeding with huge losses and subsidies. You're talking about revenues? These schools are subsidizing ports from the academic side. USA Today adds subsidies to the revenue totals. But that doesn't change the fact that the schools are bleeding with sports.

 

[UConnJim]

A lot of southern schools are cutting departments. I don't think some of them can call themselves universities if they keep cutting them. The Louisiana schools have totally cratered. Florida also has been cutting departments. As for English, those departments run university writing and the entire school would likely be up you know what creek without them.

Let me just give a few examples in Louisiana. ULLafayette cut Humanities departments like philosophy, ULL-Monroe cut Economics, SE Louisiana cut many programs, all of its languages. Other schools responded by taking departments entirely online.

Even Florida is not immune. FAU cut Humanities departments. FSU eliminated 10 departments, including Anthropology, Oceanography, etc.

As for the big money coming into sports, that's acknowledged. It is a result of the huge rights fees from TV. But--the G5 schools are bleeding with huge losses and subsidies. You're talking about revenues? These schools are subsidizing ports from the academic side. USA Today adds subsidies to the revenue totals. But that doesn't change the fact that the schools are bleeding with sports.

Upstater, yes, some Southern schools are cutting academic programs, but there are 2 prime drivers: overall enrollment and enrollment in majors.

Look at Florida, here are the enrollment growth of the schools over the past 10 years:

Florida Gulf Coast +85%
UCF +29%
FIU +24%
FAU +19%
USF +5%
Florida St. -1%
Florida -5%
Florida A&M -18%

If you grow enrollment, you grow professors and departments. If your enrollment is flat to declining, you have to cut professors and departments. Florida St. and Florida are not growing, but UCF, FIU, FAU, and USF are.

Overall enrollment in a university is important, but so is enrollment by major. Look at some UConn enrollments by major over the past 10 years:

English: 479 to 312 -35%
History: 355 to 180 -49%
Sociology: 297 to 148 -50%
Political Science: 688 to 460 -33%

Engineering: 1614 to 3273 +103%
Economics: 448 to 917 +105%
Biology: 714 to 1036 +45%

If student demand for a discipline is declining, you need to cut back on the discipline. If student demand for a discipline is growing, you have to invest in the discipline. Cutting back at universities is very difficult due to tenure, but how can you maintain spending in a major that has enrollment decline by 50%? In the real world, universities would be radically restructured due to technology and enrollment trends. Ultimately, it will happen.

 

[upstater]

Upstater, yes, some Southern schools are cutting academic programs, but there are 2 prime drivers: overall enrollment and enrollment in majors.

Look at Florida, here are the enrollment growth of the schools over the past 10 years:

Florida Gulf Coast +85%
UCF +29%
FIU +24%
FAU +19%
USF +5%
Florida St. -1%
Florida -5%
Florida A&M -18%

If you grow enrollment, you grow professors and departments. If your enrollment is flat to declining, you have to cut professors and departments. Florida St. and Florida are not growing, but UCF, FIU, FAU, and USF are.

Overall enrollment in a university is important, but so is enrollment by major. Look at some UConn enrollments by major over the past 10 years:

English: 479 to 312 -35%
History: 355 to 180 -49%
Sociology: 297 to 148 -50%
Political Science: 688 to 460 -33%

Engineering: 1614 to 3273 +103%
Economics: 448 to 917 +105%
Biology: 714 to 1036 +45%

If student demand for a discipline is declining, you need to cut back on the discipline. If student demand for a discipline is growing, you have to invest in the discipline. Cutting back at universities is very difficult due to tenure, but how can you maintain spending in a major that has enrollment decline by 50%? In the real world, universities would be radically restructured due to technology and enrollment trends. Ultimately, it will happen.

Depends on the university. if it is a service university and not a top university, they can do whatever they want. The top schools have to maintain a reputation. They don't want the rep of being professional schools, or training institutes. The AAU has criteria that demands a broad education. As you slash, you become less and less of a university.

I have a Communications major from BU so it gives me no real pleasure to say this, but as schools warehouse less than stellar students in Comm. programs, I become very very cynical. I went to one of the best comm. schools in the world, if not the best. In retrospect, I still resent the hogwash education I received there. It was because of that program that I spent semesters in Washington DC studying government and business (I actually worked for the sports agent who repped Michael Jordan and others) and also studying at the University of Padova in Italy. I can only imagine that professional schools are much much worse now than they were back in the 1980s. In fact, recent research shows this to be true, as the pro schools have horrible learning outcomes for students.

One thing about the big rise and demand for engineering is that students are responding to messages in the media and culture about STEM. So even though there's a huge rise in students, it is happening at the early levels. Check out the numbers of majors/graduates and it's a different story. The wash-out rate is very very large. Worse, these students tend not to switch majors but to either drop out or transfer. This is why schools are hiring administrators to rebalance the admissions system. It also helps that Humanities/Arts programs largely operate in the black, while engineering is so cost intensive it is in the red.

 

[CL82]

Why would any buyer want Fewer suppliers?

Do you think Coca-cola would prefer a sugar market with 1 producer or 10 ?

I guess the argument is that the buyer wants a monopoly. If it has sufficient supply for it's needs, the excess is potential competition.

FWIW a better analogy would probably a retailer with an exclusive contract to sell a specific high demand product. He doesn't want the store next door selling brand x at 25% of his cost.

 

[IthacaMatt]

Those locations are not suppliers to the retailer, they are part of the retailer.
The conferences are *suppliers* to ESPN and Fox. I can absolutely understand why the suppliers want there to be fewer competitors.
But it eludes me why the buyers - ESPN, Fox, CBS - would benefit from less supply.

Because (a) there is over-supply, and (b) because not all supply is equally valued.

Basketball doesn't matter so much in the economics of the NCAA TV rights because there is too much supply and poor ratings result. Football has less supply, which is why football has been more valuable - it gets far better ratings per game. But if you look at the NFL, even that incredibly valuable property is subject to over-supply. These Thursday night, Sunday night and even Monday night games are not automatic ratings draws anymore.

And this leads to point (b) above - not all "supply" is equal. Even in the NFL, the Thursday night games have tanked because of perceived crappy match-ups. Half the teams in the NFL are unwatchable, even if you are a fan. The NFL has about a half dozen too many teams, maybe more. Now, if you look at college sports, in football OOC games of P5 conference teams are getting weaker and weaker, with fewer quality match-ups. If you look at Bowl games, you have far too many, and all their ratings and attendance suffer. Once they devalued the New Year's Day bowls, it got even worse. There are fewer and fewer games that truly matter on TV.

Finally, when you turn to basketball, the trend isn't great. Last year was a very big exception to NCAA tournament coverage, jumping from around 8 million viewers for opening weekend in 2016 to 11.9 million in 2017 - the biggest viewership since the early 1990s. But that's the biggest audience in a generation, and it's still only 12 million viewers. That doesn't make the top 100 programs broadcast in 2016, or the top 40 broadcasts if you leave out sports.

Couple that with declining cable subscribers, and I will be surprised if conference pay-outs don't come down when the TV contracts come up for renewal in 2025 or so.

 

[billybud]

1...FSU has a Oceanography program...the Department of Earth, Ocean, and Atmospheric Sciences.


The FSU Oceanography area offers several graduate degree programs. Applicants can choose between a Ph.D. in Oceanography, a Master's in Oceanography or a Master's degree in Aquatic Environmental Science.

Oceanography | Earth, Ocean and Atmospheric Science

2...FSU has a Department of Anthropology

Department of Anthropology | Department of Anthropology

 

[billybud]

I notice that UConn, Florida, FSU...and others are turning down students....they could get the numbers but are being choosy.

UConn turned down 50% of entrants, FSU 44%.

UConn and FSU's average ACT was 28

 

[huskymedic]

 

[Stray_Dog]

W

Those locations are not suppliers to the retailer, they are part of the retailer.
The conferences are *suppliers* to ESPN and Fox. I can absolutely understand why the suppliers want there to be fewer competitors.
But it eludes me why the buyers - ESPN, Fox, CBS - would benefit from less supply.

why did Ford get rid of Mercury, Chrysler get rid of Plymouth, GM get rid of Saturn, Pontiac, etc... ?

 

[billybud]

W

why did Ford get rid of Mercury, Chrysler get rid of Plymouth, GM get rid of Saturn, Pontiac, etc... ?

Consolidate here, expand there. Been going on for a century.

Mercury's were basically fords with common underpinnings..they were consolidated. Same with Pontiac and GM.

Why did Ford buy Volvo, Aston Martin? Why does Ford have Ford of Europe? They expanded market.

GM dropped Lasalle years ago, Saturn, Pontiac and Hummer...but moved into Opel, Vauxhall, Holden, Daewoo (sold in 150 countries under different labels). And the Chinese Wu.

 

[Stray_Dog]

Consolidate here, expand there. Been going on for a century.

Mercury's were basically fords with common underpinnings..they were consolidated. Same with Pontiac and GM.

Why did Ford buy Volvo, Aston Martin? Why does Ford have Ford of Europe? They expanded market.

GM dropped Lasalle years ago, Saturn, Pontiac and Hummer...but moved into Opel, Vauxhall, Holden, Daewoo (sold in 150 countries under different labels). And the Chinese Wu.

...but this is my point, consolidation of brands does happen, the big 3 consolidated, college football will consolidate - why, where's the money for all these schools? Also, how many total colleges are there, how many schools are not filling up their freshman enrollment? Schools are getting to expensive and many kids will have loans far exceeding their earning potential. I point all these facts out as to reasons why sports for the G5 will soon contract. It's not if but when, provided the trends I point outdo not change - higher education costs, less number of majors being offered at the colleges, and lower enrollments.

 

[uconnfan68]

Absolutely true.

I've thought this was the intent from the start. They do not want to pay 120 teams in football and soon enough, they will not want to pay 320 in basketball. There's room for four or five conferences and then perhaps 20 programs making minimum wage to play the Washington Generals' role.

Not a nickel extra from me. If it's just P4-5, I stop caring.

 

[billybud]

and, after it all, the gre

I guess the argument is that the buyer wants a monopoly. If it has sufficient supply for it's needs, the excess is potential competition.

FWIW a better analogy would probably a retailer with an exclusive contract to sell a specific high demand product. He doesn't want the store next door selling brand x at 25% of his cost.

So, as a product manufacturer, you own the whole supply and regulate the price at which it can be sold.

The FTC allows some leeway for this...

Reasonable price, territory, and customer restrictions on dealers are legal. Manufacturer-imposed requirements can benefit consumers by increasing competition among different brands (interbrand competition) even while reducing competition among dealers in the same brand (intrabrand competition). For instance, an agreement between a manufacturer and dealer to set maximum (or "ceiling") prices prevents dealers from charging a non-competitive price. Or an agreement to set minimum (or "floor") prices or to limit territories may encourage dealers to provide a level of service that the manufacturer wants to offer to consumers when they buy the product. These benefits must be weighed against any reduction in competition from the restrictions.

 

[huskymedic]

PlutoTV?

 

[upstater]

When Andy Warhol said "every football team will be on TV for 60 minutes," this must be what he meant.

 

[Vowelguy]

Stadium is the the Sinclair Media sports station, formerly ASN and others.

 

[ZooCougar]

The beauty of America is that what works gets rewarded and what doesn't work anymore, fades..

So Sears may be gasping its last breaths and Amazon is expanding...


But...as far as divesting from athletics...more schools have been moving to FBS, schools have been building sports palaces...new training rooms, locker rooms, athlete's lounges...

The salaries of coaches have climbed so far that now assistants in football can be paid a million bucks a year.

What follows a Gilded Age?

 

[billybud]

The Progressive Era....followed the Gilded Age