The Tier III myth

[Carl Spackler]

This is my point about the Tier 3 myth. Where are you get these numbers that the UCONN Tier 3 rights will sell for $7-8 million? To who?

The entire Big 10 sells their entire Tier II rights for $7.5 million per team. A better conference. On a better tier. With more fans. Who's paying for these rights? Maybe if you combine the existing $8 million with Tier 3 rights, you get to $10 million

This is where the value of the actual markets probably figures in. I'm pretty sure that broadcasting in NYC metro area, Houston, Dallas FW has different aspects to it than broadcasting in Nebraska - although I will actually not try to write I think how and what that might be.

 

[Carl Spackler]

Aren't you double counting on some of this? ESPN pays for the rights now and then sells it downstream. If its NBC/SNY that kind of ends the discussion. They own the content and distribute it where they see fit and promote the games to Versus and NBC as they see fit.

What Tier 3 football would there be? That's the whole contract! Regional Tier 3 with maybe one home game getting promoted upstream a year.

What tier 3? I'm pretty sure there's a difference between conference football games and non-conference football games that fits into this, although again, I'm not sure how.

 

[WestCoastHusky]

Aren't you double counting on some of this? ESPN pays for the rights now and then sells it downstream. If its NBC/SNY that kind of ends the discussion. They own the content and distribute it where they see fit and promote the games to Versus and NBC as they see fit.

What Tier 3 football would there be? That's the whole contract! Regional Tier 3 with maybe one home game getting promoted upstream a year.

BE currently owns most of UCONN's rights. I am talking about the new TV deal. It really depends on how they will structure it and what rights they will leave to individual schools. I am hope we sign something like what B12 has where schools can market their own tier-3 rights. Obviously, they will be for games that's not BE conference games. Ex: basketball vs. Hartford or football vs. UMASS. SNY would pick those up and I hope we get paid for those vs. the BE.

 

[auggie22]

UCONN has a 10 years, $80M deal with IMG. They manage all the advertising, coaches show, Website etc. This pays UCONN $8M per year.

http://ctsportslaw.com/2008/09/24/uconn-reaches-80-million-deal-with-img-college-for-media-rights/

UCONN also has a deal with Nike that pays UCONN $4.55M per year to wear Nike Stuff.

UCONN's women basketball tier-3 rights just signed for $1.14M per year.

That's $13.69M per year on top of whatever we are getting paid from the BE.

quote]

Great post. These are the facts that are lost by people who question the marketability of UCONN. Did you know that UCONN is among the top 10 (maybe even still top 5) most lucrative contracts that IMG has written. IMG - you know, the company that makes a living in valuing the marketability of college sports brands. And that company has valued UCONN in the same tier as UK, UNC and just short of UMichigan. But somehow there are fan message boards across the country that think they can appraise us through spotty inference better than the people that literally earn their living doing this (with data and research to back it). Another reason why I will say emphatically that SU/Pitt in the ACC has nothing to do with their higher brand value. The higher brand value that delivers them 25% lower sports revenues year after year?

 

[RS9999X]

What tier 3? I'm pretty sure there's a difference between conference football games and non-conference football games that fits into this, although again, I'm not sure how.

Even that isnt' simple as the pressure is on to book games against strong media draws. The ND contract was one of those contracts. We are entering an era where they really want to see 9 conference games and 2 good OOC games like Tennesse and Virginia and Michigan--the only teams on the schedule after 2013.

Of course UConn wants the home gate from the 7th home game usually the Div II game. Towson's the only true FCS left on the schedule in 2013.

I don't think there's any conincidence with Herbst looking to BC for a rivals game.

 

[auggie22]

Out of curiousity, I did a bit of digging. A lot of information is out there, but the best I could find as a reference is admittedly a blog that purported to aggregate the top local deals from the major players (IMG, LSP, etc.).

http://leatherhelmetblog.com/2010-a...e-multimedia-rights-worth-to-sec-schools.html

They have us at #8 for all local media rights deals, though they don't link to the raw data, so it is hard to say the accuracy of it.

 

[RS9999X]

They have us at #8 for all local media rights deals, though they don't link to the raw data, so it is hard to say the accuracy of it.

May not be current (2010) . And that doesn't translate into National Audience for football) which is what is really at issue with Tier 1 and 2 media rights.

 

[Jericho]

Aren't you double counting on some of this? ESPN pays for the rights now and then sells it downstream. If its NBC/SNY that kind of ends the discussion. They own the content and distribute it where they see fit and promote the games to Versus and NBC as they see fit.

What Tier 3 football would there be? That's the whole contract! Regional Tier 3 with maybe one home game getting promoted upstream a year.

I'm pretty sure he is. The numbers being thrown around are ridiculous. Here's a summary of current contracts:

http://espn.go.com/blog/bigeast/post/_/id/32789/college-tv-rights-deals-undergo-makeovers#more

The Second Tier rights on the Big 10 averages $7.5 Million per school

The second tier basketball rights for the Big East get $9 million per year...for the entire conference. Per school (if divided equally) that's more like $500,000. Not Five Million.

The point is that Tier three rights suck. Texas ended up getting one football game and 12 basketball games. And I think people misread the $15 million they are getting. They're not getting $15 million for one football game and a few basketball games and all the sports no one watches. They're getting $15 million for everything. The same things UConn currently gets $8 million for with some extra games thrown in.

UConn may be in a large market, but it does not matter if no one is watching. Uconn's Tier 3 football might consist of one game. Tier three basketball might be a handful of games (and not the conference stuff). No one is watching the other sports. The school is not getting $10 million for these rights. The number don't add up.

 

[WestCoastHusky]

I'm pretty sure he is. The numbers being thrown around are ridiculous. Here's a summary of current contracts:

http://espn.go.com/blog/bigeast/post/_/id/32789/college-tv-rights-deals-undergo-makeovers#more

The Second Tier rights on the Big 10 averages $7.5 Million per school

The second tier basketball rights for the Big East get $9 million per year...for the entire conference. Per school (if divided equally) that's more like $500,000. Not Five Million.

The point is that Tier three rights suck. Texas ended up getting one football game and 12 basketball games. And I think people misread the $15 million they are getting. They're not getting $15 million for one football game and a few basketball games and all the sports no one watches. They're getting $15 million for everything. The same things UConn currently gets $8 million for with some extra games thrown in.

UConn may be in a large market, but it does not matter if no one is watching. Uconn's Tier 3 football might consist of one game. Tier three basketball might be a handful of games (and not the conference stuff). No one is watching the other sports. The school is not getting $10 million for these rights. The number don't add up.

You are using the numbers from the BE deal now? It is a horrible deal. BE gave away the farm for little to nothing. You can't be serious if you are comparing B1G network deal to what BE has with ESPN right now. BE got paid pennies for some exposure. ESPN has not been a good partner. Do you honestly think BE is that stupid that they would sign something like this again when all the blueprints (PAC-12, B-12 etc.) for how conference should structure a deal is out there?

Plenty of people watch UCONN on SNY. In fact, SNY got some of the highest ratings for UCONN games.

http://www.uconnhuskies.com/sports/m-baskbl/spec-rel/020511aab.html

SNY just paid UCONN $1.14M a year for tier-3 women's games. There is a reason why UCONN has been generating highest revenue in the BE for years and continue to do so.

 

[Carl Spackler]

I'm pretty sure he is. The numbers being thrown around are ridiculous. Here's a summary of current contracts:

http://espn.go.com/blog/bigeast/post/_/id/32789/college-tv-rights-deals-undergo-makeovers#more

The Second Tier rights on the Big 10 averages $7.5 Million per school

The second tier basketball rights for the Big East get $9 million per year...for the entire conference. Per school (if divided equally) that's more like $500,000. Not Five Million.

The point is that Tier three rights suck. .

First off, you're linking an ESPN source? -1

I freely admit I don't know a lot about this stuff, but I'm learning. And sometimes being dumb about somehing makes it easy to think of questions.

I have a simple question - if tier 3 rights suck so badly, how come the Pac 12, Big 12 and down the line are making money with it, and nobody is trying to do what Swofford did with ESPN and the ACC?

I dont' understand this stuff, and i'm not too familiar w/ the guys out west but on simple face value, and knowing alittle bit about three important guys in all of this.....Chuck Neinas, Jim Delaney and Swofford.....if Neinas and Delaney are doing the same thing with broadasting and college athletics, and it's different than Swofford, I'm inclined to lean toward whateve Neinas and Delaney are doing as a better way to be doing things.

 

[TuxedoYoda]

In regards to Tier 3, Texas gets $15M from LHN and $9M for radio/internet and other media rights through IMG for a total of $24M

 

[The Funster]

If I understand correctly, and the light bulb went off with WestCoast's post - is that tier 3 is basically what Delaney had the foresight to consolidate for the big 10 a long time ago, in forming the big 10 network. So ceding rights isn't necessarily a bad thing, if the conference is going to form it's own television network.

I'm not sure it's a good thing for us, right now to be doing, if a big east network is to be formed, b/c it sure looks like our tier 3 rights are a lot more valueable than others in this confererence, and there's the whole thing about hybrid membership, and Notre dame.

I think that if I'm understainding correctly, maintaining your own freedom to do what you want with your tier-3 broadcasting rights, is probably what the glue behind this thing is right now.

All just internet rumor and speculation of course.

I could buy ceding tier 3 rights for a conference network like the BTN. The advantage is that you give your schools other sports a good platform for recruiting. I watch Big 10 softball a lot and I have to believe it will be an aid in the recruitment process down the road. Those schools can now say that if you go to an SEC school, you could play on ESPN but if you go to our school in the Big 10, you'll definitely get to play on our own network.

I think if you look at the ACC deal there may be some hidden value. Lets say ESPN said to the ACC, "If you give us all your Tier 3 rights we'll guarantee that we'll produce X amount of content for baseball, soccer, lax, softball, etc. The ACC might decide that having all their other sports being broadcast may be worth the value of their Tier 3 rights. They have the world wide leader in sports producing coverage of all their olympic sports which are then either broadcast on ESPN or farmed out to other regional networks. More ACC exposure would logically lead to more successful recruiting.

The problem I see with that approach, though, is that if ESPN produces and then sells it you lose the consistency of your own network. You don't have to look on different channels for different events on different days. A conference network is ideal. I have no clue what the startup cost would be though. I also don't think the NBE could do it. First, I feel that the FB schools would have to split away from the non FB schools. There is too much football related content that can be produced and I don'ty see how that can be shared. Secondly, I'm not sure the other FB schools all share the same commitment to the olympic sports.

 

[Jericho]

I have a simple question - if tier 3 rights suck so badly, how come the Pac 12, Big 12 and down the line are making money with it, and nobody is trying to do what Swofford did with ESPN and the ACC?

I dont' understand this stuff, and i'm not too familiar w/ the guys out west but on simple face value, and knowing alittle bit about three important guys in all of this.....Chuck Neinas, Jim Delaney and Swofford.....if Neinas and Delaney are doing the same thing with broadasting and college athletics, and it's different than Swofford, I'm inclined to lean toward whateve Neinas and Delaney are doing as a better way to be doing things.

It's not that you cannot make any money. It's just the money you make is not going to be huge. Not to mention conferences like the Big 10 form networks with their Tier 3 rights (and the Big 10 Network also has Tier 2 rights). It's possible to make even more money from a Network that can go beyond Tier 3 programming.

But let's be logical here. Who's going to pay tons of money to show Big East cross county and tennis? Cause that's what Tier 3 is. There's a great post in this thread quoting from Oliver Luck on what Tier 3 is. Is maybe one football game (possibly against a I-AA opponent), the leftover basketball games that the major carriers don't want, and all the other sports that 99% of America does not care about. How is that going to earn $10 million when the major contracts for the top stuff from the major conferences aren't doing much better?

Look, UConn can make money outside their Big East contract. There are posts in this thread about how they make $8 million on a lot of these other rights, things like coach's shows and radio deals. And sometimes these other rights get lump together with Tier 3 rights into one package all called "Tier 3".

Some people like to point out how UConn got over $1 million per year for it's women's basketball team. For one, UConn women's basketball is an anomaly. Last I checked, it was actually profitable as a sport (normally only Football and men's basketball are profitable). Not sure any other school in the country could swing a deal like that for its women's basketball. And that deal appears to include some other stuff (like coach's shows) and basically the entire schedule (since women's basketball as a whole falls into Tier 3). The UConn men's basketball Tier 3 rights would be games against Wagner and Coppin State. It would be a small fraction of the games against the worst opponents. And sweetheart deal or no, when the Big East as a whole is averaging a little over $500,000 per team for many more games against the premier opponents, why are a small handful of games against the worst opponents going to earn 6 times as much?

Throw out the current Big East deal for a second. The Big Ten sold a choice selection of its basketball games AND the conference tournament semifinals and finals for $1 million per year per school. This is at a minimum twice the content (probably more like triple to quadruple), way better games, and some of the most watched Big Ten games a year. And they're going to get one third what UConn will get for a handful of out of conference games? No. Because UConn's Tier 3 basketball rights are not worth much. No one's are.

 

[Jericho]

In regards to Tier 3, Texas gets $15M from LHN and $9M for radio/internet and other media rights through IMG for a total of $24M

I'm pretty sure that is not correct. That prior posts indicating otherwise are misled. The $15 million per year LHN deal superseded and bought out the prior $9 million IMG/Learfield deal. Or at least some of the $15 million goes to pay off the other deal. It's still a sweetheart deal, but I think people are misreading it.

Here's an interesting post on some Tier 3 info for public schools (this includes many non Tier 3 revenue like coach's shows and other media revenues):

http://businessofcollegesports.com/2011/05/06/school-specific-broadcasting-revenue/

Edit to the above. Found this posted on another site:

The contract (LHN) was with IMG (ISP), not Learfield. The LHN contract pays IMG for rights that IMG owned that are being transferred to ESPN. There is an escalator in the contract every year.
In the first year, Texas netted a tick under $11 mil, and kicked $5 mil of that to the school for academics. There is a 3 percent escalator in the contract every year. Basically, once ESPN makes back its investment, ad proceeds are shared. IMG is an agent for ad sales.

 

[Dann]

so learning all about our t3 rights has been great, great thread guys. based off this, is it possible that we passed on the acc and are holding out for a b12/b10 invite or are going to stay with the nbe becuase our t3 stuff is so good with sny putting out to so many?

 

[WestCoastHusky]

so learning all about our t3 rights has been great, great thread guys. based off this, is it possible that we passed on the acc and are holding out for a b12/b10 invite or are going to stay with the nbe becuase our t3 stuff is so good with sny putting out to so many?

It is one possibility we have to consider. B1G or B12 would be much better options for making money. ACC would be good for regional rivals and academic fit. NBE would be a good place to grow our FB program. Our basketball and other Olympic sports will be fine in the NBE. At end of the day, we need to do what's best for UCONN. By controlling our own tier-3 rights, we will more or less have a major say in our future. We need to do that in the nBE regardless of the future. I believe schools like ND and BYU (if they join) will help us achieve this goal.

 

[Jericho]

so learning all about our t3 rights has been great, great thread guys. based off this, is it possible that we passed on the acc and are holding out for a b12/b10 invite or are going to stay with the nbe becuase our t3 stuff is so good with sny putting out to so many?

Let's be clear, no one passed on anything. If the ACC came calling, UConn would agree in a second. While schools should earn more in both the Big 10 and the Big 12 than the ACC, the difference is not huge. And the Big 12 has its others problems that casued 4 good schools to leave a huge money making conference. Not to mention some geographic concerns moving over to the Big 12. Third Tier rights will not be a deciding factor in conference movement.

 

[Carl Spackler]

I don't understand the numbers in all of this or what any of it really means. But once again, from my perspective.

You've got a couple of power playres in all of this. Swofford, Delaney, Neinas, Slive, Scott...........They're all dealing with broadcasting arrangments in the billions of dollar range, for leagues of university athletic departments.

You look at the deals in place, and a simple thing jumps out at me.....which one of these things is not like the other?

And then - when you look at the track records of these guys, and what they've done, and learn a little bit about them - I still have yet to hear a single argument as to why what Swofford has done is better than what any of the others have done.......and there's pleny of reason, simply based on their histories, and experiences, to think that what the other four have done - is most likely a better way to be doing the business.

 

[Jericho]

I don't understand the numbers in all of this or what any of it really means. But once again, from my perspective.

You've got a couple of power playres in all of this. Swofford, Delaney, Neinas, Slive, Scott...........They're all dealing with broadcasting arrangments in the billions of dollar range, for leagues of university athletic departments.

You look at the deals in place, and a simple thing jumps out at me.....which one of these things is not like the other?

And then - when you look at the track records of these guys, and what they've done, and learn a little bit about them - I still have yet to hear a single argument as to why what Swofford has done is better than what any of the others have done.......and there's pleny of reason, simply based on their histories, and experiences, to think that what the other four have done - is most likely a better way to be doing the business.

What's out of line? I'll grant the ACC has the worst deal, but outside the PAc-12, they also have the worst football.

Acc gets 17 million per
Big 12 likely will get 20 million
Big 10 gets 20 million
Pac-12 gets 21 million
Sec gets 17 million (subject to renegotiation)

Where's this huge difference?

 

[Jericho]

I disagree. I think our revenue situation around athletics is not compatible with the ACC. I think it's very real possibility that we stand lose money in the future if we join the ACC. I think the most important thing for uconn moving forward is freedom in our ability to schedule our sports as we see the best fit to reach our audience in primetime spots.

I don't see the ACC giving that to us.

How's that? The ACC would give UConn $17 million per year. Uconn would keep their existing $8 million per year in multimedia rights and $4 million in uniform money. The only possible thing UConn would lose would be the $1 million Women's basketball contract. And its unclear it they'd even have to lose that.

 

[Carl Spackler]

What's out of line? I'll grant the ACC has the worst deal, but outside the PAc-12, they also have the worst football.

Acc gets 17 million per
Big 12 likely will get 20 million
Big 10 gets 20 million
Pac-12 gets 21 million
Sec gets 17 million (subject to renegotiation)

Where's this huge difference?

I don't know. I'm not claiming to understand this. I know one difference. 4 of 5 conferences have retained their own rights, to some broadcasting. 1 conference has not.

Again, on simple face value, I think that Delaney, Slive, Scott - and especially Neinas, are a hell of a lot more endowed when it comes to aptitude in dealing with sports broadcasting, than Swofford is. That's my opinion.

but that fact is that the ACC deal is significnatly different than 4 others. WHy is that? You tell me, you're the expert.

 

[Jericho]

I don't know. I'm not claiming to understand this. I know one difference. 4 of 5 conferences have retained their own rights, to some broadcasting. 1 conference has not.

Again, on simple face value, I think that Delaney, Slive, Scott - and especially Neinas, are a hell of a lot more endowed when it comes to aptitude in dealing with sports broadcasting, than Swofford is. That's my opinion.

but that fact is that the ACC deal is significnatly different than 4 others. WHy is that? You tell me, you're the expert.

You're talking about Tier 3 rights. Something that most schools get $1 million or less on. It's not this huge money maker people make it out to be.

 

[Carl Spackler]

How's that? The ACC would give UConn $17 million per year. Uconn would keep their existing $8 million per year in multimedia rights and $4 million in uniform money. The only possible thing UConn would lose would be the $1 million Women's basketball contract. And its unclear it they'd even have to lose that.

Because I see 5 broadcasting arrangements, for major conferences, and 4 of them are different than 1. In a situation like this, you ahve to find out why 4 or similar and 1 is different, and based on what I know about the 5 entities invovled, the one that is different, makes me uncomfortable.

 

[Carl Spackler]

You're talking about Tier 3 rights. Something that most schools get $1 million or less on. It's not this huge money maker people make it out to be.

That's not good enough. You're talking aobut billions of dollars here. Dozens of universities, major state universities. 4 deals are significantly different than 1. Why?

 

[jrazz12]

So I understand this....right now UConn's Tier III rights consist of the 8M IMG deal, the Nike deal, some women's bball broadcasting rights, perhaps some other small pieces, and then what the Big East owns/shares, which is the crappy football game and some crappy basketball games. I believe the chart that was linked before shows that latter value (which I believe reflects the SNY deal) at about 1.8M dollars.

Am I correct in understanding that the latter piece, the crappy broadcasting rights owned by the BE valued at approximately 1.8M, is the only thing we would EVER have to share with a conference? We keep everything else correct?