The Tier III myth

[whaler11]

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?

Because their rights aren't as valuable. If someone sells their BMW for more than your Tercel it doesn't always mean they are a better sales person than you, they had something more valuable to sell.

Commissioners aren't alchemists, they aren't turning lead into programming gold. You can measure the interest in these programs quite easily - in a shocking twist, the conferences with the most interest have gotten the highest paydays.

 

[Carl Spackler]

Because their rights aren't as valuable. If someone sells their BMW for more than your Tercel it doesn't always mean they are a better sales person than you, they had something more valuable to sell.

Commissioners aren't alchemists, they aren't turning lead into programming gold. You can measure the interest in these programs quite easily - in a shocking twist, the conferences with the most interest have gotten the highest paydays.

Well, if the numbers in that college sports business link are to be trusted, you're flat out wrong, because if I read it right, schools like North Carolina, Florida State, NC State....and others have multiple millions tied up in this tier 3 mystery, that they no longer have their own rights to control.

 

[Jericho]

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?

It's somewhat confusing because of the way people use the term Tier 3. But you have it right. The 8 million IMG deal is something that all schools always keep to themselves. Even all ACC schools have the power to enter into such contracts and those rights are not given in the conference contracts. Similarly, the Nike deal is negotiated on an individual school level. That will not be affected by any conference deal.

The conference deals are solely about television rights. Tiers 1 and Tiers 2 cover men's baketball and football. Whatever is left falls into Tier 3, which usually includes some men's basketball and maybe men's football (although SEC Tier 3 received no football last year). Women's basketball as whole falls into that Tier, so that could be affected. The only conference that cedes any Third Tier rights as a whole is the ACC. It's unclear what the coverage of that contract is. I believe some content may still flow through to schools, but that's somewhat speculative on my part.

But bottom line, the only Tier 3 stuff UConn might have to give to a conference are the TV rights to sports not covered by Tiers 1 and 2.

 

[Jericho]

Well, if the numbers in that college sports business link are to be trusted, you're flat out wrong, because if I read it right, schools like North Carolina, Florida State, NC State....and others have multiple millions tied up in this tier 3 mystery, that they no longer have their own rights to control.

You're misinterpreting the data. Lots of the claims on what Tier 3 is usually lumps in a whole littany of items including Tier 3 television rights and a whole bunch of other items like coaches shows, radio broadcasts, stadium advertising rights, website operation rights, and various other marketing & advertising related enterprises. The only item in that list that the ACC is giving to ESPN is the television rights. Everything else remains in control of the schools and the schools do make money off it (for example - NC State just signed a deal for $5 million per year for this "other" stuff. This is the exact same "stuff" UConn is selling for $8 million a year through IMG)

As to your other question. You indicated the ACC is doing things wrong by granting Tier 3 rights to ESPN. Not sure I follow the logic. Just because its different does not mean its wrong. The total purchase price by ESPN factors in Tier 3 rights, so the ACC is getting paid for them. Just as any other conference is getting paid. In the Big 12, these rights are sold at an individual school level. That's great for a school like Texas, not so great for an Iowa State. In the Pac 12, they grant them not to ESPN but to their own Network. In the end, all conferences are getting paid for that Tier 3 content. The ACC sells it as a group. Technically so do the Big 10 and Pac 12, except they're selling them to their own networks. The Big 12 lets the schools sell them. Not sure the ACC is smarter (I would suspect no), but it's not exactly radically different either.

 

[whaler11]

Well, if the numbers in that college sports business link are to be trusted, you're flat out wrong, because if I read it right, schools like North Carolina, Florida State, NC State....and others have multiple millions tied up in this tier 3 mystery, that they no longer have their own rights to control.

You are adding apple and oranges and saying they are all apples. They only give up the games, not the rest that is included. The games are virtually worthless beyond a few exceptions.

 

[Carl Spackler]

I still see no reason to think that tying up all your media rights with a single company, a cable company no less, is better than what the others have done. I have plenty of reason to think that the business models for broadcasting that the other four conferences are using, with multiple levels of ownership of rights and multiple broadcasting partners is a better way to do it, and I fully admit that my reasoning is based entirely on my opinion of the quality of leadership in each conference.

 

[Carl Spackler]

You are adding apple and oranges and saying they are all apples. They only give up the games, not the rest that is included. The games are virtually worthless beyond a few exceptions.

So are you saying that the ACC tier 3 is worthless? so much so that they don't give a about it and want ESPN to handle it?

 

[whaler11]

So are you saying that the ACC tier 3 is worthless? so much so that they don't give a about it and want ESPN to handle it?

Its pretty close to worthless and if they feel its in their best interest to include it how can you know they are wrong. You have no idea what the true facts are.

Youve just decided its different..... Therefore bad. The Big 12 is very different than the Pac 12 and Big 10, why aren't they wrong.

To me the Big 12 answer is clearly the worst - it gives Texas such a head start it's ridiculous - but I don't give a damn about the Big 12 so I don't lose much sleep over it.

 

[Carl Spackler]

Its pretty close to worthless and if they feel its in their best interest to include it how can you know they are wrong. You have no idea what the true facts are.

Youve just decided its different..... Therefore bad. The Big 12 is very different than the Pac 12 and Big 10, why aren't they wrong.

To me the Big 12 answer is clearly the worst - it gives Texas such a head start it's ridiculous - but I don't give a damn about the Big 12 so I don't lose much sleep over it.

With my admittedly limited understanding of this - numbers aren't my game......I just think that I'd rather UConn be the Texas of the Northeast, than Florida Sate of the south when it comes to these media situations and seems like UConn wouldn't have a chance to build something like Texas did down south, up here, if we were to agree to what the ACC has done. That's my understanding of all of this.

But then again, I've always kind of wondering whether or not you're really a UConn supporter, so I suppose it shouldn't be a surprise if you'd disagree with that.

 

[whaler11]

With my admittedly limited understanding of this - numbers aren't my game......I just think that I'd rather UConn be the Texas of the Northeast, than Florida Sate of the south when it comes to these media situations and seems like UConn wouldn't have a chance to build something like Texas did down south, up here, if we were to agree to what the ACC has done. That's my understanding of all of this.

But then again, I've always kind of wondering whether or not you're really a UConn supporter, so I suppose it shouldn't be a surprise if you'd disagree with that.

You truly are a jackass. Because I'm realistic and think the new Big East sucks and you have talked yourself into nonsense about the TV contract means I don't like UConn.

UConn can never be Texas for a number of reasons not the least of which you can't be Texas when your conference mates suck.

Texas' arrangement may also be harmful to themselves in the long run. Sports stop being interesting when they aren't competitive. One of the reasons why baseball's tv ratings are in the toilet is that there is a perception that only a few teams can consistently compete. Texas may use their money and snuff out Iowa State and Baylor, but that has unintended consequences down the line.

Michigan pooled their tier 3 rights even though they are more valuable than Northwestern's or Purdue's. It costs them dollars relative to their conference mates, but they used some of those games to build an amazing network that will lift all ships.

So it's really all a bit more complicated than give me every cent I can get today.

 

[Dann]

so all boston college university football games and bball games fall to tier 3? am i'm understanding this right?

 

[Jericho]

I still see no reason to think that tying up all your media rights with a single company, a cable company no less, is better than what the others have done. I have plenty of reason to think that the business models for broadcasting that the other four conferences are using, with multiple levels of ownership of rights and multiple broadcasting partners is a better way to do it, and I fully admit that my reasoning is based entirely on my opinion of the quality of leadership in each conference.

When the one single company has a virtual monopoly on sports broadcasting (and has its own broadcast channel in ABC), it's not so bad. I agree that it might not be the best scenario, but I fail to see how it is inherently bad.

 

[Carl Spackler]

When the one single company has a virtual monopoly on sports broadcasting (and has its own broadcast channel in ABC), it's not so bad. I agree that it might not be the best scenario, but I fail to see how it is inherently bad.

Fair enough, we simply have different opinion on business, and I really don't have much to go on other than what I've stated, becuase numbers and things like all this tier 1, 2, 3 stuff is not anything that interests me. There's a saying about putting all your eggs in one basket - and I'll just add.....even if it's the biggest and nicest, and cushiest easter basket around.

 

[WestCoastHusky]

When the one single company has a virtual monopoly on sports broadcasting (and has its own broadcast channel in ABC), it's not so bad. I agree that it might not be the best scenario, but I fail to see how it is inherently bad.

Bad deal for the ACC anyway you spin it.

BTW, are you an ACC fan?

 

[whaler11]

Fair enough, we simply have different opinion on business, and I really don't have much to go on other than what I've stated, becuase numbers and things like all this tier 1, 2, 3 stuff is not anything that interests me. There's a saying about putting all your eggs in one basket - and I'll just add.....even if it's the biggest and nicest, and cushiest easter basket around.

So pontificating about how to broadcast a league's game over 200,000 words is in your purview, but the actual numbers and details bore you. Ever think maybe if you dont have a handle on the important details maybe you dont have much of a handle on the big picture?

Like 99% of what u say fall back on cliches. Dont put all your eggs in one basket. You should be consulting.

 

[Jericho]

Bad deal for the ACC anyway you spin it.

BTW, are you an ACC fan?

Not an ACC fan per se. I've always like basketball and therefore like the basketball conferences. So I do prefer the ACC over some other conferences.

Although I'm not sure why the ACC deal is per se "bad". I'll freely admit that other conferences got better deals (Big 12, Pac 12), but I'd also say the ACC is near the bottom of the big conferences in football and therefore should get paid less that places like the Big 10 and SEC. I think the deal puts the conference in the ballpark financially, which in the end is really all that matters. I don't see it as some huge negative or anchor to the conference.

 

[rdmscribbles]

Texas fan here. I think the ACC's selling of tier 3 was a mistake, simply because it can be turned into more money if used differently. They still think like all conferences did ten years ago, but the financial landscape (and mindset of the other major conferences) has changed dramatically since then.

The ACC has one giant advantage over the other power conferences that they haven't leveraged: population. In the past that didn't mean much, since it never translated to a much higher viewership of their actual games, but that changed with the discovery of the conference network model. All of a sudden, conferences can get cash based on the number of tv sets in the area, not just the ones watching. That could solve all of the ACC's financial problems in one fell swoop. Now it's easier said than done. It takes a lot of start up capital. And getting cable companies to carry it on basic packages is a huge fight, as the longhorn network has proven. But ultimately it would be far more profitable if used that way rather than as a minor perk in the media deal- a perk that simply gives ESPN more content they can stream online.

 

[uconnfan68]

Texas fan here. I think the ACC's selling of tier 3 was a mistake, simply because it can be turned into more money if used differently. They still think like all conferences did ten years ago, but the financial landscape (and mindset of the other major conferences) has changed dramatically since then.

The ACC has one giant advantage over the other power conferences that they haven't leveraged: population. In the past that didn't mean much, since it never translated to a much higher viewership of their actual games, but that changed with the discovery of the conference network model. All of a sudden, conferences can get cash based on the number of tv sets in the area, not just the ones watching. That could solve all of the ACC's financial problems in one fell swoop. Now it's easier said than done. It takes a lot of start up capital. And getting cable companies to carry it on basic packages is a huge fight, as the longhorn network has proven. But ultimately it would be far more profitable if used that way rather than as a minor perk in the media deal- a perk that simply gives ESPN more content they can stream online.

If it were just about tvs in a viewing area, the Big East wins hands down. The problem is that they aren't the top pick to watch.

 

[nelsonmuntz]

If it were just about tvs in a viewing area, the Big East wins hands down. The problem is that they aren't the top pick to watch.

The Big East does fine in the ratings. The Texas poster is right that these TV contracts are life and death for a league. The Big East never recovered from signing a TV deal in the 90's with BCU caught in a gambling scandal and Miami facing the death penalty while Rutgers and Temple were two of the worst programs in D1. That lousy deal led to the 2003 raid which led to another bad contract which left the Big East vulnerable to another raid a year ago. A league must maximize its TV contract every time, or it becomes vulnerable. The ACC didn't do that.

 

[huskypantz]

One thing that's not really brought up in these parts - at this point in the game, why does UConn, UL, ND (nonfootball) etc have to share its tier 3 rights with the rest of the BE? I know that's part of the BE agreement, but if they're going to renegotiate their TV deals, that should be on the table too.

 

[RS9999X]

Texas fan here. I think the ACC's selling of tier 3 was a mistake, simply because it can be turned into more money if used differently. They still think like all conferences did ten years ago, but the financial landscape (and mindset of the other major conferences) has changed dramatically since then.
.

i

My understanding is that Raycom was involved in the ACC ESPN contract and is still involved in production and distribution. The ACC does earn Tier 3 as part of the ESPN package if that makes sense. Not every conference is the same.

http://en.wikipedia.org/wiki/ACC_Network#ACC_Network

 

[RS9999X]

More Swofford, ACC, ESPN, Tier 3 and Raycom incest from Sports Business Daily.

Good old boys at work.

http://www.sportsbusinessdaily.com/...story-With-ACC-Secures-Future-For-Raycom.aspx

 

[Jericho]

The Big East does fine in the ratings. The Texas poster is right that these TV contracts are life and death for a league. The Big East never recovered from signing a TV deal in the 90's with BCU caught in a gambling scandal and Miami facing the death penalty while Rutgers and Temple were two of the worst programs in D1. That lousy deal led to the 2003 raid which led to another bad contract which left the Big East vulnerable to another raid a year ago. A league must maximize its TV contract every time, or it becomes vulnerable. The ACC didn't do that.

I can't sit here and say it wasn't a factor, but Miami always wanted to be in the ACC. Geographically it makes great sense and academically it was a huge win. But when the ACC went to expand in the 1990s, Miami was under the aforementioned problems with the NCAA. So the ACC passed and took FSU (a much weaker academic school). For about a decade, Miami tried to undo that decision and in 2003 it finally got enough votes to be welcomed in by the ACC (they needed 7 of 9 and Duke and UNC were constant no's). The other movement that year seemed to be in response to Miami leaving (i.e. Virginia Tech did not want to be in a football conference without a stud school like Miami and forced there way in). So in the end, even a sweetheart TV deal might not have made one lick of difference.

 

[WestCoastHusky]

FSU just proved what I been saying about the ACC TV deal. It really sucks. I hope BE learns that lesson and keep that in mind when we go for the new TV deal. It seems whoever has the highest payout per school can raid whoever has the lesser payout per school. B12 was dying less than a year ago and now they are the aggressor and the ACC is crapping in their pants. It will be good to see ACC get a taste of its own medicine.

It really is important for UCONN to keep its own tier-3 rights.

 

[nelsonmuntz]

The crazy thing about this ACC deal is that it appears to be much better for UConn than it would be for FSU. UConn's Tier 3 for football are not worth much at all, but the basketball Tier 3's would be very lucrative. Since the ACC schools keep the Tier 3's, that league has become even more attractive to UConn.