This works out to be expensive for ESPN

[nelsonmuntz]

It doesn't really hold water. Walk through the numbers.

The cost to ESPN for the ACC expansion:

$60MM (12x$5MM per existing school)
$36MM (Pitt and Syracuse)
----------
$96MM

The cost to ESPN/Fox for the Big 12 expansion:

$20MM (TCU)
$20MM (Louisville)
----------
$40MM (number increases if Cincinnati and WVU are added)

So we are at $136MM for just the teams that left plus the ACC bump.

Additional costs:

$84MM - Big East basketball conference (12x$7), if ESPN even gets it.
$40MM - Big East football conference 10x$4 - guesstimate, you can argue
----------
$124MM

All in, the ACC raid is going to cost ESPN at least $260 million PER YEAR. Wouldn't it have been cheaper just to pay the Big East something reasonable?

 

[Northbound]

They don't lose a lot of money in their core business, it's when they venture outside of things they know (i.e. phone buisness, bass, action sports) that they lose money. So my guess is that they'll recoup that in fees from MSO's, ad revenue, unique content distribution deals, etc.

 

[06029]

It doesn't really hold water. Walk through the numbers.

The cost to ESPN for the ACC expansion:

$60MM (12x$5MM per existing school)
$36MM (Pitt and Syracuse)
----------
$96MM

The cost to ESPN/Fox for the Big 12 expansion:

$20MM (TCU)
$20MM (Louisville)
----------
$40MM (number increases if Cincinnati and WVU are added)

So we are at $136MM for just the teams that left plus the ACC bump.

Additional costs:

$84MM - Big East basketball conference (12x$7), if ESPN even gets it.
$40MM - Big East football conference 10x$4 - guesstimate, you can argue
----------
$124MM

All in, the ACC raid is going to cost ESPN at least $260 million PER YEAR. Wouldn't it have been cheaper just to pay the Big East something reasonable?

What currently constitutes BE FB is not getting $4mm per school. If there are 8 BE FB schools there is not enough in conference games to justify that number by ESPN. Break the #'s down by conference games available to ESPN. Regarding the BB # you propose, you lost 2 of the big names in the conference. You lost a number of potential high profile games for ESPN with the loss of Pitt/Cuse and if Lville goes (and to a lesser extent Cinci and WVU), you lose a ton of games that would have been Big Monday/Game Day style matchups. How do you get the number of teams? Are you assuming some FB only teams? What schools would agree to that?

 

[zls44]

You do realize that the exclusive negotiating period you are pillorying against is in EVERY TELEVISION CONFERENCE DEAL EVER, right?

ESPN and C-USA were in court last year over a dispute involving C-USA's FOX deal, specifically over the window and how C-USA illegally ignored it. ESPN got the Football title game every year because of their incompetence.

http://espn.go.com/college-football/story/_/id/6866698/conference-usa-espn-settle-lawsuit-contract

 

[pepband99]

...and to think you had the nerve to call this post "made up" http://the-boneyard.com/threads/imp...of-14-to-make-policy-changes.3622/#post-40840

I'm sure you have inside knowledge of all of this, though. Wow, you really are an epic tool.

 

[upstater]

Let's take this from the top. $11 million to each BE football school. That's $99 million. Add another $3m to the 8 bball schools, that's $24 million. ESPN would have shelled out say $223 million to the BE.

ACC adds 2, that's 14 x $5 million, or $70 million extra to ESPN.

A difference of $53 million.

Then, assume the BE signs a new deal. $53 million less - the new BE deal. Would it be on the order of the current one? $4 million to football, $1 million to basketball. 4 x 4 = $24 + $8 = $32m.

$54 - $32 = $22 million over 10 years = $220 million.

 

[CTMike]

Nelson - not trying to be a jerk - legitimately curious where you are obtaining these numbers, and why you are including certain sunk costs in to the equation.

 

[nelsonmuntz]

...and to think you had the nerve to call this post "made up" http://the-boneyard.com/threads/imp...of-14-to-make-policy-changes.3622/#post-40840

I'm sure you have inside knowledge of all of this, though. Wow, you really are an epic tool.

Just because you have an IQ below 75, are functionally illiterate, and are incapable of simple addition and multiplication, doesn't mean everyone else is.

This information has been provided elsewhere in blogs, news articles and what not, as was the information covered in the post you linked. There is something out there called "the google". It works on the intertubes. You should try it.

 

[nelsonmuntz]

Let's take this from the top. $11 million to each BE football school. That's $99 million. Add another $3m to the 8 bball schools, that's $24 million. ESPN would have shelled out say $223 million to the BE. Your math doesn't work, but the number was estimated at $130 in news reports.

ACC adds 2, that's 14 x $5 million, or $70 million extra to ESPN. Wrong. Pitt and Syracuse are INCREMENTAL costs. I thought you were an academic? And you didn't include the incremental cost of TCU and whoever else gets added to the Big 12.

A difference of $53 million.

Then, assume the BE signs a new deal. $53 million less - the new BE deal. Would it be on the order of the current one? $4 million to football, $1 million to basketball. 4 x 4 = $24 + $8 = $32m. No chance of ESPN getting the Big East that cheap. If this is your position, you are making an intellectually dishonest argument.

$54 - $32 = $22 million over 10 years = $220 million.

The right analysis is that ESPN would have gotten the Big East for around $170-180 at reasonable market prices compared to about $260 that it paid to destroy it.

 

[nelsonmuntz]

Nelson - not trying to be a jerk - legitimately curious where you are obtaining these numbers, and why you are including certain sunk costs in to the equation.

what sunk costs?

 

[nelsonmuntz]

You do realize that the exclusive negotiating period you are pillorying against is in EVERY TELEVISION CONFERENCE DEAL EVER, right?

ESPN and C-USA were in court last year over a dispute involving C-USA's FOX deal, specifically over the window and how C-USA illegally ignored it. ESPN got the Football title game every year because of their incompetence.

http://espn.go.com/college-football/story/_/id/6866698/conference-usa-espn-settle-lawsuit-contract

That clause wiped out UConn's football program. Should I feel better about it because you claim it is standard?

And why are you yelling at me about this?

 

[zls44]

That clause wiped out UConn's football program. Should I feel better about it because you claim it is standard?

And why are you yelling at me about this?

Because that clause was also in the TV contracts that helped build the football program in the first place. And basketball. And every other team that has benefitted from TV (read: all of them) ever.

But somehow, to you, the uninformed, it's the worst thing ever.

 

[nelsonmuntz]

What currently constitutes BE FB is not getting $4mm per school. If there are 8 BE FB schools there is not enough in conference games to justify that number by ESPN. Break the #'s down by conference games available to ESPN. Regarding the BB # you propose, you lost 2 of the big names in the conference. You lost a number of potential high profile games for ESPN with the loss of Pitt/Cuse and if Lville goes (and to a lesser extent Cinci and WVU), you lose a ton of games that would have been Big Monday/Game Day style matchups. How do you get the number of teams? Are you assuming some FB only teams? What schools would agree to that?

The MWC will probably get about $7 to 8 million per school in its next deal. Rights fees have tripled to quadrupled across the board. The benchmarks are all higher.

You can argue the number of teams. I was assuming UConn, Rutgers, USF, Cincinnati and a few football onlies. Does it matter?

 

[nelsonmuntz]

Because that clause was also in the TV contracts that helped build the football program in the first place. And basketball. And every other team that has benefitted from TV (read: all of them) ever.

But somehow, to you, the uninformed, it's the worst thing ever.

What is your point with posts like this? You have no position at all, just crap all over UConn and anyone who says anything remotely positive.

Time for a new act.

 

[FfldCntyFan]

You do realize that the exclusive negotiating period you are pillorying against is in EVERY TELEVISION CONFERENCE DEAL EVER, right?

ESPN and C-USA were in court last year over a dispute involving C-USA's FOX deal, specifically over the window and how C-USA illegally ignored it. ESPN got the Football title game every year because of their incompetence.

http://espn.go.com/college-football/story/_/id/6866698/conference-usa-espn-settle-lawsuit-contract

You should know better than to use facts when debating anm issue with Waylon. Not only os he ,ore qualified to run a major university than Herbst, he knows more about valuing sports programming than the entirety of ESPN's senior management.

 

[zls44]

What is your point with posts like this? You have no position at all, just crap all over UConn and anyone who says anything remotely positive.

Time for a new act.

How many years after you dropped out of middle school did they teach the rest of your class how to read?

 

[upstater]

The right analysis is that ESPN would have gotten the Big East for around $170-180 at reasonable market prices compared to about $260 that it paid to destroy it.

$260 bucks is cheap

 

[nelsonmuntz]

$260 bucks is cheap

You might be right. If ESPN is willing to pay this much to destroy it, I wonder what their estimate was of what it would cost to keep the Big East.

 

[CTMike]

When I first read it, it sounded like you were factoring in existing payments to ACC teams... are you saying that every other team in the ACC is getting an extra $5mil/school by virtue of Pitt and Cuse moving over? And that Pitt and Cuse are each getting $18mil/year by moving to ACC? TCU and Louisville would each receive $20mil/year by joining the Big Twelve? Should the Big East Basketball contact be factored in, since that would be paid regardless of realignment? Just trying to connect all the dots.

 

[FfldCntyFan]

That isn't how you look at this. Their belief is that the return on the investment of $260mm will exceed what was expected from the BE (as it was set to be constituted) by enough that it was worth the risk involved in getting a handful of schools to change conferences.

 

[nelsonmuntz]

When I first read it, it sounded like you were factoring in existing payments to ACC teams... are you saying that every other team in the ACC is getting an extra $5mil/school by virtue of Pitt and Cuse moving over? And that Pitt and Cuse are each getting $18mil/year by moving to ACC? TCU and Louisville would each receive $20mil/year by joining the Big Twelve? Should the Big East Basketball contact be factored in, since that would be paid regardless of realignment? Just trying to connect all the dots.

Yes on all counts. I needed to include all incremental monies paid to all parties from the Big East realignment, including the new Big East deal, to come up with the minimum that ESPN expected to pay to the Big East. more likely, ESPN probably saw a significant ROI on this activity.

 

[nelsonmuntz]

That isn't how you look at this. Their belief is that the return on the investment of $260mm will exceed what was expected from the BE (as it was set to be constituted) by enough that it was worth the risk involved in getting a handful of schools to change conferences.

So the ROI from putting TCU in the Big 12 and Pitt and Syracuse in the ACC is enough to compensate from the rest of their market likely shrinking? They will have less content at the end of the day, and there is a greater risk that several of the parties go to another media partner.

 

[FfldCntyFan]

So the ROI from putting TCU in the Big 12 and Pitt and Syracuse in the ACC is enough to compensate from the rest of their market likely shrinking? They will have less content at the end of the day, and there is a greater risk that several of the parties go to another media partner.

Ok, since you obviously know more about what is going on here than anyone else, you tell me why they did this if it wasn't the profit motive?

They are a business. They easily could have miscalculated on some projected values but they would have had to follow some set protocol to justify the projections that led to the values they put on these properties. If they did not believe that the projected return was worth the projected risk (which is exactly what you are stating) then tell me, why did they do it and how will Disney ever be able to explain this to shareholders?

 

[nelsonmuntz]

Ok, since you obviously know more about what is going on here than anyone else, you tell me why they did this if it wasn't the profit motive?

They are a business. They easily could have miscalculated on some projected values but they would have had to follow some set protocol to justify the projections that led to the values they put on these properties. If they did not believe that the projected return was worth the projected risk (which is exactly what you are stating) then tell me, why did they do it and how will Disney ever be able to explain this to shareholders?

Two things, as discussed elsewhere in the thread.

1) ESPN clearly thought that a combined Big East was going to be very, very expensive to re-sign, if they could get it at all.

2) ESPN also wanted to block Comcast from getting into the business. They worked with Fox on the Pac 12 deal to box out Comcast.

 

[Fishy]

How much does it cost for ESPN to fuel the black helicopters in your scenario?