What Does NBC Have to lose?

[nelsonmuntz]

Is this a joke?

So NBC is going to factor in the cost of tickets to the bowl games when they price UConn and the Big East? That's your argument? LMAO.

Many people know what schools are in demand. Only those willing to offer up irrational arguments in endless pursuit of their agenda compare UConn to Nebraska in those discussions.

Your argument is "because I say so". My argument has things like data and information supporting it.

You say no one wants to watch the Big East, but the SEC, Big 12, Big 10 and whoever else are in tremendous demand. Well, it turns out the demand for those other games is nothing special. Now, being a thinking person, I will assume that ESPN and NBC know the demand for those games when they bid on them. In other words, they price they have paid for the media rights is based on all available information. So, if the media rights for the Big 10, SEC, Big 12 and Pac 12 are all over $20MM/team/year and the ACC is about $18MM, and ESPN has all available information when pricing those products, then we can assume that pricing for the Big East is not going to be that much less, because demand indicators are that the Big East is not worth that much less than the other leagues.

Furthermore, we know that ESPN has essentially paid an incremental $140 million for TCU, WVU, Pitt and Syracuse. Now, if those teams are worth $20MM a piece and it is worth it to kick in an extra $60MM to the ACC to add Pitt and Syracuse, then what is the relative value of the Big East teams compared to those programs?

See, that is how an analysis based argument is done. Now give me another of your "because I say so" arguments.

 

[nelsonmuntz]

Do you realize how often you make yourself into a hypocrite? Unless you have the numbers to back it up, your argument about BMW's market share is "not demographic information, just your opinion. That is one way to win an argument."

I suspect more season tickets are sold for Nebraska the first week they are available, than the entire season for UConn, maybe two.

Are their TV's in Nebraska's stadium? If 75k are sitting in lincoln on gameday, how many are watching commercials, which is really paying the bills?

 

[whaler11]

Your argument is "because I say so". My argument has things like data and information supporting it.

You say no one wants to watch the Big East, but the SEC, Big 12, Big 10 and whoever else are in tremendous demand. Well, it turns out the demand for those other games is nothing special. Now, being a thinking person, I will assume that ESPN and NBC know the demand for those games when they bid on them. In other words, they price they have paid for the media rights is based on all available information. So, if the media rights for the Big 10, SEC, Big 12 and Pac 12 are all over $20MM/team/year and the ACC is about $18MM, and ESPN has all available information when pricing those products, then we can assume that pricing for the Big East is not going to be that much less, because demand indicators are that the Big East is not worth that much less than the other leagues.

Furthermore, we know that ESPN has essentially paid an incremental $140 million for TCU, WVU, Pitt and Syracuse. Now, if those teams are worth $20MM a piece and it is worth it to kick in an extra $60MM to the ACC to add Pitt and Syracuse, then what is the relative value of the Big East teams compared to those programs?

See, that is how an analysis based argument is done. Now give me another of your "because I say so" arguments.

You do realize that the price of tickets at bowl games isn't what networks pay contracts for right? It's pretty silly to use one single example of the Pinstripe Bowl when Rutgers is playing in it to draw wide generalities.

If there was anything to take from those ticket prices... it's that there are a lot of Rutgers grads in metro NYC who want to go to a bowl game at Yankee Stadium. It means nothing about the Big East or UConn or what their television package is worth.

If Virginia Tech was playing West Virginia at Fed Ex Field or at Heinz it would make a lot more sense to try and compare and contrast the two. Even if VPI and WVU brought huge contingents of fans to Miami there would be no local support of the game which makes it impossible to compare to NYC and Rutgers.

 

[whaler11]

Are their TV's in Nebraska's stadium? If 75k are sitting in lincoln on gameday, how many are watching commercials, which is really paying the bills?

Um, people all over the country who like to watch high level college football?

 

[whaler11]

Furthermore, we know that ESPN has essentially paid an incremental $140 million for TCU, WVU, Pitt and Syracuse. Now, if those teams are worth $20MM a piece and it is worth it to kick in an extra $60MM to the ACC to add Pitt and Syracuse, then what is the relative value of the Big East teams compared to those programs?

I know that you realize this and ignore it every time when you are trying to make this same point. That incremental money also exists to placate schools like FSU and Clemson and make a move to another conference less attractive to them. Every one of those dollars isn't for Pitt and Syracuse, it's money spent in defense to protect the overall long term health of the ACC.

 

[RS9999X]

Furthermore, we know that ESPN has essentially paid an incremental $140 million for TCU, WVU, Pitt and Syracuse. Now, if those teams are worth $20MM a piece and it is worth it to kick in an extra $60MM to the ACC to add Pitt and Syracuse, then what is the relative value of the Big East teams compared to those programs?quote]

I prefer the lower figures ($34 million incremental based on $15 mil a team) when comparing the ACC/Big East Fall out. The $34 mil includes a contract extension for a couple years and increased media rights to ESPN.

Not a stupid or predatory deal by ESPN taken by itself. If the proposal included UConn and Rutgers for an additional $10 million incremental some would call it a brilliant deal. I think that's' an ACC decision, not an ESPN decision. 16 teams @ $15 mil each would be $190 mil for the East Coast. A pretty good value compared to the PAC-12 deal.

I don't think WVU to the B12 for $20 mil after phase in can be called predatory.

TCU? That's the B12 on tilt.

 

[HuskyHawk]

Um, people all over the country who like to watch high level college football?

Exactly. Growing up in Manchester CT I knew two college football fans, me and my friend Joe. He was a Notre Dame fan, me, Nebraska. Moved to Simsbury, where my sister had a boyfriend who was (and still is) a Nebraska fan. At UConn I once shocked a room full of people by being able to name all the schools of the old Southwest conference in a Trivial Pursuit game. Most of them had never heard of the conference. But then I came to CT by way of Kansas City, so I learned about college football at an early age.

It's a balance. How popular the team is locally and nationally. What markets does it reach? What are the demographics? Are those fans occasional fans or die hard fans? Local demographics don't matter much at all to TV, since my guess is that Nebraska turns on as many TVs in CT as UConn does, and many times as many in the midwest. Yes, it's a guess, just like the guess that BMW sells far more in CT than Mississippi. You provided no data at all on that. You might be surprised by the way, in how much the cost of living in Southern New England destroys purchasing power. And even if BMW doesn't want the Miss St. v So. Miss game, do you think that just maybe Ford or GM might want to pitch trucks to that audience (far more than to the CT audience)? Would McDonalds possibly be interested?

 

[nelsonmuntz]

You do realize that the price of tickets at bowl games isn't what networks pay contracts for right? It's pretty silly to use one single example of the Pinstripe Bowl when Rutgers is playing in it to draw wide generalities.

If there was anything to take from those ticket prices... it's that there are a lot of Rutgers grads in metro NYC who want to go to a bowl game at Yankee Stadium. It means nothing about the Big East or UConn or what their television package is worth.

If Virginia Tech was playing West Virginia at Fed Ex Field or at Heinz it would make a lot more sense to try and compare and contrast the two. Even if VPI and WVU brought huge contingents of fans to Miami there would be no local support of the game which makes it impossible to compare to NYC and Rutgers.

You are the one that brings up fans in the seats all the time, not me. I only used the secondary ticket market example to point out that these programs do not have the enormous national following that posters like you and WingU ascribe to them.

 

[whaler11]

I didn't ascribe enormous national followings to all of those schools.

Enormous regional following when compared to UConn? Yup.
Larger national following than UConn? Yup.

Are you still confused why 80 years of selling out 60-70k compared to 8+/- sellouts of 40,000 means it's logical to assume there are more eyeballs watching Nebraska football than UConn football?

I was confused by his comment as well - I think he is talking about West Virginia, Virginia Tech and Clemson... not Nebraska.

 

[Uptop]

HartbeatHusky,

Congrats on Chapter 2 of this elightment. Just so you know, your quote "money equals stability" from Chapter 1 is getting stronger by the day. See article below. A lot can change between now and 2014, which is a millenium in college football

Matt Hayes Sporting News
PUBLISHED 8 hours and 46 minutes ago

New conference, new money

Before the Big East fell apart (again), before the conference found a way to piece things together (again), NBC wanted to land the television rights to the league and expand its college football presence.

That desire hasn’t changed. In fact, according to industry sources, it’s stronger than ever. NBC wants the Big East, and wants to wrap games around Notre Dame to increase the visibility of the league.

Now, we reintroduce karma: last spring, Pitt chancellor Mark Nordenberg spearheaded the Big East’s decision to leave an estimated $110-130 million per year on the table and play out the final year of a contract with ESPN—in the hopes of making a killing with ESPN, NBC and FOX bidding on the league next fall.

After Pitt left with Syracuse for the ACC, Nordenberg said he was merely part of the process in the Big East’s decision to not accept ESPN’s offer.

Fast forward four months: the Big East expands, will add a championship game, and will open the bidding for its inventory next year. And—wait for it—the per-school payout could exceed the ACC per school payout if NBC gets aggressive and does everything it can to expand its college football reach.

Karma is so sexy.

 

[HartbeatHusky]

HartbeatHusky,

Congrats on Chapter 2 of this elightment. Just so you know, your quote "money equals stability" from Chapter 1 is getting stronger by the day. See article below. A lot can change between now and 2014, which is a millenium in college football

Matt Hayes Sporting News
PUBLISHED 8 hours and 46 minutes ago

New conference, new money

Before the Big East fell apart (again), before the conference found a way to piece things together (again), NBC wanted to land the television rights to the league and expand its college football presence.

That desire hasn’t changed. In fact, according to industry sources, it’s stronger than ever. NBC wants the Big East, and wants to wrap games around Notre Dame to increase the visibility of the league.

Now, we reintroduce karma: last spring, Pitt chancellor Mark Nordenberg spearheaded the Big East’s decision to leave an estimated $110-130 million per year on the table and play out the final year of a contract with ESPN—in the hopes of making a killing with ESPN, NBC and FOX bidding on the league next fall.

After Pitt left with Syracuse for the ACC, Nordenberg said he was merely part of the process in the Big East’s decision to not accept ESPN’s offer.

Fast forward four months: the Big East expands, will add a championship game, and will open the bidding for its inventory next year. And—wait for it—the per-school payout could exceed the ACC per school payout if NBC gets aggressive and does everything it can to expand its college football reach.

Karma is so sexy.

There's a lot of doubters out there but I truly think NBC will be aggressive and will put up the money to try to stabilize the league. I've said it a million times but to me that would include making a last ditch effort to woo Cuse, Pitt, and WVU back into the fold. If that happens I think we are talking Pac 12 money for the Big East which would make us one of the top leagues and the ACC on the bottom. I readily admit it's a long ass shot but I wouldn't put it past a new network trying to aggressively expand and take it to the worldwide leader.

 

[ctchamps]

There's a lot of doubters out there but I truly think NBC will be aggressive and will put up the money to try to stabilize the league. I've said it a million times but to me that would include making a last ditch effort to woo Cuse, Pitt, and WVU back into the fold. If that happens I think we are talking Pac 12 money for the Big East which would make us one of the top leagues and the ACC on the bottom. I readily admit it's a long ass shot but I wouldn't put it past a new network trying to aggressively expand and take it to the worldwide leader.

I'm in the optimistic category. I think this thread validates our opinion. People are throwing out logic all over the place. As if it is logical for intelligent people, and yes the posters on both sides of this argument appear intelligent to me, to believe any of our opinions really matter in how this plays out. But we argue our cases like our lives depended on the outcome. This is a totally illogical endeavor considering none of our posturing will be noticed in any of the negotiations and the best we can do is pump our virtual chests if proven right. I think there are more valuable things we can do with our time.

And that is the point. People are not as logical as we pretend to be. We just try to hide from our illogic. I'm counting on the illogic of the media gurus as well. When it comes down to it they are making emotional as well as intellectual decisions. I think there is still some irrational exuberance to be played out in the sports media and the BE is on the correct side of the curve.

NBC/Comcast have decided to make Versus a player. They need content and they will rationalize that any aggressive play for the BE is not a mistake but a future investment. They get immediate content and they put the pressure on the other media players. What do you think the SEC and the ACC will think if the BE gets a big pay raise? Will they be satisfied with their contracts? Probably not. Isn't that the curse of this whole thing. People are satisfied only insofar as the ego is satisfied. My wonderful new car purchase is great until my neighbor gets a slightly better car making the car I loved a lot less satisfying.

If this process takes place, as I suspect it will, that will make it harder for ESPN to keep all their conferences in the fold without huge raises. This could allow for Versus to take one of the other conferences from ESPN in the future. And even if ESPN tries to avoid this and offer even greater contracts to keep everyone in the fold, they may be doing it at the expense of profits. So I'm logically arguing for an NBC gambit that will appear illogical initially but offer the network plenty of advantages down the road.

 

[nelsonmuntz]

Everyone knows NBC wants in, and despite the opinions of media experts Z, Whaler and WingU, they will pay up. How much? It will be a big number. Maybe not ACC big, but big.

ESPN is not done. If they spent $140 million a year for the next 8-10 years to raid the Big East, and don't put the league out of business, they royally screwed up. That is over a billion dollars they will have essentially flushed down the toilet to get the rights to Pitt/Wake, Syracuse/Maryland and WVU/Iowa State. If they don't put the Big East 6 feet under, the would have been better off leaving the league alone. So what does ESPN do?

1) Stop where they are. Over a billion dollars over the next 10 years for WVU, TCU, Syracuse and Pitt is stupid enough, it is time to cut their losses. Trying to finish off the Big East looks to be more expensive that it is worth. The reality is that the league is worth more to NBC than it is to ESPN, and ESPN just has to settle for what it has.

2) Come back and raid the Big East again. Take Louisville, Cincinnati, UConn, and/or Rutgers to ESPN leagues, since the incremental cost is not that big, and call it a day. Would have been cheaper to leave the Big East alone, but they have gone this far, might as well finish the job.

3) Someone at ESPN says "enough" with these massive forward commitments for Big East teams. ESPN does not need more content, and the league is worth more to NBC than it is to ESPN. Upon further review, paying the ACC $100 million more per year for Pitt and Syracuse doesn't seem so smart either, and coughing up another $20 million for WVU also seems like a bad idea, especially when the Big 12 would be fine at 9 members. It tells the ACC that it is not going to increase its contract one nickel, and if it wants to add Pitt and Syracuse, the ACC can split the pie 2 more ways. WVU is less expensive, and Fox is picking up about 40% of that check, so maybe they cover the nut, maybe they don't. A negotiated settlement is worked out to ease Pitt and Syracuse back to the Big East and save face for everyone.

Those are the three choices for ESPN. I think 1 is most likely, followed closely by 2. 3 is less likely, but definitely still on the table. A billion dollar forward commitment for Pitt and Syracuse has to be giving the divisional CFO at ESPN ulcers when the whole point of the move, to put the Big East out of business, looks like it will not work out as planned.

 

[nelsonmuntz]

Freudslip,

I think ESPN tells the rest of the conferences to pound sand if they don't like their deals. These are 10 year deals, and ESPN doesn't have to do a thing about any of them. ESPN can not keep throwing more money at content they have already purchased. At some point, profitability matters.

 

[HartbeatHusky]

Freudslip,

I think ESPN tells the rest of the conferences to pound sand if they don't like their deals. These are 10 year deals, and ESPN doesn't have to do a thing about any of them. ESPN can not keep throwing more money at content they have already purchased. At some point, profitability matters.

I definitely agree with this which is why the ACC will be getting at most $14 to $15 million per team a year, if that. They are still in real danger of falling into last place when it comes to TV rights. That is why they tried to kill the Big East because they were all but guaranteed to fall to last place had an intact Big East gone to the open market.

 

[ctchamps]

Freudslip,

I think ESPN tells the rest of the conferences to pound sand if they don't like their deals. These are 10 year deals, and ESPN doesn't have to do a thing about any of them. ESPN can not keep throwing more money at content they have already purchased. At some point, profitability matters.

Ultimately this will be the final result. But when that takes place is a matter of debate. I thought people would stop well short of where they did with the dot com and the housing market bubbles. But they didn't.

The B12's contract ends in six years. Most likely they can renegotiate before that. And of course there is the bugaboo of conference realignment which ultimately can negate current contracts or alter them. So we'll see how this plays out.

The funny thing is most people see a conference whose teams get "only" 10 million dollars as a loss compared to a conference getting 20 million dollars. That cup half empty attitude is just as much a problem as the media throwing out all the dough. At some point people have to stop buying into the view that what the other guy makes is paramount to what we have to make. Sooner or later this jealousy or "keeping up with the Jones" attitude ends up ruining more than it benefits. It creates atmospheres within universities to forsake decency for one ups man ship. It promotes cheating, and back stabbing and every man for himself attitudes that are poisonous. The BCS system, the Bowl system, the exorbitant media contracts are the result of our nature not the promotors of our nature. They are only fulfilling what we want them to fulfill.

 

[nelsonmuntz]

Ultimately this will be the final result. But when that takes place is a matter of debate. I thought people would stop well short of where they did with the dot com and the housing market bubbles. But they didn't.

The B12's contract ends in six years. Most likely they can renegotiate before that. And of course there is the bugaboo of conference realignment which ultimately can negate current contracts or alter them. So we'll see how this plays out.

The funny thing is most people see a conference whose teams get "only" 10 million dollars as a loss compared to a conference getting 20 million dollars. That cup half empty attitude is just as much a problem as the media throwing out all the dough. At some point people have to stop buying into the view that what the other guy makes is paramount to what we have to make. Sooner or later this jealousy or "keeping up with the Jones" attitude ends up ruining more than it benefits. It creates atmospheres within universities to forsake decency for one ups man ship. It promotes cheating, and back stabbing and every man for himself attitudes that are poisonous. The BCS system, the Bowl system, the exorbitant media contracts are the result of our nature not the promotors of our nature. They are only fulfilling what we want them to fulfill.

I agree with some of what you say, although I would put the BCS into a different category than the rest. The BCS system really is corrupt and anti-competitive, but I believe the television deals are fairly priced to both sides. One of the things that many fail to acknowledge is how tightly priced all 5 major conferences are. They are all priced within about 30% of each other, with the ACC at the low end at $18MM/school and the Pac 12 around $25MM. For all the SEC worship that goes on around here, the networks have priced them within a pretty tight range with the other leagues. I suspect that the MWC, whatever form it takes, is due for a big payday when it recuts its new deal, which is the likely reason why it is going through with the merger with CUSA. I would not be surprised for those schools to get to $8-10MM/school.

The MAC and Sun Belt will benefit because I expect Guarantee Payments to go to $2MM a game within 5 years. Expect more road trips to MAC schools because the Big East schools are not going to pick up those checks very often. I also think the CAA upgrading as a league, somehow, is all but a done deal.

Money absolutely corrupts, but it can do a lot of good too. Better that ESPN pitches in than the schools have to cut professors or raise tuition. This money can help hold onto marginal sports, particularly on the men's side, that are under enormous pressure from Title IX cuts. This money can be used to build athletic facilities that all students can use.

 

[HartbeatHusky]

I agree with some of what you say, They are all priced within about 30% of each other, with the ACC at the low end at $18MM/school and the Pac 12 around $25MM.

Nelson, where are you getting your ACC numbers? Based on what I've read they currently get about $12 to $13 million per school.

http://www.bcinterruption.com/2011/...-deal-espn-big-east-pac-12-big-ten-big-12-sec

 

[nelsonmuntz]

Nelson, where are you getting your ACC numbers? Based on what I've read they currently get about $12 to $13 million per school.

http://www.bcinterruption.com/2011/...-deal-espn-big-east-pac-12-big-ten-big-12-sec

ESPN is rumored to have boosted the ACC $5MM a school for adding Pitt and Syracuse. Since the ESPN deal with the ACC has not been finalized, there is no way to know, but it is safe to assume there was a meaningful bump since the Pitt and Syracuse had been behind turning down an ESPN deal that would have paid the Big East about $11MM/year. Would they have bothered to leave for an extra $2MM a year? Would the ACC have bothered to add 2 teams for no incremental revenue?