Perspective from the Big Ten and some much needed clarifications

[Cloneon]

Wow, I have no clue if what you just said has anything to do with media packages.

Under the big 10 media deal, the money is NOT made from those that actually watch the games, its made off those that are being charged whether they watch it or not. Why did they pick Rutgers to expand into too? Not because of the school and their winning tradition and fan base, it was because by picking them, that allowed the conference to charge every person in New York City, that has cable a dollar a month. I am charged for it here in Iowa whether I watch or not.
In your example, you actually have to purchase the product, but BTN got around that, by being on basic cable. IF you had cable, you paid money to BTN. That was the genius of the system, that allowed the money to flow in.

Now with streaming, that flood of money, starts to slow down. People that are not interested will not purchase the added sports pak, therefore less money into the conference. Once they go down this path, and we are going down this path, then the size of your teams crowds and fanbase give you a good idea of how many people are willing and able to purchase the product. Hardcore BTN fans are buying, but for everyone of them, there are dozens of other people that will not. Under the old system, those dozens would have had no choice but to pay into the system, now they do, and they are not doing it. If they were then BTN+ would not be $80 dollars a year, or $10 bucks a month, they would have kept it at roughly the same price as basic cable costs, at a dollar or two.

BTN knows all of this, and that is why they are trying to transition to putting more games on BTN+ thereby forcing people to purchase it, even if that means for only one month. NBC and ND is doing the same thing this coming season, putting one game on their streaming service to see how large of a crowd they can draw and if there is going to be enough money there in the future to do it more often.

Exactly. Designed to charge you whether you need it or not.

 

[usedcarguy]

Wow, I have no clue if what you just said has anything to do with media packages.

Under the big 10 media deal, the money is NOT made from those that actually watch the games, its made off those that are being charged whether they watch it or not. Why did they pick Rutgers to expand into too? Not because of the school and their winning tradition and fan base, it was because by picking them, that allowed the conference to charge every person in New York City, that has cable a dollar a month. I am charged for it here in Iowa whether I watch or not.
In your example, you actually have to purchase the product, but BTN got around that, by being on basic cable. IF you had cable, you paid money to BTN. That was the genius of the system, that allowed the money to flow in.

Now with streaming, that flood of money, starts to slow down. People that are not interested will not purchase the added sports pak, therefore less money into the conference. Once they go down this path, and we are going down this path, then the size of your teams crowds and fanbase give you a good idea of how many people are willing and able to purchase the product. Hardcore BTN fans are buying, but for everyone of them, there are dozens of other people that will not. Under the old system, those dozens would have had no choice but to pay into the system, now they do, and they are not doing it. If they were then BTN+ would not be $80 dollars a year, or $10 bucks a month, they would have kept it at roughly the same price as basic cable costs, at a dollar or two.

BTN knows all of this, and that is why they are trying to transition to putting more games on BTN+ thereby forcing people to purchase it, even if that means for only one month. NBC and ND is doing the same thing this coming season, putting one game on their streaming service to see how large of a crowd they can draw and if there is going to be enough money there in the future to do it more often.

What you said isn't wrong, but what you're leaving out of the equation is that advertising revenue is a major driver as well. Each cable company that decided to add the network made the decision based on the actual number of viewers and resulting ad revenue. Not withstanding Fox's strongarming back in the day to get the network picked up in NY and NJ, in regards to subscriptions revenue it's a net sum gain. 1 million households paying an extra $1 on their cable bill is the same as 40,000 paying $25 for a package. All it changes is who's paying the subscription revenue. And yes, the trend in that revenue stream favors Iowa State.

However, the other side of the equation is that fewer casual viewers also means networks will have less overall ad revenue. Streaming and subscriptions are not what's increasing the pot of money...at least not directly. If anything, it's leading to fewer viewers. But it's changing consumers' viewing habits. There is no longer a Thursday Night NBC "Must See TV." You watch what you want when you want, and you skip the commercials. This has lead to a dwindling supply of advertising slots that can be viewed live, which is resulting in a premium being placed on advertisements during live sporting events. It is that lack of supply that's driving revenues and growing the pot of money.

The big question going forward is what happens to those casual viewers and where the money flows. Does the model evolve to subscriptions making up a bigger piece of the revenue pie and the casual viewer who won't pay a subscription goes away, or does advertising become targeted to the point where it's value is so great that subscriptions go away and the model is 100% ad supported?

 

[Cloneon]

What you said isn't wrong, but what you're leaving out of the equation is that advertising revenue is a major driver as well. Each cable company that decided to add the network made the decision based on the actual number of viewers and resulting ad revenue. Not withstanding Fox's strongarming back in the day to get the network picked up in NY and NJ, in regards to subscriptions revenue it's a net sum gain. 1 million households paying an extra $1 on their cable bill is the same as 40,000 paying $25 for a package. All it changes is who's paying the subscription revenue. And yes, the trend in that revenue stream favors Iowa State.

However, the other side of the equation is that fewer casual viewers also means networks will have less overall ad revenue. Streaming and subscriptions are not what's increasing the pot of money...at least not directly. If anything, it's leading to fewer viewers. But it's changing consumers' viewing habits. There is no longer a Thursday Night NBC "Must See TV." You watch what you want when you want, and you skip the commercials. This has lead to a dwindling supply of advertising slots that can be viewed live, which is resulting in a premium being placed on advertisements during live sporting events. It is that lack of supply that's driving revenues and growing the pot of money.

The big question going forward is what happens to those casual viewers and where the money flows. Does the model evolve to subscriptions making up a bigger piece of the revenue pie and the casual viewer who won't pay a subscription goes away, or does advertising become targeted to the point where it's value is so great that subscriptions go away and the model is 100% ad supported?

The advertising you're speaking of is 'blanket' in nature. Basically, that means the viewing audience has enough commonality to fit the advertising. Of course contracts will also stipulate income for in-stadium advertising. I see the ESPN's saying "If you put those up, you need to pay us something because it'll draw from our spot advertising." What I see is advertisers spending 'less' on 'branding' and more on 'targeted'. Especially, if it's streamed. "Bob was on autotrader.com this week looking at these types of cars. Hit him up with a deal." That's the model of the very near future.

 

[AuH2O]

The advertising you're speaking of is 'blanket' in nature. Basically, that means the viewing audience has enough commonality to fit the advertising. Of course contracts will also stipulate income for in-stadium advertising. I see the ESPN's saying "If you put those up, you need to pay us something because it'll draw from our spot advertising." What I see is advertisers spending 'less' on 'branding' and more on 'targeted'. Especially, if it's streamed. "Bob was on autotrader.com this week looking at these types of cars. Hit him up with a deal." That's the model of the very near future.

Right, but either way it is pushing value toward teams that get viewership and away from those that don’t, with market size continuing to matter less and less. Whether it’s blanket ads or targeted, both depend on viewers.

 

[FriendlySpartan]

What you said isn't wrong, but what you're leaving out of the equation is that advertising revenue is a major driver as well. Each cable company that decided to add the network made the decision based on the actual number of viewers and resulting ad revenue. Not withstanding Fox's strongarming back in the day to get the network picked up in NY and NJ, in regards to subscriptions revenue it's a net sum gain. 1 million households paying an extra $1 on their cable bill is the same as 40,000 paying $25 for a package. All it changes is who's paying the subscription revenue. And yes, the trend in that revenue stream favors Iowa State.

However, the other side of the equation is that fewer casual viewers also means networks will have less overall ad revenue. Streaming and subscriptions are not what's increasing the pot of money...at least not directly. If anything, it's leading to fewer viewers. But it's changing consumers' viewing habits. There is no longer a Thursday Night NBC "Must See TV." You watch what you want when you want, and you skip the commercials. This has lead to a dwindling supply of advertising slots that can be viewed live, which is resulting in a premium being placed on advertisements during live sporting events. It is that lack of supply that's driving revenues and growing the pot of money.

The big question going forward is what happens to those casual viewers and where the money flows. Does the model evolve to subscriptions making up a bigger piece of the revenue pie and the casual viewer who won't pay a subscription goes away, or does advertising become targeted to the point where it's value is so great that subscriptions go away and the model is 100% ad supported?

Another thing to consider when talking about big ten vs SEC media money is that the big ten conference owns part of the BTN meaning that they get not only a cut for it being on various platforms but also get a cut in ad revenue. SEC could very well have a more lucrative media rights deal for the reasons people have mentioned but they don't own any part of the SEC network. This is a major reason for the 80mil per school payout estimate that that AD's are being told. I have no contacts at all in SEC land and have no idea the numbers they are hearing besides just pundits talking.

 

[cubuffsdoug]

So then you know that all of your 2010 talking points are stupid, then? Right?

I wish the best for Iowa State.

 

[cubuffsdoug]

How do you know the B1G will increase payouts annually in the range of 5%, but the SEC will see increases in the neighborhood of 50% with the addition of OU and UT.

The 50% figure is to arrive at the average value over the 10 year agreement. So in essence that equates to slightly over 4% annual bump.

SEC giving ESPN everything they want is not in their best interest. If ESPN doesn't gain control of the CFP and NY6 games, then all of these moves were for nothing. CFP Governance has indicated they plan on letting the contract run out and hit the open market for competitive bids. ESPN could lose the CFP and NY6 games, then what?

I think the SEC would debate aligning themselves with ESPN isn't in their best interest. They were able to increase the previous 2:30CT game with CBS from $55M to over $300M annually. Seems to me that ESPN wants to brand themselves as the place to catch SEC football. I imagine they view the SEC deal & playoff rights as 2 separate financial transactions.

Only a fool puts all of their assets in the hands of one person (ESPN). ESPN has never negotiated in good faith with anyone. ESPN will hedge its investments if this doesn't work out, and the SEC will feel it.

I don't get how fans of ISU have against the B1G when a few weeks ago you were happy that the B1G might invite you.
Btw, why are so many ISU fans kissing up to the success of the SEC when your school is in survival mode?

 

[cubuffsdoug]

Another thing to consider when talking about big ten vs SEC media money is that the big ten conference owns part of the BTN meaning that they get not only a cut for it being on various platforms but also get a cut in ad revenue. SEC could very well have a more lucrative media rights deal for the reasons people have mentioned but they don't own any part of the SEC network. This is a major reason for the 80mil per school payout estimate that that AD's are being told. I have no contacts at all in SEC land and have no idea the numbers they are hearing besides just pundits talking.

isucy86 read that post.

 

[ISU_Guy]

Stadium Capacity:

Michigan - 107K
Penn St - 106K
Ohio St - 104K
Nebraska - 87K
Wisconsin - 80K
Mich St - 75K
Iowa - 70K
Iowa State - 61K
Illinois - 60K
Purdue - 57K
Indiana - 52K
Minnesota - 52K
Rutgers - 52K
Maryland - 51K
Northwestern - 47K

IF ISU joined the B1G and Coach MC stayed around....we probably could expand to 70-75K in 2030
if ISU lost out on the Pac12 and Big10, the Big12 lost members to the P12 and WVU goes to the ACC....Then our stadium is overkill.
crazy to think how this decision can affect a university.

 

[Clone83]

IF ISU joined the B1G and Coach MC stayed around....we probably could expand to 75K in 2030

I saw just "IF ISU" at first (before you added "... 75K in 2030," and revised and added more after that).

Before I saw your revision, I was just going to post -- with potential for future growth -- located in the largest and fastest growing part of the state.

 

[FriendlySpartan]

I saw just "IF ISU" at first (before you added "... 75K in 2030," and revised and added more after that).

Before I saw your revision, I was just going to post -- with potential for future growth -- located in the largest and fastest growing part of the state.

Plus your game experience seems to be awesome from what I have heard. Many big ten schools really suck to attend games. OSU has had a ticket problem since 2017 with declining sales. With so many people opting to stay at home instead of go to games its impressive to have such a good in game atmosphere

 

[ISU_Guy]

I saw just "IF ISU" at first (before you added "... 75K in 2030," and revised and added more after that).

Before I saw your revision, I was just going to post -- with potential for future growth -- located in the largest and fastest growing part of the state.

ha! accidentally tapped post and then my internet went out for 5 mins. bad timing!

 

[RustShack]

Only a fool puts all of their assets in the hands of one person (ESPN). ESPN has never negotiated in good faith with anyone. ESPN will hedge its investments if this doesn't work out, and the SEC will feel it.

I don't get how fans of ISU have against the B1G when a few weeks ago you were happy that the B1G might invite you.
Btw, why are so many ISU fans kissing up to the success of the SEC when your school is in survival mode?

Who’s kissing up to the SEC and hating on the B1G? Lay down the pipe.

 

[isucy86]

Only a fool puts all of their assets in the hands of one person (ESPN). ESPN has never negotiated in good faith with anyone. ESPN will hedge its investments if this doesn't work out, and the SEC will feel it.

I don't get how fans of ISU have against the B1G when a few weeks ago you were happy that the B1G might invite you.
Btw, why are so many ISU fans kissing up to the success of the SEC when your school is in survival mode?

Pretty sure SEC's commissioner and their university AD's know more about the situation than you. If they align the SEC media rights entirely with ESPN, it is because that is the way to maximize their revenue for this round of media rights. Who knows, with the SEC's next package, they might choose another partner. But for now they have to be very happy that ESPN was willing to pay over $300M/year for a timeslot that CBS used to pay $55M. I am sure the Big10 and Pac12 would gladly take a multiplier of 6x on any of their media rights.

Most ISU fans frustration about the Big10 is that we view ourselves as equal to or better than the Hawks in what happens on the field or court. The potential of being left out of the P5 would be a bitter pill to swallow. I am sure Buff fans would feel the same way if they were on the outside if USC, Oregon and Washington decided to leave the Pac12.

I don't think ISU fans are kissing up to the SEC. When speaking about the financial aspects of college football go forward- the SEC hit it out of the park by adding OU & UT. Demographic trends will only get better for the SEC & ACC schools go forward vs. Big10. Like it or not, pretty likely the SEC will pass the Big10 in TV Revenue. Not sure it matters if the Big10 owns half its network or not. Its not likely they can sell their ownership interest to a third party.

 

[JM4CY]

Boy, realignment has really brought some real weirdos to the forums.