Post by 96Ag on Jul 31, 2014 18:50:34 GMT -5
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Teeples: The Big 12 simply can't afford to add BYU
By Ryan Teeples, For the Deseret News
Published: Wed, July 30 2:00 p.m. MDT
Big 12 commissioner Bob Bowlsby speaks at the opening of the NCAA college Big 12 Conference football media days in Dallas, Monday, July 21, 2014. (AP Photo/LM Otero)
(LM Otero, AP)
Yesterday marked the end of the football media day frenzy that’s gripped America for the past few weeks. While these events are fun, they typically result in little more than copious media fodder and an overdose of coach-speak and pigskin platitudes.
But BYU fans have watched with keen interest as their school’s name has been mentioned in nearly every conference’s event. As recently as Monday at AAC Media Days, Commissioner Mike Aresco brought up the Cougars relative to his league.
"Three of our schools will be playing BYU this year, who we absolutely consider a power team and that will continue moving forward." Aresco said.
While people in Provo probably find the AAC gesture nice, they’re far more interested in what the Big 12 thinks about their program. The 10-team conference held its media days July 21-22, and there was no shortage of pontification from fans and media about the conference’s need to expand and consider BYU its top choice.
The Deseret News used the occasion to put together interesting articles and charts showing how the Cougars stack up against current Big-12 membership. One media outlet, CFB Matrix, even went so far as to include BYU in its Big-12 preview.
But for all that excitement, the Big 12 showed little enthusiasm for expansion. While Commissioner Bob Bowlsby spoke of significant changes yet to come in college football, the collective sentiment of the event in regards to any need for expansion was “No thanks. We’re good.”
Everyone else is expanding, why not the Big 12?
However, not a single media outlet seems to understand exactly why the Big 12 isn’t interested in expansion. Most simply state that the more the conference grows, the more it would have to share its TV revenue, and they imply that’s all there is to it.
Why, then, did the Big Ten, SEC, Pac-12 and ACC expand while the Big 12 stood pat?
It all boils down to the TV revenue model. Conferences can make money televising their product in three distinct categories. First, they sign lucrative contracts with ESPN , ABC, CBS, and Fox to air their top matchups. These are called Tier 1 games. For example, when LSU and Wisconsin play Saturday, Aug. 30, the game will be on prime time on ESPN.
Next, conferences offer rights to Tier 2 games, which are typically shown on lesser but still “national” sports networks. They get significantly lower ratings than the tier 1 games and are often on channels that deliver limited exposure like Fox Sports 1.
Finally, what’s left is considered Tier 3 programming. Conferences typically retain the rights to these games for themselves. Here’s where it gets confusing and where a general lack of understanding exists in the sports landscape.
Tier 3 rights are at the core of expansion — or stagnation
The SEC, Big Ten, Pac-12 and SEC all have their own conference athletics TV networks, built for the purpose of broadcasting Tier 3 games. The Big 12 and ACC do not. Odd as it sounds, the college football expansion insanity is driven primarily by these lower-tier TV games.
The ACC is in a sticky situation because they — probably foolishly — included those lucrative Tier 3 rights in their TV deal with ESPN. While the ACC is rumored to be working on a conference network with ESPN, it may be for sheer survival, as will become clear later.
The Big 12 gives its Tier 3 rights to member schools. Back when it looked like the Pac-10 was going to pilfer Texas and Oklahoma, the conference agreed to let Texas build the Longhorn Network, leaving it almost impossible to make a Tier 3 conference network marketable.
That’s well and good for Texas, but it really hurts the rest of the schools. They are left to individually monetize their own Tier 3 rights. But they can’t come close to making the money schools in other power conferences are making from theirs.
The Big 12 schools are left to split just the revenues from their Tier 1 and Tier 2 TV deals, which amount to about $20 million per school per year.
Cable and Satellite Subs drive big Tier 3 revenue
Those Tier 3 games may not be attractive to national television networks, but they are vital to fans. So the conference networks work out deals with cable and satellite providers to carry the network with their programming. But at a price. A hefty one.
Many fans scratched their heads when the Big Ten was excited to add Rutgers to its membership. What the confused failed to realize is that with the addition, TV providers in the New York City metro area would now be required to carry the Big Ten network, often as part of basic packages.
And for every subscriber that’s added in the conference footprint, the Big Ten gets $1 — per month! So adding the New York Market means Big Ten schools’ checks get much, much bigger. And by a significantly greater amount than what they give up splitting the Tier 1 and 2 pie by an extra member. That doesn’t even take into account the wider advertising reach the network will now enjoy.
In all, it means the Big Ten Network is projected to earn over $100 million dollars this year, or $7.4 million per school on top of the more than $30 million expected from the other TV contracts.
And the SEC is rumored to be getting more per sub than the Big Ten. That kind of money is why conferences are looking to expand their footprint, not stand pat.
Big 12 has no incentive to expand
Without the ability to collectively monetize those Tier 3 rights through subscriber count like other conferences, the Big-12 distribution is limited to the $20 million per school it receives from its Tier 1 and 2 deals. Any additional school added to the conference means less money per school. Period.
The deal goes all the way through the 2024-2025 football seasons. And the contracts are such that they can’t be renegotiated without a major shift in the earning power of the product. Adding BYU doesn’t do that.
At this point, it would take outside forces acting upon the conference forcing them to expand. Maybe the other leagues get upset that the Big 12 teams in the football playoff are fresher and have an easier path to a championship. Maybe at some point Texas relents on Tier 3 rights.
But right now, there’s nothing the Big 12 or BYU can do to make a relationship work. The money just isn’t there.
Ryan Teeples, twitter.com/SportsGuyUtah, is a marketing and technology expert, full-time sports fan, owner of Ryan Teeples Consulting Inc. (RyanTeeples.com) and regular contributor to LoyalCougars.com.