Realignment Megathread (All The Moves)

[CascadeClone]

This makes some sense. ESPN/fox/apple/whoever wouldn't have to handle the cameras, talent, etc. They just broadcast it. It will make the deal look better on paper, but interesting to see what the price the PAC would have to put up to produce all their content themselves. Interesting idea.

So PACN stays on cable with existing (limited) distribution, but Apple gets rights to stream the games too maybe? And one or the other could sell a game a week to Fox or ESPN to go linear. And you pay for all the costs of production. It's a bit tortured, but its probably the best they can do overall.

Good: less fixed costs for your buyers, which would be appealing. You can get your best game of the week onto linear, so UW/UO/UU are happy. The top line number is a fig leaf for the money issue, so the proud can stay behind and cut off their nose. Wil-Zano can go nuts about how they were right all along and flog the number.

Bad: practical teams may still bail out since it is obvious you're gonna drop $7-10M per team lower after production costs. And everybody not UW/UU/UO will be lucky to be on linear once a year.

Ugly: How stoned will Bill Walton be during hour 5 of a 2OT game at 1am?

 

[BCClone]

The B10 is different from the rest of the conferences with a network. All the other conferences the ACC, SEC and P12, get their money from the network that is broadcasting their games. The genius of BTN is that is only half of the money comes in that way, the other half comes in by the rate at which they charge the households. If you do not have a B10 team in your state, the price of the service is around .10 cents per month, but if you do that price then jumps to $1.10 or so per month. So, states like Florida with a lot of people are going to bring in a ton of money to the conference, just like Rutgers and Maryland did bringing in NY city and Washington/Baltimore.

If the B12 adds Colorado, the league has to hope that its TV partners will pay more, the B10 is going to be able to make money charging more to the people of Colorado, thereby increasing the amount brought in.

The problem that the B10 has is that right now the payouts are reaching such high levels that new schools would have to bring in 60 tp 70 million or more per year to not cut into the pie of the other schools. California does this, and so would Florida or Texas, but most states just do not have the population to bring in the added money.

With ND you get them, they will add nothing to the league from their subscription BTN because those people are already paying the higher price, but FOX will pay a ton of money to be able to broadcast ND games on their network.

One area that the big ten has started to devalue the BTN is they have sold 61% of it to Fox. They keep selling off 5-10% here and there. They have lost majority control of it already and seem to keep profiting a little here and there off the sale. I wonder how much of the media payments are from the sale of the BTN to Fox. They don't seem to get a lump sum so it makes me wonder if a portion of the media payment from fox is the partial purchase of the BTN.

 

[Acylum]

So PACN stays on cable with existing (limited) distribution, but Apple gets rights to stream the games too maybe? And one or the other could sell a game a week to Fox or ESPN to go linear. And you pay for all the costs of production. It's a bit tortured, but its probably the best they can do overall.

Good: less fixed costs for your buyers, which would be appealing. You can get your best game of the week onto linear, so UW/UO/UU are happy. The top line number is a fig leaf for the money issue, so the proud can stay behind and cut off their nose. Wil-Zano can go nuts about how they were right all along and flog the number.

Bad: practical teams may still bail out since it is obvious you're gonna drop $7-10M per team lower after production costs. And everybody not UW/UU/UO will be lucky to be on linear once a year.

Ugly: How stoned will Bill Walton be during hour 5 of a 2OT game at 1am?

Then throw in unequal revenue sharing.

 

[BCClone]

This would make things interesting. Not sure I believe the financials though.

I could see the PAC staying together for this if it is a 3-5 year deal. It would be a time buyer. Allow teams like WSU and OSU to hold together for more years, give Oregon and UW time to see if they can get a big ten invite, get the PAC closer to then end of the ACC deal and the 12, 10, and SEC deals.

 

[Bestaluckcy]

Hope Yormark is hammering CU and UA hard about all the money they have thrown down the PAC network rathole, and this is just some more. Big 12 pays in greenbacks baby!

 

[SEIOWA CLONE]

One area that the big ten has started to devalue the BTN is they have sold 61% of it to Fox. They keep selling off 5-10% here and there. They have lost majority control of it already and seem to keep profiting a little here and there off the sale. I wonder how much of the media payments are from the sale of the BTN to Fox. They don't seem to get a lump sum so it makes me wonder if a portion of the media payment from fox is the partial purchase of the BTN.

We will never know if the league is doing this to keep payouts up or the reason for it. But the league now only hold 39% of BTN.

Insider: Fox, Big Ten made a big bet on TV future; it paid off Thursday

Insider on the big bet that paid off for the Big Ten and Fox with new TV rights deal.

www.indystar.com

 

[BCClone]

We will never know if the league is doing this to keep payouts up or the reason for it. But the league now only hold 39% of BTN.

Insider: Fox, Big Ten made a big bet on TV future; it paid off Thursday

Insider on the big bet that paid off for the Big Ten and Fox with new TV rights deal.

www.indystar.com

If they would get to 100% sold, I wonder how that would work then. Does that mean that the big 10 has in essence forever sold their tier 3 rights and have no rights to them? At that point the big ten would be getting payments curtailed and could start falling behind in the payments race. I know it may be many years out, but that could be the wrench in the big ten payout machine.

 

[KnappShack]

Hope Yormark is hammering CU and UA hard about all the money they have thrown down the PAC network rathole, and this is just some more. Big 12 pays in greenbacks baby!

And it's a 20% linear only a "PAC 12 Game of the Week"?

1 game on the traditional network and the rest hidden on Apple or the PAC Network?

Does Primetime think that's enough?

 

[1UNI2ISU]

Honest question, how would those production costs compare to Big 12 schools and ESPN+? Don’t the Big 12 schools produce their own events broadcasted through ESPN+?

Apparently about $12M per year per school. The Big 12s costs are around $3M per year per school.

It's significant.

 

[HFCS]

And it's a 20% linear only a "PAC 12 Game of the Week"?

1 game on the traditional network and the rest hidden on Apple or the PAC Network?

Does Primetime think that's enough?

If it was Amazon Prime I'd feel much more comfortable as a Pac fan if I had to put 80% of the eggs in one streaming basket.

 

[SEIOWA CLONE]

If they would get to 100% sold, I wonder how that would work then. Does that mean that the big 10 has in essence forever sold their tier 3 rights and have no rights to them? At that point the big ten would be getting payments curtailed and could start falling behind in the payments race. I know it may be many years out, but that could be the wrench in the big ten payout machine.

Selling more would be silly for the league and a mistake. I believe originally the league owned 49% and FOX had 51%, so the league sold another 10% to Fox, I never saw a reason for the sell but maybe FOX wanted more control over the content, and with the payouts so high, maybe the league was willing to give up a little more control to keep the network happy.
The mistake the Pac12 made was trying to own the entire league, and therefore none of the broadcasting partners had any skin in the game to make sure that the network would be successful. The ACC is owned totally by ESPN, while the SEC is owned 80% by ESPN and 20% by the Hearst Corporation.

 

[Die4Cy]

I sort of wonder if media value is being maxed out on this round of contracts. These conferences are all in on tv money and overall viewership is on a steady decline. Sports has just seen the slowest decline. There are unlimited other entertainment options for people now. At some point the math comes into play when most of the funding of the funding of these conferences is advertising dollars.

I don't know what that looks like, but it's not a moment you'd be envious to be in if you are a lower tier team in a P2 conference.

 

[Gunnerclone]

I guess if rumors that Apple is going to be the primary driver, utilizing PAC12 network infrastructure, it gives more weight to what we heard from one of the PAC presidents last week about needing more linear programming.

Let’s see if the AZ President sticks to his previous comments where said they need at least 50/50 linear/streaming to make it work for them.

 

[CascadeClone]

Then throw in unequal revenue sharing.

That too.
"tortured" is sounding more and more accurate...

 

[heitclone]

So in this deal the big names will get fed the linear games and the rest will have to accept streaming and have no chance to grow their brand? Feels like Colorado would be a big no, they in the middle of a total rebrand, they want to be on TV.

 

[FriendlySpartan]

I sort of wonder if media value is being maxed out on this round of contracts. These conferences are all in on tv money and overall viewership is on a steady decline. Sports has just seen the slowest decline. There are unlimited other entertainment options for people now. At some point the math comes into play when most of the funding of the funding of these conferences is advertising dollars.

I don't know what that looks like, but it's not a moment you'd be envious to be in if you are a lower tier team in a P2 conference.

The funding is already almost all advertising dollars. That’s how the networks are paying for the media rights, selling ads. The advantage of this is that live sports are one of the only ways left to capture an audience. Most streaming is ad free or has a tier to avoid ads if not live. Premier shows on services like HBO have no ads so unless you get a show you have to watch live to avoid massive spoilers, love sports is still one of the best ways to capture an audience.

 

[SCNCY]

Let’s see if the AZ President sticks to his previous comments where said they need at least 50/50 linear/streaming to make it work for them.

I see a scenario where the PAC/Apple promises that Apple will sell inventory of games to linear TV stations, but fail to meet the 50/50 split.

 

[HouClone]

Apparently about $12M per year per school. The Big 12s costs are around $3M per year per school.

It's significant.

Is the $12M correct? It was reported in May that the Pac 12 operating expenses were $77 million ($6.42 million per school) for the 2021-2022 year.

Pac-12 announces record 2021-22 financial results

In first reported financial year since the Covid-19 pandemic, record consolidated revenue at $581M with record total distributions at $444M, up 9% and 10% respectively from the last Pac-12 pre-pandemic 2019-2020 financial results Consolidated Expenses decrease 9% from last pre-pandemic 2019-2020...

pac-12.com

$3M per school for ESPN+? Oof, that is a lot.

 

[KennyPratt42]

It really feels like the Pac-12 is at the stage where they are trying to appease the different schools. Trying to find the balance between the number they can announce for revenue (which will almost certainly be before you take out likely production costs), the amount schools will actually receive, and the amount of games that will be on linear networks. Every one of their members is obviously interested in all three, but for some Pac-12 perception/competing with other conferences is most important (total revenue number), for others the biggest factor is getting enough money actually coming in to pay for things, and others visibility of their games for recruiting and perception is the most important.

 

[theshadow]

Don’t the Big 12 schools produce their own events broadcasted through ESPN+?

Football and conference MBB games on ESPN+ are done by a "normal" production crew -- even though nowadays they're mostly off-site, producing the games from a studio in Orlando or Charlotte.

Everything else (MBB non-con, WBB, WR, VB, GYM, SOC) is produced in-house.