Fox, Big Ten Closing In On Media Rights Agreement

[BleedGopher]

per Sports Business Journal:

Fox is close to signing a deal that gives it half of the Big Ten’s available media rights package, according to several sources. Deal terms still are flexible – both in terms of money and rights. However, the two sides have agreed on basic terms that will give Fox the rights to around 25 football games and 50 basketball games that it will carry on both the broadcast channel and FS1 starting in the fall of '17. The deal runs six years and could cost Fox as much as $250M per year, depending on the amount of rights the Big Ten conference puts in its second package.

The Fox deal essentially is half of the package of games that had been with ESPN (as part of a 10-year, $1B deal that expires next spring) and CBS (as part of a 6-year, $72M basketball-only deal that also expires next spring). The Big Ten will return to the market to solicit bids on the second half of the package. The conference has the flexibility to allow for another network or two to pick up that half. ESPN will be one of several TV networks engaged for the second half of the Big Ten’s package, along with the usual suspects of CBS, NBC and Turner.

The second package also is expected to include around 25 football and 50 basketball games. The package also could include rights to the football championship games every other year, though sources caution that the rights in the second package are flexible and could include more – or less – games.

http://www.sportsbusinessdaily.com/Daily/Closing-Bell/2016/04/19/Big-Ten.aspx

Go Gophers!!

 

[BleedGopher]

per USA Today:

When the final numbers are in, they’re going to be staggering. If there’s anything we can glean from John Ourand’s report Tuesday in the Sports Business Journal about the Big Ten’s first step toward its new media rights deal, that much seems certain.

And soon, commissioner Jim Delany will be able to walk away secure in the knowledge that he one-upped his old friend and rival Mike Slive once and for all.

First, though, let’s break down the numbers. If Ourand’s reporting is accurate, the Big Ten will sell half of its rights package to Fox for up to $250 million per year — which would divide out to a cool $17.86 million per school. And that’s with the other half still up for bid to ESPN, CBS, NBC or whomever.

We’ll see where the final numbers come out, but it seems almost certain that Big Ten schools will soon be banking more than $30 million per year — a number that doesn’t even include what the conference makes off the Big Ten Network and digital rights. When it’s all said and done, it could be a $40 million distribution.

And the best part? If it’s a six-year deal, as Ourand reported, the Big Ten’s media rights will come up for bid again (and maybe again prior to that) before ESPN’s 20-year agreement with the SEC expires in 2034.

http://www.usatoday.com/story/sport...delany-new-deal-stunningly-big-deal/83247570/

Go Gophers!!

 

[MaxyJR1]

So the thing about the B1G being smarter is true.


Sent from my iPad using Tapatalk

 

[Oregon Gopher]

Surprised a thread about "the increased revenue should eliminate the need for seat donations" hasn't started yet.


Sent from my iPhone using Tapatalk

 

[Iceland12]

Fox Sports preparing for big move on Big Ten - Strib

The Big Ten Conference is poised to shift much of its media rights from ESPN to Fox.

An industry source on Tuesday confirmed a Sports Business Daily report that a pending six-year deal would give Fox Sports and Fox Sports 1 about 25 football games and 50 men’s basketball games per season starting in the fall of 2017.

The deal could be worth as much as $250 million per year — and that’s for only half of the Big Ten’s inventory. ESPN, which has been broadcasting Big Ten football and basketball games for decades, has been paying $100 million per year.

Each Big Ten school, save for recent additions Maryland and Rutgers, is expected to receive $40 million to $45 million a year in media rights once the new deals kick in. That figure was $20 million in 2009-10.

The Big Ten will return to market to solicit bids on the second half of the package, according to the report. Among the potential interested parties are ESPN/ABC, CBS, NBC and Turner Sports.

ESPN had first negotiation rights to renew, but the network is in cost-cutting mode after losing about 7 million subscribers from 2014 to ’16 as so-called “cord cutters” opt for slimmed-down TV packages.

Big Ten Commissioner Jim Delany is personally handling the negotiations for the conference — no surprise, considering how he boosted revenue by creating the Big Ten Network. BTN’s deal with the conference runs through 2031-32.

BTN is a joint venture between the Big Ten and Fox. The Fox networks have not been home to any Big Ten football or basketball games save for the conference’s football championship game, which began in 2011.

Sports Business Daily has reported that CBS wants to renew its package of men’s basketball games, currently worth $12 million a year. That contract, like ESPN’s, expires after next season.

http://www.startribune.com/fox-preparing-for-big-move-on-big-ten/376298051/

 

[wait!what?]

Every Big Ten football Stadium should have a Delany Gate. Not everything he did was perfect but financially he came pretty dang close.

 

[Iceland12]

According to documents obtained from Ohio State, full Big Ten members — all but Maryland, Nebraska and Rutgers — were each given a total of $21.5 million from all of their media rights deals in 2015. All fully-integrated Big Ten members receive the same payout.

Here’s the information from Ohio State via a Freedom of Information Request in trying to learn more about the Big Ten’s revenue distributions to the conference.

TV + BTN profit shares: $21,499,346

NCAA: $4,443,096

Bowl: $4,723,939.44

Big Ten MBB Tourney: $405,580

Big Ten FB Championship Game: $335,402

Total: $32,407,363

In 2018, Big Ten schools will receive roughly $17.8 million just from half of the conference’s first-tier rights, not even including revenue from the Big Ten Network. If the rest of the first-tier rights are sold for a similar package, each Big Ten school will receive roughly $35 million in first-tier rights alone.

The Big Ten allocates almost all of its revenue — not just from TV money — to schools. According to its 2013 tax forms, the conference brought in $338.9 million. $317.2 million was distributed to the schools, while roughly $19 million was spent on conference salaries and other expenses.

Big Ten schools received an average of roughly $8 million from first-tier rights in 2015. However, given that Maryland, Rutgers and Nebraska only received partial shares, the other Big Ten schools made a bit more — somewhere around $9 million (the exact first-tier rights numbers were not made available, but we can come very close to an estimate, based on what the three expansion members received). So that means first-tier rights are likely about to increase by, for the long-time Big Ten members, $25 million per year.

Considering that first-tier rights were only worth roughly $9 million to Ohio State — and by extension, all full Big Ten members — and the Buckeyes got $21.5 million in TV money, that means hoards of money from other media sources, like the Big Ten Network, will add on to the whopping $35 million per school number.

The Big Ten Network is likely increasing in profitability every year, as many of the costs for running a network are fixed. But even if BTN profits stay stagnant — they won’t — the gap between first-tier rights and total television revenue is still around $12.5 million per school.

So let’s add all that up:

2015 - 2018

First-tier rights (full members) ~$9 million ~$35 million

Other rights and BTN ~$12.5 million ~$12.5 million (or more)

College Football Playoff $4.7 million $4.7 million
N
CAA distribution $4.4 million $4.4 million

Big Ten Tournament and Championship Game $740,000 $740,000

Total $32,407,363 ~$57 million

These are projections, and the exact figures for the Big Ten Network are still unknown, but given what we know now, and what the Big Ten’s full first-tier rights package is expected to look like, we can comfortably say that the conference will be making far more than the previous projection of $44.5 million per school.

At the very worst — assuming BTN profits don’t grow, which is incredibly unlikely — the Big Ten should be able to distribute roughly $47 million per school in 2017-18, just from media rights alone. That’s double what it distributed in 2015, and more than previous projections for the entire distribution once this new deal hit.

http://awfulannouncing.com/2016/big...ia-revenues-skyrocket-thanks-new-tv-deal.html

 

[short ornery norwegian]

Sounds great - BUT - the TV rights fees are based on a system that is supported by cable TV customers. As one of the articles noted, ESPN is starting to slowly back off from the big rights agreements, because it's losing customers to cable cutters. More people are dropping cable or satellite TV and getting all their content from the streaming services - Netflix, Hulu, Sling TV, Amazon Prime, etc. Eventually, the sports networks will have to make provisions for the streaming services to carry games - but those agreements will not produce anywhere near the revenue that the cable customers have been coughing up.

And, the remaining cable customers are going to get gouged even more to make up for the loss of revenue.

Just as Gopher fans are deciding whether they can afford season tickets, soon we will all face the choice of whether to keep or drop cable - even if that means we don't have access to all the sports we have become accustomed to.

 

[Lakeville Goldy]

The Big Ten Conference is poised to shift much of its media rights from ESPN to Fox.

An industry source on Tuesday confirmed a Sports Business Daily report that a pending six-year deal would give Fox Sports and Fox Sports 1 about 25 football games and 50 men’s basketball games per season starting in the fall of 2017.

The deal could be worth as much as $250 million per year — and that’s for only half of the Big Ten’s inventory. ESPN, which has been broadcasting Big Ten football and basketball games for decades, has been paying $100 million per year.

Each Big Ten school, save for recent additions Maryland and Rutgers, is expected to receive $40 million to $45 million a year in media rights once the new deals kick in. That figure was $20 million in 2009-10.

The Big Ten will return to market to solicit bids on the second half of the package, according to the report. Among the potential interested parties are ESPN/ABC, CBS, NBC and Turner Sports.

ESPN had first negotiation rights to renew, but the network is in cost-cutting mode after losing about 7 million subscribers from 2014 to ’16 as so-called “cord cutters” opt for slimmed-down TV packages.

Big Ten Commissioner Jim Delany is personally handling the negotiations for the conference — no surprise, considering how he boosted revenue by creating the Big Ten Network. BTN’s deal with the conference runs through 2031-32.

BTN is a joint venture between the Big Ten and Fox. The Fox networks have not been home to any Big Ten football or basketball games save for the conference’s football championship game, which began in 2011.

Sports Business Daily has reported that CBS wants to renew its package of men’s basketball games, currently worth $12 million a year. That contract, like ESPN’s, expires after next season.

http://www.startribune.com/fox-preparing-for-big-move-on-big-ten/376298051/

So, whether you like them or not, I'm a little puzzled as to why Maryland and Rutgers wouldn't get a full portion when the new deal kicks in. When the whole reason they were added was to expand the TV market, shouldn't they be rewarded with an equal portion of that TV revenue?

I get that currently they aren't because they were added during an existing contract that was sized according to 11 schools (Nebraska currently does not get an equal portion either). But shouldn't this new negotiation reset that to the current 14 teams?

 

[olddoc]

If you cut the cable you cannot see cable channels such as ESPN, FS!, HBO etc on devices like AppleTV etc unless you subscribe to said channels..

 

[Iceland12]

So, whether you like them or not, I'm a little puzzled as to why Maryland and Rutgers wouldn't get a full portion when the new deal kicks in. When the whole reason they were added was to expand the TV market, shouldn't they be rewarded with an equal portion of that TV revenue?

I get that currently they aren't because they were added during an existing contract that was sized according to 11 schools (Nebraska currently does not get an equal portion either). But shouldn't this new negotiation reset that to the current 14 teams?

Good question but all three schools knew what they were doing when they joined the Big Ten. The contracts were in place, but the offer was contingent on the schools coming in at partial shares for "x" number of years and if they were willing to do that they would get a share of a MUCH bigger pie than they'd get from the Big12 or ACC.

They all came in on a "6 year plan". Nebraska gets a full share starting in 2017. Maryland and Rutgers? Those "schools have a six-year financial integration plan — the same as Nebraska — and start receiving full revenue shares beginning in the 2020-21 school year."

 

[GopherGod]

So, whether you like them or not, I'm a little puzzled as to why Maryland and Rutgers wouldn't get a full portion when the new deal kicks in. When the whole reason they were added was to expand the TV market, shouldn't they be rewarded with an equal portion of that TV revenue? I get that currently they aren't because they were added during an existing contract that was sized according to 11 schools (Nebraska currently does not get an equal portion either). But shouldn't this new negotiation reset that to the current 14 teams?

Maryland I know was essentially fronted some of their future Big 10 media money by the conference when they came in because their athletic department was needing assistance to buy out of their ACC deal.

 

[Lakeville Goldy]

Good question but all three schools knew what they were doing when they joined the Big Ten. The contracts were in place, but the offer was contingent on the schools coming in at partial shares for "x" number of years and if they were willing to do that they would get a share of a MUCH bigger pie than they'd get from the Big12 or ACC.

They all came in on a "6 year plan". Nebraska gets a full share starting in 2017. Maryland and Rutgers? Those "schools have a six-year financial integration plan — the same as Nebraska — and start receiving full revenue shares beginning in the 2020-21 school year."

Maryland I know was essentially fronted some of their future Big 10 media money by the conference when they came in because their athletic department was needing assistance to buy out of their ACC deal.

Thanks for the answers. Makes sense...

 

[Nate]

We'll have that facilities plan paid off in no time!

 

[MNGoldenGophers1]

Sounds great - BUT - the TV rights fees are based on a system that is supported by cable TV customers. As one of the articles noted, ESPN is starting to slowly back off from the big rights agreements, because it's losing customers to cable cutters. More people are dropping cable or satellite TV and getting all their content from the streaming services - Netflix, Hulu, Sling TV, Amazon Prime, etc. Eventually, the sports networks will have to make provisions for the streaming services to carry games - but those agreements will not produce anywhere near the revenue that the cable customers have been coughing up.

And, the remaining cable customers are going to get gouged even more to make up for the loss of revenue.

Just as Gopher fans are deciding whether they can afford season tickets, soon we will all face the choice of whether to keep or drop cable - even if that means we don't have access to all the sports we have become accustomed to.

This is spot on but it is not just about affordability whether people continue to pay for cable as we know it today. A lot of people who can afford cable but are forgoing it because they don't want or need it. Many savvy consumers are only going to buy what they really think is of value.

I know someone who makes well over $100,000 annually and recently dropped cable and his wife is the bread winner in their household. He is simply streaming because it gets him most of what he wants. I suspect there are many more like him and many more who will do the same thing especially as cable contracts come to termination.

Perhaps this not the best analogy but consider a car dealership. They can't just offer one expensive style of car with all the bells and whistles. Consumers know there are a lot of options and will typically buy just what they want or need. Cable and satellite have had it too good for so long which probably explains in large part why they could charge so much with such crappy service.

I don't see these lucrative network deals lasting too much longer.

 

[tjgopher]

This is spot on but it is not just about affordability whether people continue to pay for cable as we know it today. A lot of people who can afford cable but are forgoing it because they don't want or need it. Many savvy consumers are only going to buy what they really think is of value.

I know someone who makes well over $100,000 annually and recently dropped cable and his wife is the bread winner in their household. He is simply streaming because it gets him most of what he wants. I suspect there are many more like him and many more who will do the same thing especially as cable contracts come to termination.

Perhaps this not the best analogy but consider a car dealership. They can't just offer one expensive style of car with all the bells and whistles. Consumers know there are a lot of options and will typically buy just what they want or need. Cable and satellite have had it too good for so long which probably explains in large part why they could charge so much with such crappy service.

I don't see these lucrative network deals lasting too much longer.

If streaming becomes a mainstream way for fans to get Big Ten games, the money will still be there. Netflix last year paid $118 million for "Friends" and HULU this year paid $180 million for "Seinfield", both of which anyone with cable and a DVR can record off of TBS and get every episode in about 2 weeks. That's not to mention the billions they pay for premium motion picture content, etc.

Big Ten football and MBB is PREMIUM CONTENT. If it goes to streaming, those services know it will bring them many new customers. There will always be value there. Someone will pay millions for this. In fact, I wouldn't be surprised when this new 6-year deal runs out that they get BOTH a TV deal and a STREAMING deal and it will be even more lucrative. The streaming services know Big Ten will provide unique, live and feature programming that has been proven people will demand. The success of the BTN will be a nice piece of evidence to just that.

 

[MNGoldenGophers1]

If streaming becomes a mainstream way for fans to get Big Ten games, the money will still be there. Netflix last year paid $118 million for "Friends" and HULU this year paid $180 million for "Seinfield", both of which anyone with cable and a DVR can record off of TBS and get every episode in about 2 weeks. That's not to mention the billions they pay for premium motion picture content, etc.

Big Ten football and MBB is PREMIUM CONTENT. If it goes to streaming, those services know it will bring them many new customers. There will always be value there. Someone will pay millions for this. In fact, I wouldn't be surprised when this new 6-year deal runs out that they get BOTH a TV deal and a STREAMING deal and it will be even more lucrative. The streaming services know Big Ten will provide unique, live and feature programming that has been proven people will demand. The success of the BTN will be a nice piece of evidence to just that.

I don't disagree that new opportunities will emerge with streaming services but they won’t be nearly as lucrative as past contracts due in large part to ESPN (and other sports networks) being heavily subsidized by non-sports customers. Although most networks with sports programming are considered premium content, most networks and in particular ESPN currently have unsustainable models if non-sports people figure out how to quit subsidizing them as is already starting to happen. Time will tell but my bet is that ESPN, FOX, CBS, etc. are going to see their returns greatly diminish for sports programming as compared to today. They are striking while the iron is still hot but it will eventually cool. It’s a good thing the B1G is getting in on it before the bottom falls out.

http://www.thewrap.com/cable-network-carriage-fees/

 

[Ski U Mah Gopher]

Another thing people might see is multiple households splitting the cost of cable and sharing a login to use on Apple-TV or Roku plus on their portable devices.

 

[Ski U Mah 55]

Another thing people might see is multiple households splitting the cost of cable and sharing a login to use on Apple-TV or Roku plus on their portable devices.

This is why device limits are starting to crop up on streaming services. A certain price point for access on 2 devices, 3-5 is another price point, etc.

 

[scalgopher]

per Sports Business Journal:

Fox is close to signing a deal that gives it half of the Big Ten’s available media rights package, according to several sources. Deal terms still are flexible – both in terms of money and rights. However, the two sides have agreed on basic terms that will give Fox the rights to around 25 football games and 50 basketball games that it will carry on both the broadcast channel and FS1 starting in the fall of '17. The deal runs six years and could cost Fox as much as $250M per year, depending on the amount of rights the Big Ten conference puts in its second package.

The Fox deal essentially is half of the package of games that had been with ESPN (as part of a 10-year, $1B deal that expires next spring) and CBS (as part of a 6-year, $72M basketball-only deal that also expires next spring). The Big Ten will return to the market to solicit bids on the second half of the package. The conference has the flexibility to allow for another network or two to pick up that half. ESPN will be one of several TV networks engaged for the second half of the Big Ten’s package, along with the usual suspects of CBS, NBC and Turner.

The second package also is expected to include around 25 football and 50 basketball games. The package also could include rights to the football championship games every other year, though sources caution that the rights in the second package are flexible and could include more – or less – games.

http://www.sportsbusinessdaily.com/Daily/Closing-Bell/2016/04/19/Big-Ten.aspx

Go Gophers!!

Hopefully Saturday morning game times will change.