Big Ten Expansion: It's The Ratings, Stupid

One of the things that most people--ourselves most certainly included--assumed about the Big Ten strategy for expansion is that the ultimate goal was the largest carriage footprint possible (by population, we mean, not area). We didn't understand why Nebraska was in the discussions, then, because while they were certainly a traditional power, it didn't seem like they'd add much to the subscriber base except for Omaha, the rest of Nebraska, the Dakotas, and maybe Wyoming. Pitt and Notre Dame, meanwhile, were in already saturated markets, so they seemed to make even less immediate sense.

Then we read this epic post from Frank The Tank, who has become an absolute must-read during conference expansion talk, and for the first time, we have some numbers to work off of, plus one very surprising fact:

The majority of the BTN's revenue does not come from subscription fees.

Here's more on the subject from FTT's post, written by a veteran of the business:

By the Big Ten’s own admission they are clearing about $0.36 per subscriber per month for the states inside it’s footprint. They also tell us that there are 26,000,000 subscribers and it is AVAILABLE to 75,000,000 people. The BTN wants to increase the available number but even more important is to increase the subscriber numbers, and there is an opportunity to do that within the current footprint. Regardless, at $0.36 per month for 26,000,000 households over 12 months I only came up with $112,320,000 for a cable carry rate. Well short of the $272,000,000 that the network likely made last year. The other $160,000,000 is advertising revenue!

Now, what you're probably thinking (since we thought it at first too) is "where in the shit did Ro-Tel and Barbasol get $160 million?" But think of how many times you actually saw the Close Shave America commercial during an Iowa basketball game. Usually about once a game, twice on rare occasions. There were scads of other companies advertising, it's just that they blended into the background because they were the same commercials you'd see elsewhere, unlike that infernal Ro-Tel song.

SO. From a BTN standpoint, the objective here must be ratings, ratings, ratings. You know what gets ratings and advertising dollars? Live events. You know how you get lots of people to watch those live events? Theoretically, by putting the channel on as many peoples' cable plans as possible (see: New York), but if nobody there actually watches the BTN, then it's far less beneficial to the conference as a whole.

Thus, Patrick (FTT's source on the discussion) crunched the numbers and came up with this list of projected added revenue per school. He says the numbers are conservative, specifically to added revenue for live events, but in any case, here's his list:

CANDIDATES TOTAL ADDED REVENUE ESTIMATE
 
Texas $101,369,004
Rutgers    WITH NYC $67,798,609
Nebraska $54,487,990
Maryland $50,818,889
Boston College $48,382,692
Notre Dame $47,629,255
Kansas $46,320,092
Missouri $45,901,459
Syracuse $43,504,813
Connecticut $38,080,271
Pittsburgh $34,365,175
Iowa State $31,831,077
   
Syracuse WITH NYC $65,874,573

Full numbers here on Google Docs.

He also projects the total revenue necessary to break everything even at nearly $50 million, which is somewhat sobering, but includes this caveat:

With the talk and discussions that were flying around Sunday about the AAU meetings and the accelerated time table, I firmly believe that my estimates are probably too low. The fact that they want to move this quickly with an expansion means that the potential revenue is HUGE and the decision isn’t even a tough or close one.

What would have been nice is if he'd included Texas A&M, because the Aggies are near mortal locks to be a package deal with Texas if the Longhorns go anywhere. That's just the way that state works. And if so, FINE, GREAT, IS THAT ALL, LET'S DO IT.

That's because if we assume that the Big Ten would need to add both Rutgers and Syracuse to get onto NYC cable/satellite packages across the board, they'd be looking at roughly $130 million and change. Not bad. If Texas A&M raises $31 million in addition to Texas, that's a better deal. Even Iowa State can raise $31 million, and Iowa State isn't in Dallas' backyard.

It's also clear to see that there's significant benefit to getting into the NYC market. Duh, really, but it's nice to see some numbers to go along with it. But as Patrick notes, Syracuse is not a research institution; we're not certain the Big Ten actually, y'know, wants them. Moreover, both Syracuse and Rutgers, for their proximity to New York, have absolutely wretched national television ratings, especially compared to Nebraska (duh) and Pitt (!!!).

Thus--and we realize some of this is some Central Time Zone bias, but bear with us--here's what we'd like to see the Big Ten accomplish in each scenario:

1 team: Nebraska

3 teams: Texas, Texas A&M, Nebraska

5 teams: Texas, Texas A&M, Nebraska, Kansas, either Mizzou, Pitt, or Notre Dame

Frankly, we'd like to have Notre Dame higher, but Jack Swarbrick's comments seem to indicate, at best, a reactive stance for that athletic department. If Notre Dame's ever going to join a conference, it's dependent on the Big Ten making that first move. That pretty much excludes them from this discussion unless the conference involves them closely in expansion proceedings. That doesn't seem terribly likely.

As for Texas and Texas A&M, they are absolute no-brainers, financially. Further, they're both already decent schools, though A&M isn't in the AAU (yet). As for Nebraska and Kansas, the deal is simple. KU is one of the five most popular programs in college basketball. Nebraska is (still) similarly elite in terms of prominence and media attention. There is nobody even close to that standing in either sport to the east. They further soften Texas' transition into the Big 10, plus bring their own rivalry (if they want to include Mizzou to complete the triumverate of hate, that's fine).

Am I advocating that the conference turn their back on the NYC plan? Yes. Promixity alone does not guarantee success in a New York market that is utterly dominated by professional sports. The NYC plan is the only one being seriously considered that is contingent on a divergence in viewer behavior. That's a level of risk that the Big Ten doesn't exactly need to undertake.

On the other hand, the Big Ten can lock up every single media market in the Central (except for, like, New Orleans and maybe Oklahoma City) and add consistently premier programs in both sports. Moreover, they're in markets that demonstrably, you know, CARE about college sports already.

Plus, the Big XII would turn back into the Big 8, except they'd have replaced Nebraska and KU with Baylor and Texas Tech. That might not be, how you say, viable. And then it's off to the MAC for Iowa State and okay you caught us that's all we really wanted to accomplish with this post.

X
Log In Sign Up

forgot?
Log In Sign Up

Forgot password?

We'll email you a reset link.

If you signed up using a 3rd party account like Facebook or Twitter, please login with it instead.

Forgot password?

Try another email?

Almost done,

Join Black Heart Gold Pants

You must be a member of Black Heart Gold Pants to participate.

We have our own Community Guidelines at Black Heart Gold Pants. You should read them.

Join Black Heart Gold Pants

You must be a member of Black Heart Gold Pants to participate.

We have our own Community Guidelines at Black Heart Gold Pants. You should read them.

Spinner.vc97ec6e

Authenticating

Great!

Choose an available username to complete sign up.

In order to provide our users with a better overall experience, we ask for more information from Facebook when using it to login so that we can learn more about our audience and provide you with the best possible experience. We do not store specific user data and the sharing of it is not required to login with Facebook.

tracking_pixel_9347_tracker