Big Ten 2023

[Farfromgeneva]

“Cords are still king”

Pfft

[1766]

Cable/Satellite/Linear whatever you want to call it has more eyeballs on sports than streaming right now. Sure an argument can be made that is going to change and likely will, but now? Linear television is generating the real revenue.

https://theathletic.com/4126045/2023/01 ... able-espn/

[pcowlax]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

[Farfromgeneva]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

It’s just speculation and puffery. Probably some existential dread thrown in there as well.

Cable is dead like Ed. The market model is over. Just like cable overturned the network model ages ago. Nobody including the boards and CEOs of the top TMT companies have any visibility into 5yrs from now. But we know they are making sweeping drastic operational changes and cutting costs like mad.

The logical conclusion of the assertion driven the the Atlantic piece is there’s “two leagues” under two discrete content distribution companies (to precisely describe it as not cable as ESPN is going digital completely per the CEO of Disney who came back after not liking his successors work-thats power) but then there’s zero need for conferences and the content distribution platforms can ultimately optimize its construction on their own. Especially under the new pay for play regime under NIL. Too much fat and overhead to having conferences, you’ve already got the universities as liability shield. The distribution has the power here over the conferences which aren’t the content creators just a middleman. If a media exec is negotiating with a bunch of college presidents (even if they have advisors) you think they wouldn’t toss an existing member of the distributor said “well give you $5Bn but need FSU and Colorado in and Vandy and Rutgers out”?

[coda]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

They are definitely making money off those old cable deals. That should not surprise anyone. Netflix announced a couple weeks ago they will exit the DVD delivery business in 25 years. That is a dying business, but clearly it is still providing cash-flow. Cable maybe in the same boat as the DVD. It maybe a run-off business, but it will provide substantial cash-flow for some time to come. That does not mean your moves today are based on cable deals.

[wgdsr]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

what happened at the time, which is light years ago, is that the b1g network wasn't widely carried in nj/ny before rutgers came aboard, at least not in a wrapper. presumably, once they did, the b1g then became part of the "sports packages" in those states. so if you wanted the sports package (or whatever premium package), you were buying the b1g and an extra ~$2 on your monthly bill.

the b1g didn't need you to tune in to rutgers. or purdue/iowa. they just needed it in the lineup, so everyone could pay them.

also probably got them small slice of fox/espn carriage fees indirectly in content negotiations (using regions in/population as a guide).

[1766]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

No offense but you don't understand how bundling sports works as it relates to the Big Ten Network. Maryland and Rutgers were added for that reason. As it relates to Rutgers specifically, you want watch the Yankees on the YES network? Great, you have to buy the bundled sports package. Btw, you are now paying $1.50 for BTN every month. You don't watch it? Irrelevant, you're still paying if you want YES.

As a more direct answer, Rutgers is popular in NYC and obviously NJ. Especially when they win, which granted isn't a lot in football.


https://knoji.com/article/10-most-popul ... york-city/

Delany and the B1G brass had it well figured out. Payouts per school went up nearly $10MM the first year Rutgers and Maryland were added.

[Wheels]

The last time I was out of the area, I wanted to stream a Terps game. When I went to BTN+ to login, I still had to stop first to enter my cable provider information before I could login to BTN. Why? Because even though people are cutting cords (and driving prices up for all of now as companies now bundle their streaming services), your cable provider is most likely your internet provider, too. So even streaming is tied to a location. I don't subscribe to YouTube TV, so I'm not sure what their revenue model is with regards to the commercials they run (national? local? regional?).

Cable companies are internet companies. The number of connections/boxes in a market still matter.

When the last round of speculation about UW and Oregon joining the B1G kicked off, all of the B1G sources still said that eyeballs in those markets matters. That those two markets still could bring in enough viewers to justify adding the schools.

[Farfromgeneva]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

They are definitely making money off those old cable deals. That should not surprise anyone. Netflix announced a couple weeks ago they will exit the DVD delivery business in 25 years. That is a dying business, but clearly it is still providing cash-flow. Cable maybe in the same boat as the DVD. It maybe a run-off business, but it will provide substantial cash-flow for some time to come. That does not mean your moves today are based on cable deals.

When I was investing in leveraged loans and other forms of high yield debt mid 2000s we had exposure to Kodak in a few spots (mainly CDS his synthetic CDOs) they had 33% margins in print film while it was going to digital. We only needed to roll down the default curve a few years not even get to the tenor maturities. They didn’t make it and even converting to digital didn’t matter because margins were low double digits and they couldn’t restructure operations and legacy expenses fast enough to go from a 30%+ margin business environment to a low double digit one…

[1766]

Interesting graph on what the B1G values in institutions. While this is a sports centric discussion for obvious reason, the academic side dwarfs what the athletic side is generating via grants. It's over $10B/year. The real win is the Big Ten Academic Alliance. Sports are a very small overall investment compared to academics. For good reason.

https://twitter.com/TJAltimore/status/1 ... 18/photo/1

[Farfromgeneva]

The last time I was out of the area, I wanted to stream a Terps game. When I went to BTN+ to login, I still had to stop first to enter my cable provider information before I could login to BTN. Why? Because even though people are cutting cords (and driving prices up for all of now as companies now bundle their streaming services), your cable provider is most likely your internet provider, too. So even streaming is tied to a location. I don't subscribe to YouTube TV, so I'm not sure what their revenue model is with regards to the commercials they run (national? local? regional?).

Cable companies are internet companies. The number of connections/boxes in a market still matter.

When the last round of speculation about UW and Oregon joining the B1G kicked off, all of the B1G sources still said that eyeballs in those markets matters. That those two markets still could bring in enough viewers to justify adding the schools.

The name or nature of the company isn’t the question it’s the revenue model.

[coda]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

They are definitely making money off those old cable deals. That should not surprise anyone. Netflix announced a couple weeks ago they will exit the DVD delivery business in 25 years. That is a dying business, but clearly it is still providing cash-flow. Cable maybe in the same boat as the DVD. It maybe a run-off business, but it will provide substantial cash-flow for some time to come. That does not mean your moves today are based on cable deals.

When I was investing in leveraged loans and other forms of high yield debt mid 2000s we had exposure to Kodak in a few spots (mainly CDS his synthetic CDOs) they had 33% margins in print film while it was going to digital. We only needed to roll down the default curve a few years not even get to the tenor maturities. They didn’t make it and even converting to digital didn’t matter because margins were low double digits and they couldn’t restructure operations and legacy expenses fast enough to go from a 30%+ margin business environment to a low double digit one…

I am familiar with EK and its demise. They made some very unfortunate moves, but that isn’t really pertinent. The point is even, if cable is dying. It is currently a cash cow for the BIg 10 and can be for years. Someone pointed to that cable revenue as a major influence in current decisions. That is why I used Netflix as an example. They went from dvd business to online model (to put it simply). They still have DVDs, but that revenue has been dwarfed by the digital business. My belief is conferences are looking at the world similarly. Decisions on realignment were based on cable bundling opportunities the last time. In that world your geographical footprint was king. Now they are considering what the landscape will look like in streaming or App subscription model and trying to position themselves to take advantage of that. In that world the footprint is not as important as the brand recognition.

[1766]

USC and to a lesser extent UCLA check all of those boxes, including a new market for linear while whatever the future holds via streaming starts to come to fruition.

[Farfromgeneva]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

They are definitely making money off those old cable deals. That should not surprise anyone. Netflix announced a couple weeks ago they will exit the DVD delivery business in 25 years. That is a dying business, but clearly it is still providing cash-flow. Cable maybe in the same boat as the DVD. It maybe a run-off business, but it will provide substantial cash-flow for some time to come. That does not mean your moves today are based on cable deals.

When I was investing in leveraged loans and other forms of high yield debt mid 2000s we had exposure to Kodak in a few spots (mainly CDS his synthetic CDOs) they had 33% margins in print film while it was going to digital. We only needed to roll down the default curve a few years not even get to the tenor maturities. They didn’t make it and even converting to digital didn’t matter because margins were low double digits and they couldn’t restructure operations and legacy expenses fast enough to go from a 30%+ margin business environment to a low double digit one…

I am familiar with EK and its demise. They made some very unfortunate moves, but that isn’t really pertinent. The point is even, if cable is dying. It is currently a cash cow for the BIg 10 and can be for years. Someone pointed to that cable revenue as a major influence in current decisions. That is why I used Netflix as an example. They went from dvd business to online model (to put it simply). They still have DVDs, but that revenue has been dwarfed by the digital business. My belief is conferences are looking at the world similarly. Decisions on realignment were based on cable bundling opportunities the last time. In that world your geographical footprint was king. Now they are considering what the landscape will look like in streaming or App subscription model and trying to position themselves to take advantage of that. In that world the footprint is not as important as the brand recognition.

We’re in agreement in the conclusion I think your vastly overstating the value of milking legacy cash flows however and the Netflix example those dvd shipment operations if they even still exist haven’t been relevant to a managerial or operating decision in 15yrs. Isn’t accretive at all if they even still do it then only because they have fixed opex that’s more expensive to shutter than keeping operating.

The point is economic models are very different regardless of who the distribution owners are and more importantly “just milking the cash flows of a dying model” A. Doesn’t last 25yrs in this modern world. That’s not reality. Land has a 38yr useful life. And B. Doesn’t happen most of the time as everyone learned the lessons of legacy corporate deaths of former nifty 50 companies from the 70s and 80s. They alter the model and do things a differently because a model can’t easily be restructured while “milking cash flows”.

Frankly I don’t believe the conferences need to exist. Layer of fat that adds zero value at the end of this. It’s the schools creating media content and the distribution. NCAA and conferences could all be gone before my kids are in college.

[Wheels]

Having gone to a MLS game tonight, I can't help but wonder if we're seeing a bit of a natural experiment occurring right now vis a vis streaming vs cable. Is the MLS better off on Apple TV or with their ESPN deal? We'll find out in a year or so.

[10stone5]

You don’t really need those media players like Apple TV,
Roku and such any more - everything is streamed now.

[coda]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

They are definitely making money off those old cable deals. That should not surprise anyone. Netflix announced a couple weeks ago they will exit the DVD delivery business in 25 years. That is a dying business, but clearly it is still providing cash-flow. Cable maybe in the same boat as the DVD. It maybe a run-off business, but it will provide substantial cash-flow for some time to come. That does not mean your moves today are based on cable deals.

When I was investing in leveraged loans and other forms of high yield debt mid 2000s we had exposure to Kodak in a few spots (mainly CDS his synthetic CDOs) they had 33% margins in print film while it was going to digital. We only needed to roll down the default curve a few years not even get to the tenor maturities. They didn’t make it and even converting to digital didn’t matter because margins were low double digits and they couldn’t restructure operations and legacy expenses fast enough to go from a 30%+ margin business environment to a low double digit one…

I am familiar with EK and its demise. They made some very unfortunate moves, but that isn’t really pertinent. The point is even, if cable is dying. It is currently a cash cow for the BIg 10 and can be for years. Someone pointed to that cable revenue as a major influence in current decisions. That is why I used Netflix as an example. They went from dvd business to online model (to put it simply). They still have DVDs, but that revenue has been dwarfed by the digital business. My belief is conferences are looking at the world similarly. Decisions on realignment were based on cable bundling opportunities the last time. In that world your geographical footprint was king. Now they are considering what the landscape will look like in streaming or App subscription model and trying to position themselves to take advantage of that. In that world the footprint is not as important as the brand recognition.

We’re in agreement in the conclusion I think your vastly overstating the value of mimicking legacy cash flows however and the Netflix example those dvd shipment operations if they even still exist haven’t been relevant to a managerial or operating decision in 15yrs. Isn’t accretive at all if they even still do it then only because they have fixed opex that’s more expensive to shutter than keeping operating.

The point is economic models are very different regardless of who the distribution owners are and more importantly “just milking the cash flows of a dying model” A. Doesn’t last 25yrs in this modern world. That’s not reality. Land has a 38yr useful life. And B. Doesn’t happen most of the time as everyone learned the lessons of legacy corporate deaths of former nifty 50 companies from the 70s and 80s. They alter the model and do things a differently because a model can’t easily be restructured while “milking cash flows”.

Frankly I don’t believe the conferences need to exist. Layer of fat that adds zero value at the end of this. It’s the schools creating media content and the distribution. NCAA and conferences could all be gone before my kids are in college.

I fully admit I am over-simplifying the point. No idea how long cable will last, but there are significant revenue to be had there until it dies. I do believe that conference are essentially unions. They allow for collective bargaining and bundling of content. ESPN attempted to circumvent conferences with the Longhorn network and that was a failure. ND had to make a deal with a conference to ease scheduling issues. IT is possible to put together an ad-hoc group, but that would take a lot of coordination.

[Farfromgeneva]

"Think it was Andy Staples in The Athletic that said this, but the best way to think about what's happening with college football right now is similar to the AFC and NFC in football. Each conference has a primary and lucrative deal with a major network (Fox, CBS). Right now, Fox is locking up the B1G, and ESPN is locking up the SEC. Every other rights deal will be dwarfed in comparison. That's why USC/UCLA hopped on board to Fox...er, I mean, the B1G. That's why Clemson and FSU want in on ESPN...er, I mean, the SEC. There's going to be a finite point for expansion. When the revenue from new TV markets added no longer exceed the individual payouts of existing members, expansion will stop. Contra FFG, that's why GT will be a target for the B1G (and was rumored to be be back when MD and RU joined). Whether or not anyone watches GT football in ATL doesn't really matter. The size of the ATL market does matter.

When the musical chairs stop, I bet Duke follows UConn basketball's route to the Big East while football goes independent."


This is certainly the conventional thinking. I have often wondered what the data is to back it up. Given that GT football doesn't move a needle, what does it mean to give the Big10 access to the Atlanta market? Will people there start caring more about a Minnesota-Iowa game than the Florida-LSU game because Georgia Tech in is the Big 10? People in that area can already watch Big10 games and support those teams if they want, it's not like the market is "closed" because the league doesn't have a team there. I don't see why TV deals would go up significantly because there is now a team in Atlanta; again, Big10 games were already televised in Atlanta. There aren't millions of GT fans who are now going to watch Fox when they otherwise wouldn't just so they can catch the Tech game. Honest question about something I know little of. Why would the Big10 expect significant financial gain by adding Georgia Tech?

I am not sure that is what is driving this round of realignment. That made sense when cable was king and you got to charge the NYC area extra for Rutgers joining. This time I think it is about viewers and marquee names. Latest names to move have been UCLA, Texas, OU, and USC. I believe this round is more about fanbase and alumni size, than adding a new state/area. Whether is subscription model or steaming a la carte, you need to have content, brand names, and marquee match-ups to drive wallet share. The best way to secure that is to have a conference assembled with Blue Bloods.

USC and UCLA check all of those boxes, including a big new market. Cords are still king. Those boxes in Maryland/NJ/NY are generating significant revenue.

But are they? Is there any actual data that viewership of Big10 games in the MD/NJ/NY area has increased since Rutgers joined? There aren't enough Rutgers fans to matter for just their games and I think it's highly unlikely any significant number of people in that area are now tuning in to other Big10 games (which were already previously available) just because a team in that area (which is not an area attached to college football) is in the conference.

They are definitely making money off those old cable deals. That should not surprise anyone. Netflix announced a couple weeks ago they will exit the DVD delivery business in 25 years. That is a dying business, but clearly it is still providing cash-flow. Cable maybe in the same boat as the DVD. It maybe a run-off business, but it will provide substantial cash-flow for some time to come. That does not mean your moves today are based on cable deals.

When I was investing in leveraged loans and other forms of high yield debt mid 2000s we had exposure to Kodak in a few spots (mainly CDS his synthetic CDOs) they had 33% margins in print film while it was going to digital. We only needed to roll down the default curve a few years not even get to the tenor maturities. They didn’t make it and even converting to digital didn’t matter because margins were low double digits and they couldn’t restructure operations and legacy expenses fast enough to go from a 30%+ margin business environment to a low double digit one…

I am familiar with EK and its demise. They made some very unfortunate moves, but that isn’t really pertinent. The point is even, if cable is dying. It is currently a cash cow for the BIg 10 and can be for years. Someone pointed to that cable revenue as a major influence in current decisions. That is why I used Netflix as an example. They went from dvd business to online model (to put it simply). They still have DVDs, but that revenue has been dwarfed by the digital business. My belief is conferences are looking at the world similarly. Decisions on realignment were based on cable bundling opportunities the last time. In that world your geographical footprint was king. Now they are considering what the landscape will look like in streaming or App subscription model and trying to position themselves to take advantage of that. In that world the footprint is not as important as the brand recognition.

We’re in agreement in the conclusion I think your vastly overstating the value of mimicking legacy cash flows however and the Netflix example those dvd shipment operations if they even still exist haven’t been relevant to a managerial or operating decision in 15yrs. Isn’t accretive at all if they even still do it then only because they have fixed opex that’s more expensive to shutter than keeping operating.

The point is economic models are very different regardless of who the distribution owners are and more importantly “just milking the cash flows of a dying model” A. Doesn’t last 25yrs in this modern world. That’s not reality. Land has a 38yr useful life. And B. Doesn’t happen most of the time as everyone learned the lessons of legacy corporate deaths of former nifty 50 companies from the 70s and 80s. They alter the model and do things a differently because a model can’t easily be restructured while “milking cash flows”.

Frankly I don’t believe the conferences need to exist. Layer of fat that adds zero value at the end of this. It’s the schools creating media content and the distribution. NCAA and conferences could all be gone before my kids are in college.

I fully admit I am over-simplifying the point. No idea how long cable will last, but there are significant revenue to be had there until it dies. I do believe that conference are essentially unions. They allow for collective bargaining and bundling of content. ESPN attempted to circumvent conferences with the Longhorn network and that was a failure. ND had to make a deal with a conference to ease scheduling issues. IT is possible to put together an ad-hoc group, but that would take a lot of coordination.

Understood but looking at revenue absent expense structure is like, well, Silicon Valley or CRE professionals the last decade. It’s the expense structure that effects the change more than the revenue really.

A union of less than 50 institutions that control multi billion dollar endowments and revenue streams? We’re talking negotiating at the margins, I.e. this is more like ESPN saying “we went these three in, even if you have to cut 1-3 of these others we care less about”. Then the 20-50 Presidents and their advisors go back, think for 5 min, and then they have a vote that goes 17-3 or 45-5 for the ease of getting that next deal and there you go. The coordination of the conferences is of little value, certainly not the overhead and restrictions a conference layer of far puts on top of it.

And the TX and ND examples are under the old construct. When the paradigm shifts, it’s changes the constructs. That’s what’s happening. Nobody knows but going forward each unit or entity is going to have to make their case for existence going forward like zero based budgeting. NCAA, conferences entities, content creators. Once we got to 50-75 schools in their own league, paying players directly as the old regime fo amateurism is gone, what’s a conference or the ncaa worth? I can get a top rate professional advisors far bette than the ones now for sure to negotiate and plan for 3-5pts. So if the NCAA of conference entities represent line items out of revenue greater than 5% what’s their value proposition?

The biggest problem I have with these acolytes of their own interests as fans is that they claim they know what changes are coming structurally but think certain elements are fixed and infinite such as the NCAA and conferences. All you have to do though is look at the lack of loyalty and relationship between institutions these days and the actual behavior that’s occurred to know that neither the NCAA or conference structure is sacrosanct. The NCAAs sole purpose for the last 25yrs has been as a shield to deflect matters and retain SRO status. Now that players (if you really know big time athletics they’re players first students second) are paid at the college level their value as an SRO has declined. What’s the college athletics and media landscape look like in the next iteration where geography doesn’t matter and we will shift to govt regulation managed through lobbied regulatory capture?

Keep in mind political subdivision tax receipts are dropping (funds for state schools), we’re likely heading into a economic cycle (should’ve happened in 20 but Covid based on what I was seeing in markets second half of 2019) which will reduce donations and grants, and we have inflation with declining college age demographics. And higher debt service costs because it’s not all fixed rate term debt for these universities. Every nickel that can be had will be scraped in the next decade by higher Ed.

[Farfromgeneva]

ESPN Plans to Stream Flagship Channel, Eyeing Cable TV’s Demise

Internal project code-named ‘flagship’ lays out shift in coming years, as talks with leagues and cable partners have begun

By Jessica ToonkelFollow
and Sarah KrouseFollow
May 18, 2023 9:04 am ET

ESPN is laying the groundwork to sell its channel directly to cable cord-cutters as a subscription-streaming service in coming years, according to people familiar with the matter, a shift with profound implications for the company and the broader television business.

Executives at ESPN and its parent, Disney DIS 0.78%, for years have said it was inevitable that the sports-TV channel would one day be available as a stand-alone streaming service. Now, as consumers increasingly cut the cable-TV cord, the company is actively preparing for that shift under a project with the internal code name “Flagship,” the people said. The company has set no firm timeline for the change.

ESPN would continue to offer the TV channel after launching a streaming option, the people familiar with the matter said. Still, the change could have a major impact on cable-TV providers, since ESPN is one of the main attractions of the cable bundle. The providers pay to carry the ESPN channel and would have to compete with the new streaming service.

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ESPN has begun securing flexibility in its deals with cable providers to offer the channel directly to consumers, the people said. The financial terms of those deals couldn’t be learned. The company is having similar discussions with pro sports leagues as those rights deals come up and has secured the same flexibility from at least two major leagues, the people said.

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The sports-media giant took its first step into streaming in 2018 with the launch of ESPN+, a monthly streaming service whose live programming includes golf events, certain Major League Baseball and professional hockey games, as well as a variety of scripted and unscripted programming. It has 25.3 million subscribers.

But ESPN+ doesn’t offer access to the ESPN channel itself, including high-value programming like National Basketball Association and National Football League telecasts that are only available on TV. Project “Flagship” is about helping ESPN transition the full channel to streaming.

Every big media company is carrying out a tricky shift from the traditional TV business, which has been very lucrative, to a streaming world where the economics are more uncertain. Consumers for decades have paid for large bundles of channels under long-term, hard-to-cancel cable contracts.

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That system means that many consumers who don’t watch ESPN are paying for it in their packages. ESPN gets a $9.42 slice of the average cable TV bill—it collects fees from cable providers for each customer—compared with an average of 49 cents per subscriber for other U.S. cable networks, according to S&P Global Market Intelligence.

Streaming is a different world. People only pay for the subscriptions they want. It is likely that the number of households who would sign up for an ESPN streaming service would be smaller than the number who have the ESPN channel in their cable TV packages. That could impact how ESPN prices its streaming service. MSG’s new streaming service, which offers New York Knicks and Buffalo Sabres games, is priced at $30 a month.

“It’s a huge decision for us to make and we know that we’ve got to get it right both in terms of pricing and timing,” Disney Chief Executive Robert Iger said earlier this month, of migrating ESPN to a direct-to-consumer service. At the time, he offered few details of Disney’s work on the change.

While ESPN has dominated the sports TV landscape, it has plenty of competition in the streaming arena. Services from Apple to Amazon are increasingly scooping up sports-media rights—including for National Football League and Major League Baseball games. Most recently, Google’s YouTube paid roughly $2 billion a year for the NFL’s Sunday ticket package of games.

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ESPN has long brought in a lot of revenue—and profit—for Disney. But cord-cutting is casting a larger shadow on the business.

Some 74 million households had access to ESPN via traditional cable packages or digital distributors like YouTube TV, as of last September, down almost 11% from 2019, according to company filings.

In the most recent quarter, income from Disney’s traditional television networks, including ESPN, fell significantly to $1.8 billion, from $2.8 billion in the year-earlier quarter.

ESPN’s work on the strategic shift dates back to the early days of Iger’s efforts to offer direct-to-consumer subscriptions.

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Disney+, which was launched in 2019, has grown to 157.8 million customers. Still, Disney+ lost 4 million subscribers in the most recent quarter amid stiff competition. The transition to streaming has been costly. Direct-to-consumer losses over the past year alone topped $4 billion.

Iger reiterated his commitment to a streaming-focused future when he returned to the top job in late 2022.

“We’re in a very interesting transition period, but one that I think is inevitably heading toward streaming,” he said earlier this year, adding that the company is “not going to abandon the linear or the traditional platforms while they can still be a benefit to us and our shareholders.”

Write to Jessica Toonkel at [email protected] and Sarah Krouse at [email protected]

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[BigTom5]

The Big Ten has the opportunity to make it's case as clearly the best conference in the land.

This just in, it’s not…