SECN revenue > B1G and PAC combined, plus 115 mil

[Churchillin]

I'm pretty sure that the $20 million plus that each school will get in the first year will cover the media booth renovations.

As to the ongoing costs ... production, licensing, salaries, etc., that will be paid by the network and will obviously reduce the gross revenue. That's how business works.

In two years B1G schools will be getting $47 million per year after contract renewal. This is a reliable estimate. At that time it will be the only major conference not tied into a long term deal. The money will be insane. I would expect the SEC to do some basking in the glory for now but a bit of perspective is not a bad thing.

 

[LawDawg]

The writer of the attached article is slobbering all over himself. Look at his words.

Revenues are not the end game. Profits are. The article cites revenue only and is not apples to apples. ESPN could put its name on a tiddly-winks competition and it would generate revenue. How much of it goes back into ESPN's coffers though?

Money in the schools pockets are the end game. What are the profits? Revenue is merely a piece of the equation. You have to subtract expenses, including dollars that will disappear right back into ESPN's balance sheet (and not the school's).

There is obviously going to be hype surrounding this. Much of it warranted. The discrepancy between the B1G and SEC is in terms of dollars going back to schools is nowhere near what is being pushed right now.

Revenue is obviously part of the profit equation. With no revenue, there can be no profit. The higher the revenue, the more likely the higher the profit. I get that if you have to spend a ton to make a ton, the profits could be less. The author has simply stated gross numbers that don't lie. You can wish that they aren't showing a dramatic difference between the two networks, but the numbers are the numbers.

The SECN launches with about 25 million more households, and the SECN is able to charge about double what the BTN charges. So from a gross revenue perspective, there is a huge difference. From the article (glad for you to show that the numbers are innacurate, but I will assume they are), we see 611 million to 236 million. Unless you can show the numbers are inaccurate, that is where you have to start in the analysis.

As you and a number of people have mentioned, now you have to look at the expenses. Both networks are 50/50 owned (or close enough) with Fox and ESPN. So there is no difference there. I can't think of a reason to think that the SECN varible expenses will be more than the BTN. In fact, my guess is that the tie in with ESPN will be more efficient than the BTN's tie in with Fox as ESPN simply has more experience and resources. Sure, in the first few years there will be startup costs, but thereafter, the two networks will have comparable expenses. That would mean that the significant difference in the gross revenue will carry through to the net profit.

While you appear to be minimizing the SECN, I am not trying to put down the BTN. The SECN success is in part due to the fact that the BTN made the mistakes already and the SECN learned from them. Moreover, with the addition of 2 new teams, BTN will pick up more households. Based on where the cable industry is, I am not sure I would bet that the BTN will be able to increase their subscriber rates, but we will see if and when they are renegotiated. Hard to believe they would double to the SECN levels.

So, until the BTN increases households and can dramatically increase its subscriber rate, the disparity per team between the BTN and SECN will be as dramatic as this article indicates. If you don't think so, I'd be really interested in know what the difference in the operating expenses would be that would result in that.

 

[LawDawg]

In two years B1G schools will be getting $47 million per year after contract renewal. This is a reliable estimate. At that time it will be the only major conference not tied into a long term deal. The money will be insane. I would expect the SEC to do some basking in the glory for now but a bit of perspective is not a bad thing.

You are conflating two different issues - the renegotiation of the Tier 1 and 2 network rights, and the conference's networks that covers 3rd Tier rights. The B1G will likely to get a big bump there for sure. Then, my guess is that the SEC will do the same thing a few years thereafter, and the conferences will hop over each other. But there is no question that the new 1st and 2nd Tier contract will be very high for the B1G. That said, that doesn't have anything to do with what this thread is about.

 

[michaeljordan_fan]

I'd be curious to see how the payouts to schools compare with the P12 Network, which is wholly owned by the conference. I suspect they are more, but not so much more that they blow the P12 out of the water.

 

[LawDawg]

I'd be curious to see how the payouts to schools compare with the P12 Network, which is wholly owned by the conference. I suspect they are more, but not so much more that they blow the P12 out of the water.

Yeah, that'd be interesting to see. I suspect one of the reasons they are having a harder time with distribution is the lack of ESPN or Fox expertise. If they can get that down, they still have the whole East/West thing, but without a partner to split they could make some bucks. I get the PAC channel as part of a sports package I buy to get NFL Red Zone, and I watch it more than I would have thought during college football season ... it's my Saturday night cap.

 

[Oney]

You are conflating two different issues - the renegotiation of the Tier 1 and 2 network rights, and the conference's networks that covers 3rd Tier rights. The B1G will likely to get a big bump there for sure. Then, my guess is that the SEC will do the same thing a few years thereafter, and the conferences will hop over each other. But there is no question that the new 1st and 2nd Tier contract will be very high for the B1G. That said, that doesn't have anything to do with what this thread is about.

It doesn't? I think it means in two years the two conference networks will be very similar revenue wise.

I hope ESPN picks it up then rather than FOX. I hate the video quality on FOX. It always looks grainy.

 

[LawDawg]

It doesn't? I think it means in two years the two conference networks will be very similar revenue wise.

I hope ESPN picks it up then rather than FOX. I hate the video quality on FOX. It always looks grainy.

I could be wrong, but the only thing that is up for negotiations in two years is the network deal for the Tier1 and Tier2 rights. Right now that is with ESPN and ABC. It is anticipated that Fox will be a bidder on this as they grow their college football brand, and because they are already in bed with the B1G as the partner in the BTN.

I don't think there any renegotiations for the BTN, as Fox is already a 51% stake holder - they aren't going to suddenly bow out. Besides, the only renegotiations would be for additional households and/or a raise in the per household subscription rate.

That is why I think you and the poster I was responding to are conflating two different issues.

As to where the conferences are total revenue wise, I am not sure. Right now it looks like the SECN will earn the SEC a lot more than the BTN. But, the BTN appears to be set to get a big bump in its Tier1/2 payout that will exceed the SEC. I think the SEC still has some renegotiating to do on their Tier1/2 rights with ESPN and CBS based on expansion, but I have no idea what that will be worth. So, it could be that between the Tier1/2 and the conference network shares it might even out.