By Joe Ovies
Big time college athletics often plays out like "Game of Thrones," with the great noble houses of the Power Five realm relentlessly engaged in battles for geographic footprints and control of an Iron Throne forged from piles of television contract money.
And the Big Ten, one of the richest conferences in the land, will soon hammer out new rights deals to keep the wealth gap between House Delany and three of the other Power Five families rather considerable. Only the Southeastern Conference can match their affluence.
According to the Sports Business Journal, Big Ten commissioner Jim Delany is close to signing a deal that gives half of their media rights package to FOX. Basic terms of the contract will reportedly add an estimated $250 million per year, over the next six years, to the Big Ten's revenue stream starting in 2017. The new pact should consist of 25 college football games and 50 basketball games to be broadcast on FOX's over-the-air channel and FS1 every season.
The Big Ten's approach to their upcoming television deal with FOX is really savvy for a couple reasons.
First, the decision to split the package maximizes how much the Big Ten can make off their product. The NFL made similar arrangements with CBS and NBC for Thursday Night Football in February. Even as general viewer habits change and cable subscribers slim down their bundles or outright cut the cord, live sports programming remains a highly sought after commodity that consistently brings in ratings. Both the NFL and the Big Ten are wisely taking advantage of broadcasters willing to stretch their budgets for the eyeballs.
While many expect ESPN to shell out enough dough to secure the remaining half of the Big Ten television rights, the conference will certainly listen to any potential offers from NBC, CBS and Turner. When combined, even if the other half is less than what FOX is paying, it's possible the Big Ten will generate over $30 million per year for each conference member. Throw in Big Ten Network revenue, digital rights and championship reimbursements, every athletic department could make roughly $40 million each season through 2024.
For comparison, the ACC pays out an average of under $25 million per school.
Second, and to me the smartest move made by the Big Ten, was signing with FOX for only six years. At the very least, half of their media rights will come up for negotiation again around the same time as the ACC, Big 12, PAC-12 and Notre Dame are also seeking new deals. That's not a coincidence; that's what I'd call "accidently on purpose."
Another round of conference realignment possibly on the horizon
Setting aside the SEC, which is set through 2034, college sports is headed for a media rights frenzy in the not-too-distant future.
FOX's half of the Big Ten will be renegotiated by 2023-2024. The Big 12 has a media rights agreement with ESPN and FOX that runs until the 2024-2025 season. The PAC-12 has a similar deal with ESPN and FOX running through the 2024-2025 season. Notre Dame's contract to televise football games on NBC will expire in 2025. The ACC's exclusive deal with ESPN wraps up a season later, in 2026-2027.
Let's not be naive and believe all these conferences are worth the same.
Unfortunately for the Big 12, they occupy the same precarious position as the Big East did over a decade ago. The lure of better economics brought Miami, Virginia Tech, Boston College, Pittsburgh, Syracuse and Louisville to the ACC. The same could create a scenario where Texas and Oklahoma look to another conference in order to keep up with their peers from the SEC and Big Ten.
There's really nothing the Big 12 can bring in for the next media rights contract that'll generate the kind of revenue to keep up. Expanding with Cincinnati and BYU ain't going to do it, so the logical step is to start coming up with exit strategies. The Sooners and Longhorns will be just fine, but the same can't be said for a school like Iowa State.
The ACC and ESPN have decisions to make
So, about that long-rumored dedicated ACC channel from ESPN ... Prospects for such a venture certainly don't look great from my point of view, but there's been speculation the conference could get a bump in rights fees in July if the network doesn't materialize.
During last summer's ACC football media event, commissioner John Swofford explained to David Teel of the Daily Press "the other alternative is larger rights fees (from ESPN)" if the ACC and the network felt the distribution wouldn't be "great" when the channel went live. When asked specifically if a deadline existed with ESPN related to a rights-fee increase, Swofford vaguely explained on 99.9FM The Fan that any partnership can be altered in any way the two parties so choose.
Regardless, it's clear that ESPN and the ACC must make a decision sometime soon. Whether the money in lieu of a channel would be satisfactory enough to keep up with the Big Ten and the SEC is another matter.
Same goes for the ACC and any long-term, exclusive arrangements with ESPN after the current deal expires in 2026-2027.
If I was in Swofford's golf shirt, I'd start laying the groundwork for a more robust digital distribution strategy. If ESPN doesn't want to work on a standalone streaming option for the conference, take a game usually assigned to Raycom and put it on a ACC Digital Network streaming app (something different from browser only web streaming currently available). The point here is to be first movers for whatever is next, much like the Big Ten was ahead of the pack when it came to a cable channel.
I'd also take another lesson from what the Big Ten is doing with FOX and leverage the ACC's massive inventory of sports programming to multiple networks. ESPN will always be a willing partner, but they don't have to be the only network.
NBC would be an obvious choice for Swofford or his successor to approach, along with Notre Dame, for a new broadcast partnership. The trick is convincing Notre Dame they could make more money as a full-time member of the ACC, which would allow the conference to package football home games on NBC and road contests on ABC/ESPN.
And who knows, while the market is currently soft for digital broadcasting rights, a company like Amazon or Facebook might be more inclined to invest in live sports ten years from now.
There's still time to figure all this stuff out, but the bottom line for the ACC is to fully recognize its worth rather than settle for a comfortable relationship with ESPN.
Source : http://www.wralsportsfan.com/big-ten-television-deal-could-set-table-for-next-conference-realignment/15652491/