http://www.sportsbusinessdaily.com/Journal/Issues/2016/06/20/Media/ESPN-Big-Ten.aspx
ESPN stays in the game
Ponies up $1.14B for Big Ten package
By John Ourand, Staff Writer
Published June 20, 2016
ESPN will buy the second half of the Big Ten’s media rights package, ending months of speculation that the two were about to sever their 50-year relationship.
ESPN will pay an average of $190 million per year over six years for essentially half the conference’s media rights package, according to several sources close to the talks. Two months ago, Fox Sports agreed to take the other half of the package for an average of $240 million per year. CBS Sports also has told the conference that it will renew its basketball-only package for $10 million per year.
The six-year, $2.64 billion media rights haul represents a big win for the Big Ten Conference, of course, which will see its average media rights payout nearly triple when it takes effect next fall.
More significantly, the deal is a good sign for the broader sports business, showing that ESPN will remain an active player in the live rights business, especially when it comes to premium rights.
All the headlines of cost cutting and layoffs coming out of Bristol, Conn., during the last 12 months — combined with dropping rights fees from properties like Conference USA — led some industry observers to expect the Disney-owned company to take a pass on Big Ten rights in order to further save costs. Those doubts increased in April when word leaked that ESPN submitted a lowball bid on the first half of the Big Ten’s media package, which ended up going to Fox. By agreeing to pay a hefty fee for a sizable package of rights, ESPN is showing that it is not paralyzed when it comes to paying for the rights that it wants. News of the deal should serve as a much needed morale boost to the company’s rank-and-file.
The six-year agreements with ESPN and CBS are being vetted by lawyers, and Big Ten officials hope to have official announcements for its entire media package ready by its annual football kickoff luncheon July 26.
The $2.64 billion deals with Fox, ESPN and CBS average $440 million per year and nearly triple the amount ESPN and CBS had been paying for the same programming. ESPN signed a 10-year deal worth $100 million annually in 2006 — a payout that increased to $150 million this year due to the addition of Nebraska, Maryland and Rutgers to the conference. CBS paid an average of around $6 million for its current basketball-only deal.
The deal does not include Big Ten Network’s package of rights, which runs to 2031-32. Fox owns 51 percent of BTN.
Like Fox Sports, ESPN will have around 25 football games and 50 basketball games each year — programming that will provide big ratings and an advertiser-friendly audience of diehard alumni in some of the country’s biggest media markets.
The difference between the two packages is that Fox Sports will carry the Big Ten football championship game every season, which is a strong draw each December. Fox also will have game selection advantages over ESPN, which almost certainly means that the coveted Michigan-Ohio State rivalry will move to Fox most years.
Cont'd ...
ESPN stays in the game
Ponies up $1.14B for Big Ten package
By John Ourand, Staff Writer
Published June 20, 2016
ESPN will buy the second half of the Big Ten’s media rights package, ending months of speculation that the two were about to sever their 50-year relationship.
ESPN will pay an average of $190 million per year over six years for essentially half the conference’s media rights package, according to several sources close to the talks. Two months ago, Fox Sports agreed to take the other half of the package for an average of $240 million per year. CBS Sports also has told the conference that it will renew its basketball-only package for $10 million per year.
The six-year, $2.64 billion media rights haul represents a big win for the Big Ten Conference, of course, which will see its average media rights payout nearly triple when it takes effect next fall.
More significantly, the deal is a good sign for the broader sports business, showing that ESPN will remain an active player in the live rights business, especially when it comes to premium rights.
All the headlines of cost cutting and layoffs coming out of Bristol, Conn., during the last 12 months — combined with dropping rights fees from properties like Conference USA — led some industry observers to expect the Disney-owned company to take a pass on Big Ten rights in order to further save costs. Those doubts increased in April when word leaked that ESPN submitted a lowball bid on the first half of the Big Ten’s media package, which ended up going to Fox. By agreeing to pay a hefty fee for a sizable package of rights, ESPN is showing that it is not paralyzed when it comes to paying for the rights that it wants. News of the deal should serve as a much needed morale boost to the company’s rank-and-file.
The six-year agreements with ESPN and CBS are being vetted by lawyers, and Big Ten officials hope to have official announcements for its entire media package ready by its annual football kickoff luncheon July 26.
The $2.64 billion deals with Fox, ESPN and CBS average $440 million per year and nearly triple the amount ESPN and CBS had been paying for the same programming. ESPN signed a 10-year deal worth $100 million annually in 2006 — a payout that increased to $150 million this year due to the addition of Nebraska, Maryland and Rutgers to the conference. CBS paid an average of around $6 million for its current basketball-only deal.
The deal does not include Big Ten Network’s package of rights, which runs to 2031-32. Fox owns 51 percent of BTN.
Like Fox Sports, ESPN will have around 25 football games and 50 basketball games each year — programming that will provide big ratings and an advertiser-friendly audience of diehard alumni in some of the country’s biggest media markets.
The difference between the two packages is that Fox Sports will carry the Big Ten football championship game every season, which is a strong draw each December. Fox also will have game selection advantages over ESPN, which almost certainly means that the coveted Michigan-Ohio State rivalry will move to Fox most years.
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