Matt Brown
Guest
Good news, Maryland and Rutgers actually are making BTN lots of money. But what's next?
Matt Brown via our friends at Land-Grant Holy Land
Visit their fantastic blog and read the full article (and so much more) here
Where does the league and their eponymous network go from here?
Among football fans, the Big Ten's recent additions of Maryland and Rutgers were met with mostly disdain. Neither team had much of a football tradition, their addition meant longer road trips, fewer trips against traditional rivals, and in the case of Rutgers, general non-competitiveness in most other Big Ten sports.
Big Ten officials, along with many journalists, counter that adding an eastern front to the Big Ten was still a good idea. Both Maryland and Rutgers shored up the league's standing in important recruiting territories, and with an influx of Big Ten money, perhaps those teams could be refurbished and turned into competent, successful programs in the future. And speaking of money, the solidified presence in the NY and DC television markets would lead to financial windfalls that would benefit everybody.
So far, it seems that everyone is right. Maryland and Rutgers stink at football. The squads are a combined 2-5 against FBS competition (those wins are over South Florida and Kansas), and a bowl bid seems like a stretch for either. Rutgers has been dysfunctional even for Rutgers standards, and the rest of their athletic department has been mostly non-competitive as well, as Men's Soccer, Women's Volleyball and Field Hockey are all in last place.
But it also looks like the newcomers have been a financial success. A recent article from Ad Age details how the new east coast additions have been a boon for the Big Ten Network. How much of a boon? Well:
In expanding its scholastic footprint, the Big Ten also increased the value of the BTN's New York and D.C. subscribers. According to SNL Kagan data, cable operators pay an estimated "in-market" rate of $1 per sub per month, more than double the $0.44 fees charged outside the conference's home markets. Cablevision alone serves 2.64 million video customers in New York, New Jersey and southwestern Connecticut; with the upgraded fee in place, BTN sees its annual payout from the operator rise to around $31.7 million from $13.9 million (bolding mine)
I'm not Sports Business reporter, but more than doubling your annual operator payout seems like a pretty good business outcome to me. AA also reports that BTN is able to charge ad rates comparable to what ESPN gets for the SEC Network. If the quality of the football product continues to improve conference-wide, there may be even more room to grow.
The fact that further penetration into lucrative markets has lead to financial gains isn't very surprising, although it is good news for the Big Ten. There were two more interesting nuggets tucked into this story though. One, on how falling dominos elsewhere lead to the expansion into the east:
According to BTN president Mark Silverman, the reconfiguration of other NCAA conferences has only served to heighten Rutgers' impact on the network. "This is a great opportunity for the Big Ten to really become the anchor league conference on the East coast," he said. "When ACC raided Big East a second time, taking Syracuse and Pitt from the old Big East, it really created an opening for us...to become the network fans in the New York metro area gravitate to."
As fans, we can debate the merits of that goal, or whether such a thing is even possible. But knowing that the defection of Syracuse and Pitt from the Big East helped set this whole thing in motion does lead to some fun alternate reality hypotheticals. How does the college football landscape look in 2015 if Syracuse and Pitt don't leave the Big East? Was there a way to keep that conference from crumbling into Conference USA with special musical guest UConn? Is Pitt actually the reason Ohio State and Rutgers is an annual game? If so, I hope Penn State never schedules them again.
Here's the other interesting nugget:
Since Rutgers and Maryland jumped to the Big Ten, BTN's sub count has risen to some 60 million households, up 15% from the 52 million customers it reached at the end of the 2013-14 academic year. But it remains to be seen if BTN can flip the script and begin expanding in the opposite direction. (The westernmost Big Ten school is located in Lincoln, Neb,, which is practically the geographic center of the U.S..)
"We're looking west of Nebraska to make sure people can see the kind of games we can offer," said Mr. Silverman, who notes that BTN is carried on Time Warner Cable in Los Angeles. "But we are very happy with our distribution. We think the Big Ten is the one true national conference. Our alums are everywhere."
***BIG TEN EXPANSION TO THE WEST IMMINENT MUST CREDIT WVU BLOGGERS DOT TUMBLR DOT COM***
Silverman is right, the Big Ten really is the closest thing to a national conference. The league could have claimed significant influence in DC and NYC even before expansion, just due to the huge proliferation of Big Ten graduates in those cities. Given the size of Big Ten schools, their historical profiles, and the geographical distribution of their alumni (compared to say, the SEC or the Pac-12), and you really do have exposure everywhere. It's probable that there are a lot more Big 10 fans in say, LA, than of a lot of Pac-12 schools.
Do you need to expand to improve coverage in the west? Maybe not, but it's potentially something the league might look at. A low risk idea might be to add Arizona State to the conference as a hockey member, something the league has already reportedly considered. That may not move the needle in it of itself, but Phoenix already claims large numbers of Buckeye transplants and other Midwestern ex-pats, and it's possible the league only needs a nudge to get on more TVs in Arizona. BTN could also look at other distribution channels (like say, an Xbox app) that could help with national coverage that have nothing to do with expansion. Failing that, a further look west is unlikely in the near future, but depending on what happens with the Big 12 over the years, you never know.
Even with an uncertain media landscape, the Big Ten appears to be in about as good a position as you could get, with a new TV deal coming soon, and with games available on every major carrier. That's good for stability, and good for business, which, in theory, trickle down to improved athletic department outcomes. Given everything that is going on down on the field, not having to worry about as many existential business issues is a good thing.
Now, if Maryland and Rutgers could start fielding good football teams, we'd really be in business.
Continue reading...
Matt Brown via our friends at Land-Grant Holy Land
Visit their fantastic blog and read the full article (and so much more) here
Where does the league and their eponymous network go from here?
Among football fans, the Big Ten's recent additions of Maryland and Rutgers were met with mostly disdain. Neither team had much of a football tradition, their addition meant longer road trips, fewer trips against traditional rivals, and in the case of Rutgers, general non-competitiveness in most other Big Ten sports.
Big Ten officials, along with many journalists, counter that adding an eastern front to the Big Ten was still a good idea. Both Maryland and Rutgers shored up the league's standing in important recruiting territories, and with an influx of Big Ten money, perhaps those teams could be refurbished and turned into competent, successful programs in the future. And speaking of money, the solidified presence in the NY and DC television markets would lead to financial windfalls that would benefit everybody.
So far, it seems that everyone is right. Maryland and Rutgers stink at football. The squads are a combined 2-5 against FBS competition (those wins are over South Florida and Kansas), and a bowl bid seems like a stretch for either. Rutgers has been dysfunctional even for Rutgers standards, and the rest of their athletic department has been mostly non-competitive as well, as Men's Soccer, Women's Volleyball and Field Hockey are all in last place.
But it also looks like the newcomers have been a financial success. A recent article from Ad Age details how the new east coast additions have been a boon for the Big Ten Network. How much of a boon? Well:
In expanding its scholastic footprint, the Big Ten also increased the value of the BTN's New York and D.C. subscribers. According to SNL Kagan data, cable operators pay an estimated "in-market" rate of $1 per sub per month, more than double the $0.44 fees charged outside the conference's home markets. Cablevision alone serves 2.64 million video customers in New York, New Jersey and southwestern Connecticut; with the upgraded fee in place, BTN sees its annual payout from the operator rise to around $31.7 million from $13.9 million (bolding mine)
I'm not Sports Business reporter, but more than doubling your annual operator payout seems like a pretty good business outcome to me. AA also reports that BTN is able to charge ad rates comparable to what ESPN gets for the SEC Network. If the quality of the football product continues to improve conference-wide, there may be even more room to grow.
The fact that further penetration into lucrative markets has lead to financial gains isn't very surprising, although it is good news for the Big Ten. There were two more interesting nuggets tucked into this story though. One, on how falling dominos elsewhere lead to the expansion into the east:
According to BTN president Mark Silverman, the reconfiguration of other NCAA conferences has only served to heighten Rutgers' impact on the network. "This is a great opportunity for the Big Ten to really become the anchor league conference on the East coast," he said. "When ACC raided Big East a second time, taking Syracuse and Pitt from the old Big East, it really created an opening for us...to become the network fans in the New York metro area gravitate to."
As fans, we can debate the merits of that goal, or whether such a thing is even possible. But knowing that the defection of Syracuse and Pitt from the Big East helped set this whole thing in motion does lead to some fun alternate reality hypotheticals. How does the college football landscape look in 2015 if Syracuse and Pitt don't leave the Big East? Was there a way to keep that conference from crumbling into Conference USA with special musical guest UConn? Is Pitt actually the reason Ohio State and Rutgers is an annual game? If so, I hope Penn State never schedules them again.
Here's the other interesting nugget:
Since Rutgers and Maryland jumped to the Big Ten, BTN's sub count has risen to some 60 million households, up 15% from the 52 million customers it reached at the end of the 2013-14 academic year. But it remains to be seen if BTN can flip the script and begin expanding in the opposite direction. (The westernmost Big Ten school is located in Lincoln, Neb,, which is practically the geographic center of the U.S..)
"We're looking west of Nebraska to make sure people can see the kind of games we can offer," said Mr. Silverman, who notes that BTN is carried on Time Warner Cable in Los Angeles. "But we are very happy with our distribution. We think the Big Ten is the one true national conference. Our alums are everywhere."
***BIG TEN EXPANSION TO THE WEST IMMINENT MUST CREDIT WVU BLOGGERS DOT TUMBLR DOT COM***
Silverman is right, the Big Ten really is the closest thing to a national conference. The league could have claimed significant influence in DC and NYC even before expansion, just due to the huge proliferation of Big Ten graduates in those cities. Given the size of Big Ten schools, their historical profiles, and the geographical distribution of their alumni (compared to say, the SEC or the Pac-12), and you really do have exposure everywhere. It's probable that there are a lot more Big 10 fans in say, LA, than of a lot of Pac-12 schools.
Do you need to expand to improve coverage in the west? Maybe not, but it's potentially something the league might look at. A low risk idea might be to add Arizona State to the conference as a hockey member, something the league has already reportedly considered. That may not move the needle in it of itself, but Phoenix already claims large numbers of Buckeye transplants and other Midwestern ex-pats, and it's possible the league only needs a nudge to get on more TVs in Arizona. BTN could also look at other distribution channels (like say, an Xbox app) that could help with national coverage that have nothing to do with expansion. Failing that, a further look west is unlikely in the near future, but depending on what happens with the Big 12 over the years, you never know.
Even with an uncertain media landscape, the Big Ten appears to be in about as good a position as you could get, with a new TV deal coming soon, and with games available on every major carrier. That's good for stability, and good for business, which, in theory, trickle down to improved athletic department outcomes. Given everything that is going on down on the field, not having to worry about as many existential business issues is a good thing.
Now, if Maryland and Rutgers could start fielding good football teams, we'd really be in business.
Continue reading...