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InsightTexas ●
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Jackdaddy said...
Simple numbers. The average Big 10 school is projected to make around $43 million in tier 1, 2 and 3 revenue by 2017. See attached link below that was used for the Maryland move to the Big 10. Compare that to the Big 12, which will average around $20 million per team per year for tier 1 and 2 for the next 13 years. Add in UT's tier 3 income from LHN, which is under $15 million per year given our need to split some economics with IMG. That's less than $35 million for UT. The economics for tier 1, 2, and 3 just don't look great from this perspective. Purdue and Northwestern would make more than UT for tier 1, 2 and 3. And it looks even less appealing for the other 9 members of the conference. Now the Big 12 has the potential to boost these numbers with the addition of a CCG but that would require expansion. The Sugar Bowl income is a wash given the Big 10 also has the same economics for the Rose Bowl.
The Big 12 needs more real estate (population/geography) and one or two marque properties (FSU/VTech) to stay competitive.
This post has been edited 2 times, most recently by InsightTexas on 11/20/2012 at 4:09 PM
InsightTexas ●
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Racer X said...
I think that is directionally correct. More and more dollars in college football will be coming from the expanded playoffs and the TV money they engender. But, you still have to address the two huge discrepancies in regards to the econmics of the regular season:
1. The Pac-12, Big Ten, and (soon) SEC all have cable networks that they OWN. Texas does NOT OWN the Longhorn Network. Texas is merely a paid employee of the LHN, which is completely owned by ESPN. The reason this is important is that the other 3 conferences are expanding in order to capture markets to grow their conference networks. Because they OWN their networks, they have an incentive to grow revenues. By contrast, Texas is a $15MM per year paid employee of the LHN. Whether or not the LHN grows or shrinks is irrelevant to Texas, because we'll get paid $15MM regardless. This leads to point #2
2. There is a growing gulf between the revenues of the SEC and Big Ten schools and the rest of the nation in Tier 1 and 2 revenues, as well as Tier 3 revenues (see #1 above). This growing gulf will lead to differences in power between the Big Ten and SEC schools and the Big XII schools not named Texas. To put numbers to it, every time the Big Ten expands, it gets to renegotiate its Tier 1 and 2 contracts. By adding TV market geographies to BOTH increase Tier 1 and 2, as well as expand the BTN (tier 3), it's a double revenue increase for them. As the article above shows, the Big Ten is looking at $40MM+ per school by 2020, and growing. By contrast, the Big XII schools are looking at $20MM per year over the next 12 years, and are NOT growing unless they expand or OWN their own cable network. However, since Texas already has the LHN, there won't be any Big XII Network of any value without Texas' inventory being part of it. Net-net: There is an ever growing gulf between the other 3 conferences and the Big XII and ACC, AND the financial incentives for further future expansion all favor these 3 conferences.
So, while I agree that the expanded playoffs will be a HUGE revenue driver for college football in general, you have to look at the regular season economics and see that there is a growing "haves" and "have nots" problem, and if the "Haves" possess more money than the "have nots" surely that wealth will translate into power when the playoff revenues get divided as well.
Net-net: I think Dodds has done a good job up to this point of accomplishing the twin goals of keeping the Big XII viable and maximizing Texas' economics throughout the realignment process, but I can't help but think that there is one more battle to fight on this front, and it will force Texas to make a hard decision or two much sooner than expected.
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Codaxx said...
what is stronger about those teams? I am not talking about today, but projecting out 5-10 yrs - Pitt- #2 state school Louisville- #2 school in KY. WVU- solid Clemson- #2 school and private.. solid program though FSU- #2 school with budget issues KSU- #2 school Texas- legit OU- legit OSU- #2 school with a solid coach that has brought the program up the last 5 yrs. Do they have staying power? Baylor: Small Baptist school. Briles leaves? TCU: small private school.. Where are they without Patterson? ISU: #2 school.
What about that line-up screams success in the future?
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Hooked636905 said...
Why would Texas go join the PAC12 when the BIG12 in its current state is stronger top to bottom? It would make more sense to just add Clemson, Florida State, Pittsburgh and Louisville.
Big 12 East: Pitt, Louisville, WVU, Clemson, FSU, Kansas State, Kansas Big 12 West: Texas, OU, Oklahoma State, Baylor, Tech, TCU, Iowa State
This post was edited by GoHorns 1 on 11/20/2012 at 4:35 PM
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InsightTexas said...
If all of this is true, why does the Big 12 not add GT and FSU for the Georgia and Florida markets and expand the renamed LHN to include all conference members with the understanding that revenues will be shared disproportionately based on the fan base sizes? This would make the whole conference stronger and more sustainable and powerful and might make UT even more money than it is getting on the LHN now and end all the problems with LHN availability and resentment.
Answer: Too big a concept with too much logic to penetrate the myopic mind of DeLost Dodds.
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Racer X said...
1. The Pac-12, Big Ten, and (soon) SEC all have cable networks that they OWN. Texas does NOT OWN the Longhorn Network. Texas is merely a paid employee of the LHN, which is completely owned by ESPN. The reason this is important is that the other 3 conferences are expanding in order to capture markets to grow their conference networks. Because they OWN their networks, they have an incentive to grow revenues. By contrast, Texas is a $15MM per year paid employee of the LHN. Whether or not the LHN grows or shrinks is irrelevant to Texas, because we'll get paid $15MM regardless.
“Kansas may wind up number one in these polls, but that would be so unfair to Texas...” -- Len Elmore, 2/13/11
Bob in Houston
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rosessmellgreat
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rosessmellgreat said...
Bobby...they'd play that old "you scratch my back" with Florida and S. Carolina. The SEC is getting large enough that the old gentleman's agreement of not accepting any school from a state that already has a SEC school is in jeopardy. UF needs all the friends they can get to keep out FSU.
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BobbyBurton
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BobbyBurton
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Hook'm RD said...
Looks like Ricky Bobby finally got his sorely needed 7 page thread and took a shot at Deloss to do it. Wise fellow he is. Yesiree bob or ricky bob we will be nobody soon. glad you girls aren't running the show and only want inter web attention.
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BobbyBurton
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BobbyBurton
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Codaxx said...
what is stronger about those teams? I am not talking about today, but projecting out 5-10 yrs
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Pitt- #2 state school
Louisville- #2 school in KY.
WVU- solid
Clemson- #2 school and private.. solid program though
FSU- #2 school with budget issues
KSU- #2 school
Texas- legit
OU- legit
OSU- #2 school with a solid coach that has brought the program up the last 5 yrs. Do they have staying power?
Baylor: Small Baptist school. Briles leaves?
TCU: small private school.. Where are they without Patterson?
ISU: #2 school.What about that line-up screams success in the future?
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BobbyBurton
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JeezGuy ●
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BobbyBurton said...
You think that was a shot at Deloss?
I don't.
I think he's been terrific for Texas in so many ways. Realignment is a multi-faceted issue of which Deloss can only control what Texas does not the rest of the country.
If you think that the Big 10 and SEC eventually going to 16 doesn't potentially concern the Big 12, then I disagree.
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With the Maryland-Rutgers move, what happens to Texas?