Doing the Big Ten expansion math

Most of the early smart thinking about the possibility of the Big Ten adding a twelfth (yeah, I know) team points in the direction of Pitt.  Maybe so, but I’m partial to Matt Hinton’s argument that what we’re looking at is another extended courtship of Notre Dame.  Except I don’t believe for a minute that it’s about all the high-falutin’ reasons that are being tossed around.  It’s about – surprise! – the money.

Stewart Mandel, give him credit, does a nice job of spelling out the calculations.

… The Big Ten does not publicly release revenue-sharing figures, but it’s been reported that its rights deals with ABC/ESPN and the Big Ten Network generate about $212 million annually. (That’s in addition to the league’s direct profits from its jointly owned network.) Add in this season’s two BCS berths ($22.3 million) and five other bowl berths (about $14 million), and we’re talking a minimally estimated $248.3 million in shared revenue, or $22.6 million per team.

Therefore, any potential 12th team would have to add $22.6 million in “value” to renegotiated TV and bowl deals to prevent the others from losing money. [Emphasis added.] With all due respect to Missouri, Pittsburgh, Syracuse and Rutgers (the most commonly discussed candidates), there’s only one viable school that could guarantee that kind of gold mine: Notre Dame…

Texas would, too, but I’ve never seen that school as a realistic prospect for the Big Ten.  In any event, that’s a steep wall to climb.  And Mandel points out one more consideration to factor into the mix.

While Big Ten teams have taken their lumps on the field, they aren’t exactly hurting for consideration. The league has produced a second BCS berth more often than any other conference (nine times in 12 years), including each of the past five seasons. If this year’s Ohio State-Iowa showdown, played Nov. 14, had taken place in a league title game three weeks later, the 10-2 Hawkeyes likely wouldn’t be playing in the Orange Bowl. Oklahoma in 2003, Alabama in 2008 and Florida in 2009 are the only title-game losers ever to receive BCS at-large berths, and all three entered their title games undefeated.

If the league loses more than one at-large berth (currently worth $4.5 million) over a four-year period, that extra championship-game revenue becomes a wash.

Not exactly a compelling case for expansion, is it?

The Big Ten’s problem here is, of course, that there’s no compelling reason for Notre Dame to join the conference.  There’s not much of a financial gain (if any at all), the Irish would lose their special BCS status and they cede some degree of control over how the program operates to Jim Delany if they were to make that move.  That’s not to say that Notre Dame doesn’t do a little dancing before sending the Big Ten back to the table.  If nothing else, it’s probably good for squeezing a couple of extra bucks out of NBC to keep the TV deal.  Maybe the school can call Jimmy Sexton in as a consultant.

In the end, I don’t see this leading anywhere.

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UPDATE: Michael Elkon argues that the Big Ten is focused on the wrong thing.

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9 Comments

Filed under Big Ten Football, It's Just Bidness

9 responses to “Doing the Big Ten expansion math

  1. JasonC

    Senator,

    Let’s say Mizzou is the team. Then, the Big 12 is short a team. Do they raid the MWC and take TCU?

    Frankly, I would rather see Penn St move to the Big East and make the Big Eleven the real Big Ten and play a Pac-10 schedule.

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  2. Wes

    Don’t forget about the title game, though. An unseen monetary benefit this new school adds is the huge revenues from a title game they may or may not ever play in, but nevertheless make possible.

    So, with the addition of a title game, they have to bring in much less of their own value. Another thing to consider is viewership. I would be that the Big Ten (can they keep calling themselves that after they have 12 teams?) actually renegotiates their TV deals for significantly more when a new team joins, and adds something like half a million fans and half a million pairs of potential TV-watching eyes.

    So in my opinion, Mandel’s number isn’t accurate, or even that close to accurate. The title game and the new TV contracts should make the necessary value of a new team much less (unless of course you include the new value of TV contracts in their original value number, and then just the title game lightens their financial load).

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    • Read what Mandel is saying: “any potential 12th team would have to add $22.6 million in “value” to renegotiated TV and bowl deals to prevent the others from losing money.”

      He’s in agreement with what you’re saying. He’s not saying the new school has to bring that in on its lonesome, just that when the dust settles on whatever new deals the reconfigured conference strikes, there needs to be that much more money in the pot. That math includes his very valid point (and note that Delany is aware of it, too) that a conference playoff game might cost the Big Ten BCS money in some years.

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      • Wes

        I guess I’m just pretty confident an extra team would bring in that much.

        The championship game just adds so much in potential revenue. It can be a springboard to the National title, to the Heisman, to more brand recognition, to a bigger bowl, etc. I heard someone say (I think Alvarez at Wisconsin) that while all the other conferences are duking it out in the last two weeks of the season, the Big Ten has nobody playing!

        It’s also possible that the Big Ten may be willing to lose a little revenue in return for the respect and attention of the CFB world the last week of the season, and a better shot at big bowls and national titles. Unlikely, but possible.

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  3. Bob

    Cowherd on ESPN Radio making a pretty intelligent case that it should be Rutgers. His argument makes some sense, but I’m not sure what to think of it.

    Good school – check
    Big School (ie can sell out a stadium, has lots of alums) – check
    Big Market – check, the biggest…
    Recruiting – locks down New Jersey for the whole conference, making the Big 10 the sure go-to destination for Northeast recruits

    Not saying I agree, but if those are the considerations, Rutgers does fit the bill.

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    • dudetheplayer

      “Recruiting – locks down New Jersey for the whole conference, making the Big 10 the sure go-to destination for Northeast recruits”

      Except for Knowshon and Kade, eh? 😉

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  4. Wes

    Rutgers has no tradition of success, so I think they’re probably out. And I don’t really buy “locking down New Jersey.” Why should that be? I’m not sure Rutgers being in the Big Ten makes northeastern kids anymore likely to go to Michigan than Rutgers being in the Big East makes them more likely to go to West Virginia.

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  5. Here’s a darkhorse in the expansion race: Maryland. It has many of the same attributes Rutgers has, but with a far longer history of big-time success. It gives the Big Ten Network inroads with the large, affluent (and growing) Washington and Baltimore markets — and Maryland has more impact in those markets than Rutgers does in New York. It also boosts the Big Ten in basketball, with men’s and women’s programs that have won national titles within the past decade. From Maryland’s perspective, it would dramatically boost its football program just through the Big Ten’s cachet (competitively from top to bottom I see little difference with the ACC). Maryland just expanded Byrd Stadium, and it’d be far easier to sell suites for Penn State, Michigan, Ohio State and Wisconsin than for Wake Forest, Florida State, Clemson and Virginia. The Big Ten’s academic consortium would also be attractive to the administration in College Park.

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  6. Mayor of Dawgtown

    As long as we’re speculating about total BS let’s examine the addition of UGA to the Big 10. That would undoubtedly add more than $2.2 Mil to the Big 10 coffers. Problem is UGA would win the conference every year. I am pretty sure that UGA, in the history of college football, has never lost to a Big 10 opponent. (Penn State doesn’t count as it was an independent in 1982.) Having a team like UGA in their conference would expose the Big 10 for what it really is–the MAC with a better TV contract. The benefit to UGA would be to get away from Slive and his band of SEC refs.

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