For all the things I get about the conference expansion crazy talk – which boils down to if you’re a Big East school or a Big XII school on the short end of a bad revenue distribution arrangement, Big Ten membership would be a godsend – what I don’t get is the general assumption that a sixteen-school conference is a win-win for everyone concerned. Or that any expansion is necessarily going to grow a conference’s bottom line.
Yet Larry Scott is being lionized today, Jim Delany is regarded as the shrewdest SOB in college football and the Mountain West is praised for putting Boise State on hold and waiting for the Big XII’s collapse to grow. How much of this is justified? I’m not sure, but I can point you to three things that ought to raise some questions in your mind about that.
… The Big Ten divided about $220 million in television revenue last year. By giving a full share to one new team, each team would be giving up $1.7 million each. That means that the new team not only has to be worth what another team in the league is worth, but it has to add value.
If the Big Ten wants to give a full share to a new team, and they want to make the same amount of money, they have to hope that that team alone can generate $20 million by itself. [Emphasis added.]
How many teams can do that? Notre Dame. Maybe Nebraska. Rutgers, if you think that gets you the New York and Philly market…
… TV revenues might double if a Pac-10 network succeeds, but if there are 16 teams involved, no one is doubling their money. Right now, TV revenue for the Pac-10 is around $100 million a year. Let’s say a new network deal after the 2011-12 season and a new network of their own adds up to $200 million in TV revenue a year.
Assuming equal splits of all 16 teams, original Pac-10 teams would only be making $2.5 million more than what they have now. And don’t forget the UCLA softball, and all its other non-generating sports, might have to travel to Texas now.
So there it is: two slam dunks and a whole lot of hope. To me, this expansion talk makes much more sense as elaborate forms of blackmail (call it leverage if you’re squeamish) to force Notre Dame into accepting Big Ten membership and to force recalcitrant Big XII schools into some sort of TV cooperative with the Pac-10 than it does as a straightforward plan. But maybe I’m underestimating the role of ego here.
Example #2: John Pennington has been on the SEC-must-expand-or-die bandwagon for a while now. One thing he’s continued to harp on as justification for his position is that the ACC’s new deal with ESPN is more lucrative than the SEC’s deal with ESPN is. Well, duh – ESPN is the ACC’s primary broadcast partner; CBS is the SEC’s. It wouldn’t be reasonable for ESPN to hand over the same kind of money in both instances. But Pennington sees a new threat on the SEC’s horizon. Asia. I kid you not. Asia.
… While the SEC is patting itself on the back for a huge ESPN contract (that has already been passed on a year-to-year basis by the ACC’s new deal), the Pac-10 is looking five steps down the road.
“How can we tap into the Asian market? How can we get television money from that continent? How much revenue can we generate in terms of cap and t-shirt sales by creating a few Asian fans across the globe?”
If Larry Scott wants to tap into some non-existent market by scheduling a USC-Oregon game in Tokyo, I doubt Mike Slive is going to lose much sleep over it. The NFL has spent decades trying to grow an overseas market and has failed miserably. It’s hard to see how college football could better the best marketed sports league in existence in that regard. Again, this strikes me as another situation where ego is getting in the way of making money.
… Right now the MWC is signed up for a 10-year $120 million TV deal. That is paltry compared to the reported $200 million and $150 million per year deals with ESPN for the SEC and ACC, respectively.
We saw a partial answer to some of these questions in 2005 when the league added TCU and went from eight to nine. The MWC just adjusted the payout, divided the pie into another piece…
How much does a school from the nation’s 112th largest TV market grow that pie? Not much, if any. Now, if BSU comes in along with a rump group from a dissolved Big XII that gives the Mountain West the opportunity to generate a new and improved broadcast contract, maybe that begins to make more sense, but on their own, the Broncos don’t enhance Utah’s or BYU’s revenue streams.
In the overall scheme of things, Notre Dame is an obvious expansion partner. So is Texas. So are Big XII schools headed to the Mountain West (assuming that’s even a possibility). The rest of the expansion scenarios seem like a stretch, financially speaking. And if that’s the case, why consider them at all?