Just keep those checks rolling in, please.

Read this ESPN piece – and think about it being an ESPN piece while you read it – and ask yourself two questions:  (1) is Bob Bowlsby the canary in the coal mine; and (2) if he is, does he realize it yet?  I mean, this is pretty doom and gloom stuff here:

But as one industry insider who worked directly with programming and distribution before recently leaving for another job in the industry indicated, there’s also plenty reason to be pessimistic a Big 12 network could ever get off the ground.

“I believe the days of conference networks have kind of come and gone for the most part,” the insider said. “The SEC Network feels like the last one to me. No cable or satellite distributor wants to pay for another network, not in this environment.”

Customers moving away from subscription are part of that environment.

“I feel that the Big 12 network is an uphill battle,” the insider said. “Nobody in the industry wants to spend money right now in the satellite or cable distribution world. Nobody wants to dance in this climate. That is the biggest issue with a [Big 12] network.”

Before you brush that off as a case of someone working the refs, consider the TV deal Conference USA is taking.

Rights fees for C-USA television are expected to fall from about $1 million per school to between $300,000 to $400,000.

Although TV revenue will decrease, MacLeod said the number of C-USA games that will be televised will increase.

More games for less money… such a deal.

As the ESPN piece indicates, the Pac-12 network has fallen woefully short of expectations.  The jury is still out on where the ACC is headed, although in any case, it looks like it won’t be top-tier in revenues, either.

Regardless, the ACC does not appear positioned to match or surpass the Big Ten or SEC in annual per-school distributions. Most recently available tax returns, for fiscal 2013-14, show the Big Ten at $26.4 million per school, the SEC at $20.9 million – that doesn’t reflect the SEC Network – and the ACC at $19.3 million. The Big Ten and SEC project future distributions of more than $40 million and $30 million, respectively.

When it comes to cash flow, the reality may simply be that the P5 is really more of a P2+3, not because Delany and Sankey are so much more savvy than Bowlsby, Scott and Swofford (not to say they aren’t), but because the former two are sitting on larger pools of college football-crazed fans.  Which is to suggest that if the Big 12 is looking for real bang for the buck, it’s not going to come from the likes of Cincinnati or Houston, but from raiding a major program or two from another P5 conference.  Is that likely, or is losing a Texas or Oklahoma to the Big Ten or SEC, both of which can afford the asking price, more likely?

Aside from that, here’s the other longer term consideration.

So while ACC revenue has doubled within four years, it needs more. Not as much as the Big Ten and SEC necessarily – if money were everything, the Big Ten would have a helluva lot more than one men’s basketball and two football national titles in the last 25 years – but an infusion, and the largest source figures to be media rights.

Right now, in terms of competing, money isn’t quite everything, although it certainly helps.  Should Jeffrey Kessler get his way, though, what happens in an era when conferences are competing with each other over player payment?  Those extra millions per year are gonna come in mighty handy.

In the meantime, I guess you can hope John Swofford’s right when he says,

“I’ve been hearing forever that rights fees and television dollars are going to level out or go backwards,” he said, “and I’ve been doing this for almost 40 years now. It’s never happened. It doesn’t mean it won’t happen, but there’s not much history to suggest that it will happen. …

Somebody’s in for a surprise.  We’ll see if it’s the conferences or ESPN.


Filed under Big 12 Football, ESPN Is The Devil, It's Just Bidness

6 responses to “Just keep those checks rolling in, please.

  1. If John Swofford had a brain, he would rent two Brinks trucks and park them in front of Jere Morehead’s and Bernie Machen’s place to try to woo the state universities from the 2 largest states in the South.


    • BarneyDawg

      That is too logical. I have wondered why the ACC has not used the academic similar meme to push this issue with UGA & UF.


  2. With regards to Swofford’s comment about how the fees have never gone down in 40 years, he’s right, but cable viewership has never gone down during that time either. Now, it IS going down, with cord cutters and the early stages of unbundling. Somethings gotta give whether he thinks it will or not.


  3. Chi-town Dawg

    It sounds eerily similar to the arguments about why investing in real estate was a foolproof way to go because housing values can only go up and we now know that’s not always the situation. A lot of similarities between the two scenarios.


  4. Russ

    Where’s Jefferson-Pilot and the Daves when you need them?