Expansion Dependent on Texas and the ACC
Land Grant Gauntlet’s Christopher Lambert has a terrific article on how the Big 12 is likely going to be deciding on expansion based on Texas, which we knew, and the ACC:
Recently Bob Bowlsby told CBS reporter Dennis Dodd that the Big 12 was sitting on top of a gold mine of unrealized revenue. Currently there are 11 football games and 60 basketball games available for tier three rights, which are worth an estimated $75M per year to the conference..
Estimates are that a Big 12 network, with expansion eastward, would eventually be in 50 million cable homes with an average subscriber fee of around $0.50, of which the conference would get a split. How does $150 million per year sound?
Combine right fees and cable fees and the hypothetical total is around $225 million per year. Do the math and be prepared to gasp.
Give Texas $20 million off the top for their sacrifice, and the remaining 11 members bank $18.6 million before expenses. Even if the Big 12 received only 50% of the $18.6 million the remaining $9.3 million would be in the ballpark of what the Big Ten and SEC bank from their networks.
I’m only quoting part of this here, but this is good stuff and I really can’t summarize the gist of the article, but take a gander. I also am curious as to how Lambert has figured the amount that he thinks a Big 12 network would be able to pull in. Are those figures that are based on anything other than educated guesses or on a factual basis, because if they’re correct, then it’s a no-brainer for a Big 12 network.
The Big 12 Network?
ESPN’s Jake Trotter writes about how the Big 12 network, if one every arrives, may not be the cure-all for the Big 12.
Yet for Texas — not to mention Oklahoma, Kansas and West Virginia — to recoup a palatable portion of tier 3 money, a Big 12 network would have to generate a collective payout in the ballpark of at least $80 million, provided the conference would share the revenue equally. That’s a tall task, considering the Pac-12 delivered about only $17 million total through a network in its fourth year of existence.
CBSSports.com reported consumers outside the state of Texas pay only 2 cents per month for the Longhorn Network; consumers in the state, meanwhile, pay 28 cents for it on their monthly bill.
Through shrewd expansion, which would deliver more content and theoretically more eyeballs, could a Big 12 network prompt a hike in that average subscription fee while doubling the current distribution of the Longhorn Network to, say, 40 million?
Boren seems to think so.
Obviously, the quoted portion isn’t doom-and-gloom, but it’s all dependent on the Longhorns.
And late yesterday, CBS Sports’ Dennis Dodds wrote that OU president David Boren may be backing down with expansion talk, noting that there’s no reason to expand without a network.