Tuesday, August 24, 2010

Why the Big Ten can't change to a 9 game schedule

It's basic math (for comparisons sake I'm ignoring the fact we will have an additional team as it is easier to compare current apples and apples).

The average gate for the "Little 8" in 2009 was about $2 million.  It's at least double that for the "Big 3".  The non conference game that will be going away will most 99.9% be a home game vs a MAC type team.  A normal Big Ten team pays about an average of around $0.6 million to get these teams to show up.  So by doing some quick math, the average Big Ten Team makes about $2 million per game ((2-0.6)x8) + ((4-0.6)x3) / 11).  That means by going to a 9 game conference schedule they lose 5.5 games or approximately $11 million ($2 x 5.5).  These numbers do not include other game day revenue like concessions or parking or any game day costs but feel pretty confident in claiming that non-gate revenue exceeds the non-gate cost.  In other words, $11 million is a very conservative number.

Compare that with the the benefit ... the league now has more inventory of conference games.  Currently they have 8 conference games and 4 out of conference.  That gives them a total inventory of 88 games (8*5.5) + (4*11).  A 9 game league schedule reduces that to 82.5 games.  Unless the Big Ten is able to charge Rotel a lot more from their ads the money from the Big Ten Network is pretty much fixed.  Any additional money will need to come from ABC/ESPN as will have a better matchup for their viewers.  The Big Ten currently makes $100 million annually from ESPN for 41 football games and 60 basketball games.  Recently I saw that the incremental revenue the league could get by splitting Ohio State and Michigan would net them at best about $2 million per year.  Are we supposed to believe that they can get an incremental $11 million from ESPN by taking 11 non-conference games and changing them to 5.5 conference games?

Another way to look at it is to take 2 average Big Ten teams and ask yourself this question - Is one Purdue vs Michigan State game more bankable than 2 games featuring Purdue vs Ball State and Michigan State vs Central Michigan?  Is it worth another $2 million?  The league would need another $2 million just to break even and I don't think it is possible.

I can make a good argument that a 9 game schedule is good for the league and it's fans.  If you don't believe me then go look at the Big Ten slate the last weekend in September and tell me you are excited to watch any of those games.  The thing is the league recently has made it very clear that money > tradition.  If that is true then they can't possibly move to a 9 game schedule as it goes against key motivation.  To do otherwise would be very hypocritical.

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