The ACC just finalized their television deal with ESPN due to the additions of Syracuse and Pitt. The Big 12 is in the final stages of their negotiations with ESPN/Fox as they lost aTm/Missouri and added of West Virginia/TCU. The SEC is in initial talks regarding the addition of aTm/Missouri. I thought it might be a good time to recap the television deals for college football.
The main motivation that got me to write this was was an article I read that stated that Florida State should leave the ACC and join the Big 12 due to their favorable deal. The key in that article is that Florida State's athletic department is currently running a $2.4 million deficit and in the Big 12 Florida State would have the ability to create a Seminole Network. The expectation is that this would bring in at least $5 million which would balance the budget. I really can't believe Florida State would move for something as risky as that proposition but it has gotten traction over the weekend. My guess is this is merely posturing to get concessions from the other ACC members at the meetings this week as the numbers don't add up. There are rumors that ESPN and the Big 12 have agreed to a new deal that would give each team an estimated $20 million per season but I don't think it would be worth it for Florida State to leave for the $2.9 in additional television money when you consider the cost of additional travel. I guess time will tell.
The other interesting thing about the spreadsheet is that most leagues seem to be happy they are getting Big Ten/SEC money and there is no doubt that ESPN stepped up to the plate and gave huge contracts to the Pac 10/ACC/Big 12. Honestly when you think about television ratings I really don't think these deals can pay for themselves. Are we really to believe that games in the ACC are worth $2.3 million? I really think the key is ESPN is protecting its $5 per basic subscriber by making sure that they have long term college football contracts tied down all over the country so they have to be included on the basic tier.
That brings me to the SEC. If the ACC is worth $2.3 million a game and the Big 12 is worth almost $2.7 million then what is the SEC worth? That is where the question of subscriber fees vs ratings is interesting as the SEC's ratings are among the best though they are probably down the list when it comes to cable boxes in their area. The SEC started their current deal in 2009 before prices really jumped and while their deal goes through 2016, I expect ESPN to cave and give them at least as much as the Big 12 for the addition of Texas A&M and Missouri. If they don't the SEC could sell those home games to Fox/NBC/CBS for a huge sum and with 2016 not that far away they want to keep the SEC happy. As you might recall, the Big Ten Network started because an ESPN executive dared Delany to find a better deal. In the end I'd expect the SEC deal to be extended for at least another 10 years at least $3.0 million per game.
That brings us to the Big Ten. Their deal is up in 2017 and they are biding their time as these deals have gotten increasingly ridiculous. Looking at the Pac 12/Big 12, I expect the final deal to be a partnership between the ESPN and Fox for the 45 games ESPN would prefer to have them all but they only really care that 1-2 games a week are on their station so it will be impossible for Midwest cable companies to remove them from the basic tier. That's because their main national competitor (DirectTV) will always have ESPN as basic and that combined with a section of the country that loves college football will make it hard to change. This protects ESPN's $5/month which is the key.
So how much could the Big Ten get when they renew this contract? Considering the games they are selling are the 3-4 best matchups every week they will get more than the average as their tier 2 games are shown on BTN. My best guess would be at least $4 million in today's dollars. That may seem high but if the Pac 10 can get $2.8 for all it's games then $4.0 million/game for the best Big Ten games seems pretty reasonable. That's a nice bump from the $2.2 million per game they currently get and add an additional $7 million to each school in the league.
If the SEC and Big Ten get numbers like I expect the revenue per team for the next 15 - 20 years in college football would be as follows: Big Ten 27.7, SEC 23.0, Big 12 20.0, Pac 12 20.1, and ACC 17.1. The Pac 12 numbers could jump a little if they are able to get their web based Pac 12 Network going for their Tier 3 content (games that Fox/ESPN don't want to run). The same is true for Texas and the Longhorn Network.
A wildcard in the mix is Notre Dame as they will soon be making less than every other school in the top 5 college football conferences. Their contract is up in 2015 and there are rumors that NBC may walk away as they are losing money on the current deal. That's another clue that the real money in these college football deals is in subscriber fees as NBC doesn't get those as they are a broadcast company. If they walk away then Notre Dame will need to negotiate with ESPN/FOX or possibly CBS/NBC's cable counterparts. The issue for the Irish is one school isn't enough to motivate people to subscribe to a cable network so they will be negotiating from a position of weakness. That leaves them with two choices - get the best deal they can from the cable companies to be included with the rest or work with one of them to form the Irish network. There are undoubtedly thousands of Irish fans that would be happy to pay a premium for this channel. That actually may be their best choice and one of the reasons for the recent talks with Texas and their Longhorn Network.
Unless they want to join a conference....
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