Tag:shared
Posted on: September 23, 2010 12:31 am
Edited on: April 5, 2011 6:39 pm
 

Just how much $$$ are we talking about?

Big Ten expansion is driven by revenue.  Updating my original notes with some research by BrendonTi, here is the best current and projected revenue breakdown I can find.  I am using 2016 as the future projection date - this is when the existing broadcast contracts for football and basketball run out and new contracts take effect.  (The BTN contract runs much longer.)

6% to 8% per year growth is common throughout this discussion.  This is derived from the amount NCAAF broadcast contracts have been increasing.  This can be tracked to the growing NCAAF audience (about 3% to 4% a year) and average inflation (about 3% to 4% a year).  This audience growth is on the low side based on recent articles I could google.

These estimates do not include gains from expansion except for the CCG.  In the case of Nebraska their gains will not significantly impact shared revenue until 2016 – their financial gains falls outside shared revenue.

BTN Licensing Fee currently $5.45 Million
$60 Million yearly is paid by the BTN to the Big Ten before splitting network profits and is not to be confused with the subscription fees collected from cable carriers.  Delany and the Illini AD noted the Big Ten has been in negotiations with the broadcasters during expansion.  Unlike situations with ESPN where they already own rights to teams in other conferences, adding teams to the Big Ten represents a new audience to Fox.  I do not know how this is structured - it may be fixed over the duration of the contract, or it may go up each year.  I am going with the more conservative former estimate:
Projected $5.45 Million (low estimate)

BTN Shared Revenue currently $6.5 Million
Estimates I could find projected this to increase $2-4 Million from 2010 to 2013 (4 years).  I am going to be conservative and estimate growth of $1-2 Million for 2014 to 2016 (3 years) since applying an inflation rate would not be accurate as it does not capture the license fee or network operating costs.
Projected $9.5-12.5 Million (accurate to low)

FB and BB Broadcast Contracts currently $8.43 Million
The 10 year NCAAF contract is for $1 Billion total ($9.09 Million a year average) and the BB contract $20 Million total (a paltry $.18 Million average).
The 10 year average is about $9.27 Million a year.
Contracts have been increasing an average of 6% to 8% a year.  I use the more readily available average over the lifetime of the contract, and the current contract length of 10 years.
Projected $16.6-19.93 Million (accurate for average, high for 2016)

Shared BCS and Bowl Revenue currently $1.98 Million
I am going to use the 6% to 8% a year increase over 7 years.
Projected $2.97 to $3.39 Million (accurate)

Basketball Tourney currently $350K/team
I don't know the revenue growth of NCAABB. so I am going very low here.
Projected $400K (low)

Update Conference Championship Game $2.08 Million
The Big Ten is maximizing CCG revenue by marketing it seperate from the broadcast contract. 
5 year broadcast deal for an escalating amount from $20 to $25 Million.  This includes sponsorship and advertising rights.
Indianapolis is reported to have paid $5 Million to host the game.  I believe this includes ticket sales.  I will lowball the estimate and make this amount constant.
Projected $2.5 Million (low estimate)


Total Current Shared Revenue $22.8 Million per team per year (excludes CCG)
Total 2016 Projections $37.4 to $44.2 Million per team per year (including CCG)
This is a low to accurate estimate before expansion, definitely low after expansion.


Some References
Big Ten (Network) bonanza
Big Ten Conference on Television 
Big Ten’s title game rights to hit market 
I could not locate all of the references – they are buried behind literally millions of google links now.

 
 
 
 
The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com