Here's an article from CNBC
http://www.cnbc.com/id/37636000?__source=RSS*blog*&par=RSS
Barry Frank knows more about TV rights money than just about anyone. And the executive vice president for IMG Media who has negotiated a slew of television deals in his years in the business has this to say about adding the 16-team conference that is developing with the Pac-10: The math might not work.
Here's why.
First of all, Frank explains, each team isn't equal in terms of the money they can bring in to the conference. In fact, not many teams—including Colorado, the only one who has thus far accepted a bid to leave the Big XII for the Pac-10—pay for themselves.
"Texas does and that's why they'll get paid a bigger share of the television money if they move, just like they received a bigger share in the Big XII," said Frank, who negotiated the new BCS deal with ESPN in 2008 and the new ACC football and basketball rights deal, a bidding war also won by ESPN.
Then comes the fact that, with more teams, rights fees might not increase enough for a 16-team split to make sense for the conference.
Right now, the Pac-10 TV deal, which expires in two seasons, pays teams $96 million total. The conference has thrown out the idea that, with the new teams, the package will automatically double. But how much bigger can the deal really get?
For comparison's sake, the Big XII is pulling in $72 million a year (though its Fox Sports Net component expires after the 2012 season). The ACC's deal is worth $155 million a year, the SEC brings in $205 million a year and the Big Ten's total coffers are worth about $220 million a year.
"People have to remember that the way the cable channels decide how much they can pay is by determining if they can increase their subscriber fee or advertising," Frank said. "ESPN already has the highest fee out there, so the cable operators aren't paying anymore there and there's probably not much growth in advertising either."
Why? Because if the new teams play in a split conference that is essentially the old Big XII plus Arizona and Arizona State, there aren't that many more games that will draw much bigger ratings than the old Pac-10 did.
With ESPN out of the picture, Frank says Fox—in Fox Sports Net, its current partner, and FX, which is transitioning into a weekend sports channel — is the most likely option to grow fees. Frank says there's a chance that cable operators will pay 25 to 50 cents more per subscriber to those channels that could lead to more money.
Then there's all that buzz about starting a new TV network. The partner is likely to be Fox, which currently is partners with the Big Ten in its network. That means there would be one check being cut to the league for both the outside deal and the network partnership with no competition in the marketplace.
Something also kept out of the public conversations thus far, Frank said, is the fact that starting up a network includes a huge monetary investment by the schools.
"It's great to have a 24-hour network," Frank said. "But you also have to realize, it costs about $25,000 to broadcast that volleyball game or $60,000 to do the track meet."
For the Big XII teams themselves that are considering the jump with Colorado already gone (Texas, Texas Tech, Texas A&M, Oklahoma and Oklahoma State), the deal seems worth it. Even with more to divvy up, they'll likely earn more than what they make in the current Big XII.
It might not work out as well for the the Pac-10's current partners as adding Texas to Colorado and closing up shop might make the most sense for each team to be able to pull in the most money.
Frank said that each team will be paid by the Pac-10 in TV money what the new conference thinks they are worth and that's where this will either turn into being a good or bad deal for the conference. Bottom line is, some teams don't add much value. They'll be paid a smaller percentage of what might be a bigger pie, which also would have to be split in 16 pieces.
"It's getting more technical every day," Frank said. "There's a great deal of math going on and it's very sophisticated."
From a television standpoint, and that's where the money is obviously coming from, Frank seems a little surprised at all the talk of movement, which in the end, might just be fool's gold.
Does Nebraska's likely move to the Big Ten make sense for the conference, considering the fact that there would be another partner to split with?
"Probably not," Frank said.
And how about the talk of the Texas A&M to the SEC?
"That's not worth it to the SEC either," Frank said. "I can't imagine adding a team that would improve on what they already have."
