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Stech OP
Apr 11, 2024 at 09:41 AM ET
ESPN is a business, 2 ways to make more $, cut costs, & more revenue.
Please explain to me how paying more for the same states you already have makes you more revenue? Except for the ACC haters or the Big 12 expanders who want the top football ratings schools (can we stop with the brand as an explanation for expansion, if it was brand, Stanford would have gotten an invite to the B1G, and Oregon would have gotten a full share). None of the expansions to date has been based off selling merchandise, what brand mostly does.Honestly I think it’s John Skipper promoting his alma mater to his ESPN/SEC. He hates the thought of losing them to Fox, so all of sudden expansion is about brand. Good for him for being loyal to his alma mater, but football ratings for games dwarfs all of that, and has for at least 30 years, probably more like 40-50 years. Anyway, back to ESPN making more money. They have a sweet heart deal with the ACC thanks to John. So ESPN already has Florida, South Carolina, North Carolina and Virginia for John’s sweet heart deal. So why pay more for those states? Successful Business Owners are into the math. It’s just like sports, score more than your opponent. The opponent is cost, and the winner gets profit. So please explain to me in numbers (not emotions like fans do) how ESPN is better off with blowing up the sweet heart deal they have with the ACC. What is the Math Path as any Successful Business Owner over time would ask? ** Edited by Stech at 4/11/2024, 9:45:54 AM

33 Replies

Pylons Pylons
As more and more move toward streaming,
how much does the state really matter? The notion of "having a state" is about automatically getting cable subscribers, right?
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Stech OP
Good point, less & less, but many businesses people look backwards instead
of forward. That’s why so many companies drop out of the Fortune 500. The Executives got there one way, but the people change, and what they want changes, but people often can’t change fast enough to see where the puck is going, they skate where the puck is right now. Some people call it recency bias, I call it being stuck in the past.
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mjfhokie
A question on markets and the BIG....why focus on big cities?
In following this I keep hearing how streaming is beating cable which was the lynchpin of ESPN's and FOX's revenue streams. I also hear how the SEC is successful with a regional footprint since it focuses on rabid fan bases that actually watch rather than the highest populations areas (which makes a lot of sense). I also see large public universities as having most alumni, funds, and therefore the most eyes following the teams (and how the ACC is weak partially because of the high number of smaller private schools. This all make sense. What I do not understand in the articles/ click bait/ etc is the BIG 10s approach. Why are the rumors that they would be interested in Miami as one of their top 4 or even 2? Georgia Tech (call it a smaller public school) also gets mentioned in these articles. The argument is always that the BIG wants to be in the south Florida and Atlanta markets as if the model is still a cable based/ population focused market. It is in the vein of their adding Rutgers a few years ago. Why does the BIG seem to focus more on the large cities which seems the opposite of the SEC? It also seems to run counter to the "streaming beating cable" argument.
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Stech OP
Great questions & good assertions, I would just change the word B1G for Fox
So instead of asking yourself why the B1G is doing this, ask why is Fox doing this? The entity paying for all of this has the most power. That entity is Fox. If we start from there we can make a really good educated guess. As Deep Throat in Watergate (Mark Felt) said, “follow the money.” I asked myself the same questions until recently when Fox didn’t even bid for the playoffs. I asked myself why not. Then it hit me Fox’s biggest sports asset is not the B1G, it’s the NFL/NFC weekly games. Considerably more viewership than the B1G. However, the B1G on Saturday is a great way to boost the NFL/NFC on Sunday. So why not get schools that can do that? Schools like Rutgers, Maryland, USC, UCLA, Washington etc. where Pro teams reside. However, if you want to expand, with that model in mind, go get Miami, Atlanta etc. so that Fox can boost their biggest sports asset, the NFL. Make sense?
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mjfhokie
Thanks for the response.
I had not thought about that aspect - it really is a reason to focus on major cites (with NFL franchises) versus the rabid college fan bases. Keep focused on the rabid NFL fan bases. New angle I had not thought of. Good insights.
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Stech OP
Yeah two different models, but both have the potential to work.
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33laszlo99
"What is the Math Path..." If you will indulge a few assumptions
I think that FSU is leaving The ACC. Doesn't matter if the GoR holds-up. They will buy their way out. They will not be going alone. I think they will get a settlement completed soon (early Summer?) ESPN dare not extent the ACC media deal because they have seen these figures:
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Stech OP
Where are you getting the school numbers from? I have never seen VT below 5
in the ACC. Much less below schools UVA, Cal, Stanford, Wake, BC, Syracuse etc. in TV ratings.
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33laszlo99
VT games are hidden on ACCN and streaming. Not reported in media.
My next sequential post explained part of that. We could speculate that ESPN doesn't want to boast about the robust viewership on ACCN and SECN, but they are not known for their humility.
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33laszlo99
Here are some notes for the charts:
Notice that just adding the three ACC newbies actually reduced the average viewership by 11%. Losing FSU, Clemson, UNC, Miami would reduce the viewership by 37%. That is calculated just by moving 2023 results into the realigned conferences. The actual decrease would be worse because games involving the "Big Guns" would no longer be there to help. I got this data from Medium.com in an article by Zach Miller. I tried to find mor sources but they all like to just list Top Ten or 25 Best, etc. Media watch lists games week by week , but not combined. While I was on Media WAtch I look for Virginia Tech games. Early games were against Rutgers, Purdue, Marshall. None drew even 400k) Later there was FSU (over 3 million), and Syracuse on ESPN (782k). The other VT games must have been on ACCN or streaming and therefor not listed on Media Watch. Also interesting, both UNC and Clemson draw TV audiences below The SEC average.
HokieAl HokieAl
I'm digging extensively into the media numbers
Still too early for me to post any conclusions. What I will say is that everyone should be very aware of what the numbers don't include as you noted (no ACCN, SECN, streaming, etc.). It's not all the sports channels. Here is one explanation from the site that a lot of people pull media info from. Why are there no ratings for SEC Network, ACC Network and more? The television networks pay Nielsen to measure viewership for their events. In some cases, they may choose not to. In a statement to Sports Media Watch, ESPN explained its rationale for not subscribing to Nielsen measurement for SEC Network, ACC Network, Longhorn Network and more: ESPN: “We regularly evaluate measurement options and currently use ComScore for all demographic, viewership and research data for ESPN’s college conference networks. We have found that this best suits our needs across the board.” Nielsen ratings explainer Rating: The percentage of television homes tuned to the game in the average minute. 1.9% of U.S. television homes were tuned to the August 26 Navy-Notre Dame game in the average minute. As of the 2023-24 TV season, Nielsen estimates there are 125 million TV homes. Viewers: The number of viewers aged 2+ viewing the game in the average minute. Navy-Notre Dame averaged 3.56 million viewers per minute. (That does not mean 3.56 million viewers total watched the game. Nielsen uses a separate total viewing figure to estimate how many viewers watched at least six minutes of any given telecast. Typically, that figure is significantly higher than the average viewership listed here.) Nielsen uses sampling data to estimate television audiences, which means your specific decision to watch or not watch a game does not have any direct impact on the numbers — unless you have been chosen by Nielsen to be part of its sample and agreed to do so. Does viewership include streaming? All Nielsen figures include streaming viewership through “virtual MVPDs” (ex. YouTube TV, Hulu + Live TV, Sling, Fubo, DIRECTV STREAM) on television, computer and mobile devices. Does viewership include DVR? Yes, all Nielsen figures cited here include same-day DVR. Nielsen also releases viewership figures that include three, seven and even 35 days of DVR viewing, but those are not shown here as they are not particularly relevant for sporting events. Does viewership include bars and restaurants? As of August 31, 2020, all Nielsen figures include out-of-home viewing. Again, Nielsen uses sampling data to calculate the audience, meaning that your viewing of a sporting event outside of your home does not count unless you are in a “Nielsen family.”
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mjfhokie
If they pretend to know the number of 2 year olds watching...
then they certainly have the viewership numbers for ACC and other league networks. Is it simply being kept secret as a tactic or data point that ESPN does not want the ACC to have (or possibly Fox)? Key data in terms of measuring the monetary value of different schools when it come to expansion. It especially hurts the Hokies since we are always the #1 or #2 game on the ACC network. FSU and Clemson get the higher profile ESPN game typically. In addition, our out of conference games with the least interest are the ones that ACC network does not cover, likely because it is known these will have the fewest fans turning in. (see Purdue/VT or Marshall, ODU, etc)
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DMV Gobbler
I always think it was a deal between 2 UNC alumni
Both the President of ESPN at the time, and ACC commissioners were alumni of UNC chapel hill, sat at games together. It was a typical behind the wall, Chapel Hill deal between to friends/alumni. I always remember when Delany was commissioner of the Big 10. He and Swofford were fraternity brothers at UNC. Delany was from New Jersey and Swofford good ole boy I i believe from Tarboro). Dulany and Swofford were rivals. They both ran for Fraternity president. Delany had a big campaign, what he would do yada yah. Swofford worked behind the scenes shaking members hand, having cocktails, building deals, and when the election happened. Damn Swofford beat the favorite Delany. Swofford never changed from being the AD and UNC to Commissioner of ACC. Very sneaky behind the room deals, and be able to smaze any opponents. Big 10 and ACC were ok until, Swofford pulled the behind the deal for Notre Dame and Cuse and Pitt as well as back door discussions with Penn State. Delany keyed in and the current strategy for the Big 10 evolved..
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2hhoop3
You have a very active.....
imagination but, your last paragraph is flat out wrong. The B1G strategy had very little to do with Swofford and the ACC.
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2hhoop3
In a scant 40 or so years........
ESPN has gone from being one of the best things to happen for sports to one of the worst, if not the worst, things to happen for sports. It is what happens when management goes from a balanced blend of business person and sports person to arrogant little pukes with an insatiable appetite for money and power with absolutely no regard for the sport. Horrible people is more the rule rather than the exception for ESPN management these days and their former mantra as "the Worldwide Leader" is a joke.
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Tailgate Guru
Your first sentence is so spot on
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Big12 guy
I wonder if FOX over paid for the Big 10, not so sure about the SEC, but
I'm not convinced that any of us are underpaid. Maybe, but they are in stupid money when they talk about $100M per school. Based on nothing but my knee jerk.
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hokieZ71
I imagine that Fox and ESPN will set viewership records this year.
The quantity of major games that have the carrot of being conference matchups will increase in those leagues. You add Texas and Oklahoma to Bama, UGA, LSU, Auburn, Florida, aTm, and then you add USC, Oregon, Washington to Ohio State, Penn State, Michigan, the number of made-for-TV matchups on a weekly basis jumps up a notch. This will trickle down to "second/third tier" conference games (like Wisconsin vs Nebraska, Iowa vs Michigan State or Tennessee vs Ole Miss) generating record numbers in less premium time slots as well.
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Big12 guy
In the short term, I think you are correct.
The matchups of blue bloods playing each other in the regular season will draw the eyeballs, no doubt. That being said, this is college ball, and when those blue bloods rack up the losses, interest will wain for the casual viewer. Nebraska is a perfect case study. Their games against the blue blood Big 10 teams drew very good numbers-at first. Not so much these days, as they struggle to be bowl eligible, let alone compete for a conference championship, or a playoff berth. The faithful in Nebraska are grasping at straws to be relevant again, and the additions to the conference just made it more difficult, not easier. They are cashing their checks to oblivian.
Vienna_Hokie Vienna_Hokie
Gambling now owns the networks, no such thing as overpaying
there are always more suckers to hook and more families to destroy. The Big pulled the national brands that will attract gamblers to feed the new FOX/ESPN streaming agreement. BetESPN is the future. And we all thought The Last Boyscout was fiction.
HokieAl HokieAl
I think we need to readjust our perspective on the money (at least I do)
$100 million per school in 2024 is not the same as $100 million 20 years ago. Lots of costs and expenses have gone up over the years (as we all know from inflation in our daily lives). Yes $100 million is still a lot of money. But it's not the same crazy overpayment that it would have been in the past. And it wouldn't be the number if FOX wasn't getting a ton of money on their end from advertising to justify all of this.
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Big12 guy
It may pencil out, but as we
All know, the disparity will be the problem moving forward.
Maroon Baboon Maroon Baboon
There are overpaid and underpaid programs as much as there are conferences.
Or at least that's the way I'm beginning to look at it. I think we all need to just start looking at conferences as something more fluid than we ever have. If in several years FOX discovers that it over paid for the B1G and ESPN discovers it over paid for the SEC, there will probably be internal finger pointing with these conferences. Accusations of dead weight and what not. ** Edited by Maroon Baboon at 4/11/2024, 11:18:09 AM
hokieball hokieball
ESPN has spent decades positioning the SEC as a premium product.
With that comes higher carriage fees for their network and higher per minute advertisement fees per game. I could be wrong on that, but that’s how I understand it at this moment. More teams in the SEC would mean higher revenue just by adding more product (games being played). You’d get an added bonus from teams that draw very high viewership (FSU & Clemson) and/or bring in new markets (VT, UVA, UNC, & NC State). Essentially, a UNC vs Vanderbilt SEC game in Chapel Hill would bring ESPN more ad revenue than a UNC vs Wake Forest ACC game in Chapel Hill if they had identical viewership. ESPN isn’t getting as much money as they could off the premium SEC product because it’s limited by the quantity of product. To increase the quantity, the SEC could play more conference games, but that has limitations and collateral negatives. The only other way would be for the SEC to expand.
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Stech OP
Let’s say that’s right, does the bump in being in the SEC, but paying more
to the school, wouldn’t that cancel each other out?
VTHokie2000 VTHokie2000
ESPN does have a sweetheart deal with the ACC. However, WRT the header of
your post, is ESPN getting the most bang for its buck by continuing to do business with the ACC? Could ESPN get more bang for its buck by dropping the ACC (and the ACCN) and re-allocate that money to the SEC? I think it is a possibly if ESPN believes the increase in revenue generated from the move would be more than the revenue generated by the ACC/ACCN.
HokieAl HokieAl
There was a post about this today actually (B12 person FYI)
Here is the summary of what was posted: ESPN has approached FSU, Clemson and the ACC about a potential settlement allowing the Seminoles & Tigers to leave the ACC whenever they want. But an ESPN brokered deal is only possible if FSU and Clemson leave for the SEC. Why? I'm glad you asked. ESPN is the exclusive rights holder for both the ACC & SEC. Moreover, ESPN is a partner in both the ACCN and SECN. ESPN would not lose money if FSU & Clemson are in the SEC as opposed to the ACC. The basics of the potential settlement are: 1. FSU & Clemson would pay an exit fee equal to what Texas & Oklahoma paid to exit the Big 12 + a %. 2. The ACC would retain the rights to FSU & Clemson home games BUT license those rights to the ESPN for SEC broadcasts. 3. The ACC receives 50% of the fair market (SEC) value of FSU & Clemson home games in both football & basketball. The % the ACC receives would decrease each year of the agreement. 4. ESPN would pick up the option on the ACC's contract until 2036, but would renegotiate terms to reflect the loss of value from losing FSU & Clemson. 5. The SEC - namely FSU & Clemson - would be contractually obligated to play a top tier ACC program each year. My source tells me the details above are the initial - opening proposition and they will change slightly as negotiations change the details, but the basics will remain the same. The proposed settlement mitigates the damages to everyone. The ACC survives because ESPN picks up the option to 2036. But their losses will be offset by the % of the FSU & Clemson rights they retain. ** Edited by HokieAl at 4/11/2024, 10:55:23 AM
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33laszlo99
Tell your friend to put the bottle down, then brew him some java.
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Stech OP
I don’t see ESPN making more money in this scenario, why pay more for FSU &
Clemson, but still have to pay the ACC? I can see why FSU and Clemson want this, but I don’t see the math for ESPN making more money. I think ESPN “could” cut costs by letting these two get cut off their payroll, where they already have both states. I don’t think ESPN fears Fox in the South as much as some do. Clemson versus Minnesota or FSU versus Rutgers will get dwarfed by the SEC matchups. I just don’t see this proposal producing more money for ESPN, taking those two off the payroll, does create more money for ESPN. ** Edited by Stech at 4/11/2024, 11:50:30 AM
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33laszlo99
I agree, ESPN will accept whatever situation results from this realignment
and take the necessary steps to maximize their position. If that means renegotiate a new ACC deal, fine. If it means walk away from The ACC, fine. If it means buying B1G content, fine. They don't have to chase all these teams and try to control the movement. They will just respond to it. There are limited linear windows for "featured" games. If ESPN thinks they would rather use the ACC allocation of timeslots to present SEC games, maybe they drop The ACCN. They are not sentimental about it.
Maroon Baboon Maroon Baboon
Not a good deal for the ACC IMO.
A. It probably isn't enough money to compensate for the loss. B. It only assumes money loss, not loss of prestige and other intangibles. I also think FSU wants to go to the B1G even more than they are leading on. So they might not be down with this.
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Marooned
So ESPN is speaking for the SEC now?
Pretty brazen if true.
Maroon Unit Maroon Unit
Nothing to see here....move along