BIG EAST - - PHASE II

[Xudash]

I thought it might be interesting to look ahead for the conference in a separate thread, now that two material events have occured that will most likely have a dramatic impact on it:

1. The addition of UCONN; and
2. The most likely re-awakening of DePaul.

As 2012 was coming to a close, the "Catholic Seven" members of the original Big East Conference (DePaul University, Georgetown University, Marquette University, Providence College, Seton Hall University, St. John's University, and Villanova University) finally said enough was enough when it came to being dragged along by the aspirations of football schools.

These schools split from the BE football playing schools in December 2012 to focus on basketball, and in March 2013 reached a settlement:

1. Acquired the Big East Conference name, logos, and history (a masterstroke);
2. The rights to the men's basketball tournament at Madison Square Garden (a masterstroke).
3. Invited and admitted Butler University, Creighton University, and Xavier University as of its July 1, 2013 launch date.
4. Entered into a 12-year, $500 million television contract with Fox Sports.
5. Entered into a 6-year television contract with CBS and CBS Sports Network (CBSSN).

We all know the story from the summer of 2013 to now. Initially, it was all about listening to fans of big football schools talking about it being a pipe dream about whether or not we would work out - find any success. Small, private schools against the dreadnoughts of the P5? Surely you jest (door's open with that one; free to open fire).

But a funny thing happened as time went by, actually wonderful things happened. We are schools with strong brands and solid basketball histories that happen to be in major media markets and, by definition, with an emphasis on BASKETBALL when it comes to sports. We have the facilities and the money to compete with almost everyone, when you factor in the Fox deal and factor out the fact that we don't carry football teams, marching bands and equivalent Title IX sports.

Four bids out of the gate in 2013-14 and we've never looked back, achieving 50% + NCAAT participation rates since. Four 1 Seeds. And, of course, thanks to our friends in Radnor, 2 NC's. Conference RPI rankings that the P5 now envy. It wasn't that we ended up struggling to hold our own with the P5 and in a manner where we hoped to stay inside the bottom half of the rankings with them. It's that we are damn near sitting at the top of these rankings now and on a consistent basis.

The uncertainties and fears from 2013 have been rather obliterated.

Now look where we are headed. UCONN is now onboard. DePaul finally fixed its AD problem and it appears that it has done so in a very big way. Their recruiting is almost off the charts at this point. Can Lateo be successful from here? If not, that issue will be corrected soon enough. We'll see.

The other big thing that has to be popping soon is the expected reset of the Fox media agreement. Imagine if the rumors of $7 million per school are real; imagine if that becomes reality.

The Big East Conference is about to become a whole lot stronger and a helluva lot harder to navigate. It will continue to derive its strength from its members, its relationship with Fox (anticipated), and its deal with MSG. Again, the media agreement that should be coming along should only add to the party, not diminish or hurt it. Long-term media deals may alter the picture for the better or worse, but we won't be at that point - streaming model as the majority platform - for a while.

Buckle-up gang. It's already been a blast. What happens moving forward in "Phase II"?

[Jet915]

Amen, it's been great so far, this conference has clearly outperformed all expectations.

[gtmoBlue]

hmmm. Xudash.
Don't know where you "heard" those rumors you refer to, but that figure is a "lowball" number.

The other big thing that has to be popping soon is the expected reset of the Fox media agreement. Imagine if the rumors of $7 million per school are real; imagine if that becomes reality.

[Xudash]

hmmm. Xudash.
Don't know where you "heard" those rumors you refer to, but that figure is a "lowball" number.

The other big thing that has to be popping soon is the expected reset of the Fox media agreement. Imagine if the rumors of $7 million per school are real; imagine if that becomes reality.

Please educate me git. I would think that $7 million is a good day at the office. I would be very interested to know if it could be more than that.

I really am interested to read about what everyone here thinks the future looks like for us.

[gtmoBlue]

Our current contract has each school earning approx $4.1 Million/year. Total contract was $500M/12 years ($41,666,666.00/10 schools).
In several previous looks at the financing, it was determined that those figures worked out to be approx $150K per game. $150K was a lowball
figure even back in the 2013-14 season, when the contract started.

Without going back and digging up snippets from the many BE expansion threads or going back to 2013 articles that clearly stated the conference
was lowballed back then. I will simply suggest that with the record of achievement the conference has shown to date, coupled with Nova's 2 NCAA
crowns, that we should expect (and receive) fair market value for our current content, unlike back in 2013. It is likely the BE will double the per
game values we currently receive.

Forbes lists ea NCAA Tourney game as valued at $1.5 M/per school. While I don't have the current figures, let's say each normal NCAA game has a
range in value from $100K - $400 K. As a top tier league, with the excellent 7 year track record we have established, the BE should command at least
$300K/game. That would double the current TV revenues, from $4.1M up to $8.2M per school. It could prove to be more if we garner a contract of
$1Billion/10 years rather than 12 years. ($ 9,090,909 per team/11 teams)

Oh and we have upgraded potential content with the addition of the UConn Huskies into the mix.

https://www.forbes.com/sites/chrissmith ... de21353e2f

[kayako]

The contract is already in place for another 5 years. What does Fox gain by tearing it up and double the payout?

[Xudash]

The contract is already in place for another 5 years. What does Fox gain by tearing it up and double the payout?

Was the contract “locked in place” for the original ten once the dust settled in 2013?

Does it provide for a true-up in the event #11 and/or #12 are added - the talk around the original deal, which was about Fox agreeing to bumping the deal for 1 or 2 additions?

I don’t know. It’s going up at least to accommodate UCONN. To your point, if I’m FOX, I would have kept the true-up provision as originally structured in place.

We’ll see.

[adoraz]

The contract is already in place for another 5 years. What does Fox gain by tearing it up and double the payout?

They wouldn't just rework the 5 remaining years, rather this would be a long-term extension similar to how the Big East extended with MSG at a higher price when we still had plenty of time left on our contract. If Fox doesn't extend/rework the contract now, I highly doubt the Big East would be willing to re-sign with them. Since 2013 we've gone out and won 2 (3) NCs, brought in the highest possible expansion team for both M/W, started 3 P6 conference challenges, and are recruiting better than ever before.

Fox pretty much has to give the Big East something more these next 5 years if they want to keep us.

[Fieldhouse Flyer]

Our current contract has each school earning approx $4.1 Million/year. Total contract was $500M/12 years ($41,666,666/10 schools).
In several previous looks at the financing, it was determined that those figures worked out to be approx $150K per game. $150K was a lowball
figure even back in the 2013-14 season, when the contract started.

Oh and we have upgraded potential content with the addition of the UConn Huskies into the mix.

Correct.

It is likely the BE will double the per game values we currently receive.

Seriously incorrect, as kayako quite rightly pointed out:

The contract is already in place for another 5 years. What does Fox gain by tearing it up and double the payout?

Fox Sports gains absolutely nothing by tearing up the existing 12-year contract, and consequently, they won’t contemplate doing so.
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Was the contract “locked in place” for the original ten once the dust settled in 2013?

Yes.

Does it provide for a true-up in the event #11 and/or #12 are added?

Yes.

New Big East and Fox Team Up – Richard Sandomir, The New York Times - March 11, 2013

The seven Catholic universities had privately voiced concerns that the Big East was changing to chase football cash; aware of the discontent, Fox last fall made clear its desire to talk to the group. The universities also knew that the terms of what essentially acted as a prenuptial agreement would let them leave the Big East as a unit, without paying exit fees, and make their own TV deal.

Fox won them over with a 12-year deal worth about $500 million, according to reports. But the contract could spike to $600 million if the conference grows to a dozen teams, according to two people briefed on the contract but not authorized to speak publicly about its terms. A number of universities are said to be candidates to join the new Big East, including Xavier, an Atlantic 10 member, and Creighton, of the Missouri Valley Conference.

New Big East, Fox Sports Formally Ink 12-Year, $500M Deal - SportsBusinessDaily.com - March 21, 2013

The new Big East yesterday formally inked a 12-year, $500M contract with Fox Sports, a “sum that will rise" to $600M if, "as expected, the league expands to 12 members,” according to Richard Sandomir of the N.Y. TIMES. The Big East “will provide a lot of basketball for Fox Sports 1, with its regular season and tournament games.” Fox “probably got a bargain.” It “locked up the long-term rights to a new conference, with its storied name and some of its stalwart basketball colleges” for between $40-50M per year, “far less than the huge deals received by the Pac-12 and ACC” (N.Y. TIMES, 3/21).

In Providence, Kevin McNamara notes the deal would provide “roughly” $40M per year for the 10 schools. In N.Y., Anthony Sulla-Heffinger writes despite “rumors that the Big East would also look to add Dayton and St. Louis to its ranks, the conference will remain 10 teams through the 2013-14 season at the very least” (N.Y. POST, 3/21).

Fox TV Contract Year. Basketball Season

1. 2013-14 . . . . . 7. 2019-20
2. 2014-15 . . . . . 8. 2020-21
3. 2015-16 . . . . . 9. 2021-22
4. 2016-17 . . . . 10. 2022-23
5. 2017-18 . . . . 11. 2023-24
6. 2018-19 . . . . 12. 2024-25

For the benefit of those of you who lack expertise in Contract Law, the contract, in its simplest form, appears to be as follows:

1. Fox Sports and the Big East Conference signed a TV rights contract for 12 years, beginning with the 2013-14 basketball season, and concluding after the 2024-25 basketball season. The amount and terms of the contract have never been publicly disclosed by either party.

2. During those 12 years, the Big East Conference is permitted to expand by as many teams as they want, or not expand at all. Any such decision(s) are at the sole discretion of the Big East Conference.

3. It there is no expansion during the 12-year contract period, Foz Sports will pay the Big East Conference ”about $500 million” for the 12-year period, (which works out to be $41,666,666 per year for the Big East Conference). Assume that the Conference keeps 10% (i.e., $4,166,666 for providing game officials, the game officials’ expenses, salaries, benefits, and travel expenses of Big East Conference executives and administrative staff, rent on HQ offices, marketing, tax, insurance, and other overhead expenses) and that the remaining 90% is split equally between the ten schools: 90% of $41,666,666 per year = $3,750,000 per BE school per year.

4. According to Richard Sandomir, the contract could spike to $600 million if the conference grows to a dozen teams, i.e. a $100M increase if two additional teams are added, or presumably, a $50M increase if one additional team is added. Note that $50M/12 years = $4,166,666 per year to the Big East Conference.

5. Assume that the Big East Conference will keep 10% of the additional $4,166,666 per year from Fox Sports ($416,666 per year) with the other 90% going to UConn ($3,750,000 per year).

6. If the Big East adds a twelfth team, it too will receive about $3,750,000 per year, with another $416,666 per year going to the Big East Conference.

7. According to the leaked terms of the contract, if the Big East adds a thirteenth or fourteen team, Fox Sports does not have to pay any additional money to the Big East Conference because the pro rata clause is capped at 12 teams, meaning that Fox Sports would pay the Big East Conference the same amount for the TV rights for a 12, 13, or 14 team conference. Therefore, it is extremely unlikely that the Big East would expand beyond twelve teams prior to the conclusion of the 2024-25 season.
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It is likely the BE will double the per game values we currently receive.

I have read nothing which supports your very questionable assertion. But I have read these articles:

Canceled College Sports Games Put Millions on the Line for ESPN - Bloomberg Businessweek - July 30, 2020

Ad revenue will plunge, and cable subscribers may balk at paying for nothing.

If students aren’t even able to walk across a quad to class, “how can you have a football game, a baseball game, a tennis match, whatever it happens to be? That’s a very difficult question.”

It’s one echoing throughout the ESPN operation these days. No major media company has bet more on college sports than ESPN. The company airs college games on 10 different channels, including the ABC broadcast network and its ESPN+ streaming service. It runs specific networks for the Southeastern and Atlantic Coast conferences and for the University of Texas. Last season more than half of all college football viewers tuned in to one of ESPN’s outlets.

ESPN, which declined to make any of its executives available for this article, said the games canceled so far have mostly involved those on its online channels, or those coming from conferences shared with other broadcasters such as Fox Corp., so the lost games on ESPN could be fewer than it seems, it said.

College football accounted for about $793 million in advertising at ESPN, ABC, and their related networks, estimates Standard Media Index, which tracks advertising spending. That’s almost four times as much as their closest rival, Fox.

ESPN’s cable networks could see ad revenue fall this year by 12%, or $320 million, says Scott Robson, an analyst for S&P Global Market Intelligence. Much of that could come from college sports. “We’re going to see similar declines at the rest of the programmers in this quarter and the current quarter,” he says. “It’s a big deal.”

Throughout the pandemic, cable TV companies have continued to collect monthly bills from customers and remit programming fees to the sports networks, even though live sports have been off the air. If ESPN and its sister channels can’t deliver the contracted hours of live sports, cable operators could ask for some of that money back.

Worse, cable customers, fed up with high monthly fees, may downsize to lower-priced TV packages or cancel service entirely. Those pay-TV subscriber fees are a big number for Disney: almost $10 billion from ESPN-related channels alone last year, or three times what its networks bring in from advertising. A recent UBS Securities survey found 14% of cable subscribers would likely cancel the service if college football didn’t happen.

“This could accelerate cord-cutting,” says Doug Perlman, who consults with leagues over media deals at his company, Sports Media Advisors LLC. “There will be more people who say, ‘There’s no college football. It’s time for me to move on.’ ”

Fox Q4 Sales Down Sharply From Previous Quarter On COVID-19 Advertising Impact - Jill Goldsmith, Deadline.com - August 4, 2020

Fox Corp. on Tuesday reported total sales of $2.42 billion last quarter, in line with expectations, down slightly (4%) from a year ago but off $1 billion from the previous three months as COVID-19 hit advertising. The company that owns Fox News, Fox Sports, Fox Entertainment and the Fox Television Stations had warned a major squeeze was coming with stations expected to be down 50%.

Cable Network Programming reported quarterly segment revenues of $1.27 billion, a decrease of $28 million or 2% from the amount reported in the prior year quarter, as lower advertising and other revenues were partially offset by higher affiliate revenues. Advertising revenues decreased $22 million or 8%, primarily due to the postponement of live events at FS1 as a result of COVID-19, partially offset by higher advertising revenues at Fox News Media. Other revenues decreased $15 million or 31%, primarily due to lower revenues at Fox Sports as a result of COVID-19.

ESPN Plus Price Getting Hiked to $6 Monthly for New Customers – Variety.com – August 7, 2020

What is certain is that Fox Sports will not renegotiate the present 12-year contract which concludes after the 2024-25 basketball season, as the present 12-year contract already provides for conference expansion.

What is not certain is what the college basketball live-streaming market will look like in 2025. It is far too early to gauge 2025 market demand, new platforms and live-game streaming options, etc., etc.

To state that ”It is likely the BE will double the per game values we currently receive.” at this point is pure silliness, with Fox Sports and ESPN both hurting badly.
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Fox pretty much has to give the Big East something more these next 5 years if they want to keep us.

More silliness.

[Xudash]

Something to chew on, as I watch the scrolls under the ESPN coverage of Marshall and now SMU, reporting athletic department furloughs and staff reductions across the country.

Will this change the “drunken sailor“ spending habits of college football programs moving forward?

What effect will COVID-19 have on spending moving forward?

The top basketball jobs will always be the top basketball jobs, but I believe this dynamic works in favor of the Big East.