Paint Touches - a look at Big East finances

[Omaha1]

Really great stuff here, but more than somewhat alarming considering the money being discussed by the big football leagues.

“For the Big East, just under 70% of all revenue collected is returned to the (now) 11 schools which has turned out to be an average of $3.7 Million per team per year. In 2020, that was up to $4.66M per team despite lower revenues in an effort to help stabilize budgets mid pandemic.

Now $4.66 million is not a small sum, but when compared to current P5 payouts, averaging between $30M and $45M and projected to nearly double for some conferences, you can see where concerns start to come in.”

https://painttouches.com/2022/07/21/big ... oes-it-go/

[GoldenWarrior11]

Excellent data and analysis. Paint Touches is an incredible MU fan resource for those that are unfamiliar.

A majority of the revenues to Big East schools comes from our TV deal with Fox (the 12-year, $500 million deal signed in 2013-2014); it continues to be rumored that the next TV deal will fall somewhere between $5 and $8 million annually per member, so a bump in pay from that area is expected. PT argued that Fox overpayed for the Big East TV package, but I would argue otherwise; FS1 was a start-up network (which was formerly SPEED) that needed sports inventory to fill up TV spots. FS1 was never intended to compete directly with ESPN; it was meant to be on-par with ESPN2 (in terms of viewership), with FOX continuing add more college and professional sports for the main network. Unlike ESPN TV deals (cough, cough, the AAC TV deal), every single Big East game was televised nationally. That exposure and presence has provided unquantifiable benefits to the Big East and to its members. From this regard, comparing viewership on FS1 vs. ESPN is comparing apples to oranges. I continue to highlight the attendance figures for Big East teams (as well as the BET); if those were dipping or dropping - then it would be a real red flag; nationwide, and specifically in college football, attendance is dropping steadily. The allure of watching games from home (w/ HD TVs, your own bathroom, cheaper food, etc.) continues to increase over time. However, BE attendance remains incredibly strong (and remains a top-5 conference) and that is a huge plus.

A key point is that a main source of revenue remains from the tournament credits. Unfortunately, without Villanova, the tournament credits are nowhere near as high as what have been paying out. Perhaps with Jay Wright's retirement, it allows a new program to compete for deep tournament runs and have another program represent the league. Or, perhaps we struggle getting E8/F4/NC programs annually. This will be a key area moving forward. Another, potentially new source of revenue, remains via expansion. Adding teams means adding content, and adding content also means adding sessions to the BET, which creates more revenues. Remember, the BET used to have 16 teams in it, offering eight different ticket sessions; with eleven teams, it is only five. I'd argue the financial value of keeping the double R/R format has run its course, and the need to expand is higher than ever. The league needs more content, more basketball strength and more opportunities to host games at MSG for the BET. I remain in the boat of adding Gonzaga (it's their travel, not our's), as it is an elite basketball brand that can provide additional viewership opportunities and a program that can compete for deep tournament runs (more tournament credits). If they are willing to travel, sign them up.

I also hope that since the current Big East has proven itself as an elite basketball conference, it moves forward signing short-term TV contract details. One of the biggest mistakes that history has shown to conferences is leagues signing long-term deals with a network (thus quickly outperforming them and being paid below market value). The AAC is guilty of this, as is the ACC. I'd even argue the SEC made a mistake with its previous CBS contract. The Big East should not sign a deal longer than 6 years with Fox, IMO.

[gtmoBlue]

Nice info all. Excellent breakdown of the recent/current scenarios GW11.
Agree we should / BE should only aim for a shortterm (6 yr.) deal to avoid the issues the ACC has
seen crop up recently. They are locked into a longterm cycle and are getting left behind. Similar to
what we did in 2013, although there is no direct comparison to the deals. Just that the BE was new, FS1 was
also new - we locked in for 12 anos for security...at a reduced price (below Fair Mkt Value- FMV). We thought
it was a great deal - when comparing it to former revenues - and it was. However, everyone else was getting
more than the$150K/game that we got. Live and learn.

I expect the BEast to get $8.8-10 Mill/yr per team this next contract. Using a rough estimate... (incl UConn & Zags)
12 teams @ $9M/yr = $108M/yr. 12 tms @ $10M/yr = $120M/Yr.
12 tms @ 6 years ($9M) = $648 Million. Essentially doubling the current contract value.
12 tms @ 6yrs ($10M) = $720 Million.

If the scenario changes and we add more teams??? 14 teams x $9M - $126M/Yr 14 Teams x $10M - $140M/Yr
14 Tms @ 6 yrs ($9M)= $756 M.
14 tms @ 6 yrs ($10M)= $840 M.

16 Team Scenario - 16 tms x $9M/Yr = 144M/Yr 16 Tms x $10M/Yr = $160M/Yr.
16 Tms @ 6 yrs ($9M) = $864 M.
16 tms @ 6 yrs ($10M) = $960 M.

[DudeAnon]

Wait a sec, these schools are getting paid? Won't that violate their amateurism?

[Xudash]

Good stuff, gents.

With UCONN on board and should Gonzaga join the conference, I would very much look forward to us getting to an $8.8mm to $10mm per year per school payout. At least that appears logical / reasonable.

If that were to happen, then that payout per school figure becomes the new bar, because I can't see any BE President or AD agreeing to take dilution from any new addition(s) beyond Gonzaga. Frankly, the media partner would have no reason to pitch the idea of dilutive content for the sake of growth anyway.

So, at that point, if it does occur, which schools would warrant a true up, while also fitting into the BE's "culture"? I'm not trying to turn this into an auxiliary expansion thread. Where I am headed with this is that we simply don't have to expand to match a number; we don't have to get to 16 because a couple goliath all sports conferences did so. All of the prior discussions about losing out on the POTENTIAL for increased NCAAT Units has for too long drowned out the reality of what happens when we take in more teams; the denominator for the distribution pool increases. If the math doesn't work or finds it hard to work, then it doesn't work.

BTW, a friend of mine is a Georgia Tech grad. He shared an article with me that was written by GT's former President. Let me put it this way: he is very happy to be GT's FORMER President, and he highlighted the fact of how few D1A athletic departments actually run in the black. While the SEC and B1G collect their respective windfalls, the leftovers of the P5, save for the ACC members for a period of time, and the near walking dead of the Group of 5 will have to find a way to slug out an all sports agenda. That won't be easy, and it certainly would seem to involve a significant reliance on student fee subsidies.

Notwithstanding the insane money SEC and B1G members will come to enjoy shortly, around $10mm per year for basketball only schools is not a bad day at the office. 11 or 12 members is a solid reset in the next couple of years. It will certainly be interesting to see how the Big East brand makes out in this department. Who knows what happens down the road from there.

[ArmyVet]

I am blown away by how much time must have been spent to accumulate and aggregate all of this information. Outstanding work by the author.

The money will never even become remotely close between us and the FBS schools, so the Big East simply needs to continue to be the premier "basketball first league".