Big East looks for a big TV deal amid realignment
By Paul Doyle / The Hartford Courant
Tuesday, May 29, 2012 - Added 2 hours ago
A year ago, Big East Conference leaders walked away from a deal with ESPN that was worth more than $1 billion over nine years.
Since making that decision, the conference has lost marquee programs (Syracuse, West Virginia and Pittsburgh) and watched football power Texas Christian leave before it officially arrived. The conference responded by expanding far and wide, adding schools in various time zones in an effort to bolster its sagging football league.
And through all of the reshuffling, the TV money has flowed to other conferences. The Pac-12 signed a $3 billion deal with ESPN and Fox, the ACC recently locked up a $3.6 billion deal with ESPN and the Big 12 is said to be close to signing a $2.6 billion deal with the Bristol-based network.
So the question hangs over the Big East: Did the conference make a colossal mistake in not taking the money last year?
The answer depends on who you ask.
"Well, we continue to be amazed at the size of these deals," said sports economist David Carter, executive director of the Sports Business Institute at the University of Southern California. "What the landscape looked like a year or two ago has obviously changed dramatically. ... But clearly they are now in a relatively disadvantageous position based on the comings and goings in their conference."
But New York-based sports media consultant Lee Berke believes that history will show that the Big East was wise to wait.
"As tempting as it may have been, the marketplace has only gotten hotter in the interim," Berke said. "There are only a relatively fixed number of major college and professional sports out there, but there is an increasing number of potential outlets bidding for those properties. ... Honestly, I think there they are going to do substantially better. They’ve added some strong up-and-coming football schools in strong markets throughout the country. I think that’s going to pay off for them, with the caveat that they remain stable."
And, indeed, representatives from NBC Sports and Fox met with Big East officials in Florida at the annual conference meetings last week. ESPN was also present, and it seems that all three outlets have strong interest in the conference.
The current deal with ESPN is expiring and ESPN has exclusive negotiating rights starting in September. The challenge for the Big East between now and then is to keep the conference structure in place.
That might not be easy. Boise State, which will arrive as a football-only member in 2013, has reportedly wavered. Without the presence of the nationally ranked Broncos, the Big East is far less attractive as a football conference.
Also, Louisville has been open about its desire to join the Big 12. UConn and Rutgers are also considered candidates for the ACC.
So, if the football conference is at all diminished before the next deal is secure, the Big East will probably lose dollars. And with more schools added to the conference, the distribution of revenue will already be smaller for members.
"This is all driven by football," Carter said. "And even now, when you think about the Big East, you still think about basketball. So it’s already a challenge."
Said Berke: "Football is driving the bus with every college conference deal. Basketball is taken care of, it’s taken care of by the tournament. The regular season, basketball has some value, but it’s relatively speaking a commodity. There are literally thousands of college basketball games, men’s and women’s, out there. ... The bulk of your revenue, the bulk of your profitability, as a school or a conference, comes from football. That’s why it’s absolutely critical for the Big East to be seen as a vital football conference."
And despite what seems to be a hodgepodge of programs spanning the country, the Big East does offer something that media outlets covet — lots and lots of programming. The conference will eventually have 13 football schools with teams based in four times zone, providing a steady stream of games.
The teams might not be vying for BCS titles, but the Big East can offer a high level of football for viewers with an insatiable appetite for sports.
"It’s a footprint that’s national in scope and those are some good schools," said former Madison Square Garden president and sports television executive Bob Gutkowski, who runs the sports and entertainment division of New York-based Innovative Strategic Management. "So I think distributors are interested in their product. ... Look, they have machines that need programming 24 hours a day. The Big East is still a very good product."
Gutkowski also points out that the emergence of NBC Sports and Fox’s increased interest in adding college sports programming will only drive the price higher when negotiations get serious. So although the Big East might be declining, the market for programming could still result in more revenue for the conference.
"The landscape and competition has gotten so aggressive and there’s such a limitation of good, solid product," Gutkowski said. "The timing is right for [the Big East]."
At last week’s conference meetings, Big East administrators touted the conference’s national reach. The football division will add Temple (Philadelphia), SMU (Dallas), Central Florida (Orlando) and Navy (Washington and Baltimore), along with Houston, Memphis and San Diego State.
So the Big East will have a presence in the top 50 markets in the country, reaching 32 million households and 27 percent of television markets.
"That helps, but it’s a combination of markets and brands," Belke said. "Some of the opportunities you have, (networks) are able to essentially choose rising stars. When you’re able to move into Orlando or Houston, those programs could be rising stars. ... That really establishes your presence over the course of the next several years so they become bigger brands in major markets."
"That combination is promising and can be an advantage when you’re negotiating your television deals."
But Carter points out that while the Big East is losing strong brands with loyal alumni (such as Syracuse and Pittsburgh), the replacements don’t necessarily bring much excitement or history. SMU might be based in Dallas, Carter said, but Texas football fans won’t be choosing the Mustangs over Texas, Texas A&M or even TCU.
And schools such as SMU or Central Florida carry little weight nationally. That point was amplified in a CBSSports.com story Thursday, as an industry source speculated that the newly configured Big East might attract as little as $50 million a year from the next TV deal. Another source in the CBS story wondered how schools moving from the Mountain West and Conference USA would "suddenly be worth more in the Big East?"
"Market size is certainly very important, but when you don’t have a compelling group of brands that bring with them the tradition, it makes it really difficult to be able to tell that story," Carter said. "When you’re trying to sell the Big East after their major reconstruction, I think it become a little more difficult to get your hands around it because it doesn’t have the same look or feel that it’s had historically. That is a huge component relative to market size ... the winning tradition, the brand strength, the potential for compelling rivalries. It’s not there."
So from where Carter sits in Pac-12 country, the Big East might be hard-pressed to secure a TV deal that matches, say, the ACC’s deal with ESPN. But if more than one outlet is bidding, the Big East can certainly match or exceed the deal it bypassed last year.
Berke, who has worked with many college and professional teams and assisted the Yankees in launching the YES Network, has a more optimistic view for the Big East. He said that the Big East can ultimately fetch a rights fee in the range of the ACC’s $3.6 billion deal, but only if the conference remains intact by the fall.
There are only so many major college conferences in the mix and only so many professional sports leagues available to offer programming, Berke said.
"That’s a big advantage of the Big East," Berke said. "If you are a television distributor for college sports, you have relatively few options. So no matter how you want to configure these schools, there’s still major programs and there’s a relatively fixed amount of them. And you have more and more distributors and media platforms. It’s a matter of demand"
By Paul Doyle / The Hartford Courant
Tuesday, May 29, 2012 - Added 2 hours ago
A year ago, Big East Conference leaders walked away from a deal with ESPN that was worth more than $1 billion over nine years.
Since making that decision, the conference has lost marquee programs (Syracuse, West Virginia and Pittsburgh) and watched football power Texas Christian leave before it officially arrived. The conference responded by expanding far and wide, adding schools in various time zones in an effort to bolster its sagging football league.
And through all of the reshuffling, the TV money has flowed to other conferences. The Pac-12 signed a $3 billion deal with ESPN and Fox, the ACC recently locked up a $3.6 billion deal with ESPN and the Big 12 is said to be close to signing a $2.6 billion deal with the Bristol-based network.
So the question hangs over the Big East: Did the conference make a colossal mistake in not taking the money last year?
The answer depends on who you ask.
"Well, we continue to be amazed at the size of these deals," said sports economist David Carter, executive director of the Sports Business Institute at the University of Southern California. "What the landscape looked like a year or two ago has obviously changed dramatically. ... But clearly they are now in a relatively disadvantageous position based on the comings and goings in their conference."
But New York-based sports media consultant Lee Berke believes that history will show that the Big East was wise to wait.
"As tempting as it may have been, the marketplace has only gotten hotter in the interim," Berke said. "There are only a relatively fixed number of major college and professional sports out there, but there is an increasing number of potential outlets bidding for those properties. ... Honestly, I think there they are going to do substantially better. They’ve added some strong up-and-coming football schools in strong markets throughout the country. I think that’s going to pay off for them, with the caveat that they remain stable."
And, indeed, representatives from NBC Sports and Fox met with Big East officials in Florida at the annual conference meetings last week. ESPN was also present, and it seems that all three outlets have strong interest in the conference.
The current deal with ESPN is expiring and ESPN has exclusive negotiating rights starting in September. The challenge for the Big East between now and then is to keep the conference structure in place.
That might not be easy. Boise State, which will arrive as a football-only member in 2013, has reportedly wavered. Without the presence of the nationally ranked Broncos, the Big East is far less attractive as a football conference.
Also, Louisville has been open about its desire to join the Big 12. UConn and Rutgers are also considered candidates for the ACC.
So, if the football conference is at all diminished before the next deal is secure, the Big East will probably lose dollars. And with more schools added to the conference, the distribution of revenue will already be smaller for members.
"This is all driven by football," Carter said. "And even now, when you think about the Big East, you still think about basketball. So it’s already a challenge."
Said Berke: "Football is driving the bus with every college conference deal. Basketball is taken care of, it’s taken care of by the tournament. The regular season, basketball has some value, but it’s relatively speaking a commodity. There are literally thousands of college basketball games, men’s and women’s, out there. ... The bulk of your revenue, the bulk of your profitability, as a school or a conference, comes from football. That’s why it’s absolutely critical for the Big East to be seen as a vital football conference."
And despite what seems to be a hodgepodge of programs spanning the country, the Big East does offer something that media outlets covet — lots and lots of programming. The conference will eventually have 13 football schools with teams based in four times zone, providing a steady stream of games.
The teams might not be vying for BCS titles, but the Big East can offer a high level of football for viewers with an insatiable appetite for sports.
"It’s a footprint that’s national in scope and those are some good schools," said former Madison Square Garden president and sports television executive Bob Gutkowski, who runs the sports and entertainment division of New York-based Innovative Strategic Management. "So I think distributors are interested in their product. ... Look, they have machines that need programming 24 hours a day. The Big East is still a very good product."
Gutkowski also points out that the emergence of NBC Sports and Fox’s increased interest in adding college sports programming will only drive the price higher when negotiations get serious. So although the Big East might be declining, the market for programming could still result in more revenue for the conference.
"The landscape and competition has gotten so aggressive and there’s such a limitation of good, solid product," Gutkowski said. "The timing is right for [the Big East]."
At last week’s conference meetings, Big East administrators touted the conference’s national reach. The football division will add Temple (Philadelphia), SMU (Dallas), Central Florida (Orlando) and Navy (Washington and Baltimore), along with Houston, Memphis and San Diego State.
So the Big East will have a presence in the top 50 markets in the country, reaching 32 million households and 27 percent of television markets.
"That helps, but it’s a combination of markets and brands," Belke said. "Some of the opportunities you have, (networks) are able to essentially choose rising stars. When you’re able to move into Orlando or Houston, those programs could be rising stars. ... That really establishes your presence over the course of the next several years so they become bigger brands in major markets."
"That combination is promising and can be an advantage when you’re negotiating your television deals."
But Carter points out that while the Big East is losing strong brands with loyal alumni (such as Syracuse and Pittsburgh), the replacements don’t necessarily bring much excitement or history. SMU might be based in Dallas, Carter said, but Texas football fans won’t be choosing the Mustangs over Texas, Texas A&M or even TCU.
And schools such as SMU or Central Florida carry little weight nationally. That point was amplified in a CBSSports.com story Thursday, as an industry source speculated that the newly configured Big East might attract as little as $50 million a year from the next TV deal. Another source in the CBS story wondered how schools moving from the Mountain West and Conference USA would "suddenly be worth more in the Big East?"
"Market size is certainly very important, but when you don’t have a compelling group of brands that bring with them the tradition, it makes it really difficult to be able to tell that story," Carter said. "When you’re trying to sell the Big East after their major reconstruction, I think it become a little more difficult to get your hands around it because it doesn’t have the same look or feel that it’s had historically. That is a huge component relative to market size ... the winning tradition, the brand strength, the potential for compelling rivalries. It’s not there."
So from where Carter sits in Pac-12 country, the Big East might be hard-pressed to secure a TV deal that matches, say, the ACC’s deal with ESPN. But if more than one outlet is bidding, the Big East can certainly match or exceed the deal it bypassed last year.
Berke, who has worked with many college and professional teams and assisted the Yankees in launching the YES Network, has a more optimistic view for the Big East. He said that the Big East can ultimately fetch a rights fee in the range of the ACC’s $3.6 billion deal, but only if the conference remains intact by the fall.
There are only so many major college conferences in the mix and only so many professional sports leagues available to offer programming, Berke said.
"That’s a big advantage of the Big East," Berke said. "If you are a television distributor for college sports, you have relatively few options. So no matter how you want to configure these schools, there’s still major programs and there’s a relatively fixed amount of them. And you have more and more distributors and media platforms. It’s a matter of demand"