The Big Ten Network: A Giant Miscalculation
by PJS on Sep 24, 2008 1:00 PM CDT
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PrintWe've seen the promotional advertisements. We've seen Tubby Smith and every other Big Ten coach applaud the supposed benefits of the conference having its own network. We've heard of the exposure the network will supposedly provide the conference to lure recruits.
It's all bogus. The Big Ten Network was a giant mistake. Tom Izzo has been quoted as calling the network a public relations nightmare. It's more than that.
Forget the fact that many cable companies have refused to cave and offer the BTN as part of expanded basic packages. BTN executives point to deals struck this year with cable companies like Comcast and suggest that now two-thirds of viewers in Big Ten Country receive the channel.
But what the Big Ten has done, is give the SEC and other major conferences a leverage boost at the negotiating table. Here's SI's Stewart Mandel:
At the same time the Big Ten announced its new venture in 2006, it also signed a reported 10-year, $1 billion extension with ABC/ESPN. The SEC, which last year earned $63.6 million from football and basketball television revenue, is expected to reap a far bigger windfall from its current negotiations. Rarely has a conference sat at a bargaining table from such a position of power.
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The question SEC officials have to ask themselves is, are the potential benefits of a network worth bearing those complications? Their counterparts at the Big Ten are only now starting to find out.
I think we know how worked out for the SEC. They got a 15 year deal worth about $55 million per year from CBS and a 15 year deal worth 2.25 billion from ESPN. You've probably seen the impacts of this already this season. On the high-profile networks, the SEC has enjoyed prime-time coverage. While Big Ten teams are somewhat hidden on the BTN--where, again, just two-thirds of Big Ten homes can watch them--the SEC juggernaut is getting the national exposure.
From the Atlanta Journal-Constitution, we know that the deal with ESPN comes with the network's agreement to help brand the conference.
No other conference has that kind of branding on ESPN: Not the Big Ten, not the Big 12, and not the ACC. The SEC will be able to walk into a living room and say that every conference game will either be on CBS or one of the ESPN platforms. And if the SEC is recruiting a player outside the nine-state area, the coaches can tell parents that the games will be on the dish as part of ESPN’s Game Plan
And this isn't to say there aren't some nice beneifts of the BTN. It's certainly great to have one-stop shopping for Big Ten highlights and programming. It's nice, albeit a ratings and financial loser, to have a place to watch non-revenue sports. I enjoyed the ongoing feature last year on Tubby Smith's Gophers.
But I'd much prefer to be in the SEC's shoes. Again, from the AJC:
2. The SEC no longer needs its own network: I talked to commissioner Mike Slive late Monday and he told me he was once convinced that an SEC network was the way to go. “I felt that way for about a year because I thought it was the only way we could get everything we wanted in terms of exposure and revenue,” said Slive, a former attorney and judge.
This new deal eliminates the need for the SEC to invest in its own network because ESPN is going to do it for them.
When the SEC representatives sat down to negotiate with ESPN they brought a laundry list of things they felt their own network could do for them. “Every time we would bring up an issue of something that we wanted, ESPN would come back to us and say ‘We can do that for you,’” Slive said. So the SEC gets the benefits of its own network without any of the risk. It will use ESPN’s massive infrastructure instead of having to build its own. “If we start our own network you’re looking at a 20-year commitment at least,” said Slive.
And here’s a question worth pondering. What if the Big Ten had asked ESPN to do this same deal? Would there be a Big Ten Network today?
So, the next time you hear a Big Ten coach exalting the benefits of the Big Ten Network, remember that the conference took a giant risk in going off on its own and the SEC took that leverage and got much, much more from two major television networks. Years down the line the BTN could be the boon for the conference executives expected. But for now, it looks like a giant miscalculation.
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I'm confused...
If I’m not mistaken, almost all Big Ten football games were on the ESPN family of networks prior to the advent of the BTN (except for road games … those are left up to the TV deals of the hosting school/conference). I’m not sure why, beyond the ‘branding’ of the conference by ESPN, the SEC holds such a drastic advantage negotiating with the likes of ABC/ESPN. The Big Ten is only one fewer conference to bid against … what about the Pac-10, ACC, Big East and Big XII? Those conferences are still on the market, right? (I know that the Pac-10 and Big XII have deals w/ FOX networks).
What you miss here in is that each Big Ten school received over $7 million cash for the revenues of the 2007-08 academic year. Keep in mind, this revenue was generated before the big deals with the major cable carriers were struck over the summer…
Also, BTN is 100% devoted to Big Ten athletics that includes coverage of Olympic sports that rival conferences can only dream about. ESPN has to divide its resources between Sunday, Monday and Wedesday Night Baseball, NBA, Monday Night Football and other commitments. Regardless of the details of the deal w/ the SEC, there are still only so many hours in the day.
Also, forgive my ignorance, but didn’t the SEC try to launch their own network a few years ago but couldn’t make it work? If there was such an attempt, is that not evidence enough that the SEC prefers to create their own stuff? I feel like this angle by the Atlanta paper and SI is simply piggybacking on the SEC’s recent football success.
It still comes down to “Win baby, win.” If Big Ten programs are successful in the revenue sports, I think the revenue will follow – not vica-versa. When it comes down to it, major networks will be forced to air Big Ten programs that are playing @ elite levels.
My point is ...
…. that because of less visibility due to being on the BTN, which is not as widely dispersed as ESPN/CBS, the Big Ten Conference put itself at a competitive disadvantage. You write “If Big Ten programs are successful in the revenue sports ….” I agree with that, but I think the conference is now less visible than it was before BTN. Revuenue programs need recruits. Recruits want to be seen. Right now, BTN is niche programming. ESPN/CBS are mainstream.
And you’re right, the individual schools and conference have brought in some nice money. But I think longterm the conference will regret this move. I might be wrong. I hope I am.
Gentlemen, you can't fight in here! This is the War Room.
Three of four games have been on BTN…I have seen 1/2 of a game. Mediacom, which is based out of Iowa, had the second half of the Northern Illinois game on. The past two weeks there has been nothing (its ESPN News).
The deal was signed four weeks ago and BTN still isn’t on their package yet. I hate Mediacom and BTN!
I have to go to a bar Saturday to watch the game.
BTN = Bad
I agree with PJS on this one. I really think the Big 11 and other sports entities underestimate just how hard it is to start a network.
First, you have to get distribution—which we all have seen is MUCH easier said than done. Secondly, the infrastructure is very expensive. You have to hire your own people from the analysts to all the people behind the scenes to accountants. Third—do you really think the BTN is covering its expenses with commercials during track and field events? I doubt it. The SEC is just pocketing cash without the headache or the risk all the while getting significant exposure and brand equity which you can’t put a price on.
Lastly, I think the network is seen as a greedy ploy by the conference. I think the general public blames the Big 11 more than the cable companies in the disputes.
Big 11
Can you please stop calling it that? There is no such thing.
thank you.
Sincerely,
Football & Sports fans everywhere
On greed and risk
I’m no expert, but I’m pretty sure that ‘risk’ is inherent whenever there is something to be gained. Without risk, nothing can be gained. Whether or not a network is a better option could be debated, but to say that the SEC has a competitive advantage because of their lack of risk in dealing directly with ESPN/ABS I think is misdirected.
Also – this idea of the BTN as a result of the conference’s ‘greed’ is interesting. I suppose if you wanted to, you could say that Universities’ athletic departments expanding to create departments that work to collect donations from former letterwinners is ‘greedy.’ I’m having trouble digesting an argument that points to the SEC’s monetary gains on one hand yet points to the BTN as an outcropping of the Big Ten’s greed on the same token … you just can’t have it both ways.
I’m not saying the BTN is perfect or is the way to go … I just think how it’s been attacked in this forum is a bit short sided.
You are mixing apples and oranges.
This ESPN deal does not mean that every SEC game is going to be nationally televised on one of the widely available networks. It means that every SEC game will be on either CBS, ESPN, ESPN2, ESPN Classic, ESPN syndicated regional broadcast/Gameplan, or, based on the use of “platform,” I’m guessing that ESPN360 will be an option.
Here’s the key point you are missing, PJS: the Big Ten has no fewer games on CBS (hoops), ABC (football), or the ESPNs (both) than it had in 2006-07. The games that are on the BTN are games that before 2007 were either syndicated on ESPN regional or were not televised at all. It’s not as if Ohio State-Michigan is going to be on the BTN anytime soon. Yes, if you compare the BTN games to the CBS game of the week, or the ESPN primetime game, of course there is a difference in exposure. But those are not the proper comparisons. The proper comparison is to compare Minnesota-Northwestern on the BTN to Mississippi State-Vanderbilt on ESPN regional. The BTN is available nationally on DirecTV (as part of the basic package) or on the sports tier for major cable companies. ESPN regional is on local TV in the southeast and available for pay elsewhere. That seems like a wash to me.
Yes, the SEC got a lucrative deal. That doesn’t mean the Big Ten deal is bad. Obviously, after watching the Big Ten’s actions, the SEC still was willing to form its own network if ESPN/CBS weren’t giving enough money. And the TV networks didn’t view the SEC’s position as an empty threat. It’s also worth noting that the BTN isn’t a student-run enterprise dreamed up in Jim Delany’s basement: Fox has a major ownership stake in the venture and wouldn’t have done it without doing some homework. It’s not obvious to me that the SEC is in a dramatically better position—not by a longshot.
by JohnM (Hoosier Report) on Sep 25, 2008 4:07 PM CDT reply actions
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I don’t know if it’s apples and oranges. Two conferences wanted a home. The Big Ten built it’s own network. The SEC got everything the Big Ten gambled to get on its own network—sans perhaps Olympic sports—without the risk. The SEC contract calls for ESPN/CBS to brand, or market the conference. To have major, established networks like this do that type of work for you is invaluable from a fiscal standpoint but more importantly in terms of visibility.
You’re right that many lower-tier SEC games will be on something other than ESPN/CBS—though I don’t know if ESPN360 is part of that. But the sell in recruits living rooms is much easier for the SEC. If you’re a recruits parent, and you can’t travel to see him play, would you feel more comfortable/excited about everyone of his games being on ESPN/CBS or on a network that is still only in 2/3 of homes in the Big Ten market.
And I believe that will have an impact on recruiting, which in turn will have an impact on success on the playing surface, which in turn will have an impact on revenues.
Gentlemen, you can't fight in here! This is the War Room.
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