NY Times on the Fox contract

[Jet915]

Interesting piece from NY times stating that Fox might up the deal to 600 million for 12 teams (4.16 million per team). 500 million for 10 is the same.

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.

http://www.nytimes.com/2013/03/12/sports/ncaabasketball/fox-sports-and-new-big-east-are-teaming-up.html?_r=0

[yorost]

http://www.nytimes.com/2013/03/12/sport ... ng-up.html

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.

Seems counter to almost any other rumor, but I won't complain if it's true.

[admin]

So $50M per team? Not bad.

[QueRico]

How is it possible that everything new that comes out keeps sounding better & better?
I'm bouncing off the walls waiting for formal announcements so we'll finally put an end to all this conjecture & hearsay.
Maybe this latest will cement a 12 team conference starting July 1, 2013...maybe...

[Masterofreality]

I think that there will be no announcements until, at least, after the conference tournaments, and maybe not until after the Final 4.

No one wants to show up their former league partners as they walk out the door, or co-op the NCAA.

Patience. All in good time.

[BillEsq]

looking at some of the rumors of the numbers on excel and you get this...

10 @ 300 million 2,500,000 million per team per year
12 @ 400 million 2,777,777 million per team per year

10 @ 400 million 3,333,333 million per team per year
12 @ 500 million 3,472,222 million per team per year

10@ 500 million 4,166,666 million per team per year
12@ 600 million 4,166,666 million per team per year

If the New York times article is correct then the media deal price staging is no longer technically prohibitive of the 10 team conference. In all other forms its is still more financially sound to go to 12 teams. What could this mean? Maybe Fox truly has no interest in 12 v 10 teams in this case all you posters who are dreaming of a 10 team conference so you can have a round robins dreams maybe coming true. However, i caution the numbers are not all what they seem.

First not all of the TV money will go straight to the Teams. Some percentage will go to the conference for operations and management. I have no idea how much of a percentage that is (if anyone knows a post office employee with that sort of knowledge please pass it on). We do know that the C7 will also have start up fees and costs and will be taking a greater than potentially expected loss from the split with the OBE. There will also be exit fees of any potential incoming teams that will have to be paid. All of this money will need to pulled from the over all pot. The higher the percentage taken off the top by the league in costs the lower the amounts will be paid to each school. Oddly, the lower amounts paid to each school, the more likely there will be 12 teams.

So what does this mean? Personally i think this means that Fox wants the league to start 2013 with 12 teams. There is no advantage to Fox for having 10 teams, it looses advertising revenue, media markets, and inventory. Fox also cannot afford to wait until 2014 for the league to start/go to 12 teams, it cannot afford to have 2 stations devoid of content. It is willing to pay the league all of its start up costs, exit fees, operation, and management costs simply to get the ball rolling and avoid a year of dead air. These costs will not be cheap as we have seen and will be taken out of the overall media deal pie. So assuming these numbers are true, it shows a heavy interest in Fox in getting this league going, and my guess with 600 million $ on the board you can expect the teams Fox wants to be in the conference over other intangibles and for the conference to start with its full allotment of 12 teams in the 2013 season.

[xu95]

How is it possible that everything new that comes out keeps sounding better & better?
I'm bouncing off the walls waiting for formal announcements so we'll finally put an end to all this conjecture & hearsay.
Maybe this latest will cement a 12 team conference starting July 1, 2013...maybe...

I'm thinking the exact opposite. If the numbers are correct, there is no reason to ever expand past 10. Unless 12 gets you one extra team in the tourney each year, it will actually cost more to field 12 due to splitting the NCAA credits 12 ways vs 10.

[podcast411]

How is it possible that everything new that comes out keeps sounding better & better?
I'm bouncing off the walls waiting for formal announcements so we'll finally put an end to all this conjecture & hearsay.
Maybe this latest will cement a 12 team conference starting July 1, 2013...maybe...

I'm thinking the exact opposite. If the numbers are correct, there is no reason to ever expand past 10. Unless 12 gets you one extra team in the tourney each year, it will actually cost more to field 12 due to splitting the NCAA credits 12 ways vs 10.

Olympic sports - With only 10 teams - and not all teams playing all sports - it gets tough to have enough teams in each sport.

Two more teams means more options on the Olympic sports side.

And yes two more teams means the ability of two more teams in the NCAA tournament - and two more opportunities for late runs in the tournament. One of the first things they post up on the screen after all 68 teams are announced is how many teams from each conference made it in. Pretty hard for the new Big East to get 11 teams back in the Tourn when there are only 10 teams - just sayin.

If the money is the same - it seems going with 12 teams - increases the leagues visibility nationally - and that helps ensure a favorable TV contract when the current deal expires.

[BillEsq]

How is it possible that everything new that comes out keeps sounding better & better?
I'm bouncing off the walls waiting for formal announcements so we'll finally put an end to all this conjecture & hearsay.
Maybe this latest will cement a 12 team conference starting July 1, 2013...maybe...

I'm thinking the exact opposite. If the numbers are correct, there is no reason to ever expand past 10. Unless 12 gets you one extra team in the tourney each year, it will actually cost more to field 12 due to splitting the NCAA credits 12 ways vs 10.

NCAA units splits is pretty even. while you on face make more with 10 teams you loose out on potential to earn units with 12. While adding bad teams to get to twelve is obviously a bad idea, all the teams being reviewed have shown a consistent history of being in the top 100 RPI. This means increases the odds of additional teams qualifying both by having more teams able to qualify and by having more "quality opponents" who then push up the overall league RPI and then push bubble teams over the edge. However its always tricky with NCAA unit comparisons as your talking about purely potential revenue technically the C7+ is only guaranteed 1 bid each year and all other scenarios are based on historical comparisons and likely projections which is little better than false science in a world where you are constantly revolving players every 4 years.

I will add the NCAA unit split even at a 50/50 the difference is so small its not really worth comparing the 12 to 10 ratio.

[BillEsq]

Also remember the schools will not be getting 4 million a team.

You have to pay league management- a few million a year.
League operations and offices - depending on where located thousands a year...
Zebras for sports all sports even the non rev- maybe a million or so a year
running tournaments in non-rev sports- a about a million a year.
There is advertising and legal expenses...
And this is being simple and generous with the costs, i could go on and on.
(This also does not take into account that some of the contract may be paid upfront by Fox to cover the start up costs. This is highly likely the reason for the bump and if true would reduce the yearly totals for the media contract. That said as i have no numbers to base it on and i want to make this as simple as possible i did not even compute this possibility into my numbers.)

For simple math assuming the league takes 5 million off the top a year for operating expenses. you get per the NYT article $3,666,666 a year per team for 10 teams and $3,750,000 a year per team for 12 teams. or 90,000 a year more for 12. Plus the savings you get by being able to field proper Non-rev sports, plus the potential for earning more NCAA units. 12 still makes more financial sense.

Overall still a good take for the conference. I think if anything can really be obtained out of all this, it is that the schools will be making a significant amount of money in the deal and that Fox is the driving force and is willing to pay to get what it wants.