FanPost

Expansion Economics



Assuming his math is close to complete and correct, Stewart Mandel at Sports Illustrated makes a pretty solid case against the Big Ten expansion...

Contrary to what many assume, a Big Ten championship game would not necessarily be a cash cow. The SEC's event -- by far the most successful of its kind -- generated $14.3 million in shared revenue last season ($1.2 million per team). The ACC's, which has been a disappointing disaster, hovers closer to $5 million. Even if we assume the Big Ten's loot comes in closer to the SEC's, that's still a drop in the bucket compared to the league's two biggest revenue generators: regular-season television deals and BCS/bowl payouts.

The Big Ten does not publicly release revenue-sharing figures, but it's been reported that its rights deals with ABC/ESPN and the Big Ten Network generate about $212 million annually. (That's in addition to the league's direct profits from its jointly owned network.) Add in this season's two BCS berths ($22.3 million) and five other bowl berths (about $14 million), and we're talking a minimally estimated $248.3 million in shared revenue, or $22.6 million per team.

Therefore, any potential 12th team would have to add $22.6 million in "value" to renegotiated TV and bowl deals to prevent the others from losing money...

Two quibbles:

First, I think the $22.6 million is a bit inflated. As he notes, the Big Ten doesn't have two BCS teams every year, just most every year, and that's not a given going forward.

With regard to the post season, what this really means is that the Big Ten is much more likely to fill the Motor City Bowl slot every year and maybe also spin off an at-large bowl eligible team to go somewhere else. So, maybe that's an extra $2 million if the Motor City Bowl ups the payout. The only clear winner is George Perles.

Second, he doesn't include the basketball math, which is admittedly much smaller. Still, it might add something to the discussion on the margin if the addition is a school like Syracuse.

But that aside, in sum he says there's only two options that balance the books:

1. Notre Dame, which is unlikely for their own reasons, and even if it were not, would they want in on an equal footing and be willing to share?

2. Nebraska. He pulls this weird idea out of "I don't know where." I think it even less likely than Notre Dame. Nebraska has actual rivalries and history to give up by leaving.

But even taking it seriously... Does the state of Nebraska have enough TV sets to cause networks to cough up bigger contracts? Sure, Nebraska is a national name. But a national name worth another $15 million all by itself?

 


This is a FanPost, written by a member of the TOC community. It does not represent the official positions of The Only Colors, Inc.--largely because we have no official positions.

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