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Started By
Message
new team must add atleast 68 million to new tv contract to be viable.
Posted on 9/19/11 at 10:49 pm
Posted on 9/19/11 at 10:49 pm
I have repeatedly addressed future SEC network concerns, but lets forget that for a while.
lets say the sec keeps the contracts with espn and cbs. right now all sec teams make 17.3 million as of the lastest data we have. Assuming each school will need on average 2 million to make up for extra travel cost, any new school must add atleast 42(41.3 exactly) million to existing contracts just for existing members to break even.
This is not the magic number that we need to think about before adding any school though. Keep in mind this is just to break even. No existing school is gonna vote for expansion just to break even. To make expansion worth it the existing schools will prolly need to see atleast a 2million dollar profit. so thats another 24 million. So for any new school to be considered for the 14th spot they will need to add atleast 67.3 million per year to existing contracts to even make that school remotely viable.
This all assumes A&M takes care of themselves and also adds 2 million to cover expenses and 2 million profit. I know it wont take 4 million extra just to travel to 2 new locations but it will cost and this is a good round number. redo the math if you want using 1 million is travel cost, still an arse load of money.
If all this happens each school would still only be looking at taking home 25.3 million which is still only a measly 2.7 million per school more then the B1G. Also SEC would be looking at 2-4 million extra in operating cost(travel for all teams etc etc). This is why the SEC network will be so important in the future.
In the end I dont believe that WVU brings enough to the table to even have existing schools break even much less make a profit. Not sure Missouri does either at this point but atleast they bring in population for a future network, wvu doesnt even have that.
lets say the sec keeps the contracts with espn and cbs. right now all sec teams make 17.3 million as of the lastest data we have. Assuming each school will need on average 2 million to make up for extra travel cost, any new school must add atleast 42(41.3 exactly) million to existing contracts just for existing members to break even.
This is not the magic number that we need to think about before adding any school though. Keep in mind this is just to break even. No existing school is gonna vote for expansion just to break even. To make expansion worth it the existing schools will prolly need to see atleast a 2million dollar profit. so thats another 24 million. So for any new school to be considered for the 14th spot they will need to add atleast 67.3 million per year to existing contracts to even make that school remotely viable.
This all assumes A&M takes care of themselves and also adds 2 million to cover expenses and 2 million profit. I know it wont take 4 million extra just to travel to 2 new locations but it will cost and this is a good round number. redo the math if you want using 1 million is travel cost, still an arse load of money.
If all this happens each school would still only be looking at taking home 25.3 million which is still only a measly 2.7 million per school more then the B1G. Also SEC would be looking at 2-4 million extra in operating cost(travel for all teams etc etc). This is why the SEC network will be so important in the future.
In the end I dont believe that WVU brings enough to the table to even have existing schools break even much less make a profit. Not sure Missouri does either at this point but atleast they bring in population for a future network, wvu doesnt even have that.
4
Posted on 9/19/11 at 10:55 pm to lsu777
quote:
Assuming each school will need on average 2 million to make up for extra travel cost,
Why the frick would there be an extra 2Mil in travel costs?
Posted on 9/19/11 at 10:56 pm to lsu777
I mostly agree with the points you make. However, working on the assumption that the goal is 16 teams, I believe we should be trying to balance the ability to get into bigger markets and also not water down our product. Adding both Mizzou and UWV may work as a balance for those goals. One decent program with OK access to TVs, and one OK program with good access to TVs.
Posted on 9/19/11 at 10:59 pm to Indiana Tiger
its not just football that has to travel, but football has to pay for all the others. do you realize how much it cost to bring all sports from BR to WVU on a charter flight? not to mention hotel, food, flying equipment etc. shite cost a lot of money. even if it only cost 1 million a new school would still need to add 56 million per year.
do you believe WVU can do that? I dont.
do you believe WVU can do that? I dont.
Posted on 9/19/11 at 11:03 pm to jturn17
i also agree. If we go 16 WVU is a take if you cant get an NC school. WVU works perfect for everything but $$$. Everything else fits perfect.
I would be all for WVU even if existing members lost money right now if in the future WVU could get the SEC network premium royalties in maryland, DC, and Penn(even if just the pitt market). But after looking at the way the B1G network is setup and how they are paid I dont believe it would be possible, despite WVU having a large presence in the aforementioned areas.
population is what is really hurting WVU and there is nothing they can do about it.
I would be all for WVU even if existing members lost money right now if in the future WVU could get the SEC network premium royalties in maryland, DC, and Penn(even if just the pitt market). But after looking at the way the B1G network is setup and how they are paid I dont believe it would be possible, despite WVU having a large presence in the aforementioned areas.
population is what is really hurting WVU and there is nothing they can do about it.
Posted on 9/19/11 at 11:07 pm to lsu777
quote:
its not just football that has to travel, but football has to pay for all the others. do you realize how much it cost to bring all sports from BR to WVU on a charter flight? not to mention hotel, food, flying equipment etc. shite cost a lot of money. even if it only cost 1 million a new school would still need to add 56 million per year.
I don't give a shite about WVU one way or the other. You can't know additional costs without knowing the alternative game/event given up.
Posted on 9/19/11 at 11:11 pm to Indiana Tiger
any new school is going to present a lot more travel cost not just wvu. 1 million for all sports to travel in a year is a very very low number and 2 million is prolly a lot closer when talking about any of the names being thrown around except FSU.
No ways around it. the numbers dont lie. any new member will have to add a shite ton of money to existing contracts or add a large population base so the SEC eventually create a network and charge premium royalties in that state.
Its the only way expansion is worth it. hell IMO its not worth expanding for a measly extra 2-4 million a year in profit. A&M holds their end of the bargain up with their huge market size but WVU doesnt.
No ways around it. the numbers dont lie. any new member will have to add a shite ton of money to existing contracts or add a large population base so the SEC eventually create a network and charge premium royalties in that state.
Its the only way expansion is worth it. hell IMO its not worth expanding for a measly extra 2-4 million a year in profit. A&M holds their end of the bargain up with their huge market size but WVU doesnt.
Posted on 9/19/11 at 11:12 pm to lsu777
quote:
lets say the sec keeps the contracts with espn and cbs. right now all sec teams make 17.3 million as of the lastest data we have. Assuming each school will need on average 2 million to make up for extra travel cost, any new school must add atleast 42(41.3 exactly) million to existing contracts just for existing members to break even.
I don't follow these numbers. If each team is averaging 17.3 million, wouldn't a program merely have to add 17.3 million to existing contracts for each school to break even? That means that each school would still make 17.3 million. What am I missing?
ETA: Nevermind. I see that you conjured 24 million in expenses out of thin air.
This post was edited on 9/19/11 at 11:14 pm
Posted on 9/19/11 at 11:23 pm to lsu777
The articles you linked just said the amount per subscription is higher in the markets of the schools. Morgantown is located in Pittsburgh's television market. I don't understand why Pitt wouldn't be classified as part of the schools "market."
This post was edited on 9/19/11 at 11:26 pm
Posted on 9/19/11 at 11:25 pm to jturn17
quote:
The articles you linked just said the subscribers are higher in the markets of the schools. Morgantown is located in Pittsburgh's television market. I don't understand why it wouldn't be classified as part of the schools "market."
Don't Pittsburgh also have tons of Penn State and Pitt fans, so I'd count that more towards the instate schools.
Posted on 9/19/11 at 11:26 pm to Baloo
quote:
ETA: Nevermind. I see that you conjured 24 million in expenses out of thin air.
but he is quick to tell people he doesnt know to go take econ classes
Posted on 9/19/11 at 11:29 pm to lsu777
Agree on travel costs. Those costs add up quick, especially when the team MUST fly to get there.
quote:I could be wrong, but I don't see how any school outside of a handful of the top football/basketball programs that could generate this revenue bump.
any new school must add atleast 42(41.3 exactly) million to existing contracts just for existing members to break even.
Posted on 9/19/11 at 11:31 pm to lsu777
quote:
any new school is going to present a lot more travel cost not just wvu. 1 million for all sports to travel in a year is a very very low number and 2 million is prolly a lot closer when talking about any of the names being thrown around except FSU.
When you expand, you are not adding extra games/events, just different games/events. I would bet there are some cases where schools will actually save money vs the alternative. Without knowing the alternative, you can't know how much extra the costs are going to be, if any.
quote:
No ways around it. the numbers dont lie.
You mean your made up, pulled out of your arse numbers?
Posted on 9/19/11 at 11:32 pm to lsu777
double post,,,
This post was edited on 9/19/11 at 11:33 pm
Posted on 9/19/11 at 11:32 pm to Baloo
baloo what do you think added travel cost would be during a given year for schools like MSU, LSU and arky to WVU? if Im high I will readjust but it cost a lot to bring all those little sports up there when you consider hotel, charter flight, food, etc. you have to factor in all coaches, support staff, gettting equipment to and from.
I realize on years the football team doesnt play there it would be less but on years we do it would prolly be much more then 2 million.
let me know what a better number would be. and realize even if it was only 1 million in travel cost that is still only a profit of 3 million per existing school. that doesnt count A&M or travel added travel cost for WVU, etc.
even 3 million more per school sucks. hell raise ticket prices 10 dollars and tell fans that is the price of not expanding and you would make more then 3 million. not worth expanding for that IMO. I used 2 million in the numbers just to show how much they would actually need to bring in before it even comes close to being worth it.
I realize on years the football team doesnt play there it would be less but on years we do it would prolly be much more then 2 million.
let me know what a better number would be. and realize even if it was only 1 million in travel cost that is still only a profit of 3 million per existing school. that doesnt count A&M or travel added travel cost for WVU, etc.
even 3 million more per school sucks. hell raise ticket prices 10 dollars and tell fans that is the price of not expanding and you would make more then 3 million. not worth expanding for that IMO. I used 2 million in the numbers just to show how much they would actually need to bring in before it even comes close to being worth it.
Posted on 9/19/11 at 11:35 pm to Indiana Tiger
in basketball you play all teams. same with many other sports. If you think the SEC will change the scheduling for other sports well then yea it changes the number.
and I didnt make the numbers up. I did estimate them based on my best guesses. Tell me what you think would be a better number for added travel cost.
and nobody in the west is saving money in travel adding WVU.
and I didnt make the numbers up. I did estimate them based on my best guesses. Tell me what you think would be a better number for added travel cost.
and nobody in the west is saving money in travel adding WVU.
Posted on 9/19/11 at 11:37 pm to jturn17
from reading the big ten boards they said its states but i dont think they really have any schools thats are on borders with non b1g states so I dunno. Maybe WVU would bring in premium royalties for the pitt market, but I doubt it.
Posted on 9/19/11 at 11:39 pm to jcole4lsu
ok joe what do you think the travel cost would be? lmk and I will revise the numbers. 2 million is actually low IMO if the schedules stay as they are now. especially on years we would play them in football.
Posted on 9/19/11 at 11:39 pm to lsu777
But it's replacing a different game on the schedule. It's not much different than LSU playing a game against Kentucky. It's an extra 200-300 drive miles, which is just a little bit of extra fuel. Compared to the start up costs, it's a very little addition.
It's a bigger deal for non-football sports. Also, WVU was already traveling to Miami for games. So for them this might be somewhat of an improvement.
It's a bigger deal for non-football sports. Also, WVU was already traveling to Miami for games. So for them this might be somewhat of an improvement.
Posted on 9/19/11 at 11:39 pm to lsu777
quote:
in basketball you play all teams. same with many other sports. If you think the SEC will change the scheduling for other sports well then yea it changes the number.
Don't you think it's within the realm of possibility that they just might reduce the number of OOC games so that the total number of games is the same?
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