Last month, the first details of the last major Power 5 conference TV deal started to emerge, and the numbers were huge. The Big Ten reportedly sold just half of their TV rights for up to $500 million bucks, helping push the "Big 12 is falling behind" narrative even more, and underscoring how even within power conferences, there are haves, and have nots. The fallout from this contract might even impact BYU on some levels.
The Big Ten's deal isn't official yet -- we still don't know who's going to buy the other half of the rights, or for how much -- and it also isn't the last college football media rights deal before BYU goes to the marketplace after their ESPN contract expires (in either the 2018 or 2019 season, depending on whether ESPN picks up their option year or not). Conference USA has finalized a new TV deal, and it paints a very different picture from what the Big Ten is reportedly getting.
BYU isn't in a completely similar situation to Conference USA, but the fallout from this TV contract might make us fans, or writers, think about reevaluating some assumptions about how conference expansion might work. Those lessons seem especially germane, now that Big 12 administrators are about to meet again to discuss TV. Let's take a closer look.
Okay, quickly, tell me the basics of the Conference USA TV contract
CUSA will split their TV rights among four different partners. ESPN will get the rights to the conference championship game for the next two seasons, and will also carry five regular season games. CBS Sports will carry six regular season football games and six men's basketball games, as well as future basketball championships. The American Sports Network, a previous league partner, will cary at least 15 football games, with the potential to carry even more. ESPN3 or other streaming networks will pick up football games not otherwise on TV.
But perhaps the most notable addition is CUSA's 4th partner, beIN SPORTS, a channel that you almost certainly don't get unless you're an avid fan of international soccer and paid extra for it. beIN SPORTS, a spinoff of Al Jazeera, will carry 10 football games, and a slew of CUSA non-revenue sports, like baseball and soccer. CUSA will be the first american football games beIN broadcasts.
Fox Sports, a previous CUSA TV partner, pulled out of the bidding in this cycle.
So that means that CUSA football games will be on channel you have, one channel you might have, one channel you probably don't have if you're out of market, and one channel you really don't have unless you have like, all of the channels.
Okay, but at least the schools are getting paid right? I bet that new TV channel paid handsomely to break into college football
Nope. CUSA's TV deal is also notable because it is the first conference TV contract to go for less money than the previous one. Under the previous contract, member schools made around $1 million, but under the new contract, TV rights are expected to fall to between $300,000 to $400,000, per Harry Minium of the Virginian-Pilot. Even if the specific contract wording allows for some wiggle room in case a few programs over perform, schools are likely looking at seeing the annual TV checks cut in half, if not more.
Why would this happen?
There are two possible reasons.
The first is that this is a sign of a changing television industry, where cord-cutting and changing viewing habits have altered the profit model of TV channels, and reduced the appetite for major rights deals for less-than-premium content. The biggest brands are still worth crazy high fees, but for smaller events or programs, their marketplace value is shrinking. After all, if an entity like ESPN already has rights for say, Mountain West, or Sun Belt, or MAC (or heck, BYU) games that could be played in weeknight broadcasting windows, do they need to pony up big money for Conference USA?
How much stock you put into this rationale depends on how skeptical you are of the long term trajectory of current TV usage habits. I don't think I'm quite as alarmist as some of my peers might be, but I personally believe these trends had some chilling effect on rights negotiations. But it's probably not the primary factor.
What's the other possible reason?
Quick. No peeking. How many teams can you name in Conference USA?
Okay, well, there's Tulsa,
Nope. They're in The American.
Ah, that's right. Well, there's Tulane,
Nope. Also in the AAC.
Also in that conference.
Okay, this is harder than I thought
Exactly. Conference realignment has hurt Conference USA more than any other conference except the WAC. Southern Miss and UAB are the only current members who were still around back in the 1990s, and most of the conference membership joined in the last few years. Most of their most successful and marketable programs, like Houston, Memphis, East Carolina, and UCF, left to join The American.
Sounds like Conference USA just needs to add a few more programs with big TV markets then, right? That ought to bring in the money
That's actually exactly what they did. UTSA is in San Antonio. Florida International is in Miami. Old Dominion sits in Norfolk, a rapidly growing metro market without a major sports team. Charlotte is in, well, Charlotte. In fact, most of the new CUSA additions site either in, or near, larger TV markets. They have more programs in larger "markets" than many other conferences, including the Big 12.
So why did their TV contract go down?
Not having a specific TV network hurts your ability to monetize raw "markets", but the biggest reason is that nobody really cares about most of the Conference USA athletic programs right now. A huge chunk of conference membership consists of de facto expansion teams, schools new to the highest level of college football that haven't experienced any success or cultivated much of a fanbase yet.
Even the ones that have been around for a little while haven't really seen much success. Florida International has been an FBS program since 2004, and they've finished with a winning record just twice. FAU has only made two bowls in school history. North Texas has made one bowl game in a decade. UTEP hasn't won a bowl game since the 1960s. The list goes on.
There are a few programs still in the conference with decent sized fanbases, like Southern Miss and Marshall. But the conference traded more established programs for several with markets and "potential", and that hasn't paid off yet.
The Big Ten was able to add crappy teams in big markets and make a lot of money. Why couldn't CUSA do that? Has anybody else done it?
The B1G was absolutely able to do that. Powered by Maryland (bad at football, good at a few other sports) and Rutgers (good at, uh...women's soccer?), the Big Ten made a ton of money. I'd argue this has been successful on that front because of the distribution success of BTN, the massive fanbases and brands of each Big Ten school, and the fact that the Big Ten already had significant fanbases and reach in both the New York and Washington D.C. market. The additions of the two schools helped them grow where they already existed, helping make a lot of money.
The SEC can tell a similar story. The additions of Missouri and Texas A&M have been up and down (but mostly up) as far as on the field success is concerned, but their large fanbases, access to good sized markets, and the fanatical devotion and size of the other fanbases led the move to be financially successful.
That's less of the case for the Pac-12, where despite additions of large universities in growing markets (Salt Lake and the Denver metro area), demand has not increased enough to overcome carriage problems with the Pac-12 Network, leading to dramatically diminished TV payouts. Obviously the Pac-12 Network has some unique challenges unrelated to just market access, but it is clear that while expansion may have made the league more competitive, it didn't lead to a financial bonanza.
So what's the takeaway here?
I think that any conference hoping to expand themselves to television riches based primarily on TV market access could be making a mistake if they're not also valuing how strong the program itself is, where the rest of the conference's fans are located, their own network distribution, and other factors. I also think that as fans, bloggers, etc, we should be a little hesitant to wholesale apply the assumptions from the last round of realignment to this round, seeing as the TV industry has changed, perhaps a lot.
Conference USA made a bet that some of their smaller programs would mature into larger fanbases, and that thanks to large market access, it will bring them stability and acclaim. That might happen 20 years from now. But for this TV deal, it's clear they are taking a step back (playing football on beIN is a good indicator of that). Who knows what the next twenty years will look like?
Big 12 administrators will spend next week discussing their TV network and expansion options. They might do well to keep that in mind too.