[NU Sports] Pac 10 to invite 6 Big XII schools to join?

Fri Jun 4 15:03:27 CDT 2010

Note that your BTN revenue estimations are way off since there aren't even
close to as many cable subscribers as population in a given state (since
each household has more than 2 people, on average, and not all households
are cable subscribers).

BUT it's more than just about pure numbers.  Nebraska has a pretty strong
reputation in college football and has more of a national following than
just one within the state (although having the state all to themselves, like
Big Ten's Wisconsin, helps a lot in terms of local interest).  Basically,
expansion is about monopolizing all of the big football powers in the
northern midsection of the country (maybe more), expanding the footprint,
and being the major "northern" football conference for a long time.

I don't think that the Pac-10 rumors are true, just like those who said Big
Ten invites were sent to Pitt and later Mizzou were jumping the gun thanks
to a rumor on sports talk radio.  I think there's a chance that the dominoes
fall this summer, but a much bigger chance that it happens sometime in the
first half of 2011.  I guess we'll see who's ready to jump the gun first,
but the Big Ten likely has a head start and is doing it the right way by
studying it to death first.

Jonathan

On Fri, Jun 4, 2010 at 2:47 PM, Peter Warner <pcw at warnerpatents.com> wrote:

> I don't post often.  Given the length of what follows, you're probably
> happy
> that is the case.  If you want to skip the statistical back-up, just go
> down
> to the "So what's this mean" section.
>
> I don't understand what Nebraska or Mizzou would add to The Big Ten,
> especially when compared to the alternatives.
>
> US Census Bureau Populations estimates as of 7/09 for The Big Ten
> "footprint" states:
>                        July 1, 2009    July 1, 2030
> Illinois                12,910,409              13,432,892
> Indiana          6,423,113               6,810,108
> Iowa                     3,007,856               2,955,172
> Minnesota                5,266,214               6,306,130
> Michigan                 9,969,727              10,694,172
> Ohio                    11,542,645              11,550,528
> Pennsylvania    12,604,767              12,768,184
> Wisconsin                5,654,774               6,150,764
> Total                   67,379,505              70,667,950
> Average:                 8,422,438
>
> Nebraska pop: 1,796,619
> Nebraska has tradition and history in college football.  It has no future.
> Nebraska is basically an agriculture state with stagnant population of
> about
> 1.7 million people since 1980.  US Census Bureau's latest stats released in
> 2005 expect that to remain stagnant through 2030.
>
> Missouri pop: 5,987,580
> Missouri has less tradition and history in college football.  It has no
> future.  Missouri is cross between an agriculture state and a dying
> industrial Midwestern state.  Presumably, bordering on Illinois, much of
> the
> St. Louis market already follows The Big Ten. Missouri has gone from a
> population of about 5 million in 1980 to 6 million today.  US Census Bureau
> expects that to increase to only 6.5 million by 2030.
>
> New Jersey pop: 8,707,739
> Rutgers doesn't have much college football tradition or history.  It could
> have a future.  New Jersey is an industrial state with a population that
> has
> gone from about 7.3 million in 1980 to 8.7 million today.  US Census Bureau
> expects that to increase to 9.8 million by 2030.
>
> New York pop: 19,541,453
> Syracuse doesn't have much college football tradition or history.  It could
> have a future.  New York is an industrial/financial state with a population
> that has gone from about 17.8 million in 1980 to 19.5 million today.  US
> Census Bureau expects that 19.5 million to remain stagnant through 2030.
>
> Texas pop: 24,782,302
> Texas, A&M, & Tech have tradition, history and a future in college
> football.
> Texas is an oil/industrial state with a population that has gone from 14
> million in 1980 to 24.8 million today.  US Census Bureau expects that to
> increase to 33.3 million by 2030.
>
> US Census Bureau (latest available) estimates US population of 307 million
> with 129 million housing units.  Namely, the average number of persons per
> household is about 2.38.
>
> According to SNL Kagan (leading cable and satellite industry analyst),
> there
> are about 105 million households that subscribe to cable or satellite.
> That's a market penetration of about 81.4%.
>
> According to SNL Kagan, The Big Ten Network receives 88 cents per
> subscriber
> per month inside its eight-state footprint and 5 cents outside.
>
> SO WHAT'S THIS MEAN?
>
> Assuming The Big Ten Network will get 83 cents (88-5) more per subscriber
> if
> a state enters the footprint than it gets now, added revenue to The Big Ten
> will be the following from each potential new state:
>
> Nebraska:    (1,796,619 / 2.38) x 81.4% x $0.83 x 12 mos. = $  6,120,160 /
> year
> Missouri:    (5,987,580 / 2.38) x 81.4% x $0.83 x 12 mos. = $ 20,396,616 /
> year
> New Jersey:  (8,707,739 / 2.38) x 81.4% x $0.83 x 12 mos. = $ 29,662,803 /
> year
> New York:       (19,541,453 / 2.38) x 81.4% x $0.83 x 12 mos. = $
> 66,567,713
> / year
> Texas:  (19,541,453 / 2.38) x 81.4% x $0.83 x 12 mos. = $ 84,420,599 / year
>
> Note, this underestimates the financial impact because it is assumed that
> all subscribers in the current non-footprint state currently subscribe to
> The Big Ten Network.  That is not the case because in most of the current
> footprint states, BTN is part of a lower-tier subscription package.  In
> other states, it is an add-on that costs more.
>
> So, financially, NY and NJ would presently be marginally better than Texas
> for The Big Ten.  And, Rutgers & Syracuse are members of the AAU.  (To
> lock-up the NY-NJ market, I view Rutgers & Syracuse as a package deal.)
>
> Texas would be a close second, particularly given census projections.
> Problem: Politically, Texas may not be able to move without A&M and/or
> Tech.
> Academically, The Big Ten presidents might be able to stomach A&M, who is
> an
> AAU member, but probably not Tech, who is not an AAU member.  (Note,
> however: ND is not a member of the AAU either, but The Big Ten has
> previously offered it membership.)
>
> SO, what's best for Texas?  The Pac-10 will undoubtedly form its own
> network
> with financial arrangements similar to the BTN.
>
> Pac-10 footprint populations:
>                        July 1, 2009    July 1, 2030
> Arizona:                 6,595,778              10,712,397
> California:             36,961,664              46,444,861
> Oregon:          3,825,657               4,833,918
> Washington:              6,664,195               8,624,801
> Total                   54,047,294              70,615,977
>
> Namely, given projected populations over the next 20 yrs., there would be a
> slight financial disadvantage for Texas to join the Pac-10 over The Big
> Ten.
> That disadvantage would increase if The Big Ten picked-up NJ and NY as
> well.
>
> Even though I've provided a lot of stats, it doesn't mean I know what I'm
> talking about.  These are extrapolations, not interpolations.  And, there's
> always the public perceptions and politics.  Worst of all, we're dealing
> with college presidents who will be making the decisions rather than
> businessmen.
>
> However, if I had any say in it, I'd dump Nebraska, Missouri and the rest
> of
> the Big 12 - except the Texas schools - from the equation.  To do otherwise
> is a financial mistake and an admission by The Big Ten that it really isn't
> as great as it portends to be.
>
> In short, depending on how many schools The Big Ten adds and if I didn't
> have to worry about Texas politics, my additions would be in the following
> order:
>
> ND
> Texas
> Syracuse
> Rutgers
> Texas A&M
> Texas Tech
>
> Peter Warner
> T'74, KGSM'76, L'79
>
>
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