TV Markets

[Mufflers]

It seems like no overlap in TV markets are an unquestioned positive.  I don't think it should be considered so clear cut. 

Isn't it good to have geographic rivalries within your league?  Wouldn't people in Philly care more about the league if both Villanova and St. Joseph's were in it?  Wouldn't people in Cincinnati care more if both Xavier and Dayton were in it?  Is it a negative that Marquette is near Chicago and gets press in Chicago and brings lots of fans to Rosemont?

Wouldn't it also cut down on the travel costs for all sports?  Also consider than Philly and Cincinnati are hubs for US Air and Delta.  Would this make for cheaper flights?

It seems like people should focus less on markets and more on fan bases.  What is the current fan base, and what is the potential fan base?  TV ratings probably correlate more to fan bases and team quality than how many people live in the city, right?

[Tugg Speedman]

If Nova and St Joe's are in the same conference, the conference gets the same TV revenue as if only Nova was in the conference.  With Nova only, everyone gets more money.  With Nova and St. Joes, everyone gets less money. 

[chapman]

It's not about whether people  "care" vs. "care more".  The conference's games are on tv with one care = one team.  Two teams may add some viewers, but it doesn't add any more coverage.  Quality helps - a good Villanova team is a better sell than a bad one.  But doubling up by adding St. Joe's is far lesser return vs. penetrating Omaha or St. Louis.

[Tugg Speedman]

Two teams in one market also hurt recruiting.  Look at how many recruits list multiple schools in the same conference as their final teams.  Many recruits will think of themselves as a "Big East Player."  If Nova is after a high recruit from Philly that wants to play in the Big East, they get the hometown advantage.  Just like MU gets with Looney and Stone.  So Nova does not want to compete with St. Joe's.

Turn it around, if St. Joes and Butler are potential schools for the new conference, why not UWM?  What would be the benefit to adding UWM for MU and the new confernece? 

[Mufflers]

If Nova and St Joe's are in the same conference, the conference gets the same TV revenue as if only Nova was in the conference.  With Nova only, everyone gets more money.  With Nova and St. Joes, everyone gets less money. 

I disagree with this statement.  This is the traditional wisdom that I don't think is logical.  TV revenue is a function of viewership, not number of people in a city.  If Villanova and St. Joe's have independent fan bases, the new conference should get the incremental revenue related to St. Joe's fan base.  In addition, there would be more buzz about the league in a significantly larger city than St. Louis.

Related, I thought the Big Ten made a bad long term move by adding Rutgers to add New York City.  I live in New York City and don't know any Rutgers fans.  The argument is made that the Big Ten has a lot of alumni in NYC.  But couldn't you just strike a deal for distribution in NYC without adding Rutgers?

My argument isn't that we should add St. Joe's.  My argument is that we should understand what creates revenue and that size of the market doesn't have the 1:1 correlation people seem to assume.

[Chili]

I disagree with this statement.  This is the traditional wisdom that I don't think is logical.  TV revenue is a function of viewership, not number of people in a city.  If Villanova and St. Joe's have independent fan bases, the new conference should get the incremental revenue related to St. Joe's fan base.  In addition, there would be more buzz about the league in a significantly larger city than St. Louis.

Related, I thought the Big Ten made a bad long term move by adding Rutgers to add New York City.  I live in New York City and don't know any Rutgers fans.  The argument is made that the Big Ten has a lot of alumni in NYC.  But couldn't you just strike a deal for distribution in NYC without adding Rutgers?

My argument isn't that we should add St. Joe's.  My argument is that we should understand what creates revenue and that size of the market doesn't have the 1:1 correlation people seem to assume.

That is the old model of thinking that isn't true any more. It's all about market size and penetration / distribution. Also, having 2 schools in one market it takes away a many recruiting advantages. If your league has a presence in a market conventional wisdom leads you to believe it's easier to recruit in that market.

[Tugg Speedman]

The B1G has a different model.  They have their own TV network, the BTN.  They make money by having their network on a basic tier on cable and get so much a month for every TV, weather they watch it or not.  I thought I read it was 80 cents a month.

Cable operators will tell you that their is only one thing that cable viewers demand in real-time and on basic cable and will switch providers if they do not have it ... sports.  If the NYC and DC TV markets have enough alumni and fans of Rutgers and Maryland, they will demand B1G from their cable operators, and if they do not get it, they will switch providers.  So all the cable providers in NYC and DC will be under pressure to add the BTN and everyone will pay for the BTN, making the B1G millions more a year.

This is why the Dodgers were sold for nearly $2 billion.  They have a TV network they broadcast their games.  Dodger fans, even though they are a small percentage of all TV viewers in LA, are so passionate and important that they demand every cable operator in LA carry the dodgers network.  The Dodgers charge $10/month for every TV that has its network, again even though most TVs never watch the Dodgers.  This is what makes the Dodgers three times more valuable that the Cubs.

[Mufflers]

The B1G has a different model.  They have their own TV network, the BTN.  They make money by having their network on a basic tier on cable and get so much a month for every TV, weather they watch it or not.  I thought I read it was 80 cents a month.

Cable operators will tell you that their is only one thing that cable viewers demand in real-time and on basic cable and will switch providers if they do not have it ... sports.  If the NYC and DC TV markets have enough alumni and fans of Rutgers and Maryland, they will demand B1G from their cable operators, and if they do not get it, they will switch providers.  So all the cable providers in NYC and DC will be under pressure to add the BTN and everyone will pay for the BTN, making the B1G millions more a year.

This is why the Dodgers were sold for nearly $2 billion.  They have a TV network they broadcast their games.  Dodger fans, even though they are a small percentage of all TV viewers in LA, are so passionate and important that they demand every cable operator in LA carry the dodgers network.  The Dodgers charge $10/month for every TV that has its network, again even though most TVs never watch the Dodgers.  This is what makes the Dodgers three times more valuable that the Cubs.

By the same logic, why don't Big Ten alumni demand the Big Ten network in NYC independent of Rutgers?  Why would it take the addition of a team with very few fans to penetrate the New York market?

[Mufflers]

That is the old model of thinking that isn't true any more. It's all about market size and penetration / distribution. Also, having 2 schools in one market it takes away a many recruiting advantages. If your league has a presence in a market conventional wisdom leads you to believe it's easier to recruit in that market.

I agree with your point about recruiting.

As a company advertising during a game, I'd rather advertise during a game watched by 50,000 viewers in a city of 1,000,000 people than during a game watched by 10,000 viewers in a city of 5,000,000 people.  Help me understand why advertising during a game watched by 10,000 viewers in a city of 5,000,000 is the better business decision.

[ChicosBailBonds]

By the same logic, why don't Big Ten alumni demand the Big Ten network in NYC independent of Rutgers?  Why would it take the addition of a team with very few fans to penetrate the New York market?

A lot of confusion here and mixing of issues.  You all make good points, you're all right to an extent but also there are some other details that need explaining.

The Big Ten Network, Pac 12 Network, the former Mtn West Network...those are different animals and we need to treat them differently to understand them.  

In the case of the Big Ten Network, they are their own channel and get carriage fees from television providers.  The amount of those fees is dynamic based on their core territories.  As an example, in the Big Ten states they will get a lot more per subscriber then in a non core territory.  Let's keep the math simple and say they get $1.00 per subscriber per month from the television distributors in the core territories.  In the non core territories (where a school doesn't exist..California, New York, Texas, etc), they may receive $0.15 per subscriber per month.  They may also be relegated to a sports tier, further reducing the number of eyeballs.  Both amounts above are illustrative only.

So when the Big Ten goes and grabs Rutgers or Maryland, it doesn't matter if there is 1 Rutgers fan watching or 10 million in the NY area.  This is because that area now becomes a "core territory" and thus they are going to open up a huge population paying them $1.00 a month rather than $0.15 a month, whether the people actually watch or not.  That's their strategy, and a smart one. It's also unique to the fact they own their network.

Now, those of us on this side of the table when that deal comes up will tell the Big Ten they are full of crap and no way are we going to give you that much money in that newly added core territory for a school very few watch.  Then the fireworks start, the Big Ten says they'll pull the channel down throughout the USA, Ohio State fans in Columbus get furious, Illinois fans in Chicago, etc, etc....on the flip side, the network gets hurt also because in actuality not a ton of people switch during these disputes yet they miss out on a ton of revenue when all those channels are off the air.  


This is totally different than the situation when someone like ESPN or NBC Sports or SNY owns your rights.  In those cases, adding a second school in Philadelphia (to use the example people are going with) might add some incremental value, but the question is how much.  How many people from Philly are going to watch St. Joe's that aren't already watching Villanova?  What is that incrementality?  Ultimately, what does it mean for ESPN, NBC Sports, SNY, etc...can they leverage that into higher subscription fees from cable, satellite, telco (not if they are in contract)...more importantly can they leverage more advertising revenue?


One thing is virtually certain, we aren't going to be starting our own network because if we do, I can tell you many on my side of the business aren't going to carry it...just as many of us right now are not carrying the Pac 12 network for the same reason.  The costs don't justify the return.  As such, we're going into a situation where someone is going to buy our rights (ESPN, NBC Sports Channel, etc) and we need a conference that is attractive to that purchaser so they can recoup and make money on what they are buying.

[Tugg Speedman]

By the same logic, why don't Big Ten alumni demand the Big Ten network in NYC independent of Rutgers?  Why would it take the addition of a team with very few fans to penetrate the New York market?

Rutgers is a huge school ... it has 56,000 students (per its Wiki) and hundreds of thousands of Alumni on the NYC area.  I would bet Rutgers has more Alumni in the NYC TV market than all the B1G schools combined.

And the size of Rutgers, it alumni base and its TV market are why it is in the B1G.  Academics and recent success on the field where not that important in this decision.

[Tugg Speedman]

I agree with your point about recruiting.

As a company advertising during a game, I'd rather advertise during a game watched by 50,000 viewers in a city of 1,000,000 people than during a game watched by 10,000 viewers in a city of 5,000,000 people.  Help me understand why advertising during a game watched by 10,000 viewers in a city of 5,000,000 is the better business decision.

Because the networks agree they cannot measure viewers accurately anymore.  Advertisers know this so they buy markets and penetration.  What TV markets are you in and how many TV sets can get that channel.

[Tugg Speedman]

CBB description is right on ...

To add to it, recall that a few years ago the BTN was not on Comcast in Chicago.  They refused to carry it (because of the fees it would cost) and pay $1/month for every TV they have in the Chicago Market (which is many millions).  B1G fans switched to cable operators that did carry the BTN (such as RCN) and screamed and screamed and screamed until Comcast relented.  Now everyone in Chicago pays $1/month a for the BTN whether they ever watched or even know they have it.

Versus wanted to be on Basic so they overpaid for the NHL and it forced cable providers to put them on basic.  They means $x/month in fees for them.

Same thing with the NFL network, to force their network on 90 million TVs across the country, they broadcast Thursday night games and get $y/month times 90 million.

Next will be the NBA and MLB networks.  The Tennis channel may try with Wimbledon and the US Open.  Ditto the Golf Channel and all the other sports networks.

Along the way CBB and his side of the table will fight this.  If they lose, we will all be paying a lot more for cable.

Again because the B1G owns the BTN, they have a leg up on everyone else and they are minting money compared to the other conferences and how good they are does not matter.

[ChicosBailBonds]

Because the networks agree that cannot measure viewers accurately anymore.  Advertisers know this so they buy markets and penetration.  What TV markets are you in and how many TV sets can get that channel.

I don't know about that, the rates advertisers pay is still tethered to ratings by and large.  How many GRPs a buyer purchases is based on ratings points.  Certainly some buyers go other routes, but I think you are stretching your comments there significantly, at least when it comes to television ad buying.  Ratings are still at the absolute core.

[Tugg Speedman]

I don't know about that, the rates advertisers pay is still tethered to ratings by and large.  How many GRPs a buyer purchases is based on ratings points.  Certainly some buyers go other routes, but I think you are stretching your comments there significantly, at least when it comes to television ad buying.  Ratings are still at the absolute core.

I know a little about this when it comes to Cable News (Fox News, CNBC, CNN, etc) and they argue that their ratings are not accurate as they are on in bars and airports during the day across the country.  Also their demographics matter.  CNBC gets the highest cable news advertising dollars because their watchers make more two or three times the income of the others channels.  So CNN might have four times the eyeballs but CNBC makes 4 times more per commercial.

So yes they still have ratings but it is not as simple as counting TV sets turned on.  

[ChicosBailBonds]

Rutgers is a huge school ... it has 56,000 students (per its Wiki) and hundreds of thousands of Alumni on the NYC area.  I would bet Rutgers has more Alumni in the NYC TV market than all the B1G schools combined.

And the size of Rutgers, it alumni base and its TV market are why it is in the B1G.  Academics and recent success on the field where not that important in this decision.

Most likely, yes, because of sheer volume.  Same could be said of how many UW-milwaukee graduates there are in Wisconsin, but does that translate into anything in TV?

However, if you look at the alumni associations of the Big Ten in NYC, they aren't small.  IU sends me this stuff all the time.  In many cases, the largest or second largest alumni base for a Big Ten school outside of their home state is NYC or Chicago. 

Ohio State's 2nd largest alumni cohort outside Ohio is NYC.
Penn State's has NYC 1st
Michigan...NYC 2nd
Michigan State...NYC 2nd
Etc

You add all of those up, and there are some strong pockets of Big Ten graduates in NYC.

[Marcus92]

Using the Big Ten and its TV network as a point of comparison is problematic because of the size of its alumni base.

Private universities like Marquette and Georgetown compete on a different level than the largest public schools. There are more Big Ten alumni nationally than any other conference — more than 4 million. And as state institutions, their fan base easily extends beyond those who actually went to school there.

The current nine-state Big Ten region accounts for about 70 million people. Pure guesswork here, but I wouldn't be surprised if there's a market of 10-20 million interested in watching Big Ten football. That's a very attractive base for cable providers and advertisers. Adding the New York and Maryland/Washington D.C. markets will only make it more enticing.

[Avenue Commons]

According to the Dayton board (which seems like a solid forum), there are some differences between the Cincy and Dayton markets.

I want them both. I want a stranglehold on the best basketball programs left in ACC or Big Ten territory.

Dayton has unfairly gotten flack on this board. That's a very good program with solid facilities and a great fan base.

[🏀]

According to the Dayton board (which seems like a solid forum), there are some differences between the Cincy and Dayton markets.

I want them both. I want a stranglehold on the best basketball programs left in ACC or Big Ten territory.

Dayton has unfairly gotten flack on this board. That's a very good program with solid facilities and a great fan base.

You mean the discussion between the northern and southern bits of counties? Or where one poster claimed an market Dayton's because his daughter has 30+ friends there?

No Dayton, mostly because of their fans.

[Mufflers]

I agree on the large public institutions versus the small private institutions point.  Large private institutions are able to get a great alumni following, but it seems like people who aren't connected to Marquette don't tune into their games.  Non-connected people are often more likely to become Badgers basketball fans because they are within the scope of what the Badgers represent (the State of Wisconsin).  That issue makes fan bases more relevant than markets for small private institutions, in my opinion.

Related, I don't think Dayton and Xavier would be less than the sum of their parts.  I think their fan bases will follow them and some additional people in the area may start following because multiple teams in the area are in a really good basketball conference.

[WarriorDoc]

According to the Dayton board (which seems like a solid forum), there are some differences between the Cincy and Dayton markets.

I want them both. I want a stranglehold on the best basketball programs left in ACC or Big Ten territory.

Dayton has unfairly gotten flack on this board. That's a very good program with solid facilities and a great fan base.

Completely disagree, they have gotten a completely fair amount of flack.  To summarize: New Big East likely goes Xavier, Butler, St. Louis, VCU, Creighton, in that order--if we go to 12.  If not, we stop at St. Louis.

My argument assumes we use Nielsen's 2011 universe estimates and we already take Xavier and Butler, accounting for the 35th and 26th largest TV markets in Cincy and Indy, respectively.  In comparison, Milwaukee is the 34th largest.  It  It also assumes only 10 teams and significant market overlap (ie St. Joe's and Nova is overlap), but you could also look extend this argument to 12 teams.  It also assumes the "new model" of TV that many have been touting, which is market penetration, not necessarily a team's quality or fanbase (see B1G taking Rutgers for NYC market).

So with Butler and Xavier already in, we have 9 teams, and a 10th spot. Dayton is the 62nd largest TV market.   By TV markets, we should at least take St. Louis, Duquesne, Richmond or VCU (same market) before Dayton, Creighton, Gonzaga, or St. Mary's.  Let's assume we take St. Louis since they are the largest TV markets.  That puts us at 10 teams, if you're the Big East, I think you can stop there at first.  But if not and you want to go to 12, then we should take Duquesne and VCU to cover the Pittsburgh and Richmond which are the next largest markets to put us at 12.  That would be the ideal for maximum market penetration if we are looking for the largest TV contract.  Next in line is Dayton, then Gonzaga, then Creighton in terms of TV market area alone.  

I think we can all agree St. Louis and VCU would at least be worthy additions to the conference from both a market perspective and b-ball quality perspective.  But let's say the new BE does not agree to take Duqesne for one reason or another (probably lack of commitment to b-ball), then Dayton would be next in line in terms of TV markets.  However, considering the fan base (5th in attendance recently, rabid fan base) and relatively small population difference (~85k more in Dayton), not to mention recent success and name, I believe we add Creighton over Dayton and Gonzaga as a 12th member.  Omaha is not THAT much smaller (as I said, 85k), their fanbase is better, and their success is higher.

Please, do tell me what some people's obsession is with Dayton, because I don't get it.  

[WarriorDoc]

I just don't see how we pick Dayton.

[ChicosBailBonds]

I know a little about this when it comes to Cable News (Fox News, CNBC, CNN, etc) and they argue that their ratings are not accurate as they are on in bars and airports during the day across the country.  Also their demographics matter.  CNBC gets the highest cable news advertising dollars because their watchers make more two or three times the income of the others channels.  So CNN might have four times the eyeballs but CNBC makes 4 times more per commercial.

So yes they still have ratings but it is not as simple as counting TV sets turned on.  

I'm just saying the ratings drive the advertising dollars for mots of this.  For local channel insertions on cable and such, usually those are done at flat rates or tiered rates much like a radio flight buy would be done.

Your example of CNN and CNBC...much of that is driven by the demographics and what the buyer is looking for based on the audience.  Definitely true, it's not just about eyeballs, it's about what kind of eyeballs...no argument from me.

[ChicosBailBonds]

According to the Dayton board (which seems like a solid forum), there are some differences between the Cincy and Dayton markets.

I want them both. I want a stranglehold on the best basketball programs left in ACC or Big Ten territory.

Dayton has unfairly gotten flack on this board. That's a very good program with solid facilities and a great fan base.

Dayton is its own DMA and Cincinnati has its own DMA.  No different than Madison vs Milwaukee.  In Ohio, it is Ohio State for the entire state and then table scraps for everyone else. 

Which forum are you talking about...UD Pride? 

[Mufflers]

Xghost... I'm with you on some of the schools.  If we can get schools with rabid fan bases and commitment to basketball, you go for it until you get to 10 schools... Xavier, Gonzaga, Butler, Creighton...

I wouldn't put Dayton as high on the list as the schools above, but I wouldn't exclude them exclusively because of the Cincinnati/Dayton market issue.

In the same way, I wouldn't invite St. Louis exclusively because they're in the largest market.  I want no part of Duquesne and the like.