Thursday, January 17, 2013
Thanks to TV, B1G will remain cash king
By Adam Rittenberg
By now, many of you have seen the Forbes story that declares the Big Ten the nation's most valuable collegiate athletic conference.
Forbes labels the Big Ten as the nation's "cash king" with an annual income of $310 million. Leagues were measured by their three biggest revenue streams: television, bowl game payouts and NCAA tournament payouts. If you flip through the slideshow breaking down revenue for the different leagues, you'll notice that bowl payouts represent a small portion of total revenue. The Big Ten received $40 million in bowl payouts, about 13 percent of its total revenue. Even the SEC's bowl payout of $50 million, the largest among the conferences, represents just 18.5 percent of its total revenue ($270 million).
Bowl money doesn't drive these leagues. TV money does, plain and simple.
And it will continue to make the Big Ten the nation's cash king.
As Forbes notes, the SEC is in the process of renegotiating its television contracts and forming its own TV network, much like the Big Ten did in 2007. The SEC's current deal doesn't look too great after what the Pac-12, Big 12 and ACC have done in recent years. There's no doubt the SEC's new TV revenue package will push it much higher in the conference pecking order.
But the Big Ten remains in the best revenue position. It already generates more TV revenue than any other league, and it also occupies the last -- and most lucrative -- spot in line for TV negotiations.
While all the other major conferences have done new TV deals in recent years, the Big Ten's last media agreement came down in June 2006. It lasts 10 years, expiring after the 2015-16 athletic season. Look how much the TV contracts have increased between the SEC's last deal in 2008 and the Big 12's $2.6 billion deal finalized in September. Imagine how much more the Big Ten stands to collect when it takes its turn at the cash machine.
It's why the Big Ten could lure Maryland away from the ACC with the promise that the school could earn nearly $100 million more in the Big Ten by 2020. And it's why the Big Ten always will be an attractive expansion option for schools in other conferences.
The Big Ten has a long way to go on the field, but the league continues to rake in the dollars and will keep doing so for years to come.