(01-19-2020 09:47 AM)JRsec Wrote:  

(01-19-2020 01:48 AM)sierrajip Wrote:  When does the A5 conference contracts come up?

SEC T1: 2023 SEC T2 & T3: 2034
ACC T1/T2/T3: 2037
Big 10 T1/T2: 2023-4 T3?
Big 12 : T1/T2: 2024-5 T3 per school.
PAC 12: T2/T2: 2025 T3 self owned

Important details


B1G network packages runs to June 30th, 2023, Schools are fully vested 50% owners of T3, Fox owns 50%
Pac-12 network package runs to June 30th, 2024, Schools are full equity owners of T3 (equity sale potential is very high)
Big 12 network packages runs to June 30th, 2025, grant of rights runs out with network contract
** Texas' T3 LHN runs through June 30th, 2031. It will pay about $18m average to Texas from 2025-31
** OU's Sooner TV (produced by Big Ten Network for FOX) pays about $5-6m for T3 and runs through 2022 season
// OU is expected to sign a 3-year extension to align T3 rights with June 2025 B12 GOR expiration
** "little 8" T3 owned by ESPN (ESPN+) through 2025, expected payouts are below $2m per school
ACC grant of rights (Notre Dame included) runs the length of the ESPN contract, through 2037 (likely has periodic rate evaluations like SEC)

Latest numbers from SBJ

B1G: $759 million ($54m per school)
SEC: $627 million ($43.1m per school)
P12: $497 million ($29.5m per school) // P12 has overhead issues, schools should be getting about $37m with this revenue level
ACC: $465 million ($29.5m per school)
B12: $373.9 million ($34.7m per school)

SEC has agreed to renewed contract that bumps per school base $20m starting in 2023, which my BOE says $69.2m per school. The B1G will be $62.6m per school when the same 3% annual bump is applied going into their next contract -- my WAG they will negotiate a 10% bump minimum to keep pace with the SEC. Where the SEC might edge ahead however is the revenue from SECtv over BTN. We are talking about the B1G pushing $70m in 2025 and the SEC maybe even over $75m per school by 2025. For comparison the 3% rate places the B12 at $41.3m per school for the 2025. That is a revenue gap of $30m per school with the B1G and SEC. A 20% bump would be sufficient for Texas to stay put, but it would much too small for Oklahoma and Kansas to easily live with.

For the Pac-12, solving their overhead issue should push distributions to about $48m per school (minimum) by 2025 --assumes a modest 10% jump in T1/T2 rights --, plus a partial equity sale likely pushes at least $100m to each of the schools. That wont keep pace with the SEC or B1G, but it should allow the P12 to be healthy. But it's an open question whether they can solve those issues. If they don't solve the distribution issues, $40m per school is reasonable ball park figure for 2025.

The ACC appears to be the weakest, as 3% revenue growth only pushes their per school revenue to around $36.5m in 2025, and they are locked in until 2037. What they are banking on is much higher digital growth for the ACCN, more like >5% per year to push them above $40m per school by that time. But even that is insufficient to keep pace.

Note Notre Dame is on the backside of it's NBC contract (1991-2025)that averages $15m per year over the life of the contract through 2025 ($525m total). Using the escalator, 2019 should pay the Irish $19.9m and 2025 will pay $23.7m. In addition they got $5.8m from the ACC last year, which should jump to $7.8m by 2025. This put Notre Dame at a slight disadvantage, but no crying they got a massive sum up front and endowed at least 40 full football scholarships with that money, a huge advantage over every other schools.

Barring any huge surprises we are probably looking at media revenue distributions of $68-70m for the SEC and B1G in 2025-26 and $38-42m for the B12, P12 and ACC schools. At least this is what simple BOE calculations yield (assumes modest improvement in P12 distributions due to more overhead control, modest 10% bump in contract, ditto for B1G contract bump, and above 5% growth in ACCN). That is a two level distribution system. Note Notre Dame will be around $31-32m total in 2025 when they negotiate a new TV contract for football -- a $10-15m jump seems probable, putting them slightly above the pack, but well below the B1G and SEC.

Note, American payout with be $7.1m (subtract about $1m for ESPN production fee -- ACC seems to be about $3m per school by comparison) and Mountain West $4.1m (Boise State $6.0m) in 2025 using the 3% escalator rule. Other G5 payouts, after production costs (MAC pays about $1m per school, absorbing most of their ESPN revenue) are really low, as in a net of maybe $300K per school -- A10 Basketball TV contract is similar.

This is a pretty rough estimate, but it should give one a sense of the levels come 2025:

level 1: ($68-70m) SEC, B1G
$30m gap
level 2: ($38-42m) B12, P12, ACC, Notre Dame
$35m gap
level 3: ($4-7m) AAC, MWC
level 5: SBC, MAC, CUSA