I agree they're not that valuable which is why I only singled out Texas/OU but pretty much the rest I said I don't know and assume that they don't make much from tier 3 tv. I never said they'd make up the difference, I said it's just not an apples to apples because you're not getting the same picture when it comes to the B12 vs. all the other conferences.
It's not only football though, it would be some basketball games and their Olympic sports as well, etc...How much is that worth? Are those tier 3 tv rights as negligible as you make it or could they be worth 1-2M or so. I've never seen the tv figure spliced out for a school's tier 3 rights so I don't really know. I thought Texas was an exception to that with their 15M but you say otherwise. If it's in that 1-2M range while it doesn't make up the difference I don't consider it negligible and that's all I'm saying when I say it's not true apples to apples because I don't think you can say eh that type of money isn't a big deal when tallying up the numbers for the conference distributions. What is your estimation about what the value of these tier 3 tv rights for these schools are worth. Obviously it will vary from school to school but just an average range that you think.
Texas' 15M I did think was a tv figure spliced out of their tier 3 and the article I quoted says that. You posted a link to the contract but I'm not going to look through the whole thing. Can you point out what page it is or quote the part where it says all of Texas' tier 3 money is 15M and there aren't any additional multimedia rights.
BTW another source this time from SBD which says the same thing.
Texas, which has its multimedia rights with IMG College, makes $15 million annually from ESPN for the Longhorn Network, while its more traditional multimedia rights generate close to $10 million, for a total of $25 million a year.
http://www.sportsbusinessdaily.com/Journal/Issues/2014/04/21/Colleges/Alabama.aspx
Pages 16-18 of the contract. It says:
ESPN agrees to pay Licensor (that's IMG) the following consideration for each Contract Year....
Then it states the amount: $10.9 million, which is called the "
Minimum Annual Guarantee Royalty."
Then it states:
The AGR .....shall be paid to IMG.
Then it states:
IMG shall be responsible for remitting to UT its share of any AGR
Ok, so the point is, the total that ESPN is paying now is $11 million. It hasn't gone up, because ESPN hasn't earned back the overhead yet. (That's spelled out in the next section on page 17.) So, we have a total of $11 million.
Now, that total of $11 million has to be split between IMG and Texas. So right off the bat, we aren't even at $15 million. In addition to that the $11 million has to be split. That means Texas is going to be well below $15 million mark, based on money from the LHN. That means you have to include the other revenue from IMG (basically radio, since ESPN has the TV and Digital rights, plus coaches' shows and such) to get to the $15 million mark. That's why the articles are wrong. (It wouldn't be the first time that happened.)
By the way, the reason your 2nd article says the same thing is that it was reporting on the same story as your first article. In other words, these two authors were reading from the same base story. It's not really two separate articles. Just the same article rewritten by two different authors.
Now aside from that, here's why the Tier 3 stuff is apples to apples. I pointed out earlier that Oklahoma makes $6.5 million from Tier 3, and North Carolina makes $11 million. Here's the problem. The ACC sold it's Tier 3 rights, and the Big 12 didn't. So you say, "Ok, let's add in the Tier 3 to make that even." Well the problem is, Oklahoma only has $6.5 million
total in Tier 3. TV is only a fraction of that. Ok, so let's say taht's worth 1/3, so we credit Oklahoma $2 million in their comparison against the ACC.
Well, the problem is, now you might have made conference vs. conference revenue a little closer, but look at the gap in Tier 3 vs Tier 3. Oklahoma is now down $6.5 million to North Carolina. So, shifting that minimal amount for Oklahoma didn't really make a difference in the total comparison.
You might say, "Well, to get a good comparison, we need that estimate for Tier 3 to know what the Big 12 would make if they had included it in the payout." Well no, that's not a good comparison. By that logic, you would have to factor out the BTN if you wanted to compare the Big Ten to the ACC's payout. Do you think anyone on this board would go along with that? No, and that's because the decisions each conference has made (not to have a network, or not to sell Tier 3) impacts the earning power of each conference. We have to compare each conference as it is currently constructed, which includes how they chose to package their rights. The point of the comparison is to show that selling the rights collectively (especially as a network) is more lucrative than selling them individually. In other words, it shows that the Big 12 made a bad decision.
