ESPN buys second half of B1G rights for $190M/year

[patk89]

Then please explain to me how it works. Because the way I read it in the 1st year of the new TV deal RU makes 11.6 mill you 60 mill., 2nd year RU makes 14 mil you 60 mil.. If our payout has now stayed the same as before the new TV, then after the new TV deal we're now paying a larger entrance fee. The equity amount to buy in to BTN has now changed, it was never a set number.

The point is our entrance never caused other schools to take less. We made you money in year one, but can't partake in those additional spoils until 2021. Why does it now cost triple to enter the B1G three years later? The only answer is this is an ever changing contract. You pay whatever the BTN equity is worth right up until your fully vested at the end of 6 years.

If that's the case RU was better off taking no money for 3 years and paying off the BTN before the new TV contract hits. This way we're locked into the old TV contract numbers and receive more in the end.

Kolesar, it seems like you are thinking short term here. Will we be at a disadvantage until the buy-in expires on 6/30/21? Absolutely. But we will take in $19.3 million in that last fiscal year, something that would have been a pipe dream prior to our entrance. The B1G is a business, especially in regards to sports. The other schools took the risk that RU would dilute the pie. Remember, we did not have power conferences knocking on our door offering us lucrative deals. Many "experts" were surprised and predicted failure. Many of our old rivals, mostly out of jealousy, thought we would crash and burn.

The other thing to keep in mind is that the value of the B1G tv contract was going to go up in this round of negotiations, RU or no RU. How much did RU contribute to the final numbers? I think it is abundantly clear that Maryland and RU added significantly but hard to quantify. The value of B1G tv rights is higher thus the value of our ownership in the BTN also went up which, in theory, makes what we should pay to buy-in go up. That is what is happening. Except instead of paying more, the other full members are getting more revenue. RU and Maryland got the same deal. Think about that. RU will be paid a full share at a time when Maryland is still paying back the loan it used to pay the much higher exit fee from the ACC. From a cash standpoint, RU did better than Maryland because our exit fee was lower.

 

[rutgersguy1]

I think this is a good article summarizing the deal and its effects. Echoes some of the stuff mentioned in the thread. These guys also believe that in 6 years like Delany, that premium content will be treated well on a relative basis even if the landscape of how content is consumed might look different. As I've said it's their lifeblood and they can't shy away from acquiring premium content. NFL and other properties will be out at the same time too so "losers" may be looking to get their hands on a premium property.

http://www.cbssports.com/college-fo...w-tv-deal?_ga=1.70410009.863342998.1466512500

 

[Akron Buck]

What was your payout in the AAC? When during the 6 year buy in do you surpass that payout?

 

[rutgersguy1]

Just my own back of the napkin calculation which I think will end up a little on the conservative side for the avg/yr each team would make if it were being split equally 14 ways.

440M deal from Fox/ESPN/CBS = 31.4M

51M CFP distribution to each of the P5 (not including bonus for a conference member qualifying for the playoff) = 3.64M

BTN distribution as I cited above = 8M (includes 1M profit share/school, hopefully a number that will grow over time)

Rose Bowl 80M divided between B10/PAC12 = 40M/14 = 2.85M (Don't forget Orange Bowl which the B10 has a tie in to on occasion)

NCAA Distribution and Other bowl money put it conservatively at 5M

So add all those numbers up and you get close to 51M average/year over the life of the contract if it were distributed equally over the 14 schools. Remember at the beginning it should be less and later it will be more. This also a conservative figure that could be a few million short because it doesn't include a B10 school making the playoff, possible Orange Bowl berth, and growth in profit of the B10 network and the NCAA distribution/other bowl money may be short as well. Take out some money for conference administration. So maybe say ~50M average on the low end and maybe 55M average on the high end.

 

[RURM85]

I think this is a good article summarizing the deal and its effects. Echoes some of the stuff mentioned in the thread. These guys also believe that in 6 years like Delany, that premium content will be treated well on a relative basis even if the landscape of how content is consumed might look different. As I've said it's their lifeblood and they can't shy away from acquiring premium content. NFL and other properties will be out at the same time too so "losers" may be looking to get their hands on a premium property.

http://www.cbssports.com/college-fo...w-tv-deal?_ga=1.70410009.863342998.1466512500

An excellent article with viewpoints from Analysts that have experience and insight into what the future may look like. Thanks for sharing.

 

[rutgersguy1]

What was your payout in the AAC? When during the 6 year buy in do you surpass that payout?

Our first year distribution from the B10 was approximately the same as our last in the AAC around 10M or so. It sticks in the 11M range for a couple year IIRC and then goes up. So we've already made as much as we would in the AAC but some here want the big money quicker. Actually, I should say we all would like it but some realize it is what it is and we're approaching the end of the rainbow in time. So some have angst over that.

But to me as I said above every extra dollar you make over us there is a diminishing return. As opposed to us who have been behind the 8 ball forever and there is a greater return for every extra dollar and bit of exposure we get as opposed to programs like yours. No matter how much you spend there are only 80 scholarships and schools like you and the others have had all those advantages over us forever so what difference does the extra money make now. How much extra return are you getting out of those extra dollars versus us. To me just by being in the B10 the gap closes, then you get the extra exposure we never had and now slowly the extra money we never had and the return on all that is much greater for us than the return schools like you receive for the extra money you make.

So while you look at it on its face, you think man the gap is widening looking at the absolute finances. But to me it's no the gap is closing because we're getting access to so many things we've never had before while the OSUs and the rest have always had these things so what's the difference. Again only 80 scholarships to give. So yea we'd all like more money sooner but I don't just look at it from that angle and am not as discourage as some others.

 

[Nosoj]

So basically we're worth less to the B1G than Nebraska. I could agree with this if corn stalks have eyeballs, but they don't. It's been proven and written that RU's entrance has brought eyeballs through cable subscribers and the all important advertising dollars to the BTN. No more International Harvestor commercials for them. But yet we have too pay more of an entrance fee? Nebraska needed the B1G championship to justify their entrance, RU just needed to show up.

Rutgers brought the big market, but Nebraska still brings a lot more eyeballs to each game. It's easy to look at the number of BTN subscribers Rutgers brought, it's much harder to do an attribution to the value Nebraska viewers bring to the national contracts.

 

[Scarlet_Scourge]

Nebraska also has pedigree and a huge hardcore fan following.

Rutgers has the biggest TV market and a much smaller but very loyal hardcore fan following. We have a ton of casual fans but they only start watching when we start winning and focus on pro sports the rest of the time.

Rutgers has the potential on paper to be one of the biggest ratings draws and names in CFB, if we can't do it in the Big Ten, then we never will. But it is all long term. It will take a lot to get from where we are today to that point but so far there doesn't appear to be anything holding us back besides money and winning games. We got a new coaching staff to help with winning and the money is coming.

 

[Nosoj]

No arguments from me on any of that. I don't believe any of that is driving a relatively short term TV agreement though.

 

[Caliknight]

It's kinda awesome that we are having a discussion about when we are going to start getting $50MM a year while playing the best programs in college football on a weekly basis.

A handful of years is a short time to wait for the full shares to start rolling in, all while making more than we were in our last conference.

It's all truly amazing from where we were just a few years ago.

 

[GoodOl'Rutgers]

What was your payout in the AAC? When during the 6 year buy in do you surpass that payout?

Absolutely the wrong way to look at it.

A deal was struck to admit us based on certain fiscal predictions regarding what it should cost to "buy into" the Big Ten. That price should not change just because revenues go up. The cost for our entry should be a set number and payback based on a percentage of expected revenue share. That is, Rutgers gets a full share but pays off its entry in installments.

As it stands, Rutgers and Maryland (but more Rutgers because of Maryland's special deal), is being charged for the success we helped bring about, i.e. the new TV markets.

How is that fair?

If the other schools get more money because of this deal then Rutgers buy-in period of lesser shares should decrease.

Now, it is very likely we signed a bad deal (if joining the Big Ten could ever be a bad deal) and the cost to join was always expressed in percentages of revenue. I imagine that is the case. But smart guys negotiating this should have thought of it in terms of real dollars and hammered that out rather than as a percentage.

Joining was a win no matter when we get a full share. But don't tell us that this is fair. It may be what we are "happily" stuck with. It may be the deal we made. But it is not fair. And here is the big thing about it...

You all should want to give Rutgers more money. The sooner we can capture more and more market share here the better everything will be for BTN advertisers. All the big Ten schools should get together and give us a better deal because it will pay them back in the long run.

 

[eceres]

Fair doesn't matter this is s business contract. We win eventually... Interesting to see how good or bad our deal was. If we agreed to fix schedule, that stinks but no point in crying now.

 

[Arizona Knight]

This thread sounds like a bunch of children complaining about their XMAS presents.

 

[wheezer]

It's kinda awesome that we are having a discussion about when we are going to start getting $50MM a year while playing the best programs in college football on a weekly basis.

A handful of years is a short time to wait for the full shares to start rolling in, all while making more than we were in our last conference.

It's all truly amazing from where we were just a few years ago.

-----
It is a little humorous that the fans lamenting about not getting the money sooner are probably a lot younger than those like myself .... those younger ones probably will have decades more time to enjoy the fruits of the big ten.

Older fans have been through many periods of time trying to be patient..... The entrance into the big east, be patient, watch our basketball and football programs eventually soar.....Schiano comes in, will lead us to the promised land.....on and on.... Patience was always required.... Decades of patience.

What is being discussed here has a definite happy conclusion for RU... Hopefully as some vent about delayed rewards, they can step back a little and at least appreciate that we are really on our way.... Really.

 

[Virginiarufan]

Agree that a contract is a contract but if memory serves, our buy-in was for the B1G Network and the fee was 50M over 6 years. By not getting a full share of network tv revenue, our buy-in will be much higher than 50M.

 

[Raritan83]

Agree that a contract is a contract but if memory serves, our buy-in was for the B1G Network and the fee was 50M over 6 years. By not getting a full share of network tv revenue, our buy-in will be much higher than 50M.

and the buy in will still be worth every penny

 

[TheB1GTerp]

Looks to be on base that we will get
~32 million a school for Tier 1 and Tier 2 (This was ~9 million before)
~ 1.5 million a school for Tier 3 (BTN)
~ 12 million other rights & advertising
~ 4.5 million for college football playoff (If we get in)
~ 4.5 million for NCAA bball pay out
~ 0.7 million for B1G tournament

~55 million per school pay out in total when no deal hits.

Take that ACC, and Big East.

 

[e5fdny]

~55 million per school pay out in total when no deal hits.

Take that ACC, and Big East.

You give them one cheek to kiss and we'll give them the other. LOL

 

[Scarlet_Scourge]

Looks to be on base that we will get
~32 million a school for Tier 1 and Tier 2 (This was ~9 million before)
~ 1.5 million a school for Tier 3 (BTN)
~ 12 million other rights & advertising
~ 4.5 million for college football playoff (If we get in)
~ 4.5 million for NCAA bball pay out
~ 0.7 million for B1G tournament

~55 million per school pay out in total when no deal hits.

Take that ACC, and Big East.

 

[e5fdny]

Is that Gamera spinning?

 

[Nosoj]

Absolutely the wrong way to look at it.

A deal was struck to admit us based on certain fiscal predictions regarding what it should cost to "buy into" the Big Ten. That price should not change just because revenues go up. The cost for our entry should be a set number and payback based on a percentage of expected revenue share. That is, Rutgers gets a full share but pays off its entry in installments.

As it stands, Rutgers and Maryland (but more Rutgers because of Maryland's special deal), is being charged for the success we helped bring about, i.e. the new TV markets.

How is that fair?

If the other schools get more money because of this deal then Rutgers buy-in period of lesser shares should decrease.

Now, it is very likely we signed a bad deal (if joining the Big Ten could ever be a bad deal) and the cost to join was always expressed in percentages of revenue. I imagine that is the case. But smart guys negotiating this should have thought of it in terms of real dollars and hammered that out rather than as a percentage.

I'll just say this, Rutgers knew that the TV deal was going to expire in the middle of their buy in and and media rights would likely skyrocket. If they signed on for a set dollar amount instead of a percentage of assets then they thought it was fair. Or they were bargaining from such a weak position that's the best they could get. Or they were dumb.

Joining was a win no matter when we get a full share. But don't tell us that this is fair. It may be what we are "happily" stuck with. It may be the deal we made. But it is not fair. And here is the big thing about it...

You all should want to give Rutgers more money. The sooner we can capture more and more market share here the better everything will be for BTN advertisers. All the big Ten schools should get together and give us a better deal because it will pay them back in the long run.

I don't think a long term payoff is enough. Especially when we're only talking about a few years and something that may or may not eventually happen.

8 B1G schools are already in the top 25 for total athletic revenue. With the new deal Wisconsin likely hits the top 10, Minnesota, Michigan State, and Iowa likely hit the 13-16 range, Nebraska makes the top 20, and as many as 11 B1G programs could be in the top 25 of revenues and potentially all* in the top 30.



*Not counting Northwestern which, as a private school, doesn't release the revenue anywhere I can find it in 2 minutes of looking.

 

[jabba2]

Absolutely the wrong way to look at it.

A deal was struck to admit us based on certain fiscal predictions regarding what it should cost to "buy into" the Big Ten. That price should not change just because revenues go up. The cost for our entry should be a set number and payback based on a percentage of expected revenue share. That is, Rutgers gets a full share but pays off its entry in installments.

As it stands, Rutgers and Maryland (but more Rutgers because of Maryland's special deal), is being charged for the success we helped bring about, i.e. the new TV markets.

How is that fair?

If the other schools get more money because of this deal then Rutgers buy-in period of lesser shares should decrease.

Now, it is very likely we signed a bad deal (if joining the Big Ten could ever be a bad deal) and the cost to join was always expressed in percentages of revenue. I imagine that is the case. But smart guys negotiating this should have thought of it in terms of real dollars and hammered that out rather than as a percentage.

Joining was a win no matter when we get a full share. But don't tell us that this is fair. It may be what we are "happily" stuck with. It may be the deal we made. But it is not fair. And here is the big thing about it...

You all should want to give Rutgers more money. The sooner we can capture more and more market share here the better everything will be for BTN advertisers. All the big Ten schools should get together and give us a better deal because it will pay them back in the long run.

That was Rutgers bargaining position at the time. Maryland I dont believe had to pay a buy-in because of their exit fee in the ACC might have prevented them from wanting to leave, so the B1G let them get a full or much bigger percentage than Rutgers. Rutgers had no such misgivings of wanting to stay in the AAC. I've read Marylands travel budget is paid for 6-7 years as well. The situations were totally different and Rutgers current payout wouldnt prevent them from assembling a good recruiting budget anyway. You're in a good recruiting area by B1G standards, Harbaugh and Meyer are holding camps there. I dont think lack of funds is preventing Rutgers from bringing in a solid class.

 

[MoobyCow]

The Big Ten could have proposed we pay them $5m a year for the first 7 years of the contract and it would have still made sense to take the deal. It is what it is.

 

[Nosoj]

That was Rutgers bargaining position at the time. Maryland I dont believe had to pay a buy-in because of their exit fee in the ACC might have prevented them from wanting to leave, so the B1G let them get a full or much bigger percentage than Rutgers. Rutgers had no such misgivings of wanting to stay in the AAC. I've read Marylands travel budget is paid for 6-7 years as well. The situations were totally different and Rutgers current payout wouldnt prevent them from assembling a good recruiting budget anyway. You're in a good recruiting area by B1G standards, Harbaugh and Meyer are holding camps there. I dont think lack of funds is preventing Rutgers from bringing in a solid class.

It was known at the time Maryland joined the Big Ten that the school had received a sweetened, front-loaded deal. Published reports put the initial payment at $32 million.

However, in response to a public records request from The World-Herald, the university last week for the first time revealed its actual first-year payment. It also revealed how much of the payment was considered an advance, dollars the school will ultimately have to pay back through reduced payments in later years.

Nebraska, Maryland and Rutgers were all given six-year terms to transition to a full Big Ten share. Payments from the league were then set at what the schools were projected to receive from their old leagues during those years at the time of negotiations — 2010 for Nebraska and 2013 for Maryland and Rutgers.

Nebraska’s $14 million payment during 2011-12, its first in the Big Ten, was based on what it had been expected to receive from the Big 12 in that year.

Likewise, Maryland’s $24.5 million base payment for 2014-15 was based on what it was projected to receive from the ACC that year.

Rutgers was coming out of the lower-tier American Athletic Conference, the reason for its low-ball Big Ten payment. The school did not release its first-year payment figure last week, but Traviolia put it at about $10 million.

http://www.omaha.com/huskers/nebras...cle_48adc24b-44f6-5bd8-ae62-3affc90e4c86.html

 

[koleszar]

Kolesar, it seems like you are thinking short term here. Will we be at a disadvantage until the buy-in expires on 6/30/21? Absolutely. But we will take in $19.3 million in that last fiscal year, something that would have been a pipe dream prior to our entrance. The B1G is a business, especially in regards to sports. The other schools took the risk that RU would dilute the pie. Remember, we did not have power conferences knocking on our door offering us lucrative deals.
.

I've stated in many of my post's yes longer term this is a great deal. No one is debating that, I know I'm not. Sure we could be back in the AAC or the Atlantic 10 and independent in football but we've moved on from that now. My main consternation is with the buy in period.

At 1st we were told RU was buying equity into the BTN fine, great we signed a contract for that value 3 years ago. Now it turns out that value was not set yet, and to be determined at a later date. WHAT?:eek:. So we pay our 1st 2 years, year 3 comes and guess what you now owe triple the amount. Now I know we didn't have much of a bargaining position, but that's about the crappiest deal anyone could possibly propose or agree to.

Also while others receive roughly $170 mil. we get $45.3 for the 1st three years of the new TV deal. That's a pretty wide margin that's going to affect us into the future. You do know we're broke and far behind the 8 ball already right. How's an additional hole of $125 mil going to close that gap come year one of being fully vested? It's not, the gap is going to become wider, meaning once fully vested it'll take that much longer to try and catch up if ever.

Finally risk? What risk. Studies were surely done and presented to each president. If there was any risk do you seriously think the Presidents of the B1G schools would have said, "sounds cool Jim let's gamble with our schools future". No, I'm sure feelers were put out to networks and cable company's about the additions of RU and Maryland and the feed back was positive. These guys knew what they were doing and knew it was going to result in boat loads of money for them. They saw something the other idiot conference(ACC) didn't and are now reaping the benefits. Well that is everyone except RU.

 

[Scarlet_Scourge]

Is that Gamera spinning?

Yes.. he is very happy about this bit of news.

 

[jerseyjustin]

Exactly, because according to the ACC they already a team "here"....

More like Canada's team, eh?

 

[Virginiarufan]

I think it would be unfair of the conference to charge more than the $50M initially agreed to if that's the case especially since we more than carried our weight in bringing the NY/NJ demographic market to the table that also helped the BTN. But, no matter how much we have to pay, we're still going to be relevant and a member of the best conference there is. I choose this over the death spiral Uconn is in or being totally irrelevant like BC and SU.

 

[patk89]

"Finally risk? What risk. Studies were surely done and presented to each president. If there was any risk do you seriously think the Presidents of the B1G schools would have said, "sounds cool Jim let's gamble with our schools future". No, I'm sure feelers were put out to networks and cable company's about the additions of RU and Maryland and the feed back was positive. These guys knew what they were doing and knew it was going to result in boat loads of money for them. They saw something the other idiot conference(ACC) didn't and are now reaping the benefits. Well that is everyone except RU.[/QUOTE]"

If there was no risk, why was RU not added along with Penn State? Many schools had to be convinced that RU would add to the total pie and not reduce payouts by diluting it. There was intense debate with very sophisticated officials (more aware of the facts than you or I) over a long period of time. If it was so obvious, they would have been stupid not to have done this decades ago. They did not want to add school that would take a share and not reinvest it. The 2006 season opened eyes. Our tv ratings were unbelievable. RU showed commitment. Later, GS turned down Michigan. Michigan! To stay at RU.

The RU/B1G marriage is mutually beneficial. That much is clear to everyone. RU did not add nearly this much value to the Big East or the American. You have to understand that we are, in fact, reaping huge benefits because our future revenue streams will skyrocket. If we wanted to, we could easily monetize those future cash flows.

 

[rutgersguy1]

"Finally risk? What risk. Studies were surely done and presented to each president. If there was any risk do you seriously think the Presidents of the B1G schools would have said, "sounds cool Jim let's gamble with our schools future". No, I'm sure feelers were put out to networks and cable company's about the additions of RU and Maryland and the feed back was positive. These guys knew what they were doing and knew it was going to result in boat loads of money for them. They saw something the other idiot conference(ACC) didn't and are now reaping the benefits. Well that is everyone except RU.

"

There's always some risk cause except for rare instances you never know for sure. Delany started the BTN you don't think they did lots of similar research before doing that and leaving ESPN behind for some of their rights. There was definitely risk in that no matter the amount of research you do. How about the ACC? You don't think they tried to find out who were the best additions and they ended up with BC/Cuse/Miami. You can do all the research you like but with some exceptions you can't know for sure how things will turn out.

People say what alternative would they have had there are no other northeast schools. I actually agree with that I don't think there would have been any other good northeast options not UConn or Cuse even though their athletic programs were more successful than ours. It didn't necessarily have to be a northeast school, it could have been a school further west like a Missouri who were clamoring to get in but shunned basically or maybe another ACC school. Although possible I don't know even if that would have been the most realistic alternative either. IMO the most realistic alternative would have been status quo. Don't expand or delay expansion until the landscape became abundantly clear. They were going to make tons of money even if they stayed at 12, now maybe they get some icing at 14 with us and Maryland, but it required no urgency. Look at the PAC12 rejecting OU without Texas. What would that have left us with, we'd have had to stew around at least a few more years in the AAC, possibly be in a weaker position and we'd be a few years behind in similar revenue share agreement which would push things out to 2024 or beyond.

 

[rutgersdave]

"Finally risk? What risk. Studies were surely done and presented to each president. If there was any risk do you seriously think the Presidents of the B1G schools would have said, "sounds cool Jim let's gamble with our schools future". No, I'm sure feelers were put out to networks and cable company's about the additions of RU and Maryland and the feed back was positive. These guys knew what they were doing and knew it was going to result in boat loads of money for them. They saw something the other idiot conference(ACC) didn't and are now reaping the benefits. Well that is everyone except RU.

Delaney could see the pot of gold when other conferences couldn't. Large alumnus base and being in the Top 2 markets in the US NYC and Philadelphia. Some might argue that the BIG TEN might not owe NYC but they definitely own PHIL with Penn State and Rutgers.

I worked in the Radio industry for about 15 years and it was two individuals, Mel Karmizan and Lowry Mays, that saw a simple idea that made them billions later in their 50-60's. They realized before everyone else that you can play 14-16 commercials an hour on the radio for a music format instead of the 10-12 that all program directors thought was the maximum. Clear Channel and Infinity basically brought up all the stations around the country because they could outbid everyone else paying 15-30-% more. Before CBS , ABC and other large Radio groups realized what happen, they were in every market. It only take a small idea to get rich and it never too late since they didn't become billionaires until their 50-60's.

 

[RURM85]

"

There's always some risk cause except for rare instances you never know for sure. Delany started the BTN you don't think they did lots of similar research before doing that and leaving ESPN behind for some of their rights. There was definitely risk in that no matter the amount of research you do. How about the ACC? You don't think they tried to find out who were the best additions and they ended up with BC/Cuse/Miami. You can do all the research you like but with some exceptions you can't know for sure how things will turn out.

People say what alternative would they have had there are no other northeast schools. I actually agree with that I don't think there would have been any other good northeast options not UConn or Cuse even though their athletic programs were more successful than ours. It didn't necessarily have to be a northeast school, it could have been a school further west like a Missouri who were clamoring to get in but shunned basically or maybe another ACC school. Although possible I don't know even if that would have been the most realistic alternative either. IMO the most realistic option would have been status quo. Don't expand or delay expansion until the landscape became abundantly clear. They were going to make tons of money even if they stayed at 12, now maybe they get some icing at 14 with us and Maryland, but it required no urgency. Look at the PAC12 rejecting OU without Texas. What would that have left us with, we'd have had to stew around at least a few more years in the AAC, possibly be in a weaker position and we'd be a few years behind in similar revenue share agreement which would push things out to 2024 or beyond.

Completely Agree and I'll add although the B1G expanded twice in a very short period of time, it's a Conference that moves methodically in its decision making and would have had no issue waiting a few more decades to make the right strategic moves. Afterall, they waited approximately 20 years with an odd number of 11 schools prior to adding Nebraska. The stars needed to align for the Rutgers and Maryland expansion - Right academic institutions; large marketplaces, BTN/TV cable model, proper timing, etc.

 

[rutgersdave]

Completely Agree and I'll add although the B1G expanded twice in a very short period of time, it's a Conference that moves methodically in its decision making and would have had no issue waiting a few more decades to make the right strategic moves. Afterall, they waited approximately 20 years with an odd number of 11 schools prior to adding Nebraska. The stars needed to align for the Rutgers and Maryland expansion - Right academic institutions; large marketplaces, BTN/TV cable model, proper timing, etc.

Actual the timing is perfect for the Big Ten to add Rutgers and Maryland. They got the two teams at depression prices, Rutgers and Maryland were considered on the bottom of the barrel. If either one of the team's move up to the Top, the entire NYC or DC market would go crazy and viewership would skyrocket.

 

[TheB1GTerp]

That was Rutgers bargaining position at the time. Maryland I dont believe had to pay a buy-in because of their exit fee in the ACC might have prevented them from wanting to leave, so the B1G let them get a full or much bigger percentage than Rutgers. Rutgers had no such misgivings of wanting to stay in the AAC. I've read Marylands travel budget is paid for 6-7 years as well. The situations were totally different and Rutgers current payout wouldnt prevent them from assembling a good recruiting budget anyway. You're in a good recruiting area by B1G standards, Harbaugh and Meyer are holding camps there. I dont think lack of funds is preventing Rutgers from bringing in a solid class.

No, Maryland and Rutgers have to buy in at the same amount.

Maryland did a few things different

1. Front loaded the deal, this will cost us $5-15$ million dollars compared to what Rutgers gets
2. We got a travel stipend of ~35 million, Rutgers and Nebraska did not, conviently around the amount of the exit fee we had to pay. Remember we had ~31 million witheld from us for a whole year.
3. We are also borrowing money from league against future pay outs, we will have to pay this back
4. We got Johns Hopkins in as an associate member, so we could have B1G Lacrosse.

Rutgers was obviously more valuable from a TV set stand point and over all growth potential, but Maryland was in a far better conference, had a far better over all athletic program, a top tier basketball program, and we were about even on football. Traditionally Maryland blows away Rutgers, but over last 15 years, we were even with Rutgers besting Maryland the last 5-7 years.

Maryland wanted to make major upgrades to football right now, we couldn't wait, we had to get Randy Edsall out and we had a new football facility that needed funding. I think Durkin, who seems to be a lightning in the bottle hire can make up a lot of the funds we left on the table. I think Ash is going to be a very good coach, and I think he'll win at Rutgers. Durkin just has "it", and could be at Maryland a long time.

So the front loaded money has got us a new coach and this new football facility, that we want now, not 10 years from now:

 

[rutgersguy1]

Actual the timing is perfect for the Big Ten to add Rutgers and Maryland. They got the two teams at depression prices, Rutgers and Maryland were considered on the bottom of the barrel. If either one of the team's move up to the Top, the entire NYC or DC market would go crazy and viewership would skyrocket.

Well Maryland wasn't that cheap. They're getting paid more than any other new members even if you back out the upfront payment for the exit penalty. I think when you back that out it's around 23-24M which is more than Nebraska has been getting most of these past 6 years and what we're getting til almost the end of our revenue share agreement.

We would have been even cheaper still if you think about it because we would have been on the new AAC contract which is a fraction of what the old BE/AAC got.

So to me the alternative aren't any other northeast schools, and I don't think any other schools in the ACC or out west although I'd put that at higher probability than another northeast option. The most likely alternative would have been just stay at 12 status quo if the costs of adding RU/Maryland became more than they were willing to pay. Either don't expand or delay it til a better time comes up. They were always going to make tons of money regardless of RU/Maryland. Like I said they got some icing on their cake with us but there was no urgency to it. Like there was no urgency to the PAC12 who rejected OU without Texas.

 

[srru86]

The Big Ten could have proposed we pay them $5m a year for the first 7 years of the contract and it would have still made sense to take the deal. It is what it is.

Yes. All the masters of the deal on this thread really need to give it a rest.

 

[goody1986]

Probably true for the time being. At the same time, Indiana enclosed one end of their football stadium with a very nice addition several years ago, and that wasn't driven by football demand...so clearly they had more money floating around than they knew what to do with.

If I ran Rutgers athletic department, I would make sure football has what it needs on a more modest scale (i.e. Hale Center is sufficiently up to date, weight room, training room, locker room, etc.), but wouldn't invest big dollars in the program until other lower cost programs get something to make them more competitive.

At some point, when you are cashing big checks year after year, though, you can make bigger investments.

The enclosure of Indiana's North end zone didn't add any seats. The seats built replaced those that were previously in both end zones. The addition was more about program facilities like the weight room (previously embarrassingly bad), academic support center, and coach's offices. They will break ground to enclose the opposite end zone after this season to add additional program enhancing facilities. This, like the North end, will add minimally to the seat total. In short, it was about demand for program enhancements, but not demand for additional seats. Indiana had so much catching up to do facility wise.

 

[bingethinker]

No, Maryland and Rutgers have to buy in at the same amount.

Maryland did a few things different

1. Front loaded the deal, this will cost us $5-15$ million dollars compared to what Rutgers gets
2. We got a travel stipend of ~35 million, Rutgers and Nebraska did not, conviently around the amount of the exit fee we had to pay. Remember we had ~31 million witheld from us for a whole year.
3. We are also borrowing money from league against future pay outs, we will have to pay this back
4. We got Johns Hopkins in as an associate member, so we could have B1G Lacrosse.

Rutgers was obviously more valuable from a TV set stand point and over all growth potential, but Maryland was in a far better conference, had a far better over all athletic program, a top tier basketball program, and we were about even on football. Traditionally Maryland blows away Rutgers, but over last 15 years, we were even with Rutgers besting Maryland the last 5-7 years.

Maryland wanted to make major upgrades to football right now, we couldn't wait, we had to get Randy Edsall out and we had a new football facility that needed funding. I think Durkin, who seems to be a lightning in the bottle hire can make up a lot of the funds we left on the table. I think Ash is going to be a very good coach, and I think he'll win at Rutgers. Durkin just has "it", and could be at Maryland a long time.

So the front loaded money has got us a new coach and this new football facility, that we want now, not 10 years from now:

The front-loaded deal was as much about pushing the entire deal through politically as it was about immediate funding for a new coach and indoor facility. Both are clearly nice byproducts, but the Regents wouldn't have approved the deal without a bunch of cash being thrown at the University.

Nebraska will make out much better than either MD or RU will because they we're added a few years before we were. Over time, new schools will be rolling in the dough. In 20 years, no one will be singing songs lamenting a few lean years or missing out on a few million dollars in the beginning.

 

[mdh2003]

I've stated in many of my post's yes longer term this is a great deal. No one is debating that, I know I'm not. Sure we could be back in the AAC or the Atlantic 10 and independent in football but we've moved on from that now. My main consternation is with the buy in period.

At 1st we were told RU was buying equity into the BTN fine, great we signed a contract for that value 3 years ago. Now it turns out that value was not set yet, and to be determined at a later date. WHAT?:eek:. So we pay our 1st 2 years, year 3 comes and guess what you now owe triple the amount. Now I know we didn't have much of a bargaining position, but that's about the crappiest deal anyone could possibly propose or agree to.

Also while others receive roughly $170 mil. we get $45.3 for the 1st three years of the new TV deal. That's a pretty wide margin that's going to affect us into the future. You do know we're broke and far behind the 8 ball already right. How's an additional hole of $125 mil going to close that gap come year one of being fully vested? It's not, the gap is going to become wider, meaning once fully vested it'll take that much longer to try and catch up if ever.

Finally risk? What risk. Studies were surely done and presented to each president. If there was any risk do you seriously think the Presidents of the B1G schools would have said, "sounds cool Jim let's gamble with our schools future". No, I'm sure feelers were put out to networks and cable company's about the additions of RU and Maryland and the feed back was positive. These guys knew what they were doing and knew it was going to result in boat loads of money for them. They saw something the other idiot conference(ACC) didn't and are now reaping the benefits. Well that is everyone except RU.

koleszar, I completely agree with you on the fairness angle, when the situation is framed as you laid out.

Here's 2 different, more palatable, if not fairer, framings:
1. We never had an "equity buy-in". Regardless of the talking points, the contract stipulates a set disbursal of funds to RU from the conf until 2021. Period, end of story.
2. We do have an "equity buy-in". But of the entire conf, not just the BTN. Since our joining, the conf is worth a WHOLE lot more money, and not all can be attributable to RU. Isn't it fair to pay more for the increased equity?

 

[srru86]

I think some of the posters here must have been advising the Temple President back in the day when the Big East wanted to talk about the problems with their football membership. He countered with a "We want full membership or bust" attitude and the Big East called the bluff and issued them walking papers.