It's not a 20M deal it's a typo. If you read the context of the first line I said 15M/yr over the life of the 20M deal and obviously that's a typo that should read over the life of the 20 year deal.
As to the reading of the contract, I don't see it as a one time increase of 3% at all. I see it as a "compounded" figure where the first yr it's 11M, the next year it's 11.33M, 11.67M, 12.02M, 12.38M, 12.75M, 13.13M, 13.52, 13.93, 14.35, 14.78, etc.. It does take about 10 years to hit 15M and if you take it out over the 20 years of the deal it's going to be a figure that averages ~15M/yr. That 3% isn't a one time deal, it says a minimum annual guaranteed royalty (initially 11M) "which amount shall increase by 3% per contract year." First you said it hadn't gone up because ESPN hadn't gotten it's overhead and now you've changed it to a only a 1 time increase of 3%. They are getting that annual 3% increase and if ESPN ever gets that 295M back then also 70% of the profits (the incremental royalty referred to). I also haven't really seen anything you linked/wrote that rejects the info I sited in 2 articles about Texas earning an extra 10M in other multimedia from the 2 articles. Mind you 2 articles from a sports business publication and one from a business publication, not just some blog post of some john doe of the internet.
Ok, first thing, when I said it hadn't gone up, I meant that it hadn't increased, as far paying off the investment, or paying the 70% of the profits.
Now, I didn't claim the 3% is a one-time thing. You are just assuming that the 3% is compounded. Says the "minimum" will increase by 3 percent. Not sure whether that means it's compounded or not.
Even with that said, you are still leaving out the cut for IMG. Let's say you are correct about the average. Ok, well $15 million figure you calculated still doesn't account for IMG's split, so you still aren't getting to the $15 million average.
Now about the extra $10 million. Here is the problem with that. Texas had an original Tier 3 contract with IMG. That included
all the Tier 3 rights. Some of those rights had to be shifted to the LHN contract to create the network. The thing you are missing is that you have to
subtract out those rights from the original contract before you add them to the LHN. So, you have to subtract out those rights from the $10 million in the original contract, before you add it to the LHN. Otherwise, you are counting the money twice.
Texas' tv deal is just like any of the other tv deals out there, they start out lower than the reported average increase over time and become greater than the reported average by the end of the deal. IMG is included in the 15M and I've never suggested that it wasn't. The rent ESPN pays Texas is also part of it. One of the quotes I posted even says as much about IMG's cut.
No, that's incorrect. You are correct that all contracts increase over time. (The 3% we talked about.) However, other contracts don't have the incentives like the LHN. For example, there is no clause in the Big Ten's contract, or the ACC's contract that says "you get 70% of the profit once we hit X amount." Sorry, that's simply not correct. Those contracts simply pay a fee for the broadcast rights. They don't have these add-ins like the LHN. (Obviously, that's because the LHN isn't going to command the same viewership as an entire conference, as we have seen.)
I'm not comparing school to school and I'm not moving back and forth at all. I don't care about what UNC makes in tier 3 without tv vs. whomever because their tier 3 consists of different things and is valued differently than others. That becomes a school to school comparison and I'm not looking for that. I didn't say most of OU's 6.5M is tier 3 tv. It could be, it might not be I don't know. I don't really know but I guess it would at least be 1-2M. But all I want is to pull out the tier 3 tv portion of the 6.5M and then I can compare between conference distributions with the other 4. That's not going back and forth that's trying to make an apples and apples comparison. Schools all have their own intrinsic values and brand equities that vary and if you take all of tier 3 you begin muddling the comparison between conference distribution and start mixing in intrinsic values of the various schools.
No, you are wrong about Tier 3. Tier 3 is strictly about media rights. IT has nothing to do with concessions, seating licenses, or naming rights. Sorry, that's 100% incorrect. Tier 3 can mean different
media rights, such as TV, radio, digital, but the term only applies to media rights.
I'm only comparing conference to conference distribution and I don't agree with you. If one conference is including all these sources and another isn't then it's not an apples to apple comparison. The B12 tier 3 tv isn't technically a conference distribution but that's the figure necessary to make an apples to apples comparison. Between the 4 conferences, save the B12, it's exactly the same as I showed you between the ACC/B10 even though the ACC doesn't have a network. Tier 1-3 tv, bowls, playoff money, NCAA credits are included in the conference distribution regardless of the source. The B12 is the only one the muddles the picture because their tier 3 tv rights isn't part of the conference distribution and is grouped in with all their other tier 3 stuff. I'd like to make a comparison of the conference distribution of the other 4 conferences with the "conference distribution" of the B12 with tier 3 tv. It's just hard to do that for any of the B12 members except Texas.
I don't care if you disagree. You are wrong. The Big 12 simply doesn't pay out Tier 3 rights, so that affects the value of the conference. If you add in Tier 3 for the big 12, that's inaccurate, because the Big 12 doesn't include that value.
It's also funny how you think it's "apples-to-apples" to include conferences networks, when on conference doesn't have one, but you can't include Tier 3 rights if both conferences don't have them. That's a classic case of having your cake and eating it too.
To me, Texas is the only one where you have a rough idea of that tier 3 tv figure. The 15M reported includes IMG so strip that out and you still have a rough idea of Texas' tier 3 tv. You're too fixated on that 15M being a figure they are making right now and trying to get to it by including other stuff. The 15M reported figure is just an average over the 20 years and a 1000 foot view of the contract. I don't focus on that being off by a little because of the IMG deduction. Nothing you've posted has dissuaded me from thinking that about the LHN. The others in the B12, I don't know because whatever tier 3 money they report includes everything and doesn't strip out tier 3 tv.
That statement just illustrates that you don’t understand my argument. Let me clarify.
I clearly understand that $15 million is just the
average. I am NOT claiming that Texas is (or should) make $15 million
right now.
What I am saying is, we have been told, specifically—specifically—that Texas gets $15 million on average. Well, even as your calculation shows, Texas can’t get to a $15 million average, because they have to split the money with IMG. Even if the payout gets to $15 million the way you calculated it, that’s
before the payout before it gets split with IMG. You also can’t rely on the other incentives, because there is no accurate way to predict how much those incentives will be worth. It’s not even estimated in the contract.
So what I’m saying is, based on the figures provided in the contract, the only way Texas could get to $15 million average is if an additional source of revenue is included, which would be the original IMG contract. That’s the problem. If you are going to say that $15 million is an accurate average, the that figure is going to have to be a combination of the LHN and IMG contracts, meaning the
combined Tier 3 revenue is $15 million. If you are saying that the $15 million figure is supposed to be just for the LHN by itself, then the $15 million estimate for the LHN was inaccurate to begin with, again based on the figures from the contract.
One other point. The LHN does not give us an accurate estimate of the TV Tier 3 rights.
As I explained to you before, the LHN contract includes more that just TV rights. It includes
TV, digital, coaches' shows, archive footage, etc. It includes several components, so you still have the
same problem as with the Oklahoma example. You don't know specifically how much the TV rights are worth, because some other rights are includes as well.
