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May
21
2014

Big 10 is closing deals for Cable Distribution in the NY/NJ area. What it means for the ACC both good and bad.

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Remember when some said why was the Big 10 picking up Maryland and Rutgers? It certainly wasn’t for their athletic prowess. Rutgers in particular has been an absolute PR nightmare for the Big 10 and itself, but Jim Delany brought Rutgers and Maryland to the Big 10 for one reason, cable subscribers. The Big 10′s doesn’t weigh success by national championships.

They have but 4 National Titles in the revenue producing sports of Football, men’s and women’s basketball and baseball since 1990. For comparison, the SEC leads the way in national titles in these sports with 33. The ACC is second with 14. Third is the Big 8/12 with 13. Fourth is the Pac 12 at 7. Then comes the Big 10 last among the Power 5 conferences, and isn’t that kind of the point to win titles?

That said having money is never bad, having more of it is even better, and the Big 10′s Big Ten Network is a revenue producing grand slam.  The Big 10 recently closed Cable Distribution deals in the New York/New Jersey as reported by NJ.com. That’s the Rutgers market, for the photographically challenged. Does this cable agreement affect the ACC in anyway? It sure does both good and bad.

Let’s start with the bad news first, because you always want to end with good news.

Cablevision has about 3.2 Million subscribers in the NYC metropolitan area.  Time Warner Cable checks in at 2.6 Million Subscribers in the NYC area.  We’ve seen estimates of the Big 10 network in-state carriage fees of around $1.00. It doesn’t take a mathematician to see if even just half of these subscribers are paying the $1.00 fee. That’s $29 Million dollars that generated by the BTN in year. Even if that is split with FOX, that’s just over $1 Million for each Big 10 school.

Throw in Maryland who will do at least as well as Rutgers, and suddenly the BTN has generated another $2 Million per school. As the BTN continues to gain carriage that only increases. I think I’m on the conservative estimate as well.

Now while TV revenue is typically less than 25% of a schools revenue, and you certainly don’t need to be the #1 revenue producing conference, you want to stay in the ball park. For the ACC and John Swofford, I would think there is increased pressure to get a network or some other revenue generating venture on the horizon in the next 3 years. As we know, Swofford said a network was still “years away” at the recent ACC Spring Meetings. The ACC should take a more aggressive stance.

At least publicly, Swofford keeps making mention of seeing how the SEC’s network is proceeding and that investigations continue. The pressure is on the ACC because the Big 10 is a money making machine and is the first to make dent in the lucrative NYC television market.

It’s not all bad news though. For all the cable cutters out there, live sports still has monster demand. The Big 10 was able to work out this cable deal months before the start of the football season for a mediocre athletic program like Rutgers. What if Rutgers was actually compelling sports? The ease of which with this deal was completed proves that the cable television market bubble is not near bursting. The Pac 12 will eventually make money, and the SEC Network will make money too.

Critics of an ACC network, have asked who will watch it in pro sports towns like Boston, MA or Atlanta, GA? It doesn’t matter… the subscribers will come. The Cable providers want live sports. Rutgers has proven this.

 As I’ve said for awhile it’s just a matter time before the ACC Channel  happens, but the pressure is back up now to the ACC and ESPN to finalize this in the next 3 years.

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1 comment

1 ping

  1. Hokie Mark says:

    3 years (2017) for the ACC Network channel sounds about right to me.

  1. SEC Network signs carriage deal with Comcast and that’s good news for the ACC. » All Sports Discussion says:

    [...] as the SEC Network continues to gain carriage from cable distributors. Back in May we told you the Big 10 was completing deals in the NY/NJ area  and what it meant for the ACC. Are you seeing a trend with the SEC’s latest deal? There [...]

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