Private equity? advertise?
See also:
NCAAF Roster Management – Part 1: Quick Review
NCAAF Roster Management – Part 2: NIL and Shared Revenue Structure
NCAAF Roster Management – Part 3: Program Revenue
private equity partnership
at the time of writing [ed. note: my bad]B1G private equity cooperation with 3 companies appears to have ended. It will create ten businesses, jointly owned by equity firms and conferences, to oversee all media, sponsorship and advertising rights. The partners will pay $2 billion to $2.4 billion for the acquisition in exchange for 5% to 10% of Big Tern Enterprises’ revenue over 20 years. In addition to marketing the broadcast rights, uniform patches and on-field logos were also placed on the table.
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This would be a bad deal. This amount is underestimated given the expected surge in broadcast contracts. The equity firm will profit from the project’s short-term budget issues and reap huge returns over 20 years. B1G can take these actions to increase its own shared revenue without having to pay 10% to other entities.
Each project won’t cost around $100 million. Revenue will not be evenly distributed, larger projects will get more because they give up more sponsorship rights, which goes against the B1G’s traditional model of equal revenue sharing.
Washington U.S. Sen. Cantwell and numerous university boards inside and outside the B1G have raised alarms about potential legal issues, and Cantwell noted that few B1G university presidents she has spoken to know the details of the proposal.
At the time of writing, the deal thankfully appears to have been terminated after USC and tTUN rightfully expressed their disapproval, as all projects would have to individually agree to approve and extend their granted rights to 20 years. That’s fine — over the next few years (until the next expected surge in broadcast contracts), shows can better cut costs and then get loans from universities or financial institutions to cover deficits for less than what equity partners require.
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Conference Level Advertising/Sponsorship
There’s nothing stopping B1G from pursuing these revenue streams without an equity company, and I have no problem with that. I have no problem with a major company investing heavily to have their name on the side of the B1G logo, sew a patch on the B1G uniforms, or have their name emblazoned on the playing field.
The bigger question with conference sponsorship is whether there is interest from the few companies that can afford this level of advertising – how much would you charge to have a company’s name appear everywhere under the B1G logo, and for the countless hours it spends at every venue and venue? The closest exposure comparison I can think of is that NASCAR’s major sponsors make between $5 million and $40 million per car per season. There may not be any company that can afford to buy this product, leaving advertising to individual shows, or segmented by sport/season.
Ultimately, pushing B1G to explore these revenue streams as a conference and as an individual project may be the biggest impact of the equity proposal.
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Revenue from broadcast contracts will continue to be the main source of conference financing. The current deal was substantially negotiated before USC and UCLA were added, and their contributions may have been undervalued. Oregon and Washington were added after the contract was signed but did not increase in value. College football regular season ratings have grown by double digits every year since the B1G contract was signed. The next contract, starting in the 2029-2030 season, is expected to be worth double that.
Good for B1G Contracts are being split among a number of major broadcasters, with recent expansions enabling high-profile brands to be offered in weekly broadcast-level selections, and B1G’s performance improving (not just India, but also shows like Illinois). B1G does not have to stop with broadcasters bidding for broadcast rights and season level selection; broadcasters must also bid for time slots, weekly level selection and shared CCG rights.
B1G’s biggest scheduling improvement may be decentralizing inventorybut there is no sign that this is being pushed. As it expands, B1G now has approximately $10 billion in inventory. 136 games per year (7 home games x 18 teams), average approx. 14-week season, 9 games per week (some games moved to Week 0).
…but sometimes, the B1G only offers 7 games during the bye week of the conference season – their cap is 1 game each week for NBC-FS1-BTN and 2 games each for CBS-Fox. Moving 2 body bag home games to the bye week of the conference season would increase the minimum offer to 8 games. Another 8 body bag games can be moved to Week 0 – you can’t significantly improve the quality of OOC opponents without paying higher appearance fees, but you can improve the context (and interest) of these games by making them season openers. That would open up most of the Thursday and Friday night game slots for the few remaining B1G games and potentially add to the inventory by grabbing the ACC.
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Other gains A few games may be pitched to NBC for broadcast during ND road games and a late-night slot for body bag games for West Coast teams.
PAC2.0 has found another avenue for gaming marketing that conferences should consider. PAC2.0 will use the remainder of the PAC network to produce games for its primary carriers: USA Sports and The CW. Rather than buying the rights to the games, the networks are buying finished products, more closely aligned with other programming they offer. This is attractive to smaller networks without sizable sports departments, who can broadcast sporting events without additional overhead. I don’t think this is the path for B1Gthey have generated 39% of net revenue from low-end games on BTN. I do hope it becomes common in non-power conferences, the B12, and even the ACC.
Last part:
NCAAF Roster Management – Part 5. Athlete Options, Moneyball