Big Ten Network Alters Picture of College Sports

10/1/2010

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CHICAGO - These are confusing times to be a college football fan. The Big Ten will soon have 12 teams, the Big 12 only 10, and the Pacific-10 is on its way to having 12 teams. It really wishes it had 16.

A land grab is under way in college athletics, a media-savvy, multiplatform one - led by Nebraska's defection to the Big Ten this summer - and nothing is driving the change more than the Big Ten Network. In three years, it has grown to 42 million subscribers, covering 35 percent of the nation, and has opened powerful revenue sources for the biggest players in college athletics.

Now, conferences like the Pac-10 and the Big East and individual universities like Texas want their own network and are willing to abandon longtime allegiances to get them. Colorado and Utah, for example, will leave the Big 12 and the Mountain West for the Pac-10 next year.

"It has unleashed value for us and given us options and opportunities we never had before," said Jim Delany, commissioner of the Big Ten and a driving force behind the network. "When President Obama comes to the University of Michigan, we can televise it. When there are flood relief efforts in Iowa, we can be part of that. It has not only extended, but has changed the shape of our brand."

In 2008-9, programs in the Football Bowl Subdivision - the top tier of college football - increased their spending by nearly 11 percent from the previous year. At the same time, universities also increased their contribution to athletics by 28 percent. Still, only 14 of the 120 athletic programs in the F.B.S. made money in the 2008-9 academic year, down from 25 the year before, according to the N.C.A.A.

The network has also raised the profile of sports that do not attract big crowds.

In 2003, Delany complained to the National Association of Collegiate Directors of Athletics that its Directors' Cup competition, which rewarded the best all-around athletic department, was driving up costs in Olympic and women's sports that do not come close to paying for themselves. He wanted the competition to end, or for the Big Ten to at least be excluded from it.

"It is our belief that the Sears Cup Competition tends to exacerbate demands for greater resources by coaches, make cost control more difficult and finally fails to adequately recognize the accomplishments of the most broad-based programs," Delany wrote about the competition, which was once sponsored by Sears, in a letter obtained by The New York Times.

Seven years later, however, the Big Ten Network relies on, in the parlance of college athletics, those nonrevenue generating sports for a bulk of its 24-hour, 365-day programming, as well as its live streaming broadcasts.

"We didn't know what they'd do, but most have overperformed," Delany said. "Women's softball, wrestling and volleyball are pretty good and compelling programming."

The Big Ten Network's primary moneymakers, however, remain the more than 35 football games it airs, followed by 105 regular-season men's basketball games. On Sept. 18, for example, four nonconference and hardly marquee games - like Michigan versus Massachusetts - averaged a 5.64 Nielsen rating in the eight local markets, numbers that rival the local ratings on ESPN and the broadcast networks.

The network is a joint venture between the Big Ten (51 percent majority owner) and Fox Cable Networks, a division of News Corporation, and industry experts have estimated their 25-year agreement is worth $2.8 billion. Neither Delany nor the Big Ten Network president, Mark Silverman, would discuss specific numbers, saying only its profit has already more than doubled over 2009 as its ad revenue has risen 30 percent.

The Big Ten's I.R.S. filing for the year ending June 2009 showed the network paid the conference $72 million. The media research firm SNL Kagan has estimated that the network had operating revenue of $203.9 million and cash flow of $35.9 million in 2009. This year, the figures are expected to rise to $229.5 million in revenue and $75.9 million in cash flow, according to SNL Kagan.

No one doubts the Big Ten's rabid fan base. The 100,000-plus crowds at the Big House in Michigan or the Horseshoe at Ohio State on autumn Saturdays are evidence of that. So is Mojo Rosa's bar and restaurant in the village of Egg Harbor, Wis., population 284, where the Big Ten Network is advertised on the front window and shown inside. Its reach, too, is staggering. Neal Pilson, a former president of CBS Sports and a television consultant, says the Big Ten's footprint encompasses 35 percent of the nation's population. It is available in 19 of the top 20 television markets.

"It's not only widely viewed within its stronghold regions, but there is a very large and devoted alumni base in all parts of the country," Pilson said. "When I was at CBS, we always knew we could put the Big Ten on in any region and it would do well."

In the media-saturated modern world, the Big Ten Network has become yet another recruiting tool. Last summer, Treyvon Green, a highly regarded running back from suburban Dallas, verbally committed to play for Northwestern in 2011. He had never stepped foot on Northwestern's campus in Evanston, Ill.; most everything he knew about the university he had learned from the Big Ten Network.

"Northwestern is a good fit for me and my family," Green told Wildcat.com shortly after he committed. "They'll be able to watch me on TV on the Big Ten Network, and that's important. I know they have great academics and a good football team."

Nebraska left the Big 12 for multiple reasons, chief among them that the balance of power and revenue tilted south to the University of Texas and Oklahoma. Nebraska Athletic Director Tom Osborne said, however, that the Big Ten Network was a draw and that the alliance would be mutually beneficial.

Nebraska football, after all, is a public trust, one cherished by the denizens of the state.

"We have 1.8 million people, I don't know how many television sets, but what we do bring is that most of them will be turned on when we play," Osborne said in a bit of understatement. There is no doubt that the Big Ten Network has not only roiled college athletics but has also increased its value. When the Pac-10 commissioner, Larry Scott, tried to woo such Big 12 stalwarts like Texas and Oklahoma over the summer, discussions about a network were part of the promises. He remains willing to steal the Big Ten Network's playbook.

Scott might have failed to create the first true super conference - this time - but by adding Colorado and Utah, he strengthened the Pac-10's foundation to add members and build a network. The conference currently has football contracts with ESPN/ABC and Fox Sports Net, and a basketball agreement with FSN. Each football contract expires after the 2011 season and the FSN basketball deal after the 2011-12 season.

"Twelve teams gives us more content," Scott said.

The Big Ten still has a 10-year, $1 billion deal with ABC/ESPN that runs through 2016. When it is up, Delany said he believed those rights would be worth even more. It is not the goal of the Big Ten Network to be the sole rights holder.

"This is an evolutionary, not revolutionary arrangement," he said, adding that it was important that all conferences continued to have a relationship with the major networks, including ABC/ESPN and CBS.

Silverman, the Big Ten Network's president, remains busy creating programming for a very particular audience. Its prime-time football ratings are up 30 percent from last year, and the studio shows are showing increases from last year.

But it is the success of the new show, "Big Ten Icons" - its highest-rated nonevent show - that best demonstrates that the conference's devotees have a deep connection to their universities. The 20-episode series is hosted by Keith Jackson and profiles superstars like Jack Nicklaus, Charles Woodson and Steve Alford.

"I think the size and scale of our audience, and how they understand history and appreciate tradition is unique to the Big Ten," Silverman said. "We are profitable, and we will continue to grow more."

 

*Article courtesy of the New York Times

The article in full can be accessed by clicking here.

 

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