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Value of B1G 10 Targets

Posted: 11/24/2012 9:10 AM

Value of B1G 10 Targets 

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  • slojoe
  • All-Big Ten
  • 2405 posts this site

Posted: 11/24/2012 9:41 AM

Re: Value of B1G 10 Targets 

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Posted: 11/24/2012 11:37 AM

Re: Value of B1G 10 Targets 

That list probably plays a role.

This one does also:

All B1G universites are A.A.U. members, with the exception of Nebraska, which was an A.A.U. member when added to the B1G until 2011.  There was some objection to the Nebraska medical school being on a different campus.
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Posted: 11/24/2012 11:37 PM

Hard to believe the CATASTROPHIC math errors in that mess. 

i emailed the Tank a couple yrs ago about the catastrophic math errors in that piece, but since it's still up, apparently it just didn't register.

anyone can make a math error, but if the guy was really an expert, he should have known something looked horribly off.

where he went wrong was at the start of the second paragraph, 

"By the Big Ten’s own admission they are clearing about $0.36 per subscriber per month for the states inside it’s footprint. They also tell us that there are 26,000,000 subscribers and it is AVAILABLE to 75,000,000 people. The BTN wants to increase the available number but even more important is to increase the subscriber numbers, and there is an opportunity to do that within the current footprint. Regardless, at $0.36 per month for 26,000,000 households over 12 months I only came up with $112,320,000 for a cable carry rate. Well short of the $272,000,000 that the network likely made last year. The other $160,000,000 is advertising revenue!" 

he got the $0.36 per sub per mo for the league correct, but he then forgot to make the adjustment that that was just the league's half of the take when trying to figure out why when he multiplied .36 times 26,000,000 households, he only got $112,320,000 instead of the $272,000,000 the network made.

he then presumed the huge difference of $160,000,000 must have been advertising revenue. (instead of looking for his math error).

the correct analysis would have taken into account that when figuring the network's take, the correct per sub per mo figure for "inside the footprint" or "in state" is $0.70 per sub per mo.

the network actually gets $0.70 per sub. "in state".  ("in footprint" means you're in a big 10 state).

the $0.36 figure is just the league's 51% cut of $0.70. News Corp gets the other 34.3 cents per sub per mo. (obviously he rounded up to get .36, as .357 would be more correct.)

multiply the more correct 70 cents times 26,000,000 customers, and you get $18,200,000 per mo, or $218,400,000 per yr, not his figure of $112,320,000.

next he forgot to figure in the subscriber fees from "out of state" subs. they average just under $0.10 a sub per month for the other  nearly 49,000,000 "out of state" homes the network is available to per his own figures of 26,000,000 "in footprint" and 75,000,000 total homes with availability.

$0.10 times 49,000,000 brings another $4,900,00 per month, or $58,800,000 per yr. from sub fees.

add that to the more correct $18,200,000 for "in footprint" homes, and you get $277,200,000 per yr from subscriber fees, which actually slightly exceeds his figure of $272,000,000 that the network made last yr.

point being, the network did not make even a significant fraction of the $160,000,000 he extrapolated as being from ad sales. ad sales makes up only a small portion of most any cable station revenues. subscriber fees make up the bulk.

needless to say, this colossal math error and other huge mistakes of his makes his school analysis a total joke. 

the correct figure for Texas would be $27,000,969. not his $101,369,000

the correct figures for Pitt and Iowa State would be ZERO, since both the states of Iowa and Pennsylvania are already paying "in footprint" subscriber fees.

his other projections are equally off.

i've done the numbers numerous times, and no school other than UTexas, Southern Cal, and arguably Florida, would cover the extra cuts of the pie from expansion, and even that's with the condition that those schools bring no other state schools with them. (ie, if UT brought Texas Tech with it, then that would be 2 extra shares, and therefore UT no longer comes close to covering).

truth is, expansion economically only helps News Corp, since they get 51% of the pie no matter how many schools, and don't have to factor in the diluted shares thing.

the other big expansion winner is Jim Delany, who's goal is "supreme exalted dictator" of all college sports.

News Corp and Delany win, all the legacy big ten schools lose, with expansion.

not what some want to hear, but those are the REAL facts.

Last edited 12/3/2012 12:35 AM by rocknhoops

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