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Jared

New Big 12 ESPN Deal

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https://www.sportsbusinessdaily.com/Daily/Morning-Buzz/2019/04/10/ESPN-Big-12.aspx  It means ESPN or ABC will cover the CCG in 2019, 2021 and 2023, there will be a special Big12 part of ESPN+ and that all schools other than Texas and Oklahoma will provide over 50 events per year for ESPN+ coverage (TCU starting in 2020).  And it means more money.  I think this is part of ESPN buying the Fox College Sports Networks and gradually taking over the Tier 3 deals for 8 Big12 schools.  I guess I'm gonna have to buy ESPN+ in 2 years or so because Olympic sports will be available there.  More details will (apparently) be announced later today. 

 

Here's the Big 12's announcement: www.Big12sports.com/ViewArticle.dbml?DB_OEM_ID=10410&ATCLID=211799146.  

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ESPN+ is what ESPN3 got rebranded to, is that right?

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So... UT and OU don't have to participate because they have their own deal? So they can double dip but we cant.... got it.

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By the time this rolls out, there’s a good chance you’ll be able to buy a bundle of Hulu, ESPN+ and Disney+. “Hulu has live sports” and all. Big cable is dying. Let’s see what this AT&T package looks like. I’m encouraged that the Big 12 is in early. 

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After reading a little more about this new deal, it looks like it's blurring our Tier 1, Tier 2 and Tier 3  product a little because ESPN is in the process of buying the Fox College Sports Networks and some Regionals.  Now, we get about $900,000 per year for our Tier 3 stuff with Fox - when this deal takes effect, we'll be getting about $2.2 million from ESPN for most of that with a little left over to do a smallish deal (probably also with ESPN but possibly with someone else) for whatever is left.  The difference is that most of this will be paid via the conference rather than individually.  The key question is whether ESPN will close down the Fox College Sports Networks so that the product is solely available on ESPN+.  if so, we the viewers will have to pay for ESPN+ stuff that we currently get for "free" (if we can get the Fox network on which they are broadcast).  But I already pay about $5 per month to get the extra sports package that contains the Fox networks, so now I'll just pay for ESPN+ rather than for them.  So it's kind of a wash. 

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54 minutes ago, Jared said:

After reading a little more about this new deal, it looks like it's blurring our Tier 1, Tier 2 and Tier 3  product a little because ESPN is in the process of buying the Fox College Sports Networks and some Regionals.  Now, we get about $900,000 per year for our Tier 3 stuff with Fox - when this deal takes effect, we'll be getting about $2.2 million from ESPN for most of that with a little left over to do a smallish deal (probably also with ESPN but possibly with someone else) for whatever is left.  The difference is that most of this will be paid via the conference rather than individually.  The key question is whether ESPN will close down the Fox College Sports Networks so that the product is solely available on ESPN+.  if so, we the viewers will have to pay for ESPN+ stuff that we currently get for "free" (if we can get the Fox network on which they are broadcast).  But I already pay about $5 per month to get the extra sports package that contains the Fox networks, so now I'll just pay for ESPN+ rather than for them.  So it's kind of a wash. 

 

As long as you don't care about watching the Rangers or the Mavs it's a wash.  Most people will still want both though.

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What is Obvious to The Captain isnt always obvious to others. And sometimes it is not even obvious to The Captain.

 

ESPN isnt buying Fox College Sports.  They are buying FSN, and then selling them.  They are separate entities.  Major Complication explained it to The Captain.

 

TCU doesnt get 900K per year currently from FSSW, and TCU wont get 2.2 million per year with this deal from ESPN+.  The complete deal is for 22 million a year, but that includes 3 conference title games so that portion of the deal replaces the lost revenue when Fox dropped the title games.  It is not obvious, but the ESPN+ portion is reportedly valued at 40 million total.  So if it is distributed evenly TCU will see a bump to roughly 900K per year.  It may not be distributed evenly because that figure would represent a reduction for several schools.  That part is not obvious.  What is obvious is this part of the deal is the appetizer to a potential larger deal in the future.   The conference is formenting an improved relationship with Disney.  Just in case.

 

There is nothing left over.  This deal is for all of the Tier 3 rights for the 8 schools.  ESPN+ will be exclusive.  This is the Big 12 Network.

 

UT and OU are not providing ESPN+ any content because their Tier 3 deals are of a longer length.  In UT's case, much longer.

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Not much is "obvious" as yet because we're currently in a negotiating period that was mandated by the Justice Department as part of the approval process that is needed for finalization of the announced purchase by Disney of various sports properties of 21st Century Fox, which is itself re-organizing itself into a separate entity to be named Fox Sports (or "new Fox").  Going forward, New Fox will own only the sports properties on Big Fox (the network of over-the-air stations), FS1 and FS2 and they have confirmed in an SEC filing that they have no interest in re-purchasing any of the various assets (including all of the remaining Fox Regionals and other channels) that were part of the announced (and still pending) sale.  That is, Disney is buying all remaining Fox sports properties, but in order to get approval to do so, they must also sell much of those properties.  There have been various bidders, including Amazon, Charter, Ice Cube's Big3 and MSG (and maybe others).  Some of the various Fox assets have a lot of value (because of high subscription fees and existing contracts with pro teams); some don't have much value.  We don't know as yet what will be sold and what won't and to whom and we certainly don't know how much the purchase prices will (or won't) be.  At this point, nothing is "obvious."

 

TCU's current Tier 3 deal is with Fox and although we don't know for sure how much we get for that because it was never announced, CDC did say at the time that he accepted a little less than $1 million per year in order to get more programming on.  That is why I estimated that we're getting about $900,000 from Fox.  That will last for a little more than a year or so, and then, in 2020, that will now move to Disney as part of this new Big12 Disney deal.  Most, if not all, of those events will then be available on ESPN+.  Currently, and until 2020, those TCU events are available in the D-FW area on FSSW (a Fox Regional) and in the rest of the country on the FoxCollege Sports Networks (Atlantic, Central and Pacific) and sometimes on other Fox Regionals.  Disney is buying all Fox Regionals and the FCS Networks but will have to disgorge the Fox Regionals.  We don't know what will happen with the FCS Networks; my guess is that they will be shut down because no one will buy them.  We'll see.  Someone will buy FSSW as well as the other Regionals but we don't know who (as yet).

 

For TCU, this new Big 12 deal will essentially become our Tier 3 deal; hence the blurring of Tiers 1-3 for the 8 non-UT/OU Big12 schools.  The Big 12, however, allows each school to negotiate separate Tier 3 deals - like UT (with the LHN) and OU (with SoonerSports).  Similarly, KU has an independent Tier 3 deal with ESPN for their basketball for which they are (and apparently will continue to be) paid separately.  Also, West Virginia has independent arrangements with some local stations that pay them separately.  It will still be possible for the other schools to have separate Tier 3 deals, but it isn't likely for many of us because the new Disney Big 12 deal requires us to provide 50+ events and there won't be much more to offer.  Also, it isn't "obvious" what TCU will be getting in distribution for this new deal, but I'm guessing it will be a little more that the existing $900,000 because we negotiated as a conference and were therefore able to leverage UT and OU (and their road games will be part of the package) to get a little more for each conference school.

 

What happens to FSSW doesn't really matter to me because I'm not that big of a Mavs or Rangers fan.  What happens to the FCS Networks does though - if they are folded, I'll just cancel my extra sports package that gets them for me and order ESPN+ instead.

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It looks like Sinclair Broadcasting has emerged as the successful bidder to purchase 21 Fox Regionals from ESPN - they reportedly reached a "handshake deal" for $10 billion today.  Sinclair owns hundreds of TV stations around the country and has just announced a new venture with the Cubs (Marquee TV) that'll start next year, so it looks like thy're moving into the sports market in a big way.  But who knows what they'll do with the regionals?  Will whatever emerges out of the former FSSW still want TCU content and will we have anything  left to sell them after we've provided 50+ events to ESPN+?  If you count every episode of Horned Frogs Nation as 1 "event," I could see it, but my guess is that the ESPN+ thing is going to be our Tier 3 deal and we're not going to get much else, if anything.  How will Brian and Alexa cope with not doing HFN anymore if it goes away?

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23 minutes ago, Jared said:

How will Brian and Alexa cope with not doing HFN anymore if it goes away?

The real question might be, would anybody really want to work for Sinclair?

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3 hours ago, PurpleDawg said:

The real question might be, would anybody really want to work for Sinclair?

 

Alex Jones would love it.

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I've been reading all the various idiotic comments on various message boards about the recent UConn move back to the Big East and although one should never really believe anything written on conference realignment gibberish boards, one item stuck out that might be accurate.  It seems that the new AAC ESPN+ deal that they've been touting as providing a $7 million per year payout also provides that the schools themselves must provide the production and thus absorb annual production costs (and this is one of the many reasons UConn hated that deal).  This is like the PAC12's fiasco of a deal where they tout a $31 million payout but also shoulder the production costs which have been estimated to be between $1 and $2 million, so instead of actually receiving $31 million, the PAC's schools have actually been netting only about $29.5 million per year.

 

The thing is, ESPN+ probably also did this to the Big12 on our new 3rd tier deal.  I don't know for sure, but it seems reasonable to assume that that's how they're going to run the ESPN+ thing; making the schools do the production for 3rd tier stuff that only hard core committed superfans will watch (and pay a subscription fee for).  If so, that makes the figures they announced make more sense.  If you look at the original announcement and pro-rate the CCG's that were included, it looked like Big 12 schools will now receive roughly $2.3 million per year.  That seemed really high; especially when you consider that TCU has been earning less that $1 million per year with Fox.  Why the increase - were we really worth that much?  It seemed doubtful.  if the above is accurate, however, it makes more sense - we'll "receive" $2.3 million, but we'll have to absorb production costs, so the "real" payout will probably be closer to $1 million or so, which seems closer to market.

 

Now, we've provided the production for some time - we did it when we were on the mtn.; we've done it with Fox as well (and our DOE reports have said that we've "really" only been netting $450,000 from Fox - not the estimated $900,000).   So it's really not that big of a change.  The changes are that it'll be a few more events (at least 50) and a little more money.  The contracts aren't public - we'll never really know, but those are my readings of the tea leaves.

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Commissioner Bowlsby announced at Big 12 Media Days that the ESPN+ arrangement will be structured as a single digital "network" entitled "Big 12 Now" which will supposedly be separate and distinct from the other ESPN+ available options, thus allowing the non-UT/OU schools the ability to claim that we have a conference "network."  We'll see.

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