Big Ten Hockey Conference Pt III - Revenge of the Sith.

[SteveP]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

From a Big Ten viewpoint it is.

Otherwise, comes across as exactly like the movie: arrogant and egotistical with a good measure of self-righteousness.

Point taken

[Scally Lama]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Barry is going for the lowest common denominator, because he wants the average joe football fan to start showing up at hockey games. It's part of what explains why he was so gung ho about the BTHC in the first place. If I were a betting man, I'd bet on Barry throwing his support behind ****ing shootouts.

Wisconsin's attendance issues are pretty well documented.

And yeah, shootouts suck. Records are meant to be three columns, not four.

[Scally Lama]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

By the way, here's the up-to-date list of "no plans for hockey at this time" schools:

Nebraska
Iowa
Indiana/Purdue
Northwestern (not an AD quote, but it doesn't exactly sound imminent according to the co-president of their ACHA team)

Which leaves Illinois, the one school that was considered co-favorites with us to go first. Always easier said than done though. Either have a facility or find $75 million somewhere - and don't forget Title IX. Or the fact that $13 million of the Pegula donation and an additional $10 million we're trying to raise are just to cover program costs, endow scholarships, etc.

We're doing this with the idea that the program is supposed to break even, probably not a unique requirement for any new program at a state school in this day and age. Nobody's adding anything that can't take up for itself, and we feel that $23 million or so even beyond the arena is what's needed to do that. So even if you throw some ice in your basketball arena (as has been discussed with varying levels of seriousness at Indiana, Illinois and Nebraska), it's not like you're ready to go.

[HarleyMC]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Read at you own risk :

Make no mistake about it; the Big Ten Network is the cash cow driving force in the Big Ten’s current and ongoing expansion agenda which includes the announcement of a Big Ten Hockey Conference. The Big Ten is notably the most profitable college athletic conference in the NCAA. According to the U.S. Dept. of Education, 2010 aggregate profits (rounded) for Big Ten athletic departments was reported as $118M, compared to the SEC which reported a $98M profit with one extra school than the Big Ten. The Big Ten showed average profit/school of $10.7M compared to $8.2M in the SEC and $2.6M in the ACC (Dosh, 2011).

The unprecedented growth in Big Ten profit margins can be directly attributed to the success of the value added Big Ten Network. Although its launch in 2007 was vehemently challenged by skeptics and critics, no one is laughing now. Profits have increased by nearly $50M/year since its inception and the Big Ten footprint has grown to 42M subscribers, an estimated 75M viewers covering 35% of the United States and has more than doubled its initial 2007 revenue to $242M.

The Big Ten Network, with help from its 49% partner News Corp-run Fox Broadcasting, experienced substantive growth through an ambitious and exacting process of penetrating small cable channels on basic tiers and proceeding to the major cable suppliers such as Warner and Comcast. Now the network currently has agreements with more than 300 providers. The network is available on cable in 19 of the 20 largest U.S. media markets. In the last three years, negotiations with Rogers and Shaw Communications in Canada resulted in granting broadcast rights to air the BTN to millions of viewers on basic subscriber tiers throughout British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and New Brunswick (Cabot, 2008).

The league is now suddenly enjoying a windfall infusion of revenue from a source never before available to any college conference through two primary revenue streams: cable rights fees and advertising. Consequently the measurable success of the BTN has NCAA conferences, such as the SEC and Pac-10, trying to emulate the Big Ten’s financial playbook to develop strategies of their own to launch proprietary conference networks. Kevin Weiberg, Pac 10 deputy commissioner and a former Big Ten Network executive stated, “The Big Ten's arrangements do set a very high and new benchmark and there will be some catching up.”

Chicago-based investment firm William Blair & Company concluded from its study that the Big Ten expansion agenda was not only a good idea, but implied that the addition of more than one team might be not only viable but advisable (Jones, 2010). The Big Ten will comprise 12 teams when Nebraska officially joins the conference in July, 2011. Nebraska Athletic Director Tom Osborne said the Big Ten Network was a draw and the alliance would be mutually (financially) beneficial.

The BTN delivered $8M to Big Ten schools in 2010, an increase of 20% from the previous year. In addition, ABC/ESPN also paid the member schools approximately $14M. The Big Ten has a 10 year, $1 billion contract with ABC/ESPN which expires in 2016. Big Ten commissioner, Jim Delany, believes that leveraging the BTN against contract renegotiations with ABC/ESPN will drive up rights fees as well, resulting in millions of dollars in contractual media revenue for the Big Ten Conference (Marek, 2010).

However, what many college hockey fans don’t realize is in addition to carriage fees, the largest revenue generating stream for the BTN is ADVERTISING. A breakdown of the total income indicates that roughly 60% of BTN revenue is derived from advertising. It’s also interesting to note that over the last year advertising revenue on BTN has also increased by 30% (Drape, 2010). It’s common knowledge that key Big Ten athletic events and championship games yield millions of dollars in advertising revenue. Expansion to include Nebraska and the BTHC into established and untapped U.S. and Canadian markets will mean a substantial increase in revenue from advertising and carriage fees.

BTN CEO Mark Silverman is currently setting in motion plans to recruit at least 60 million more subscribers over the next five years. Notably, the announcement of the BTHC plays a significant role in this futuristic financial blueprint. Currently, the BTN yields $.88/household in subscriber fees (Sansirino, 2010). If the BTN raises carriage rates by a negligible $.05/household, an additional 60M subscribers in the U.S. and Canada could conservatively generate an additional $55.8M, and that’s not even considering advertising revenue.

Ad revenue could generate as much as $83.7M for a substantive albeit conservative increase in BTN revenue of $139.5M. In addition to current income, the BTN could over the next five years realistically generate substantially more than a quarter of a billion dollars for the Big Ten conference. That would more than double aggregate revenue distribution to member schools.

Based upon current operating costs, a reasonable estimate to maintain a D1 BTHC hockey program could range anywhere from $1-2M/year. Current area facilities could be temporarily used for any of the potential BTHC schools (i.e. Iowa, Illinois, Indiana), with a view to developing an arena feasibility plan which would require robust funding sources, functional and site analysis, concept design and implementation strategies. However, the ever expanding Big Ten footprint into new markets and the exponential growth potential in all financial aspects of the BTN makes the feasibility of sustaining a Big Ten D1 hockey program for member schools such as Illinois, Iowa and Indiana a much more attractive proposition.

In my view, Big Ten schools with vibrant club hockey programs, USHL teams and an established core fan base like Illinois, Iowa and Indiana will most likely be observing the media exposure and financial landscape after but not before the BTHC launch to determine their next move. The revenue potential increases exponentially by adding more members to the BTHC so I'm sure there's a long term plan for expansion in the foreseeable future.

Schools wishing entry into the BTHC would most likely be considered based upon similar criteria that brought Nebraska into the fold: 1) membership in the prestigious American Association of Universities, 2) Large fan base which translates into ad revenue, and 3) Brand value in other revenue generating sports such as football and basketball. Finally, some of the positive outcomes and perks for BTHC members will be: 1) increased revenue, 2) reinvestment income for sports programs, 3) broadening recruiting possibilities, 4) fan base increase of member schools, 5) wide ranging exposure of college hockey games into new markets, and 6) contributing to a potential increase in the overall interest and development of various strata of ice hockey in the United States.

References

Dosh, Kristi. (2011, January 30). How the Big Ten Stacks Up Against the SEC in Sports Revenue, Sport Money Blog, Forbes.

Drape, Joe, (2010, October 1). Big Ten Network Alters picture of College Sports. New York Times.

Jones, David, (2010, March 7). How the Big Ten Network Makes Expansion More Likely. The Patriot News.

Marek, Lynn. (2010, July 6). Big Ten Network Defies Early Skeptics as Audience and Profits Rise. Crains Detroit Business.

Cabot, Jeff. (2008, December 19). Shaw Launches New HD Sport Channels. HD Report.

Sansirino, Micheal. (2010, May 23). Big Ten Changes Could Have Seismic Effect. Pittsburgh Port Gazette.

[5mn_Major]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Harley I'm impressed with how smart you are about the big ten (or perhaps with how skilled you are with plagerism).

Interesting article that sheds a lot of light on big ten expansion, etc. In fact, it shows why it chose Nebraska in order to stay within common sense and go for a school with a national rep in the top revenue earning sport. It also says to me that its next best move is to add two of the three...Notre Dame, Texas (assuming it drops the drama) and a Syracuse/Oklahoma.

It definitely shows the math and importance of the network. Most importantly for me, it highlighted Canadian audience asperations...which says hockey is actually somewhat important. As a related side note, most Minnesotans here have not been against the idea because of the value to the big ten...but rather their personal displeasure with losing great local rivalries that we feel will not be replaced to the same level. And also, in the end, I don't know that U Minnesota will regain the large chunk of the $4 million it will lose by surrendering much of the control and rights to its program.

[bigmrg74]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Read at you own risk :

Make no mistake about it; the Big Ten Network is the cash cow driving force in the Big Ten’s current and ongoing expansion agenda which includes the announcement of a Big Ten Hockey Conference. The Big Ten is notably the most profitable college athletic conference in the NCAA. According to the U.S. Dept. of Education, 2010 aggregate profits (rounded) for Big Ten athletic departments was reported as $118M, compared to the SEC which reported a $98M profit with one extra school than the Big Ten. The Big Ten showed average profit/school of $10.7M compared to $8.2M in the SEC and $2.6M in the ACC.

The unprecedented growth in Big Ten profit margins can be directly attributed to the success of the value added Big Ten Network. Although its launch in 2007 was vehemently challenged by skeptics and critics, no one is laughing now. Profits have increased by nearly $50M/year since its inception and the Big Ten footprint has grown to 42M subscribers, an estimated 75M viewers covering 35% of the United States and has more than doubled its initial 2007 revenue to $230M.

The Big Ten Network, with help from its 49% partner News Corp-run Fox Broadcasting, experienced substantive growth through an ambitious and exacting process of penetrating small cable channels on basic tiers and proceeding to the major cable suppliers such as Warner and Comcast. Now the network currently has agreements with more than 300 providers. The network is available on cable in 19 of the 20 largest U.S. media markets. In the last three years, negotiations with Rogers and Shaw Communications in Canada resulted in granting broadcast rights to air the BTN to millions of viewers on basic subscriber tiers throughout British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and New Brunswick.

The league is now suddenly enjoying a windfall infusion of revenue from a source never before available to any college conference through two primary revenue streams: cable rights fees and advertising. Consequently the measurable success of the BTN has NCAA conferences, such as the SEC and Pac-10, trying to emulate the Big Ten’s financial playbook to develop strategies of their own to launch proprietary conference networks. Kevin Weiberg, Pac 10 deputy commissioner and a former Big Ten Network executive stated, “The Big Ten's arrangements do set a very high and new benchmark and there will be some catching up.”

Chicago-based investment firm William Blair & Company concluded from its study that the Big Ten expansion agenda was not only a good idea, but implied that the addition of more than one team might be not only viable but advisable. The Big Ten will comprise 12 teams when Nebraska officially joins the conference in July, 2011. Nebraska Athletic Director Tom Osborne said the Big Ten Network was a draw and the alliance would be mutually (financially) beneficial.

The BTN delivered $8M to Big Ten schools in 2010, an increase of 20% from the previous year. In addition, ABC/ESPN also paid the member schools approximately $14M. The Big Ten has a 10 year, $1 billion contract with ABC/ESPN which expires in 2016. Big Ten commissioner, Jim Delany, believes that leveraging the BTN against contract renegotiations with ABC/ESPN will drive up rights fees as well, resulting in millions of dollars in contractual media revenue for the Big Ten Conference.

However, what many college hockey fans don’t realize is in addition to carriage fees, the largest revenue generating stream for the BTN is ADVERTISING. A breakdown of the total income indicates that roughly 60% of BTN revenue is derived from advertising. It’s also interesting to note that over the last year advertising revenue on BTN has also increased by 30%. It’s common knowledge that key Big Ten athletic events and championship games yield millions of dollars in advertising revenue. Expansion to include Nebraska and the BTHC into established and untapped U.S. and Canadian markets will mean a substantial increase in revenue from advertising and carriage fees.

BTN CEO Mark Silverman is currently setting in motion plans to recruit at least 60 million more subscribers over the next five years. Notably, the announcement of the BTHC plays a significant role in this futuristic financial blueprint. Currently, the BTN yields $.88/household in subscriber fees. If the BTN raises carriage rates by a negligible $.05/household, an additional 60M subscribers in the U.S. and Canada could conservatively generate an additional $55.8M, and that’s not even considering advertising revenue.

Ad revenue could generate as much as $83.7M for a substantive albeit conservative increase in BTN revenue of $139.5M. In addition to current income, the BTN could over the next five years realistically generate substantially more than a quarter of a billion dollars for the Big Ten conference. That would more than double aggregate revenue distribution to member schools.

Based upon current operating costs, a reasonable estimate to maintain a D1 BTHC hockey program could range anywhere from $1-2M/year. Current area facilities could be temporarily used for any of the potential BTHC schools (i.e. Iowa, Illinois, Indiana), with a view to developing an arena feasibility plan which would require robust funding sources, functional and site analysis, concept design and implementation strategies. However, the ever expanding Big Ten footprint into new markets and the exponential growth potential in all financial aspects of the BTN makes the feasibility of sustaining a Big Ten D1 hockey program for member schools such as Illinois, Iowa and Indiana a much more attractive proposition.

In my view, Big Ten schools with vibrant club hockey programs, USHL teams and an established core fan base like Illinois, Iowa and Indiana will most likely be observing the media exposure and financial landscape after but not before the BTHC launch to determine their next move. The revenue potential increases exponentially by adding more members to the BTHC so I'm sure there's a long term plan for expansion in the foreseeable future.

Schools wishing entry into the BTHC would most likely be considered based upon similar criteria that brought Nebraska into the fold: 1) membership in the prestigious American Association of Universities, 2) Large fan base which translates into ad revenue, and 3) Brand value in other revenue generating sports such as football and basketball. Finally, some of the positive outcomes and perks for BTHC members will be: 1) increased revenue, 2) reinvestment income for sports programs, 3) broadening recruiting possibilities, 4) fan base increase of member schools, 5) wide ranging exposure of college hockey games into new markets, and 6) contributing to a potential increase in the overall interest and development of various strata of ice hockey in the United States.

BTN = Death Star
Penn State = Jar Jar Binks
Barry Alvarez = Darth Vader
Jim Delany = The Emperor.

[4four4]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Harley I'm impressed with how smart you are about the big ten (or perhaps with how skilled you are with plagerism).

Interesting article that sheds a lot of light on big ten expansion, etc. In fact, it shows why it chose Nebraska in order to stay within common sense and go for a school with a national rep in the top revenue earning sport. It also says to me that its next best move is to add two of the three...Notre Dame, Texas (assuming it drops the drama) and a Syracuse/Oklahoma.

It definitely shows the math and importance of the network. Most importantly for me, it highlighted Canadian audience asperations...which says hockey is actually somewhat important. As a related side note, most Minnesotans here have not been against the idea because of the value to the big ten...but rather their personal displeasure with losing great local rivalries that we feel will not be replaced to the same level. And also, in the end, I don't know that U Minnesota will regain the large chunk of the $4 million it will lose by surrendering much of the control and rights to its program.

I agree the Canadian audience is untapped and if the Big Ten can penetrate it the sky is the limit. Obviously, with more students potentially watching the BTN recruiting in hockey and more importantly sports in general will make it easier to recruit. For example, PSU and OSU can tap into a market not known for attending their school for academics or even hockey.

[LynahFan]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Lots of impressive #s about the BTN

But if I'm, say, Iowa, why should I buy a cow (pay to start up a hockey program) when I'm already getting the milk (BTN $$$) for free? Would the BTHC with me attract (statistically) any more new (Canadian or otherwise) BTN subscribers than the BTHC without me? I just can't believe it would, so any money I spend to add hockey will not be recouped via increased BTN revenue, and even if there were a tiny bump, I'd have to share it with 11 other schools - 5 of whom still don't sponsor hockey and are riding for free.

[bronconick]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

I agree the Canadian audience is untapped and if the Big Ten can penetrate it the sky is the limit. Obviously, with more students potentially watching the BTN recruiting in hockey and more importantly sports in general will make it easier to recruit. For example, PSU and OSU can tap into a market not known for attending their school for academics or even hockey.

Isn't the average Canadian opinion of NCAA hockey thinly veiled scorn?

[Tiggsy]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Isn't the average Canadian opinion of NCAA hockey thinly veiled scorn?

That's what I always thought... except the thinly veiled part. Which is why hearing rumblings about a Canadian university joining the NCAA was very puzzling. If that happens would they have to change the N in NCAA to an I for International?

[Rhett]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

That's what I always thought... except the thinly veiled part. Which is why hearing rumblings about a Canadian university joining the NCAA was very puzzling. If that happens would they have to change the N in NCAA to an I for International?

National Basketball Association
National Hockey League
National League (former, but whatever)

I think the NCAA moniker is just fine. Plus, it has already happened. Simon Fraser University is already playing NCAA II & Great Northwest Conference schedules.

[4four4]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Isn't the average Canadian opinion of NCAA hockey thinly veiled scorn?

Yes but the opinions might change if they see more college hockey.

[HarleyMC]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Harley I'm impressed with how smart you are about the big ten (or perhaps with how skilled you are with plagerism).

Interesting article that sheds a lot of light on big ten expansion, etc. In fact, it shows why it chose Nebraska in order to stay within common sense and go for a school with a national rep in the top revenue earning sport. It also says to me that its next best move is to add two of the three...Notre Dame, Texas (assuming it drops the drama) and a Syracuse/Oklahoma.

It definitely shows the math and importance of the network. Most importantly for me, it highlighted Canadian audience asperations...which says hockey is actually somewhat important. As a related side note, most Minnesotans here have not been against the idea because of the value to the big ten...but rather their personal displeasure with losing great local rivalries that we feel will not be replaced to the same level. And also, in the end, I don't know that U Minnesota will regain the large chunk of the $4 million it will lose by surrendering much of the control and rights to its program.

You mean "plagiarism" right? Nah, I just didn't have time to throw in the references I used when I posted but they're in there now. The BTN will accelerate the influences of the college sports professionalism motif that has emerged over the past few years within Big Ten culture by crystallizing their focus on the avant garde binary of college sports and media revenue. The BT has notoriously been slow in adding teams (Nebraska 2011, Penn State 1990, Mich. State 1959, Ohio State 1912). I think the BTN will change that mode of thinking. UMN will make out fine on the deal.

[Tiggsy]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Yes but the opinions might change if they see more college hockey.

True because it's the only way to keep the number of programs up after CCHA teams start packing it in.

[Scally Lama]

Re: Big Ten Hockey Conference Pt III - Revenge of the Sith.

Read at you own risk :

Make no mistake about it; the Big Ten Network is the cash cow driving force in the Big Ten�s current and ongoing expansion agenda which includes the announcement of a Big Ten Hockey Conference. The Big Ten is notably the most profitable college athletic conference in the NCAA. According to the U.S. Dept. of Education, 2010 aggregate profits (rounded) for Big Ten athletic departments was reported as $118M, compared to the SEC which reported a $98M profit with one extra school than the Big Ten. The Big Ten showed average profit/school of $10.7M compared to $8.2M in the SEC and $2.6M in the ACC (Dosh, 2011).

Great work on that. As someone who tries to substantiate almost everything I say, I know how much goes into putting something like that together.

There's absolutely zero doubt that BTN is a cash cow...but it's mostly because of football and basketball. The magic questions, which nobody can answer at this point (the Big Ten people think they can):

Will cable companies pay higher carriage rates?
Will advertisers pay higher ad rates?
Will new advertisers be attracted?
Will BTN add households?

...which all goes back to...

Will people watch hockey on TV? And not the NHL, not the best players in the world playing in major cities who gets famously bad ratings in the US even for the Stanley Cup finals, but Big Ten hockey?

Like I said, I don't think anyone knows at this point. Hopefully it's a straight yes, but we shall see.

I thought LynahFan brought up a good point too. If Illinois is getting 1/12 of the BTN pot either way, where's the incentive to start hockey? Would going from 6 teams to 8 or so grow that 1/12th enough to make it worthwhile?