The Big Ten Network is turning a tidy profit

[knapplc]

@studurando

According to industry analyst SNL Kagan, BTN net revenue was $166M in 2008, $262M in 2012 and projected at $408M in 2017.

@studurando

Some Big Ten Network financials to chew on as SEC prepares to unveil its network: Each BT school received more than $34 M from BTN 2008-12.



That's net revenue, not gross. I knew the BTN was nice, but I had no idea it was making that kind of scratch. That's impressive.

 

[WoodyHayes1951]

Which is exactly why GoRs don't really matter in the end.

 

[StPaulHusker]

@studurando

According to industry analyst SNL Kagan, BTN net revenue was $166M in 2008, $262M in 2012 and projected at $408M in 2017.

@studurando

Some Big Ten Network financials to chew on as SEC prepares to unveil its network: Each BT school received more than $34 M from BTN 2008-12.



That's net revenue, not gross. I knew the BTN was nice, but I had no idea it was making that kind of scratch. That's impressive.

This should explain to everyone why Delany brought in Rutgers and Maryland. TV's people.

 

[Kiyoat Husker]

Agree that the NYC and DC markets will probably provide a large portion of revenue. Exceeding the "new mouths to feed" aspect of enlarging the conference. Smart move.

I think that people sometimes don't understand the way the BTN works. I'm no marketing or mass comm expert, but I did stay in a Holiday Inn Express last night. I also lived in the Des Moines area for awhile, and I can tell you that some of the Iowa State fans were upset when the BTN made a deal with the local cable company. Basically you can think of it as anyone who has cable through that provider were contributing to the BTN. Whether you were a Hawkeye fan or hated them, you were still paying. (as long as the provider agreed to have BTN as part of the basic plan).

Multiply that by however many people live in the NYC and NJ areas, and you have a lot of people donating to the conference, whether or not they are a fan of the Scarlet Knights.

Now this could change in the future, as things are gravitating toward more personallized programming like HULU and Netflix, but I think the BTN will be fine there as well, because that gives the most profit to the most passionate fan bases, which the B1G also has. (see nebraska)

 

[desertshox]

does nebraska get a full share yet? i've forgotten the original agreement when they joined and havent seen anything about it since.

 

[Jaybird]

does nebraska get a full share yet? i've forgotten the original agreement when they joined and havent seen anything about it since.

Nebraska doesn't get a full share until 2017. Not sure how this all works out or if that can be negotiated to be sooner or what. The specifics of the transition to my knowledge have not been fully released.

 

[Coqui]

does nebraska get a full share yet? i've forgotten the original agreement when they joined and havent seen anything about it since.

Nebraska doesn't get a full share until 2017. Not sure how this all works out or if that can be negotiated to be sooner or what. The specifics of the transition to my knowledge have not been fully released.

Isn't the partial still more than you received from the Big 12 though?

 

[Landlord]

does nebraska get a full share yet? i've forgotten the original agreement when they joined and havent seen anything about it since.

Nebraska doesn't get a full share until 2017. Not sure how this all works out or if that can be negotiated to be sooner or what. The specifics of the transition to my knowledge have not been fully released.

Isn't the partial still more than you received from the Big 12 though?

Oh yes.

 

[Coqui]

does nebraska get a full share yet? i've forgotten the original agreement when they joined and havent seen anything about it since.

Nebraska doesn't get a full share until 2017. Not sure how this all works out or if that can be negotiated to be sooner or what. The specifics of the transition to my knowledge have not been fully released.

Isn't the partial still more than you received from the Big 12 though?

Oh yes.

Good.

 

[Count 'Bility]

It's not even close if I remember right.

 

[exswoo]

So working backwards to calculate payouts:

BTN 2012 Total Revenue = $262M

Big Ten Conference BTN Ownership % = 49%

Illinois 2012 dividend (Payout) from BTN = $6.6M

Estimated Big Ten Conference payout = $6.6 x 12 = $79.2M (the actual number is smaller since we know that Nebraska took in a smaller share)

$262M * 49% = $128.38M

79.2 / 128.38 = 61.7%

So about 39% of BTN revenues is currently being re-invested into the channel with the rest being paid out to the shareholders (the schools) currently. This percentage is expected to go down over time but it's hard to know for sure for the moment. Doing some simple modeling...

Estimated BTN payout in 2017 pre re-investment (100% payout) : $408M * 49% /14 = $14.28M

80% payout = $11.42M

61.7% payout = $8.81M

...so a reasonable estimate would put it around the $10M range per school assuming BTN can hit those revenue numbers.

 

[Stumpy1]

It's not even close if I remember right.

Go read the realignment thread on Shaggy...According to those blowholes, the Big 12 makes the same as the B1G and are saying that we will be 3rd in the money race once the SEC gets their network up and running.

 

[VectorVictor]

So working backwards to calculate payouts:

BTN 2012 Total Revenue = $262M

Big Ten Conference BTN Ownership % = 49%

Illinois 2012 dividend (Payout) from BTN = $6.6M

Estimated Big Ten Conference payout = $6.6 x 12 = $79.2M (the actual number is smaller since we know that Nebraska took in a smaller share)

$262M * 49% = $128.38M

79.2 / 128.38 = 61.7%

So about 39% of BTN revenues is currently being re-invested into the channel with the rest being paid out to the shareholders (the schools) currently. This percentage is expected to go down over time but it's hard to know for sure for the moment. Doing some simple modeling...

Estimated BTN payout in 2017 pre re-investment (100% payout) : $408M * 49% /14 = $14.28M

80% payout = $11.42M

61.7% payout = $8.81M

...so a reasonable estimate would put it around the $10M range per school assuming BTN can hit those revenue numbers.

These are conservative estimates based on the current level of Tier 3 inventory, as I understand it.

Don't forget that the BTN is wanting to move more Tier 2 Football and Basketball content onto their own channel when the upcoming contract negotiations happen. This would greatly increase the amount of advertising revenue/income, even moreso than what is projected here.

 

[StPaulHusker]

I would like to get a job with the B1G as a currency rotator. You know. So the cash on the bottom of the pile doesn't get moldy.

 

[HSKR]

Is this close....

When we left the Big 12 we were making about $17 mil on TV? and some smaller schools like ISU were only making around $10-12? Now just a few years later, we will be making almost as much just from our BTN cut as what those smaller former conference members were making in total? That's crazy to think about. Now I know the Big 12 isn't making that little any more and even ahead of the BIG, just barely, but we have our new contract coming up in a couple of years and I would guess it will blow the doors off of what the Big 12 makes, especially when we will have their's and the SEC's new contract to base it off of.