October 23, 2018

The Big Ten is Just Fine: Defending Conference Expansion

On Tuesday, the website “Go Iowa Awesome” posted an article by Patrick Vint arguing, to quote the article title, that “the Big Ten needs to contract.” Yes, as in actually kick schools out.

Specifically, the thought goes, the Big Ten should contract by going back to its pre-expansion state of eleven teams, eliminating Nebraska, Rutgers, and Maryland.

I’m here to say that this is a monumentally stupid idea.

This article comes on the heels of a weekend where all three of those previously mentioned teams lost, two of them in spectacular fashion. Rutgers got boat-raced by 41 by perennial college football joke Kansas. Maryland lost to Temple by three touchdowns. Nebraska, meanwhile, is 0-2 after losing to Troy of the Sun Belt conference. The Cornhuskers are a shell of the team they were in their heyday (settle down with the scorching hot takes, Patrick), so much so that they’ve brought the Big Ten West down to a point where (and I can’t believe someone actually wrote this with a straight face) “an undefeated Big Ten West champion would possibly be left out of the playoff due to schedule weakness.”

Sigh.

Golly gee, Pat. I was just certain that Rutgers and Maryland, with their storied football histories, were brought in to compete for championships. Give me a freaking break, man. Also, if you seriously think an undefeated Big Ten team, with all of their money and influence, wouldn’t get into the College Football Playoff, I have to question not just your football acumen but your overall common sense.

When the Big Ten decided to expand, it wasn’t about football. It was never about football. It was about money, plain and simple. Surely everyone can agree that this was and still is the case. The goal was to make the Big Ten, via the Big Ten Network primarily, a more valuable conference.

Turns out, expansion worked. With a new Tier-1 media rights deal kicking in, Big Ten teams will be pulling in over $50 million per year in revenue distribution. Let me say that again: $50 million.

So, for example, let’s take Michigan. The Wolverines received $36 million in revenue in 2017. In 2018, that number makes an insane jump to $51 million. In 2019, the number jumps to $52.1 million. I’d hardly call that a “disaster.”

Now, a caveat: I will concede that Rutgers and Maryland got screwed big time in this deal. They do not become “full” members of the Big Ten, with regard to revenue sharing, until the 2020-21 season. At that point, however, the league will nearly be ready to cash in again, as the current rights contract expires after 2022-23. They are, in fact, the first major conference to have their rights go up for bidding again, a full decade ahead of the SEC, the conference’s next closest financial competitor.

In other words, the conference is poised to cash in again. And cash in they will. But what will the numbers per school look like when the conference is forced to pony up cash to Rutgers and Maryland? Will they bring the average down and simply remain “a cynical business arrangement,” as Pat put it?

Let’s dispel a few myths first. At one point, after his bad football diatribe that, in essence, matters not at all, Vint concedes that it is ultimately about finances. He writes:

And even if the three programs weren’t complete mediocrities on the football field, the rationale for their admission has been exposed as short-sighted.  Carriage fee models are being ripped apart by cord-cutting, and BTN’s demands for basic cable space (and basic cable fees) are being challenged anew by cable providers who no longer want to pay premium fees for a niche network.  While BTN can transition to streaming — it’s already available through Hulu — moving toward a post-cable model means throwing out the very business strategy that made the Big Ten the nation’s most profitable conference just a few years ago.

As he notes, the Big Ten, in their next media deal, will have to deal with cord-cutting. There’s also the pesky “challenge” by cable providers. To make his argument, he literally linked to an article that detailed how Comcast and BTN settled their dispute. In other words, things are fine (and, spoiler alert, will remain fine throughout the course of the current deal).

Now, as to the cord-cutting issue. I’ve written about this before, but here’s the quick reality of the situation in a nutshell: Live TV (and sports in particular) are more valuable than ever for advertisers and media companies. With viewership of scripted shows moving more towards streaming/on-demand services, live events/sports (and their captive audience) become increasingly important to advertisers.

So, while cord-cutting is happening, live sports, unlike other content, are built to survive and maybe even thrive.

Let’s take the WWE, for example. While not a technically a sport, it’s being treated as one, if not by the average Joe, then by television execs. Fox just gobbled up the rights for SmackDown (not even WWE’s #1 show) for $1 billion over five years. Billion with a B. You know why? Because in reality, neutral source statistics show that live TV comprises of 84% of total television viewing time. For every hour spent streaming video, people watch more than five hours of live television.

Why does that matter? Because while cable might be losing subscribers, network TV isn’t in danger of going anywhere. Fox, with the WWE move, has established a game plan to deal with people cutting the cord. Network TV, with the benefit of their over-the-air antenna, is in a great spot to hunt for more live content even if people drop cable. What is live and gathers massive ratings? Football games. What I’m suggesting is that even if the Big Ten Network has issues with cable providers or cord-cutting causes people to drop cable altogether (rather than simply supplement cable with streaming, as most do now), there’s always options. It might be a streaming service. It might be something as simple and lucrative as more football on network television. Someone will pay through the nose for a guaranteed ratings pop.

So, to get back to the original point, how should we determine the success of Big Ten expansion? Football success? The Big Ten could give a flip whether Rutgers or Maryland have great football teams. Not everyone can be good, and those teams are surely not going to end most seasons with an above average record playing in a division with Michigan, Michigan State, Ohio State, and Penn State.

So, given the Big Ten realized this, we can only assume that success is to be determined by the amount of money the conference is pulling in. By that measure, expansion has been an overwhelming success. But has Rutgers and Maryland actually contributed to that? And couldn’t the conference just get rid of them and Nebraska now and split the money between the eleven schools, thereby increasing each school’s share?

This is what Vint suggested, writing, “Revenues will remain at a level high enough to run eleven of the biggest, most lucrative sports programs in the nation.  Broadcast rights, now free of expansion dead weight and loaded with 10 weeks of conference games to televise, including more consistent run-ins between the conference’s best programs, could well increase in value.”

Let’s get rid of the hypotheticals and deal with facts: In the first year that Rutgers and Maryland played in the conference, the Big Ten Network gained eight million homes in the New York area. Earlier this year, the Big Ten conference basketball tournament was played in Madison Square Garden. The year before that, it was in Washington, D.C. Do you think any of that happens without expansion? Are homes on the east coast with Comcast going to keep getting the Big Ten Network if you kick those teams out? Let’s use our brains here.

Is it a guarantee that revenue per school will top $50 million plus with the new TV deal once Maryland and Rutgers get to share in the profits? Not necessarily, but again, let’s use facts: In Fox’s first year as a partner with the conference, ratings jumped 23%. In other words, “the rumored ‘rights bubble’ is starting to look more like a trampoline.”

So, yes, if you’re looking at football records to determine success, then you’re going to be disappointed with expansion. If, however, you can put aside your nostalgia and arrogance and focus on the big picture, expansion has enabled the conference to thrive and potentially widen the gap even more in coming years. If we’re truly concerned about the “value of the brand,” as Vint claims he is so concerned about, let’s count the zeros and call the 14 team Big Ten what it really is: An overwhelming success.

Jason Mitchell
Jason Mitchell 33 Articles
Staff Writer

Jason grew up in Iowa but couldn't bring himself to like Iowa or Iowa State. Instead, he married a Cornhusker. Jason has taught junior high, high school, and college English but is now a stay-at-home dad to four kids. He also has an encyclopedic knowledge of reality shows and 1990s professional wrestling.

Be the first to comment

Leave a Reply

%d bloggers like this: