Big Ten Conference Expansion: Feeding the Monster

Rumors swirled all about this week that the Big 10 was going to expand to 16 teams and raid the Big 12 for both Nebraska and Missouri. It made for good blogging, but right now it appears to be premature.

But still, questions remain:

Why the sudden move to expand?
Why go directly from 11 teams to 16?
And why are Nebraska and Missouri prime targets?

The answer to all three:

THE BIG TEN NETWORK

The quick success of the Big 10 Network will be a major factor in the changing landscape of College Football.

Launched in August of 2007, the Big Ten Network turned in an astounding $66 million profit in only its second year of operation. The network, jointly owned by the Big 10 (51 percent) and Fox Cable Networks (49 percent) is already estimated to be valued at almost $3 billion.

Inititally, the BTN found it difficult to get distribution outside the dominant eight-state area where league teams reside. After some long and nasty wrangling with Time Warner and Comcast, the Big Ten Network began to expand across the country.

With the Big 10 airing 35-40 conference football games, the league had 86 of its 88 contests televised nationally in 2009. No other league had more than 70 percent of their games broadcast nationally.

Thanks to the BTN and video streaming, 94 percent of all regular season Big 10 basketball games were available on TV or the web. The Big 12 was able to broadcast 79 percent of its contests either on TV or the internet.

Of course, the non-revenue sports such as softball, swimming and volleyball have really benefited from the network.

Three-time defending National Champion Penn State sees the Big 10 Network as a recruiting advantage.

The Penn State volleyball team defeated Texas last December for their third straight national title and 102nd straight match win. Already a top-flight program, the Nittany Lions believe that having most of their games broadcast on the BTN gives them even greater entry to recruits from other parts of the country whose families can see them play on a regular basis.

In order to fill up a 24/7 schedule, the BTN also includes such programming as highlight shows and various specialty telecasts, where each school gets to promote not only its athletics programs but anything else on campus it wants to highlight. This fall the network will have a special series, “Big Ten Icons,” which will feature a countdown of the league’s 50 greatest athletes, hosted by Keith Jackson. There are also replays of “Classic” games as well.

The Big 10 Ten Network is even bringing back replays of past coaches shows featuring legends like Bo Schembechler and Woody Hayes.

Right now the BTN is collecting subscription fees from 45 million homes, with an addtional 30 million having the the network option on their cable or satellite packages. The league collects approximately 70 cents per subscriber in its dominant footprint, and about 10 cents per subscriber elsewhere. The BTN is now available in Austin.

All this extra income has allowed the Big 10 the pass out yearly $22 million to each and every member from its TV coffers.

And that’s why the Big 10 is looking at expansion right now.

Big 10 blogger FrankTheTank makes the case for expansion and for Texas still being No.1 on the expansion list.

Taking into account such factors as attendance, TV markets, the number of available cable subscribers as well as national image, they estimated that Texas would help bring in an additional $101 million .

So you try to find out if Texas is interested, and then what? You go after programs that can help you in increasing your advertising and subscription dollars outside your dominant area.

The Big 10 believes Nebraska can help boost advertiser dollars and Missouri will help subscription numbers for their network.

The Big 10 Network revenue is a 60-40 split between advertising dollars and subscriptions. Of the teams seriously mentioned in the massive expansion plan, Nebraska consistently draws better TV ratings outside of its home area than any other.

Missouri brings the Kansas City and St. Louis markets into play for subscriptions. Instead of getting 10 cents a subscriber in Missouri, the Big 10 Network could boost that to 70 cents and that could mean millions over a short period of time.

As to why go from 11 to 16 teams in one move, its all about:

PROGRAM INVENTORY

Now you have 72 conference games, and if you have added “Name” programs your inventory immediately increases in value. ABC/ESPN might have four games on its schedule any week (and will pay more for it). That still leaves the BTN with a possible doubleheader that will have something better than Northwestern vs. Minnesota.

A 16-team league offers the networks a deeper selection of games while also giving the BTN more to work with as well.

Basketball will see the same increase in inventory, thus assuring the conference network that it will have more live events to sell, and more areas to charge the premium subscription rate.

Bottom line—even the Big 10 didn’t fully realize the potential of its network until after all the hard lifting was done and it was up and running. It apparently has decided that expansion is the quickest and easiest way to turn that momentum into even more revenue.

This article originally appeared on: Barking Carnival

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