AAC ESPN close to a tier 1 deal?


#121

Frankly, “tier one” used to have a specific meaning. It really doesnt anymore. It used to be that “tier one” was “nationally televised content” and tier 2 was “regional content”. With the expansion of content being nationally televised on cable----“Tier one” meaning morphed into “the package of games in which the network has first selection”. Even that has been blurred in the more recent deals. For instance, the Big 12 really has two networks that share the top content. One week FOX gets the #1 pick and the next week ESPN gets the number one pick. Essentially–the Big12 has 2 “tier one” packages. Basically–today I guess “tier one” means your “best rights package”. The truth is that the definition of “tier one” actually differs from conference to conference–so it kinda means whatever each conference says it means (if they even use that term).


#122

Nix, you can be the optimist and I agree with most of what you’re saying. There’s just no one forcing ESPN’s hand. ESPN holds all the cards. There’s a strategy used in estate law when it is known that certain family members are going to be aggressive. They’ll put just enough money in the will to make it not worthwhile for the member to sue in probate court and risk loosing the money in legal fees, but a fraction of what the estate is worth. Let’s say the estate is worth $100milion, they’ll give $500,000.
If my metaphor makes sense, that’s what I see ESPN doing here. What is the minimum that will make the AAC happy and sign quickly before going trying to shop around but not give a significant amount. More importantly, not get closer to P5 money. I say that’s $6mil.


#123

Except this isnt an estate. This is a market value situation. The main reason the AAC is so undervalued is that nobody had any clue what kind of audience the AAC would command on national TV. ESPN took a flyer on a high risk unknow property in 2013. Turned out—the AAC drew a very nice audience. Not P5–but way way in excess of the other non-power conferences. Basically, the AAC drew what mid and lower tier P5’s draw—but well below the king pin programs like Texas, Bama, Ohio St, etc.

The AAC now has a track record. Every other network knows the AAC can draw a solid audience and even at 3, 4, or 5 times their current value—they represent a good “bang for the buck” live sports property. Furthermore, the AAC filled 32 slots for ABC/ESPN/ESPN2/ESPNU. Thus, ESPN knows the AAC market value and needs the quality inventory to fill slots in their broadcast line up. Other networks know the ratngs numbers and the value as well.

My guess is that ESPN offered the AAC market value. The benefit to ESPN of dong that is multi-fold. ESPN keeps a soild property at a fair price, they keep the necessary AAC content to fill those 32 slots, they dont have to risk paying more in a possible bidding war, and they eliminate the risk losing content they actually need to a competitor. The AAC gets to keep their excellent exposure profile on the best sports platform available and they got what they believed was a fair value for their content.

The reason we were paid 2 million last time was there was zero reason for anyone to risk paying more for an unknown property. Today–we are not an unknown. There were going to be serious bidders.


(greg) #124

ESPN is giving The AAC what they ask for, or close to it, if they holds all the cards, then let it go to the open markets, ESPN don’t want to let this deal go to open market
Somebody may give the AAC more. Mike is not a newbie when it come to negotiation. Mr.Tilman, President Khator and other have said money is the most important thing we have to get for this conference to survive. We will get close to P5 money.


#125

No crap this isn’t an estate…it is a metaphor. It was a reach, I know.

You guys are right. Now I have a question. Who are the serious bidders?


(greg) #126

ESPN knows, I don’t Know.


#127

No, I mean, this is my point. Who are these other bidders? Who would compete with ESPN for the AAC’s rights?
The mistake both Aresco made with the Big East and the Pac made with their network is thinking they could either challenge or go it alone with out a big network tie in.
ESPN is holding the cards. I mean, I hope you guys are right. I’ll be doing old man cartwheels on my front lawn if we get over $10mil in front of my aggie neighbors.


(greg) #128

Post your cartwheels. Money is coming to the AAC.


(DERRICK KATELY) #129

Dont hurt yourself…Dr. might be upset with you.


(greg) #130

Mr. Tilman invested in UH getting a new coach because Houston was losing more money than a P5 coach would cost us in tickets sales. That kind of thinking is what behind these negotiation. The market research the AAC put in this deal is a whole lot.


#131

Uff…it won’t be pretty


(Patrick) #132

#133

Well if everyone who knows the dollar amount is smiling, it has to be 10M or more.


(Mike Higdon) #134

And I hope you aren’t saying that Vandy, Iowa St., KU, KSU, Ore St, Minnesota, Rutgers, Utah, etc are worth the prices they get in their conferences. All conferences are carried by their top tier teams.


#135

Good things ahead. We are the leader of the college athletics growth stock.

This is far better than being the univited guest at the SWC/Big 12 party.


(Jimmy Morris) #136

Scroll up to read my reply to Ron who asked the same thing.


#137

Double standard when it comes to the AAC. Big10 and SEC are paid around $50 per school because of the top tier schools. If Bama/UGA/LSU/UF is worth $50, then how much is UH/UC/UCF/Memphis worth? More than 1/5th of those schools IMO.


(Fred) #138

It’s like old money and new money. Vandy, Iowa St, KU are charter members of their conferences. They aren’t going anywhere. They also bring academics, the three schools I mentioned are all AAU schools, don’t underestimate that either. The University of Chicago is a still a member of the B1G, it just doesn’t participate in athletics with the rest of the conference.


#139

$10 Million Per Team (or a number north of that) along with a NY6 Bowl Tie-in would be a reason for ME to smile.

Combine that with some sort of scheduling alliance with a P5 conference (for non-conference games), that would be quite remarkable.

A reward for progress on and off the field, and a blueprint for future advancement towards a meaningful P6.

As long as its a fairly short term deal (corresponding to those of the other P5 conferences), ESPN is the best platform for now.

Who knows what the future holds with regard to streaming and/or realignment in the longer term.


(Cristian) #140

Im extremely skeptical. How much yall want to bet we bent over and arent getting anything close to 8M and up.