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Nebraska's Big Ten Revenue Lagging - But Poised to Explode

Tags: big ten

The Omaha World-Herald reports that Nebraska's revenue from the Big Ten Conference not only lags the rest of the Big Ten, but also their former brethren in the Big XII. That was done on purpose, mind you; Nebraska is currently "buying into" their share of ownership in the Big Ten Network, which is split 50/50 between Fox and the other Big Ten schools.  During this "buy-in" period, Nebraska is receiving payments similar to what Nebraska was scheduled to receive from the Big XII until 2017.  That number originated at $14 million in 2011-12 and jumped to $18.7 million in 2014-15, thanks to a bump created by the College Football Playoff.  Meanwhile, other conferences such as the Big XII and SEC are paying each member over $20 million a year, and the existing eleven members of the Big Ten received $32 million last year.

Maryland, however, received $36.1 million.

Double what Nebraska got.  More than Michigan got.  More than Ohio State.

Unfair? Ridiculous?  Insane?  It may be crazy...but it's crazy like a fox. Truth is that Maryland's deal with the Big Ten is structured differently than Nebraska's deal - mostly because Maryland's situation is different. Maryland owes the ACC $31 million for leaving, and that's something the Big Ten has to make up. The Big Ten also needs to pay Maryland as much as the new ACC media deals were paying the Terps.  So if we take the Big Ten at their word that Nebraska, Rutgers and Maryland will each pay the same amount in the end to buy into BTN, we have to assume that Maryland will be paying off their obligations longer than Nebraska will.  Nebraska will be cashing in fully with the next television deal, while Maryland won't be for a while.

This is also where we need to be reminded how Rutgers and Maryland deliver the New York and Washington markets to BTN. Awful Announcing estimated that when BTN signed a new agreement with Time Warner and Cablevision for the New York area, BTN earns $48 million a year just from the Big Apple.  So yes, Jim Delany made the smart choice to expand onto the east coast.

And that's even before the Big Ten puts their next set of media rights up for bid.  Common wisdom has been that Fox and ESPN will split the existing ABC/ESPN package, but recent developments with the NFL's television deals raise some questions in my mind. Fox's commitments to Major League Baseball, the Big XII and Pac-12 raise questions about Fox's capacity to accommodate a sizable portion of the Big Ten rights. Yes, some of those games could slide to Fox's cable properties, but that comes at the risk of reducing the audience in this age of cord cutting. It's interesting to note that last year's college basketball title game on CBS drew a higher rating (17.1) than last week's championship game between Alabama and Clemson (16.0) on ESPN. Why is that?  Simple: the cable audience is shrinking, while television outlets remain solid.  The NFL noticed this last year, and this year, ESPN's Wild Card playoff game was simulcast on ABC to ensure that it was available to everyone.

The NFL is negotiating a new deal for their Thursday night package, and the battle is down to Fox, NBC and CBS. ESPN and Turner appear to be out, mostly because the NFL wants a broadcast over-the-air network to promote their games. Clearly, the suggestion that NBC only wants exclusive rights or that CBS isn't interested in bidding isn't playing out with the NFL.

Bottom line is that networks covet football, and there will be no more valuable property up for bid than the Big Ten's football deal coming up. Even in a cord-cutting universe, there's going to be big money in the cards for the Big Ten...and Nebraska.



This post first appeared on Corn Nation, A Nebraska Cornhuskers Community, please read the originial post: here

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Nebraska's Big Ten Revenue Lagging - But Poised to Explode

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