Disaster isn’t imminent, but you could consider the comments by Big Ten Network president Mark Silverman Tuesday as a flashing warning light for not just conference-owned cable channels that funneled massive money into college sports, but the very schools and conferences that rely on that revenue.
The nearly 11-year old Big Ten Network was a genius idea, creating a channel for original programming and then jamming it on the basic cable packages of every house inside the Big Ten footprint. A decade ago, nearly everyone had at least basic cable, so the network served as a Big Ten tax of sorts. People were paying nearly $10 a year even if they never watched it, knew it existed or could tell a Badger from a Boilermaker.
That led the league to expand its membership in search of additional homes – Nebraska came first, then the odd fits (other than money) of Maryland and Rutgers.
Money-wise, it’s worked. League television revenue reached $51 million per school this year, although a large reason for the increase (up from $37 million last year) were new traditional broadcast deals with ESPN and Fox.
The Big Ten Network spawned copycats in search of the gold rush (SEC Network, Pac 12 Network, even the Longhorn Network). It also led to a major upheaval in college athletics and conference realignment shredded traditions and brokered unlikely marriages, all in pursuit of cable homes.
But what if conference television networks are no longer such a smashing success? Cable television is not a growth industry, with cord-cutting dropping the number of basic cable consumers blindly paying in, and cable providers mindful of keeping bills low as to not scare away existing customers.
It becomes easy to drop low-rated networks, and for all the hype about these channels, they struggle to draw regular viewers, especially beyond live football and men’s basketball games. There are just only so many fans, let alone ones willing to pay for it.
Which is one reason why cable giant Comcast is threatening to pull the Big Ten Network (as well as FS1, which shows league games) off basic cable packages. It already did outside the league footprint on second-tier packages. Now it is saying BTN will no longer be on basic cable in communities in the league area as of September 1.
Hence, Silverman’s alarm.
“BTN is now facing our biggest challenge since the launch of the network,” Silverman said at Big Ten Media Days in Chicago. “Our 10-year agreement with Comcast expires at the end of August. A few months ago, BTN was removed from out-of-market cable systems on Comcast, which is the leading cable provider in the country. … It’s extremely concerning.”
Comcast isn’t just the No. 1 cable provider in the country; it’s No. 1 in the 11 Big Ten states – five of those (Pennsylvania, Illinois, Ohio, Michigan and New Jersey) rank in the top 11 nationally and have a combined population alone of 56.1 million. If the channel stops being carried, not only will fewer fans be able to watch games through cable television, a lot fewer dollars will come into the Big Ten.
And if Comcast can do this with the Big Ten, then why not the SEC and others?
Cord-cutting and dwindling ratings are a major concern for all cable networks and the travails of ESPN, in particular, have been well documented. If something is hurting ESPN, then it has to hurt here also. These networks are certainly great for the college-sports-obsessed – the quality of programming is top notch. It’s still a niche market, though.
While the current Comcast impasse may work itself out, the future is fairly clear here. Using alternative distribution manners can reach the fans desperate for the content (and they may pay a premium for it) but it doesn’t allow an ability to blanket tens of millions of cable bills.
“Unfortunately, my fear is the removal of BTN in the outer market may just be the first step in Comcast’s plan to remove BTN from their systems everywhere, including the Big Ten home markets,” said Silverman.
And here is where it gets interesting. Powered by BTN revenue, school athletic departments have grown exponentially the last half dozen years – with gold-plated facilities, major debt service on new construction, bloated staffs and huge coaching contracts.
Michigan, for example, employed 253 people in its athletic department at an average salary of $73,382.64 in 2010-2011, per state records. Just seven years later, in 2017-18, there are 368 employees (up 31.3 percent) at an average salary of $99,310.58 (up 26.1 percent).
These are clearly the boom times for the National Collegiate Athletic Industrial Complex … more, more, more. But booms can go bust.
How do schools such as Michigan maintain the funding needed for all the new workers, all the new construction, all the new everything? No, not now. Michigan, and everyone else’s, check will clear. Don’t pass the hat for the Big Ten quite yet.
In five years though? In 10? Will there even be such a thing as basic cable to profit off?
And if not, then what’s the real value of some of these expansion teams? Rutgers has been non-competitive on the field and mostly a hot mess off of it. Other than some initial football victories, you can say the same about Missouri and the SEC.
The only thing either brought to their respective conferences was basic cable subscribers in their populous home states. What if that no longer matters and the schools actually pulling the freight (Ohio State, Alabama, Penn State, so on) are faced with belt tightening?
Do they cut sports and staff? Or do conferences splinter apart? Do the strong cut off the weak to protect themselves? Is smaller actually better than bigger?
Well, so did Rutgers joining the Big Ten in the first place. So did Missouri to the SEC or West Virginia to the Big 12 or Texas and Texas A&M no longer playing. Money talks in college sports. Money moves everything.
And on Tuesday in Chicago, a network president held a press conference to implore fans to call their cable provider and save the league’s money train.
It may not mean much today. It may mean everything soon.
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