Published November 21, 2012 - 10:23am
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Television revenue has always been at the heart of college football expansion and conference realignment but never has the goal of increasing revenue been more blatant and the cost of doing it so high. The Big Ten moved this week to add two struggling athletic departments with average-at-best football programs with Rutgers and Maryland.
As Dan Wetzel discusses in his latest column, the Big Ten commissioner Jim Delany is very clear about the goals with these moves:
The reality is Delany has been very forthcoming about his reasoning, in fact, so forthcoming not many people believe him.
“Demographics,” the Big Ten commissioner keeps repeating when discussing expansion.
And really, demographics it is. This isn’t a mocking of Delany. It’s a tip of the cap to pure, unadulterated, unapologetic, cutthroat capitalism. And this isn’t a mocking of pure, unadulterated, unapologetic, cutthroat capitalism. If you can make a buck, go ahead and make it.
At least he isn’t lying. This was about money. Oh, and “academics,” of course.
What’s fascinating here is that the entire strategy is dependent upon an archaic model of delivering cable television to end-users – and dependent upon that model not changing. As Wetzel explains:
Delany got his demographics, two states with a combined 14.6 million residents. The hope is Fox, which owns 51 percent of the Big Ten Network, can package enough channels, including Fox News and YES (which it is planning on buying a majority stake in and is home to the New York Yankees) to force the BTN on enough basic cable systems to make tens of millions.
Whether anyone watches is irrelevant. Conferences used to chase eyeballs. They still do only now it doesn’t matter if the eyeballs are even open. The genius of the Big Ten Network (or any cable channel like it) is it is essentially a Big Ten tax.
Because end-users are forced to buy cable television via large bundles of channels, they pay for channels they often don’t want. The Big Ten is essentially exploiting this system to increase revenues. Even if the quality of football in the conference goes down (which it does with Maryland and Rutgers).
This is an extremely dangerous move for the Big Ten. Not only does this move require the Big Ten Network (or Fox) successfully bundling the Big Ten Network onto millions of consumers that don’t even want it, but it also requires the mass cable delivery systems to remain fixed and unchanged.
Anyone who follows the world of technology knows that television is one of the biggest industries held back by regulation and corporate interests. Whenever this occurs, consumers lose. Typically it is caused by government regulation which enables various corporations to hold power over consumers by holding back competition and innovation. Cable television is a great example of this. We’re stuck with overpriced cable plans which force us to pay for dozens of channels that we never watch.
While many obstacles remain in place to prevent the dissolution of these cable television structures, I always believe that eventually the consumer will win. Eventually new technologies and new companies will break the archaic model of delivering television content to the masses. Netflix, Apple, Google and other companies have attempted to get the ball rolling, but it will take more change and more upset consumers to fully take down the cable monopolies. I believe it will happen eventually.
And when it does happen, the Big Ten’s plan goes to crap, and they’re left with two additionally very average football programs that play football that few want to watch. As a football fan, I hate the move; as a businessman, I think the move is extremely risky. As such, I sincerely hope that the SEC stays away from similar moves in the future.
While adding Texas A&M and Missouri came with its risks, with the success of the Aggies in 2012, most would agree that it was a move that did not hurt the brand of football in the SEC – at least too much. But future moves are very likely to, unless the added schools are more like Florida State and/or Clemson.
The SEC needs to remain focused on the brand of football, not acquiring new television markets.
The Big Ten has abandoned the attempt to increase its viewership via the quality of its football. Instead, they hope forcing consumers to pay for the Big Ten Network is their path to future gains. The SEC needs to take the opposite approach. By creating the best brand of football in the country, viewers will come. Revenue will come.
By focusing on real demand, instead of demand created by regulation and bad business models, the SEC will win in the long run. Quality will lead to better television contracts in the future. In the long-term, the Big Ten will lose with this recent deal. If the SEC goes the opposite path, they will remain the #1 conference in the country.
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