Pac-16 Network rough calculations of payouts....
by laxtonto on Jun 6, 2010 6:48 PM CDT
Email
PrintAt the behest of dimecoverage I will create a fanpost about this so it doesn't get lost in the shuffle.
This is a ROUGH draft of the payouts provided the the P16N and why it is such a big deal to all parts involved. This is not scripture. Don't go gloating over the values. I should have a much better versions build tonight or tomorrow.
Off of the 2008 census data, with expansion hitting TT,TAM,UT, COL, OSU and OU…
Pac-16 Network would hit approximately 96M people in Pac-16 states plus the historical overlap state markets that the Pac-10 already controls. If you base the revenue projections off of 3.2 people per household you get approximately 30M households. I am not going to go through the standard numerics of cable capture rates per household or the additive effect of viewership in difference regions and any of the overlap principles. This is just a quick and dirty look because I finally am curious enough about the numbers to really look at it. There are all sorts of parameters that I can build into this, but for now I just want a quick simple estimate to see if the standard BS numbers wee keep seeing thrown around are even remotely true.
I started with a range of values for the given in market subscriber fee between 0.87 and 0.70. If the subscriber fee is 0.70 then they should receive approximately 7.875M just for subscriber fees if you apply a 50/50 split in revenues with Fox. At 0.75 it is 8.43M, at 0.80 it is 9M and 9.56M at 0.85 per subscriber. This is just a very basic model and without some harder numbers from the Big 10N I can’t create a better version.
If we are looking at a 80/20 split in favor of subscriber fees the entire network would yield per school:
.70 – 9.845M
.75 – 10.53M
.80 – 11.25M
.85 – 11.95m
a 70/30 split would yield per school:
.70 – 11.25M
.75 – 12.04M
.80 – 12.85M
.85 – 13.65m
a 60/40 split would yield per school:
.70 – 13.125M
.75 – 14.05M
.80 – 15M
.85 – 15.93m
a 50/50 split would yield per school:
.70 – 15.75M
.75 – 16.86M
.80 – 18M
.85 – 19.12M
These are no where near accurate as they could be. This is just a demonstration on why this is such a big deal in terms revenue for schools. This is a definite reason on why schools like Standford would be willing to look the other way in regards to the lower academically inclined schools to make this happen. None of these figures include the revenue generate from local/regional deals or the secondary national deal, bowl games, other sports TV revenue or conference logo/branding rights.
Even if you disagree with the low end numbers with the worst possible payout, the Pac-16N values are still 15% higher than the Big 12 TOTAL TV deal average payout of approximately 8.5M. This is the reason why the Pac-10 and the Big12 teams are so hot on this deal. The rough estimations of 20M payout per schools from the conference is a legit number and could very possibly be on the low side.
Lets not forget that it is very possible to see Fox be able to package the B10N and the P16N together for even more revenue. This will be a money making machine until the media distribution model changes to something else.
I need to look at some of the capture ratios and historic household sizes for each state and % of cable subscriber in each state, if I really want to make a solid model but the premise is sound. Any of you guys that build mathematical models on a regular basis feel free to add in any numerics that are verifiable and have a legitimate weight. Same with you guys that deal heavily in the media industry.
All comments, FanPosts, and FanShots are the views of the reader-authors who create them.
6 comments
|
0 recs |
Do you like this story?
Comments
Here is a much better model version I finished.
After reviewing my numbers it seems that there very very few scenarios to have this deal not reach the $20M in individual revenue per school, and in most cases it could well exceed that figure.
I have found the individual state averages for persons per households. This allows me to build a much better estimate of the total number of households reached. This allowed me to build two separate scenarios, with Colorado and no Baylor and with Baylor and without Colorado.
I started with a range of values for the given in market subscriber fee between 0.40 and 1.00. This is combined with the ratio of subscriber fees to advertising revenue ranging from 90% revenue provided by subscriber fees to a 50/50 split. This allows for various analyses of yields. To help eliminate confusion I ended up covering a wide margin of household capture rates varying from 60% to 90% in 10% increments. I would prefer more accurate household capture data for any of you guys working in the media industry.
The biggest conclusion to draw from this model vs. the previous is that the exchange of Colorado for Baylor would cost, in a worst case scenario, the conference approximately 900,000 per school initially. This is not a titanic loss in the grand scheme of things and helps explain the lack of up roar from the latest discussions of force feeding Baylor to the Pac -16.
Depending on the capture rate of households, the subscriber rate and advertising revenue split there are several levels of revenue that could be expected. The most interesting part is the average of all the values, good and bad, still out distances the average revenue from the total Big 12 television revenue package.
This is just a demonstration on why this is such a big deal in terms revenue for schools. This is a definite reason on why schools like Stanford would be willing to look the other way in regards to the lower academically inclined schools to make this happen. None of these figures include the revenue generate from local/regional deals or the secondary national deal, bowl games, other sports TV revenue or conference logo/branding rights
Here is the link to Google docs for the new Excel file I created.
Google docs Link
JD’s like, "you want some fucking pitching? Here’s all the pitching you can stand. Now choke on it, bitches!"- RCCook
You're not accounting for advertising revenue correct?
That would seem to exacerbate the Baylor for Colorado effect.
Nice work though, I’m enjoying it.
proud to swim home
I did
it is in a 90/10, 80/20 …. 50/50 columns in each individual sets of market share capture.
As an example H30 is capturing 90% of the available cable households, with a 50/50 split in revenue between subscriber fee and advertising with only a 0.65 subscriber fee
JD’s like, "you want some fucking pitching? Here’s all the pitching you can stand. Now choke on it, bitches!"- RCCook
Okay, makes sense
I could be wrong, but I suspect the lack of discrete cable market penetration data accounts for the discrepancy between what I would expect with and without Colorado and the calculations you have.
That’s not a complaint, because this is good work, just reconciling my intuition, your assumptions and the calculations.
proud to swim home
What I am really curious about is the
actual capture rate out there. Well that and some solid numbers t include non-member state revenue. I will play with this off and on his next week and hopefully I get some better data from someone…
JD’s like, "you want some fucking pitching? Here’s all the pitching you can stand. Now choke on it, bitches!"- RCCook
Comments For This Post Are Closed
Secondary Sidebar
User Tools
FanPosts
Community blog posts and discussion.
