Ute/Mafia, the Big East just signed a media deal for basketball. You should use that deal as a reference point and calculate the Big 12's implied basketball value using available data and assumptions.
Hi Ute, I just watched the full video on this topic. I get your point - that even doubling basketball media rights will not close the gap with the P2. I would argue two points, however: 1) closing the gap is not the only concern, and 2) your 20% methodology may not be valid. See below for details on 1) and 2). 1) while it's true that we are not closing the gap, we still need to raise all Big 12 boats to the point members can better afford to pay the athletes ($22M?). We may not need to reach $70-$90M, but there is some number that allows the Big 12 to field competitive teams. 2) 20% is only valid for high level valuations. For example, the Big 10 and SEC will always get a larger slice for basketball, using that methodology, simply because 20% of $80M is greater than 20% of $32M. I don't accept this logic, and I don't think Yormark will either. The fact is, that the Big 10 and SEC have been collecting schools based on football, not basketball, so why should OU, for example, or Auburn/Florida, etc, be worth more as basketball media products than Arizona or Houston? The Big 12 can't add football properties like the Big 10/SEC, but it has added some good basketball properties. Yormark is going to sell media on the fact that the Big 12 is the best, deepest basketball conference, with the most exciting environments and most competitive games. Let's look at it another very tangible way. The Big East just got paid $7M per school? Using the 20% rule, the Big East's football media value, then, is $28M, and their total media value is $35M/school. This is more than the Big 12 schools get! Clearly, the Big East received a basketball media deal based on a sliding scale, based on their sport-specific worth. In addition, Yormark intends to (poentially) break off basketball as a separate distribution item, and this may reap its own rewards. In the past, this 20% number is just something people nod their heads at, but I think Yormark intends to test this norm.
Ute/Mafia, the Big East just signed a media deal for basketball. You should use that deal as a reference point and calculate the Big 12's implied basketball value using available data and assumptions.
Check out the video! You’ll like it cause it shows these figures.
Hi Ute, I just watched the full video on this topic. I get your point - that even doubling basketball media rights will not close the gap with the P2. I would argue two points, however: 1) closing the gap is not the only concern, and 2) your 20% methodology may not be valid. See below for details on 1) and 2).
1) while it's true that we are not closing the gap, we still need to raise all Big 12 boats to the point members can better afford to pay the athletes ($22M?). We may not need to reach $70-$90M, but there is some number that allows the Big 12 to field competitive teams.
2) 20% is only valid for high level valuations. For example, the Big 10 and SEC will always get a larger slice for basketball, using that methodology, simply because 20% of $80M is greater than 20% of $32M. I don't accept this logic, and I don't think Yormark will either. The fact is, that the Big 10 and SEC have been collecting schools based on football, not basketball, so why should OU, for example, or Auburn/Florida, etc, be worth more as basketball media products than Arizona or Houston? The Big 12 can't add football properties like the Big 10/SEC, but it has added some good basketball properties. Yormark is going to sell media on the fact that the Big 12 is the best, deepest basketball conference, with the most exciting environments and most competitive games. Let's look at it another very tangible way. The Big East just got paid $7M per school? Using the 20% rule, the Big East's football media value, then, is $28M, and their total media value is $35M/school. This is more than the Big 12 schools get! Clearly, the Big East received a basketball media deal based on a sliding scale, based on their sport-specific worth. In addition, Yormark intends to (poentially) break off basketball as a separate distribution item, and this may reap its own rewards. In the past, this 20% number is just something people nod their heads at, but I think Yormark intends to test this norm.