Monday, June 19, 2017

The Group of Five Conferences, TV Rights & Their Convergence in 2019-20

There could be a large amount of college sports to renegotiate with the rights agreements for three of the Group of Five conferences (the American, the Mountain West and the Sun Belt) plus Army football expiring after the 2019-20 athletic year.   Its a lot of inventory to potentially hit the open market, or at least the negotiating table, all at the same time in both football and men's basketball, presumably in late 2018 or early 2019.

Before that, C-USA will be negotiating new rights agreements starting this year for deals expiring from ESPN, CBS Sports Network and STADIUM after 2017-18, while their agreement with beIN Sports runs for an additional year to 2018-19.  BYU's agreement with ESPN for football will expire after the 2018 season and they should be working through exclusive negotiations in the near future.  The WCC, where BYU competes in most other sports, has its contract with ESPN expire after 2018-19 as well.

(The MAC, if you're wondering, starts the ten year extension they signed on their previous TV deal during the 2017-18 athletic year)

EDIT: BYU's contract has an option year for 2019 that can be exercised by ESPN, so they could be included in this group of conferences.  Per AD Tom Holmoe, they'll be talking with ESPN soon per an interview from March.

These conferences plus Army all hit the market at roughly the same time with sports broadcasting at a bit of a crossroads.  Yes, the Big Ten got paid, but in the process ESPN laid off a bunch of on-camera personnel and are looking to retool key parts of their programming.  Digital-centric broadcaster STADIUM is entering the market this summer.  The American believes that there is a Power 6 that they are a part of and the Mountain West has been unhappy with how often their football games end up as evening games which has contributed to a decline in season ticket bases for at least one Mountain West school.

The movement of about 25 Big Ten games to FOX Sports plus the creation of the ACC Network, whether it happens using existing channel space like ESPNEWS or a completely new outlet similar to how the SEC Network started up, should provide some open space on Saturdays for a few more games from these conferences, probably on ESPN2 and ESPNU, but a better judge of that would be once we see how many telecast windows ESPN ends up using across their networks during the 2017 season.

Where the Group of Five conferences do hold value to ESPN is on Thursday & Friday nights, especially when games are scheduled vs. Power 5 schools or for a school that is expected to compete for the Group of Five spot within the New Years Six.  For the 2017 football season, they have at least one game air on ESPN or ESPN2 for 13 of 23 through mid-November. I excluded Thanksgiving & Black Friday, more because Black Friday has a lot of TV windows, but even that day you'll find two American Athletic & one Mountain West game for their TV partners in 2017 with the two American games to air on ABC or ESPN.


Eyeballing the table at Sports Media Watch for the 2016 season, most of the non-Power 5 Friday games had 500K-600K average viewers where the Thursday night games typically drew above a million viewers, though Houston as a potential New Years Six representative for the Group of Five helped drive some of those numbers.  Yes, the Thursday night games go against the NFL and the Friday games shift to ESPN2 once the NBA is in season.

CBS Sports Network, on the other side of the equation, is dependent on the Group of Five conferences and, right now, ESPN provides them some of that content with their MAC and American live events coming to CBSSN through sublicenses.  That handcuffs them a bit, because that content could go away if ESPN opts not to sublicense to them or the American were to move on from ESPN and doesn't have CBSSN as a direct rightsholder.  CBSSN will lose Navy as a direct partner next season as their football rights are to return to ESPN after this season.   Some of the Mountain West's anger regarding evening start times extends to CBSSN as well.  All of this leaves CBSSN with a lot of grey area with respect to how much programming space they truly have to offer a conference if they want to be the primary rightsholder for any of these conferences.

My early gut feeling is that ESPN will try to engage with each of these conferences they have rights for to try to retain them, potentially earlier than their exclusive negotiating window to try to take advantage of an uncertain marketplace as we truly don't have a great idea what major digital companies like Facebook, Twitter, Google, Netflix, Amazon, etc. will pay for college football and, to be honest, college football that is not from one of the conferences that draws a lot of viewers on Saturdays.   They'll work to provide an increase in rights without overbidding for programming that, right now, costs a lot less to own the rights for.  Maybe hoping the conference will take a discount in return for a longer agreement.

As for Army, I feel would stay with CBS Sports Network,  A hunch, nothing more.  Army wasn't really thrilled with games on ESPN3 a few years back and both Army and Navy have extended their agreement with CBS to carry the Army-Navy game well into the next decade.

Where I do think these conferences have some wiggle room, potentially, is the pattern several TV agreements have moved towards: caps on the number of games a TV partner can carry with special provisions, such as the Mountain West, Pac-12 and Big Ten granting a maximum number of games to each primary rightsholder or C-USA signing their various agreements, though C-USA's agreements were more out of necessity and not necessarily by design.  For example, I can envision scenarios where a rightsholder doesn't increase the dollar amount of their rights fee to one of these conferences or provides a smaller increase, but instead relinquishes their status as the exclusive rightsholder in exchange for terms that are more favorable (ie. taking 10-15 games, maybe nearly all Thursday & Friday games in football or games on a specific night of the week in basketball).  If the conference can then swing it where they still have good inventory for a second or third rightsholder to buy in, then it could remain lucrative for them, especially if they want to test the digital waters for themselves.

So what do you see happening in three years?  Shorter or longer agreements? More or less use of linear television in these agreements?

8 comments:

Long Short Model said...

BYU will be a good barometer for the American.

Over 2015-16, BYU has been delivering 3-4M viewers per year for their football home games.

The same period, the American has been delivering 2-3M viewers per year per school for their home games. Of course, the American package will include basketball too.

So the whole American contract value should be something close to BYU's football package, which we'll know soon.

Matt Sarzyniak said...

BYU right now makes more from football on their deal than per school what each American school makes right now for their overall rights, so I wouldn't expect that to change. I'm unsure if the gap would close or not either.

And, per this Deseret News report from April, there is an option year for 2019 that ESPN can pick up.

Andy said...

I think that CBS is going to make a play for Tier 1 AAC rights. They could use the best game of the week in the AAC as the AAC GOTW at noon to lead in to the SEC GOTW in the afternoon. The exposure would also elevate the conference in the P5 eyes for scheduling home and homes. Navy would bring the Notre Dame game every other year, and the championship game would also be a well viewed lead in to the SEC title game.

Marc Londo said...

The American have been subsidizing their last deal with exit fees procured from a split with the C7. They gambled by signing for such a reduced amount that they would prove their value - both in television rating and competitively.
IMO, that is really the only nationally relevant inventory among all the conferences you listed in this article. None of those other conferences are winning football and basketball championships like the AAC, in major metropolitan markets.
ESPN is simply not going to start airing Coastal Carolina and ODU if they can help it.
I see them at the very least closing the revenue gap that the American subsidized with Big East credit money and likely using the BYU and C7/Fox contracts as barometers.
The AAC drives more value as a whole.

Mel Goldberg said...

I agree with the above. The American inventory is really separate from the others you talk about. They are getting much higher viewership #s and are clearly in that 4-5-6 spot in all the most watched sports. IMO they are more like the top tier group than the bottom tier group, and the difference in their athletic budgets compared to the MWC, MAC, etc, reflect why. None of those other conferences had an RPI that so closely paralleled the Big 12 and actually had more football players drafted than the Big 12.
That's what's really going on here. Houston's ratings are no less relevant (in the midst of their CFP chase) than Alabama's are for theirs.
Aresco is on point with pushing the narrative. Those athletes deserve a platform that reflects the viewership they bring in.

Matt Sarzyniak said...

@Andy - I'm unsure of CBS's interest with respect to football. Navy's "home" game vs. Notre Dame would interest them as it would probably interest ESPN for placement on ABC. I do suppose that particular game would take up one of the American's minimum three ABC games under the current deal, which may/may not bump another game down to the ESPNs.

As you probably caught in the discussion about this on Twitter, CBS seems to want to maintain a 30 minute buffer of a SEC pregame show with the exception of their doubleheaders of two SEC games at 12pm & 3:30pm. The SEC likely wouldn't budge on a start time later than 3:30pm ET, so the American's game might be 11:30am ET starts, which would be OK for 2/3rd of the conference, but four schools do reside in the Central Time Zone. If they're cool with 10:30am starts at home, go for it.

@Marc - I know the exit fees were largely to keep USF, UConn and Cincy whole with respect to rights fee drops since those three were the most longstanding Big East members moving to the American. I also thought that the payout of those exit fees & NCAA credits were close to ending either this year or next year, but I wouldn't be surprised if I'm incorrect on that.

@Mel - I would agree, particularly with respect to men's basketball, that the American is clear of both the Sun Belt & the Mountain West when it comes to televised games.

Darrell McKown said...

Speaking of Navy, are their TV rights included in the AAC deal (with the Army game carved out), or separate? The CBS deal for the Army-Navy game raised that question and I don't recall seeing anything that clarified it.

Matt Sarzyniak said...

@Darrell - Army-Navy is handled separately and Navy's home games, including Notre Dame at a neutral site, is supposed to move under ESPN's agreement in 2018. I do not know if that triggers any increases in rights to the conference.