clock menu more-arrow no yes

Filed under:

Will the Big Ten Get A New TV Deal Done Before Cord Cutting Pops the Revenue Balloon?

New, 25 comments
George Frey/Getty Images

The Big Ten is entering the ninth season of a ten-year $1 billion agreement with ESPN and ABC to televise football and basketball, which means that commissioner Jim Delany is exploring all of the options for a new television deal...and likely looking for a huge payday.  Every other sports property has signed new deals over the last few years granting them big increases in money.  So it only stands to reason that the Big Ten is going to be rolling in dough, right?

Maybe.  Maybe not.

Last year, reports had the Big Ten anticipating a $45 million payout for each school. Earlier this year, the number was down to around $34 million per school. A nice sized number and increase...but still about 25% less than a year earlier. Granted, these are all estimates and predictions, but why such a drop?

Cord-cutting.

Once thought of a mere fad or just idle chat, it's now very real. A survey conducted by Digitalsmiths concluded that over 8% of respondents had cut the cord, and another 5% were about ready to. And it's no secret why either: have you seen your cable bill lately? 20 years ago, cable TV cost $20 or $30 a month.  Now, it's in triple figures.  Yes, we have more channels, but as more and more channels appear, we're watching less and less.  And with the rise of online streaming packages, people are now able to be much more selective over what they want to pay for.

By February 2015, ESPN's subscriber count had dropped from over 100 million homes to 94.4 million. It's no longer a theory or a few cranks. Cord cutting is not only real...it's gaining momentum.  ESPN knows it, Fox knows it. It raises the question: is the bubble for sports rights going to pop before the Big Ten can cash in?

No doubt that the Big Ten will do better than the previous contract...and Nebraska will do much better, as they are still paying off their equity portion into the Big Ten Network. It's not like the Big Ten is going to lose month.  But the reality might be that the Big Ten may not be making nearly as much as they had hoped to, and probably not as much as the SEC is.