Pac-12 Network Should Net Millions Per Year For Each Conference Member
by Avinash Kunnath on Feb 21, 2012 6:14 AM PST
in Pac-12 General
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The Pac-12 Network is going to provide plenty of crucial financial benefit for the members of the conference if these current subscription prices are right.
Source: Pac12 Network will charge 90 cent/sub, give or take a nickel. That's close to B1G in-market rate.
— Jon Wilner (@wilnerhotline) February 16, 2012
That would mean about $10.80 per subscription per year. With about 15-20% of American households being digital cable subscribers and the population of the Pac-12 states is just over 60 million, it probably means there are about 9-12 million households watching the network, which would mean probably about $100 million of revenue generated by the Pac-12 national network. Split between the schools and you have at least $7-8 million going back to each member of the conference. Not too shabby.
And this is only a start. There's the out-of-market costs, which will only provide a fraction of that back. This is not taking into account the regional networks, which will probably have a much smaller subscription base and cost but should still bring in revenue totaling a million or so for each member school. There are the online options from Internet and mobile devices, which will probably also have their own subscription costs. There's the broadband and satellite providers that still need to be negotiated with, which should come with their own subscription costs and add in a few more million.
Millions, millions, millions. Who knew the Pac-12 could be so profitable if someone put the time to try and make it so?
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You also have to factor start-up costs
Since the conference is going to own the network 100% there are going to be some substantial start us costs. Everyone takes the total revenue amount and divides it by 12 and claims each school is going to get that amount. There are expenses at the conference level and starting a TV network will create a lot of them.
Larry Scott got the cable partners who signed up last year
to upfront payments along with ESPN/Fox to cover the start up costs. Unlike the Big10 or Longhorn networks, the Pac12 network starts off on a positive cash flow.
by ev on Feb 22, 2012 9:08 AM PST up reply actions
correct
Scott said that they would be profitable in the first year even before advertising was sold.
by Jeremy Mauss on Feb 24, 2012 7:01 AM PST up reply actions
Jon Wilner is saying each team will get around $7M
year one. The projections are they might make as much as $15M-$20M once the network is fully built out, another 4-5 years (not counting anything from the East either). Amazing when you consider the Big10 network took two years just to turn a profit. While the Longhorn network made money year one, no one saw them. The Pac12 network is already signed up for 40M homes and that is without the deal with Direct TV or Dish Network (or any other cable partners).
by ev on Feb 24, 2012 8:46 AM PST up reply actions
i wonder
if that’s the charge for just the main network or the main + local network. If it’s just the main, then it’s surprising that they could get so much given how hard the BTN had to fight to hit those rates. I’m skeptical they can get onto basic carriage given those rates, but we shall see.
