Wednesday, May 30, 2012

Why The Wind Of Change in Collegiate Realignment Matters: Georgetown

As weakly-sung 80's hair metal ballads go, you could do a lot worse than the Scorpions' "Wind of Change", the German group's documentation of the fall of Soviet-style communism in Eastern Europe.  (Though I never could get into Klaus Meine's vocals, which were always comically flat to me.)

To some Patriot League fans, the wind of change blowing through collegiate athletics right now seems as distant to them as the Scorpions' last hit record. 

Does it matter, they seem to say, that the Big East might break apart?   The Patriot League, after all, has their core ideals and priciples, and if the rest of the NCAA tears itself apart over money, ego, or something else, what is it to the schools of the Patriot?

The answer, of course, is absolutely everything - no matter what any deniers might say.  As I'll demonstrate in this blog posting, what happens in the Big East could potentially make a very big difference in the Hoya football program.


On the surface, it might seem like the Patriot League is beyond all the turmoil of the rest of the collegiate world.

There are, of course, the "core five" of Lehigh, Holy Cross, Colgate, Bucknell, and Lafayette, who are in the Patriot League in all sports. 

Then there's Army, Navy and American, who play in the Patriot in all sports but football, and Georgetown and Fordham, who play in football only.

It's how realignment plays out in terms of the Patriot League's affiliate members in football where the winds of change could have the most effect.

Let's start with Georgetown, who plays in the Big East in all other sports.

The travails of the Big East in the last three years have been well documented - losing Pitt, Syracuse, and West Virginia, but gaining Temple, Memphis, Houston, SMU, and Central Florida in all sports and Navy, Boise State, San Diego State in football only.

But the backdrop to this Big East reshuffling is something even larger - the rights to their games on TV, which are in the midst of being negotiated

For all of the gloom cast over the league, television executives from NBC, Fox and ESPN still mingled at the Big East meetings. There is such a rabid demand for live sports programming that the Big East, even in flux, has suitors. With few collegiate sports properties not locked up for the long term, entities like NBC appear eager for inventory. And if the Big East has anything, it is a seemingly endless stream of games.

Whether the league will match the deal worth nearly a billion dollars it turned down from ESPN last spring is a tricky question. The answer will ultimately lie in who is around Sept. 1 when ESPN’s exclusive negotiating window opens.

The TV rights are the money taet from which all the "big money" conferences suckle. 

And for Gerogetown, that taet is a significant part of what funds the athletic department in terms of basketball revenue.

This Forbes article in 2011 details the fact that the $10 million of Georgetown's athletic revenue, or 41.3% of the revenue for the entire Hoya athletic department, was generated by basketball.

Of those basketball revenues, ESPN's current deal pays $1.5 million per year to each non-football member, or 1/7th of that total.

Since basketball essentially funds Georgetown athletics, any TV revenue gains or losses don't just affect Hoya basketball but also directly affect all of Georgetown's athletic squads, including the foootball team.

Given it's such an important piece of the financial puzzle, what's the Big East's TV contract going to look like after the negotiations?

Brett McMurphy of CBSSports.com speculated that the Big East's TV contract will create anywhere from $1 million per year (on the low end) or $2 million per year (on the ESPN TV contract the Big East rejected).

But the Rumble in the Garden blog breaks down the particulars of the Big East TV contract now, and what it might be later as well - and comes to a different conclusion:

Pro-rated to nine years for comparison to the original ESPN deal ($155 million/ year), the top figure ($130 million/ year) would be worth $1.17 billion over 9 seasons. The lower figure ($60 million/ year) would be worth $540 million over 9 seasons. By these numbers, the Big East's presidents would have been better off accepting last year's deal extension.

In speaking with the Hartford Courant, New York-based media specialist Lee Burke thinks that "the marketplace has only gotten hotter in the interim... I think they are going to do substantially better."
The negotiations for the new contract will be done in private, but the jockeying, as we know, occurs in the thoroughfare, in front of fans and boosters. So with speculative numbers like these, grains of salt apply.
The "sources" with the lower amounts are most likely interested parties in some way - dealmakers at ESPN or NBC, for example - floating out lower numbers to undercut the Big East's hopes.


It seems inconceivable to me that this deal will fall on the low end.  Not in this market, where the ACC recently renegotiated a deal where each full member school gets $17.1 million apiece - and, mere months later, are being accused of not getting full value for their TV contract and are seeing rumors swirling of members moving to the Big XII for even fatter TV contracts.

The question becomes, then, what does the Big East get in terms of TV money?

If they simply match the ESPN deal, the projection is $2.1 million per school for basketball.  If there's a bidding war between two or three suitors, that number could easily grow immensely, perhaps eclipsing $3 million per school per year - for non-FBS schools, the gold standard of media rights.  No other basketball-only conference would come anywhere close.

For the Georgetown athletics department specifically, what do these TV rights mean?

The Patriot League - you might have heard - recently allowed schools to start offering merit-based aid to athletes, or conventional, FCS-flavored scholarships that schools like Delaware and James Madison are very familiar with.

It's been speculated that Georgetown, who spends less on Patriot League football than any other school, either cannot or will not spend the money for more financial aid in football.

A new TV deal, however, could change the economics somewhat.

While not all of that TV money would flow into football scholarships for Hoyas, obvioously, even a quarter of that money flowing in that direction could make a big difference.

Georgetown's reputation is global, and certainly many football recruits decide to go there for its academics - its proximity to Congress, its law department, its medical school - rather than simply looking for a career in the NFL.

I beleive with need-based aid filling the gaps, Georgetown, with some convetional scholarships, could really make some noise on a regular basis in the Patriot League.  After all, this was a team that went 8-3 and were a victory over Lehigh away from going to their first-ever FCS playoffs last year.

Moreover, with enough conventional scholarships and grants-in-aid, suddenly Georgetown opens up to the possibility of playing "body bag" games against teams like Maryland or Virginia - for some guarantee money from the other schools to go with a national TV audience.

That's more revenue in an athletic department that needs it.  Enough for ivory backscratchers for everyone?  No, but a strong enough revenue stream to make the Hoyas - hopefully - think about it.

This is precisely why Patriot League watchers should be following the the soap opera that is the Big East. 

If it survives the winds of change with a very fat TV contract - and, today, all signs point to the fact that it will - it might affect Patriot League football in a very positive, material, way.

Instead of suffering through the whispered rumors that the Hoyas might leave the league - because it's grown too expensive - instead they may be able to say that they can complete for the championship along with everyone else.

It could help the Hoyas stay where they want to compete in football - in the Patriot League.

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