Big Ten Network Beats Comcast with 3 Yards and a Cloud of Dust

Posted: June 16, 2008 in Big Ten, College Basketball, College Football, Illinois Fighting Illini, Sports
Tags: , , ,

I’m one of the fortunate souls that has had DirecTV for several years, so I personally was able to avoid the issues stemming from the spat between the Big Ten Network and Comcast (among others) over this past year. While the football offerings on BTN weren’t drastically different than the old ESPN Plus syndicated package, it was definitely a boon for college hoops junkies such as myself to be able to get midweek doubleheaders of basketball (particularly when I needed to watch something to take my mind off of the last Illini b-ball season). Unfortunately, many of my Big Ten fan brethren were stuck with cable and ended missing a large portion of their respective teams’ football and basketball seasons. Tom Izzo at one point called it a PR nightmare with all of the Big Ten fans not having access to games and he was right at that particular moment. Take it from me, for all of comparable stories about the NFL Network and MLB Extra Innings this past year, there is absolutely nothing that compares to the level of venom spewed when the fan of a major college sports program can’t watch a game due to television contract disputes. When you consider that the Big Ten arguably is the strongest and has the most passionate fans of the BCS conferences (I have a multitude of reasons as to why this is the case as compared to the SEC, but that’s another debate for another day), that could have been a pretty toxic mix for conference commissioner Jim Delany.

At the end of the day, though, it appears that the Big Ten largely got what it demanded from Comcast, which was basic cable coverage within the Big Ten footprint and sports tier coverage everywhere else. While tons of people on Big Ten message boards exclaimed last year that they would have been willing to pay extra for the BTN, I completely understand and agree with why the network dug in its heels on the basic cable issue. The fundamental economics of the cable industry dictate that basic cable coverage is the road to riches (unless you’re HBO) and premium tiers aren’t really “premium” as much as they are a cable ghetto. ESPN is a financial powerhouse because it can charge in excess of $2.50 per subscriber for every single cable household in the country and the similar stories can be stated for the various regional sports networks within their respective metro areas. For the Big Ten to cave on this point would have invalidated the economic advantages of setting up the network in the first place.

What Comcast miscalculated here was that it kept comparing BTN to the NFL Network in terms of how much those channels were charging when it really was more akin to the YES Network situation in New York when the corpse of George Steinbrenner started it up . It’s all about critical mass squared – as in critical mass of viewers times critical mass of games. The NFLN only offers less than a half-season of games and they are still shown over-the-air in local markets for the applicable participating teams. There isn’t a critical mass of games that makes the NFLN particularly valuable to even diehard football fans (although I prefer their highlight shows exponentially over ESPN’s). As a result, although there is a critical mass of people that love the NFL over all other sports programs, the fervor from the general public to watch a limited schedule of NFLN games was pretty shallow. At this point, sports fans don’t believe that they’re missing anything yet with just eight weeks of games – I’m sure that the NFL understands this and you can count on a significant addition to the number of games on NFLN when the next league television contract is negotiated.

Compare the NFLN experience with the Steinbrenner clan’s true money-maker. When the YES Network, which carries the majority of New York Yankees games, first went on the air, it went into a year-long dispute with Cablevision over the subscriber rates. Thus, Yankees games were not shown in most New York City households for an entire season and the parties didn’t finalize a deal until moments prior to the subsequent opening day. Cablevision threw out many of the same arguments about YES as Comcast did with respect to BTN, such as the entire subscriber base shouldn’t be paying so much for a “niche” product and that it should be relegated to a sports tier. Go figure, though, that there happen to be a lot of Yankee fans that live in New York City and if they’re like me, pretty much the entire reason why they purchase cable in the first place is to watch sports. The Yankees had a critical mass of games to offer exclusively to a critical mass of fans. Likewise, the BTN exclusively showed at least a couple of football games for each conference member along with a truly full slate of basketball games. In every Big Ten state outside of Illinois (which is a center of alums from all of the Big Ten schools) and maybe Pennsylvania (Penn State football is behind the Steelers and Eagles, but ahead of everyone else), a Big Ten sports program is either the first or second most popular sports team (college or pro) in that state in an average year (i.e. Ohio State is the biggest sports draw in all of Ohio). So, the BTN had a critical mass of potential viewers who had quite the fervor to watch the critical mass of games that the network was offering. Comcast either eventually figured this out or at least admitted that no one was buying the NFLN comparison and had to stem the tide of Midwestern sports fans flocking to DirecTV and other providers offering the BTN.

Now that the BTN is getting the carriage that it has been seeking, don’t be surprised that the SEC will be right around the corner in setting up its own network (which has already been considered). The SEC will have the benefit of learning from the Big Ten’s travails and probably will be able to avoid the regional cable issues (if only because SEC fans have the passion of Big Ten fans coupled with ownership of a lot more guns), although it’s unlikely they could get a national basic deal that the BTN has with DirecTV since the television markets aren’t as large or affluent. The other BCS conferences will surely attempt to do the same over the next few years, but the revenue production for them will almost certainly be short of what the Big Ten and SEC could expect to make.

In the meantime, all of the Big Ten fans out there that haven’t switched to the dish yet (even though I recommend doing so) won’t need to fill their time next winter with hockey games on Versus. Football and basketball will be back in those homes and that’s great for the conference’s schools and fans alike.

(Image from Koo’s Corner)

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Comments
  1. Marc says:

    It will be interesting to see how Comcast caving plays out with Time Warner (which I think is the only major holdout left on the BTN). It’s also nice that all of the BTN games are in HD–something that ESPN+ still doesn’t provide.

    Regarding the counterpart to the South, Comcast has a majority stake in the rumored SEC network, in an area that’s mostly served by Comcast. I think it will play out quite differently than the BTN w/r/t Comcast. As another DirecTV subscriber, it’s nice to know that they usually don’t play the games that Comcast does with new channels, so they will probably get the SEC network–not that I truly care, other than I like college football.

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  2. David says:

    Hopefully Time Warner will follow suit, though I’m not holding my breath.

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  3. Lou says:

    Um, a report in the Philly Inquirer indicates that the deal will only have the BTN on basic cable in the footprint states for the first year, as a “preview” before it shuffles off to the digital premium sports tier (where it belongs). In eastern PA, it will go on that premium tier from Day 1. The Tribune has been shilling for the Big Ten since this issue arose, so I’m not surprised how Greenstein (a Big Ten alum) is framing the story.

    http://www.philly.com/philly/sports/colleges/20080617_Comcast__Big_Ten_close_on_broadcast_deal.html

    And I’m not sure what business school teaches coming down 40 percent off your asking price as “a win,” but hey, go with that.

    As for me, a MAC and Big East alum (undergrad and grad, respectively) living in Chicago, along with thousands of others here who don’t give a rat’s patoot about the overrated and corrupt league that we’re all supposed to follow simply because they siphon away our state tax dollars, I guess I can be relieved that I’ll only have Jim Delany and front-running Big Ten “fans” reaching into my pockets to subsidize their little adventure in greed for one year.

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  4. Lou,

    The compromise that you’re pointing out is that the BTN will be on all basic cable (both analog and digital) for the first year in the Big Ten footprint, but will be moved exclusively to digital basic cable (not the digital sports tier) after that. It will be on the digital basic cable only in Philly from the beginning. Since all cable companies are moving subscribers to all digital, this is effectively the same as obtaining full basic cable coverage. As a result, unless you are one of the few households that still has analog cable, you’ll be subsidizing Jim Delany’s salary for many years to come. By the way, speaking as a fellow Big East grad school alum, you ought to be happy that the existence of the BTN has opened up some time slots on Chicago television for Big East basketball.

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  5. BillyW says:

    Saw the Philly story as well. The way I read it, after the “preview” as Lou points out, the channel goes not on analog expanded basic (which a lot of older fans and recent grads probably have) but bumps up to digital – which makes sense because BTN has a number of HD games that analog cable customers aren’t going to get anyway. Outside the Big Ten states the local Comcast systems can choose between digital cable and a sports tier. In short, BTN is available (in some form) in Comcast’s 25 million homes (what the Big Ten wanted) but not everyone will pay for it (what Comcast wanted) – sounds like a good compromise.

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  6. […] TV deal with ESPN, with the harshest criticism coming from Big Ten country itself, I looked at as the platform to turn the Big Ten into the New York Yankees of college sports financially. Many sports fans look at the BTN as shooting fish in a barrel money-wise now, but a lot of them […]

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