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How Is A So-So Big Ten Rolling In Dough? It’s All About The Numbers

cash-wadYesterday we posted a note regarding the projected payouts for Big Ten schools this spring.  According to The St. Louis Post-Dispatch, those payouts are expected to be north of the $25 million barrier.  It’s the first time that a conference has had so much wealth to share.

After posting said note, we received questions from three people — a comment and a pair of emails — asking how a mediocre football league is raking in so much cash when football is clearly the main revenue stream for conferences today.

That’s easy — Look at the numbers.

The Big Ten Network is a cash cow.  That much everyone knows.  It’s a 51/49 ownership split between the conference and FOX.  It currently stretches across the nation with serious penetration in the Midwest from Nebraska to Pennsylvania.  The additions of Rutgers and Maryland are expected by Big Ten leadership to increase the channel’s cable/satellite penetration into Maryland, the District of Columbia, New Jersey and New York.

For the sake of comparison, let’s look at the number of top 30 television markets that can be found in the footprints of the Big Ten and the SEC.

 

Big Ten:  New York (#1) coming, Chicago (#3), Philadelphia (#4), Washington DC (#8) coming, Detroit (#11), Minneapolis/St. Paul (#15), Cleveland/Akron/Canton (#18), St. Louis (#21), Pittsburgh (#23), Indianapolis (#26), Baltimore (#27) coming

SEC:  Dallas/Ft. Worth (#5), Atlanta (#9), Houston (#10), Tampa/St. Petersburgh (#14), Miami/Ft. Lauderdale (#16), Orlando/Daytona/Melbourne (#19), St. Louis (#21), Nashville (#29)

 

First, yes, we credited St. Louis to both camps because the city sits on the border between Missouri and Illinois.  Second, it’s obvious that the Big Ten is home to more big cities.  Big Ten commissioner Jim Delany has referenced on numerous occasions the fact that people in the Rust Belt are currently moving to the Sun Belt — which led his league to expand again — but for now his conference reaches a whole lot of people in some of America’s biggest cities.

Ya know another reason the Big Ten gets such good television contracts for what’s currently a so-so product?  Interest.

Think of it like this — Harvard might not be a big school with big athletics, but you can bet its graduates care about Crimson athletics.  Now consider just how big the schools of the Big Ten are (again, with the SEC used as a comparison).

The following enrollment statistics are from 2012:

 

  Big Ten Enrollment   SEC Enrollment
  Ohio State (56,867)   Texas A&M (50,230)
  Minnesota (52,557)   Florida (49,589)
  Michigan State (47,825)   Georgia (34,816)
  Penn State (45,628)   Missouri (33,762)
  Illinois (44,407)   Alabama (31,647)
  Indiana (42,731)   South Carolina (30,721)
  Michigan (42,716)   Tennessee (30,194)
  Wisconsin (41,946)   LSU (29,718)
  Purdue (40,849)   Kentucky (27,226)
  Rutgers (39,950)   Auburn (25,469)
  Maryland (37,632)   Arkansas (23,199)
  Iowa (29,810)   Mississippi State (20,424)
  Nebraska (24,593)   Mississippi (18,224)
  Northwestern (20,959)   Vanderbilt (12,836)

 

It’s not hard to spot the differences between those two lists.  The Big Ten footprint might be losing population, but for now, its schools are cranking out graduates at an unparalleled pace.  In 2012, the current and future Big Ten schools had a total enrollment of 568,460 students.  In the same year, the SEC schools had 418,055 students on campus.  That’s about 150,000 more Big Ten fans cranked out per year than SEC fans.  Over a decade that’s 1.5 million more fans.

Now, the SEC plays better football — attracting national eyeballs — and its fans are fiercely loyal.  That’s how Mike Slive and company keep cutting brain-melting television deals.

But whether Big Ten football is up or down in a given year, there are simply more Big Ten grads and alums running around to follow that conference.  Homestate U. may stink and its conference may be weak, but someone who went to Homestate U. will still tune into his alma mater’s games on television.  That’s how Delany and company keep cutting their own wallet-fattening television contracts.

The quality of football in the SEC allows it to make a ton of cash.  The sheer size of the Big Ten — its schools’ enrollment numbers and its cities’ populations — allow that league to bring in monster bucks.

 


15 comments
clayaggie
clayaggie

1. Quibble: Having 150k more total students in the B1G does not equate to cranking out 150k fans per year. Assuming graduation rates of about 20% per year, it's more like a 30k difference in fan-cranking-outedness.

2. Nate Silver did a pretty detailed analysis on this stuff a couple years ago to estimate how many actual fans each school has. His analysis wasn't perfect, but it captures why schools in the South have large fan bases.

Joe1776
Joe1776

Based on the cities you listed the actual counts of people within those listings is 14,269, 770 for the SEC cities, and 35,580,140 for the Big 10 cities... plain and simple that's how the Big 10 is printing the money.

torris187
torris187

One thing you could add to your anaylsis is the availabilty of substitutes.  For example, the Alabama market may be small, but College Football is pretty much the only thing going on in that state.  There are no pro-teams or other sports to compete with it.  As for the New York Market, Rutgers Football has to compete with a couple of Pro-Football teams, pro-baseball teams, pro-basketball teams, etc.  That market may be bigger, but it may also be more saturated. 

KennonRay
KennonRay

Does Louisville qualify as a large SEC market?

BillySmoak
BillySmoak

A few observations: I believe you need to add the Kansas City, Mo and Charlotte, NC TV markets to the SEC tally. Also the 150,000 Big 10 enrollment difference does not equate to eventual alumni. Maybe 15% of those will ultimately receive degrees. In the deep south you also have the phenomena we term "football alumni". The most passionate fans in many cases have never set foot on campus except to attend a game. I'm a USC graduate who has lived in Indiana, where basketball is king, and round ball is much, much more popular across the Midwest region. That is where most of the Big 10 network's advantage in revenue is coming from at the present time. But they better brace themselves because if they don't they won't know what hit them next year.  

adarpy
adarpy

Thanks.  This analysis makes sense.  Now I understand why those TV Networks are willing to pay Big Ten big money despite their mediocre football.

JeremyNabors
JeremyNabors

Not a big deal but your enrollment numbers are from 2011 and are outdated. It doesn't change the point of your article though.

MoKelly1
MoKelly1

Good analysis. It also shows pretty clearly why the SEC expanded to A&M and Missouri. These additions gave the SEC 3 of their top 8 TV markets and 2 of their top 4 largest schools. Thank goodness for Florida or it would really be a night and day comparison of people between the SEC and Big 10.

John at MrSEC
John at MrSEC moderator

@clayaggie 

Nate Silver is a very sharp individual but his "detailed analysis," if I recall correctly, was somehow based on Google searches.  There's no perfect way to gauge the size of a fanbase -- as you said -- but the larger the student body, the bigger the alumni base.  The bigger the alumni base, the more TV viewers.

I can tell you a group that very much buys into that line of thinking -- and that group actually sold me on the idea -- Las Vegas oddsmakers.  For two or three years in our early days on this site we would do a summer piece talking to the oddsmakers about how/why they set their lines and who from the SEC would be favored in a given year.

We were informed -- and we've tried to explain this many times on this site -- that the casinos in Vegas set their lines ONLY for the people who are coming to the desert to bet in their casinos.  They don't care what some bookie in Atlanta does with their lines because they get no cash off of that.  

So their goal is to set the line at just the right spot to get an equal flow of cash coming in from both sides of a game.  So which teams get a little extra bump in the spreads?  Big name schools that everyone knows -- Notre Dame, Ohio State, Alabama, Texas, etc. Teams from the West Coast tend to get a point shaded their way because folks from California and Arizona are the most likely to zip over to Vegas for the weekend and the casinos figure they'll bet on their teams.  And finally... schools with bigger alumni chapters.  I was told by different oddsmakers from different casinos over multiple trips to Vegas that Big Ten schools tend to get a little love at line-setting time because with so many grads, there are always Michigan, Ohio State, Minnesota, Michigan State, Illinois fans, etc, in the sportsbooks.

Also, nowhere did I say that every student from a Big Ten school became a Big Ten fan.  Logic, however, says most will.  Whether they graduate of not.

Schools in the South have great fanbases.  There's no question.  There were no pro sports in the South until the '60s so most people rooted for the local school whether they went their or not the way other regions fell in love with the Yankees, the Cardinals, the Packers or the Bears.

This was not a "The Big Ten is good and the SEC is not" kind of piece.  We'd been asked how the Big Ten could make so much money with average football in recent years.  Everyone knows why the SEC makes mad cash -- great football, fan passion.  We were explaining the Big Ten side of things -- big metropolitan areas, and big fanbases.

It wasn't an either/or argument.  In fact, it wasn't an argument at all.

Thanks for reading the site,

John

John at MrSEC
John at MrSEC moderator

@torris187 

That's why the SEC and ESPN are starting a network.  We'll see how it works, but I would suspect it will do quite well.

But the question put to us was "Why is the Big Ten making money?"  And that's because of metro areas, major markets, and huge groups of alums.  Not so much an analysis as a statement of fact.

Thanks for reading the site,

John

John at MrSEC
John at MrSEC moderator

@KennonRay 

As stated, we listed the top 30 television markets (2012-13 according to Nielsen).  Louisville is market #48.

Thanks for reading,

John

BillySmoak
BillySmoak

@KennonRay When I lived in Southern Indiana, Louisville was the largest town nearby. It has a big UK presence, but is probably not a top 30 market, which brings up another point. The entire states of Alabama, Arkansas, Mississippi, Louisiana, Kentucky, and South Carolina, and most of Tennessee (Memphis & Knoxville),and North Florida are outside of the major TV markets. The guys at ESPN are certainly aware of these facts. 

John at MrSEC
John at MrSEC moderator

@BillySmoak 

As stated, we listed the top 30 television markets (2012-13 according to Nielsen).  Kansas City is market #31 and while Charlotte is market #25, it is never listed as an SEC market anywhere.  I lived there, the South Carolina fans are far, far outnumbered by Clemson, North Carolina, Duke and NC State fans.

We listed St. Louis as both an SEC and Big Ten market because St. Louis sits right on the border of those states and there are many Illinois fans in the area.

Thanks for reading,
John

clayaggie
clayaggie

@John at MrSEC @clayaggie Wow, John, I really appreciate your detailed response. Sites like this one have been a nice surprise benefit following A&M's move to the SEC. Keep up the good work!

Well, you have convinced me...mostly. The Vegas oddsmakers' "line setting bias" is a nice data set to consider when sizing up fan bases. It's skewed by geography, as you point out, as well as by, e.g., affluence, if you consider trips to Vegas to be a mark of such, but probably those are still useful filters. Bottom line is it's hard to see any disadvantage in measuring fan intensity in dollars. So while there are obvious reasons why enrollment figures can underestimate a fan base, it's not as obvious that enrollment figures will underestimate how much you can monetize a fan base.

FYI, you may have misunderstood the point of my quibble. I'm not saying that only 20% of B1G students will become fans, I'm saying 80% of those students were there LAST YEAR. Only 20% each year are new fans/students.

FYI2, I don't have any problems saying nice things about other conferences. I went to grad school in the PAC12 and met great fans out there. And as fun as it is to be on top, the SEC needs the other conferences to legitimately challenge it. Otherwise it feels like a regional sport.

Anyway, thanks again for the response!

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