Dissecting the Turtle & Shedding Light on the Knights – What It Means for NU

At first, my reaction to the breaking reports of Maryland and Rutgers joining the Big Ten over the weekend were likely similar to yours. My gut reaction – “yech”.  The Big Ten brand is iconic. Despite its century plus roots, it is also progressive. While Boston College really was the start of all of the conference landscape changes when they bolted the Big East for the ACC, the Big Ten really was there twenty years ago when they added Penn State. The most recent addition of Nebraska, while shocking to Big XII fans for the inconceivable dissolving of long-standing rivalries, seemed to pass the sniff test for B1G fans. Iconic football brand, Midwestern footprint and the bonus of a program chock full of Academic All-American awards. The only downside was the relative puny headcount that would be added to the revenue generating machine known as the Big Ten Network. However, adding Nebraska football made sense economically based on future revenues with ESPN as the Nebraska brand would add tens of millions to the fold.

The addition of Maryland and Rutgers was a money play.  B1G commissioner Jim Delany was relatively clear about the role the television markets, known as DMAs in industry speak, were a major appeal and since the “plate tectonics” had shifted from geographic footprints to “how can we maximize revenue?” Despite the fact Rutgers is irrelevant in the big picture of the Big Apple’s sports landscape, it looks good on the corporate slide show to cable systems and advertisers. Maryland brings the Washington DC AND Baltimore markets in to play which is nearly 6 million eyeballs. You add New Jersey and you get another 9 million. That’s 15 million people (obviously household numbers are less than total population numbers) and while the BTN won’t get every system to take them at a rate they want, the total households will no doubt increase by millions.

I’ve scanned some of the coverage and as it relates to explaining the math, I believe Sports Illustrated did the best job with Pete Thamel leading the way. The big money and brand exposure comes from the B1G’s television packages.  It offers two primary revenue streams – a lucrative contract with ESPN, which is up for renewal in 2017 and perhaps the more influential to college coaches and administrators – the money and exposure BTN offers, particularly for both lower level teams and revenue. Most fans don’t realize the cash cow comes from cable subscriptions.  Your cable or satellite bill is portioned by various companies, each getting a payment per household PER MONTH. ESPN, the most costly fee on the planet to cable companies gets as much as $5 per household per month. They’re in 90 million homes.  They charge this amount because they have the rights to every premium sports fans and their hedge to the cable compaines is that fans would storm Comcast, Time Warner and Cablevision offices if they ever dared pulled NFL, college football etc..Well, the best kept secret is the Big Ten Network (BTN).  Despite every industry pundit telling Jim Delany and network president, Mark Silverman, “it will never work”, the team did what even the almighty NFL Network couldn’t do – they played a massive game of chicken – and won.

The BTN gets a reported high end of $1.10 per household within the “footprint” or geographic area where the schools reside and as low as $.10 per household in what’s known as the “outer” markets. BTN is currently in about 60 million homes,  an accomplishment that ESPN didn’t reach in its first 20 years of existence. You can do the math  modeling yourself , but depending upon the per subscriber rate, the BTN is bringing in of millions of dollars per month and that’s before the first ad revenue comes in the door. When you consider there are only 120 employees, it’s a profit center of epic proportions. To get the then 11 conference schools on board, the B1G promised a 20-year contract with an escalation every year starting with a $6Mish  payment. Jim Phillips and Morty Schapiro now get more than $7M in additional revenue then they did prior to the BTN existing PLUS a huge recruiting advantage for ALL 19 sports. Fitz will tell you the BTN has been the single biggest difference in his ability to increase the level of recruits. He’ll likely tell you our pipelines in Houston are a direct result of our games being on there on Saturday morning. Kids in places like Columbus and East Lansing and Madison get to see Northwestern every week (along with every other team), something that NEVER happened in the days of ESPN Regional TV where the only games seen in Columbus were Ohio State games. For the non-revenue sports, there is no comparison to the exposure these teams get and other conference coaches have been squawking to their conferences how it is killing them in recruiting.

Adding the Rutgers and Maryland markets will no doubt impact the BTN revenue in a way that Pete Thamel reported, will result in Maryland (and presumably every B1G school including Northwestern) getting $32 million in 2014, $33 million in 2015, $34.5 million in 2016 and then $43  million in 2017.  Thamel nails the fact that this is all about the ESPN contract in 2017 as a true cash cow for that $43 million number which compares to the ACC schools getting $24 million.  Remember, that doesn’t put a pricetag on the exposure the BTN will bring.

OK, so what does this mean for Northwestern? Well, there is the obvious immediate ties that will get played up big time as the Northwestern-Maryland Big Ten/ACC Challenge game set for next week, will be getting a heck of a lot of attention.  The ‘Cats former DC from the Gary Barnett title years, Ron Vanderlinden, had a short stint there that essentially was the tail end of Maryland’s Dark Ages. There is the fact that we’ll now become one of two Under Armour schools (Maryland is a UA school as Founder/CEO Under Armour, Kevin Plank is a former walk-on for the Terps). And of course there is the women’s lacrosse connection with legendary NU WLAX coach, Kelly Amonte Hiller, a Maryland grad, potentially playing her alma mater more often should the B1G make women’s lacrosse a sponsored sport.

Those things are tiny, little footnotes. Several reports have Illinois moving to the ‘Cats Legends Division with Rutgers and Maryland populating the Leaders Division. The B1G basketball schedule will be greatly impacted and you can look at the former Big East as a blueprint for the drama surrounding which teams play one another twice and which ones play once. The recruiting footprint for Northwestern will logically improve in the mid atlantic region and New Jersey.  And, in my opinion, Rutgers football stands to benefit the most. It will become Northwestern of the east in terms of percentage of attendees being from the opposing teams’ fans based in NYC, nearly every school’s second biggest alumni base. You can see the marketing packages now “Hey Michigan fans, if you want your 2014 ticket, you must buy a 2013 season ticket to reserve your seat”. Maryland is 65th this season in CFB attendance at 36,023, coincidentally one spot BEHIND Northwestern in national attendance ranking (NU is averaging 36,244). Rutgers is 42nd in attendance with 48,466 per game.  Rutgers, a team usually like Northwestern in terms of flirting with the Top 25, but not consistently in the rankings. Rutgers has been to six bowls in the last seven seasons (missing out in the 2010 season), but unlike NU, they’ve won their past five bowl games. Maryland was better than you’d think during this century as head coach Ralph Friegden led the Terrapins to a bowl game pretty much on an annual basis until he was let go and replaced by current head coach Randy Edsall, which hasn’t gone so well.

Make no mistake about it, Maryland is a basketball school. From Gary Williams to Lefty Driesell to Len Bias, the ups and downs of Terrapins sports history is wrapped around the hardwood.  New Jersey is also a hotbed for basketball and Rutgers struggles mightily for relevance in the saturated hoops corridor.  Commissioner Delany talked about his memories of Maryland from his perspective on the bench as a North Carolina Tarheel. Delany, a New Jersey native, also “gets” the whole NY/NJ/Philly area mindset and the reality of the media mix. But, as Chris Martin said yesterday on the BTN coverage, “while others are playing checkers, Jim Delany is playing chess”.  This move to add these two head-scratchers of a fit, rationalized by the Maryland president on the academic side by being an AAU member and extolling the virtures of the virtually unknown CIC, an academic collaboration beween Big Ten schools (and University of Chicago), had to be part of a bigger plan.

Delany alluded to the fact thatt the conference landscape is one that seems to be trending towards the 16-team superconference model. With 14 teams under its fold, the work is not done. The brilliance of the Maryland add is only partially the revenue generation and recruiting foothold it offers the conference and its members. It also simultaneously erodes the value of the ACC and its future contracts with ESPN.  Obviously the counter move by the ACC is to pluck a UCONN or the like. Then, who pulls whom next?

My father-in-law is a brilliant strategist. The second his business mind heard of this move, he said “this is a foundation for a Notre Dame bluff.” It got me thinking. This is move “b” with move “c” TBD, although I guarantee it is already mapped out in Delany’s mind. So, here’s my best guess. Delany has a 15th school lined up, say University of North Carolina (his alma mater and a school that he is a board member of). The 16th slot stays empty as the BCS, a group of major conference movers and shakers including Jim Delany, decide that membership to the playoff is slanted towards power conferences. Notre Dame, an independent, gets voted in to a ctorner where their only way in to the party is with football conference affiliation. Corner painted, parachute strategy equals the B1G.

OK, you say “no way” to Notre Dame, then that’s find. What about North Carolina and Duke? Delany knows ESPN’s east coast bias as well as anyone. Hell, their announcers continue to portray the conference as three yards and a cloud of dust when two of the nation’s leading rushers are B1G QBs. The SEC has low scoring football games and its painted as beautiful defense. When it comes to Duke-UNC basketball, it is a crowned jewel collegiate relationship, likely favored in the basketball centric hallways of Bristol in higher regard than Michigan-Ohio State football. The two schools are likely the second biggest non-NFL rivalry behind the incessant Yankees-Red Sox rivalry. Delany, a Tarheel grad, is also a true believer in academics and taking his alma mater and their rival under a new umbrella would be a crowning achievement for the collegiate pioneer who has few trails left to blaze.

Yes, there are all sorts of holes with this theory, but its one of the few ways that I can even rationalize the branding misfit that is the two new additions to the club. If you’re Fitz, you’re pretty excited to get Illinois in your division and Maryland on the schedule as a crossover. You’re pretty happy about Rutgers as it’s a program you expect to beat, despite the similarity in records in recent years. If you’re Carmody you are giddy as your home state, home of highly touted recruit Jared Sina, is now going to become covered regularly by the media and you can promise TV exposure to other Garden State recruits. As for Maryland, you gulp a bit as it is a program on the rise and makes it pretty tough, but offset perhaps by Rutgers basketball being a team you expect to beat more than you would lose.

If you’re Jim Phillips you’re looking at the money. You’re projecting operating costs that will increase modestly, especially with increased travel budgets to New Jersey and College Park, Maryland, but you’re looking at nearly doubling your B1G dividend check to $43 million by 2017 – PER YEAR. I’m not privy to the ‘Cats P&L in athletics, but I’m confident those numbers put us in the black and enable Jim to reinvest some of the money in to coaches, facilities and a host of other things, like keeping up with rising tuition costs that you must cover.   You’re building in events for the NU Alumni centers in New York and DC, which will be a big deal for football games in those markets. You’re getting exposure in to new markets which will positively impact recruiting efforts for EVERY sport.

The bottom line is today’s news of Rutgers riding in to the Big Ten in its Scarlet Knights fashion, is only part of a story that is to be continued. We’ll do just that starting NEXT week once we complete the regular season and await the news on December 2 of which bowl we’ll be invading.

Mark, Colter…Get Set

Pat Fitzgerald announced yesterday that after speaking with both Venric Mark and Kain Colter he expects both of them to play this weekend against Illinois. He gushed about Mark’s attitude once he showered up and changed in to street clothes at halftime of the Michigan State game. Fitz described how Mark was an over the top cheerleader firing up his teammates and really stepped up to lead by example for a guy who clearly was crestfallen to have to call it a day in such a big game. Unfortunately, as of now, Fitz doesn’t see Nick VanHoose suiting up for Saturday.

We’ll return to focusing on Illinois tomorrow, but first, Brett Kurland will be posting about the bowl bingo scenarios at midday. Plus, we’ve got a Northwestern hoops game against Delaware State tonight at Welsh-Ryan at 7pm.