Recent Wilner tweet on Pac 12 Network subscription fee

[SuperD]

Just tweeted by Wilner:

Jon Wilner @wilnerhotline Reply Retweet Favorite · Open
Source: Pac12 Network will charge 90 cent/sub, give or take a nickel. That's close to B1G in-market rate.

If that number is accurate, it works out to $432 million in annual gross revenue before they even factor in advertising revenue given the estimate of roughly 40 million subscribers I've seen quoted for launch. That's based on the cable partners they have already lined up. Of course you have to deduct plenty for operating costs and whatever sweetheart deal they worked out with the cable partners to get them on board so early. However it also doesn't factor in any other cable or satellite provider agreements which would essentially be gravy since the costs are covered by the existing partners.

 

[NashBuff]

Wow...

 

[Tractor]

Everyone gets a humpback whale! You get a humpback whale! You get a humpback whale!

 

[buff4bcs1985]

Everyone gets a humpback whale! You get a humpback whale! You get a humpback whale!

ill take the volkswagon

 

[Shldr2Shldr]

ill take the volkswagon

He was talking about the one in the pinkish dress

 

[buff4bcs1985]

He was talking about the one in the pinkish dress

ill take its bank account haha

 

[tante]

I still dont understand why we didnt join the mountain west

 

[supahphish]

Am I not reading this right? Because 40 million subscribers * $0.90 = $36 million per year.

 

[DBT]

Am I not reading this right? Because 40 million subscribers * $0.90 = $36 million per year.

STFU asshole! :wink2:

 

[DBT]

supa is correct. Should be, like, $10.80 per sub. That's close to, say, DirecTV's sports package. Will 40 million pay that amount for the PAC network? Hard to believe.

 

[HotRack]

damn misplaced decimals

 

[SINKRATZ]

Am I not reading this right? Because 40 million subscribers * $0.90 = $36 million per year.

$0.90 per month.

 

[supahphish]

$0.90 per month.

Ah thank you, I knew I was missing something! Makes sense now.

 

[DBT]

$0.90 per month.

:doh:

 

[Cal84]

So....remember when I said that Texass' Longhorn Network deal wasn't that great of a thing? Now you see why. LHN's annual payout to Texass is great initially, but then they are locked into only a 3% annual raise for years and years and years. B1G's per school payouts have been rising by 15% per year. Within 2-3 years it's expected that Northwestern will get more from their Tier 3 FB TV rights than Texass.

And now.... so will Wazzu. And Utah. LOLZ.

 

[tante]

So....remember when I said that Texass' Longhorn Network deal wasn't that great of a thing? Now you see why. LHN's annual payout to Texass is great initially, but then they are locked into only a 3% annual raise for years and years and years. B1G's per school payouts have been rising by 15% per year. Within 2-3 years it's expected that Northwestern will get more from their Tier 3 FB TV rights than Texass.

And now.... so will Wazzu. And Utah. LOLZ.

there is going to be a point where Texas comes crawling to the PAC:12 to try and get in a bring their tv markets. I hope we can just give them the middle finger and send them home.

edit: If Texas, Oklahoma, Kansas, and San Diego State (I know tough one there since not a true travel partner) you can look at around an additional 10 to 15 million tv sets in Kansas, Oklahoma, Texas and Southern Cal). I'll let you do the math, but it is essentially a break-even, unless it is on the high side at 15 million viewers.

 

[alchemist]

I hate to be the one to piss in the chips but while this news is great it's not quite as great as some of you are making it out. The $0.90 number is for in-market subscribers only and Comcast, Time Warner, Cox and Bright House only have about 9 million (I think) subscribers inside the six states Pac 12 states and those are the ones who will pay that price. The other 30+ million subscribers those companies have in the other 44 states who will receive the network on the sports tier will be paying a much lower rate, probably less than a dime per household.

If we know Larry is getting B1G-level money then we can look at their overall number and compare. The Big Ten Network now is pulling in an average of just under $0.40 per household nationally when you factor in in-market and out-of-market household pay scales. Their conference covers nine states that have a total population a bit larger than the Pac 12's six states so that should give them a slightly higher average subscription fee on account of the larger high-rate-paying population base. Still though if we round way down to $0.30 on average per household per month, even if the Pac 12 signs no other carriage agreements with any satellite or smaller cable companies then we're still looking at almost $150 million in gross revenue before the first ad is sold. So it's a lot but it isn't $400+ million.

Now I also remember Larry saying the sub. fees already agreed to will bring in enough revenue to pay startup costs and operations, and the back-of-the-envelope $150 million number is in line with what those costs were projected to be so that leaves the ad revenue to bring in the profits during the first year. The Big Ten Network did over $220 million in ad sales last year so even if you knock $100 million off that on account of them having a more mature network with much better distribution (for now at least) and the Pac 12 pulls in piddly $120 million that's still $10 million per school on top of the ESPN/Fox deal.

So adding it all together in a near-worst-case scenario all 12 teams would make $30 million in cash *AND* get 1/12th equity in the wholly-owned new TV network.

 

[krom]

I hate to be the one to piss in the chips but while this news is great it's not quite as great as some of you are making it out. The $0.90 number is for in-market subscribers only and Comcast, Time Warner, Cox and Bright House only have about 9 million (I think) subscribers inside the six states Pac 12 states and those are the ones who will pay that price. The other 30+ million subscribers those companies have in the other 44 states who will receive the network on the sports tier will be paying a much lower rate, probably less than a dime per household.

If we know Larry is getting B1G-level money then we can look at their overall number and compare. The Big Ten Network now is pulling in an average of just under $0.40 per household nationally when you factor in in-market and out-of-market household pay scales. Their conference covers nine states that have a total population a bit larger than the Pac 12's six states so that should give them a slightly higher average subscription fee on account of the larger high-rate-paying population base. Still though if we round way down to $0.30 on average per household per month, even if the Pac 12 signs no other carriage agreements with any satellite or smaller cable companies then we're still looking at almost $150 million in gross revenue before the first ad is sold. So it's a lot but it isn't $400+ million.

Now I also remember Larry saying the sub. fees already agreed to will bring in enough revenue to pay startup costs and operations, and the back-of-the-envelope $150 million number is in line with what those costs were projected to be so that leaves the ad revenue to bring in the profits during the first year. The Big Ten Network did over $220 million in ad sales last year so even if you knock $100 million off that on account of them having a more mature network with much better distribution (for now at least) and the Pac 12 pulls in piddly $120 million that's still $10 million per school on top of the ESPN/Fox deal.

So adding it all together in a near-worst-case scenario all 12 teams would make $30 million in cash *AND* get 1/12th equity in the wholly-owned new TV network.

Dude you just melted my brain.

 

[HotRack]

Dude you just melted my brain.

Looking at your avatar - not surprising. :lol:

I'm with you though, couldn't follow after first paragraph. Of course local stout brew might have something to do with that.

 

[SuperD]

I hate to be the one to piss in the chips but while this news is great it's not quite as great as some of you are making it out. The $0.90 number is for in-market subscribers only and Comcast, Time Warner, Cox and Bright House only have about 9 million (I think) subscribers inside the six states Pac 12 states and those are the ones who will pay that price. The other 30+ million subscribers those companies have in the other 44 states who will receive the network on the sports tier will be paying a much lower rate, probably less than a dime per household.

If we know Larry is getting B1G-level money then we can look at their overall number and compare. The Big Ten Network now is pulling in an average of just under $0.40 per household nationally when you factor in in-market and out-of-market household pay scales. Their conference covers nine states that have a total population a bit larger than the Pac 12's six states so that should give them a slightly higher average subscription fee on account of the larger high-rate-paying population base. Still though if we round way down to $0.30 on average per household per month, even if the Pac 12 signs no other carriage agreements with any satellite or smaller cable companies then we're still looking at almost $150 million in gross revenue before the first ad is sold. So it's a lot but it isn't $400+ million.

Now I also remember Larry saying the sub. fees already agreed to will bring in enough revenue to pay startup costs and operations, and the back-of-the-envelope $150 million number is in line with what those costs were projected to be so that leaves the ad revenue to bring in the profits during the first year. The Big Ten Network did over $220 million in ad sales last year so even if you knock $100 million off that on account of them having a more mature network with much better distribution (for now at least) and the Pac 12 pulls in piddly $120 million that's still $10 million per school on top of the ESPN/Fox deal.

So adding it all together in a near-worst-case scenario all 12 teams would make $30 million in cash *AND* get 1/12th equity in the wholly-owned new TV network.

Good info on the in-footprint numbers, I'd be shocked if the number Wilner quoted is the national rate, and it the total footprint is 40 million, only a fraction of that is going to order the sports tier.

What makes me nervous about trying to make any projections off the advertising revenue is that I think that may have been the sweetener the league used to avoid a fight over carriage. That's pure speculation on my part, but the cable mafia did not agree to carry the network a year in advance (and likely agree to front some of the setup costs) out of the goodness of their hearts. They have to be getting something relatively significant out of the deal, and since the league retained full ownership equity, a significant piece of future advertising revenues had to be the leagues most valuable negotiating chip.