Breaking down the potential revenue

The only reason you expand a conference is to create greater revenue opportunities for each of the members. So what do Colorado and Utah bring to the table exactly? Does the addition of these two schools and markets increase the size of the pie enough to make sense?

First of all it enables the conference to stage a championship game that could be worth in the neighborhood of $15 million per year. The exposure given keeps the Pac 10 in the national limelight in early December. It puts it closer to being on a par with the SEC, Big 10, and ACC who will also be hosting championship games.

As far as overall TV numbers go the conference is adding a new population base of close to eight million people. Denver is ranked 18th largest and Salt Lake City is ranked 31st nationally as TV markets. According to the US census the Pac 12 foot print represents a population of 61.8 million located in five western states. Just for comparison the Big 12 states have a combined population of around 40 million with 24 million of it residing in Texas where football is a religion. 

What this all means when the conference heads to the negotiating table with ESPN/ABC and FOX isn't exactly clear. We all know that the Pac 10 is due for a big raise with or without the expansion. Some say the addition of the two schools won't make much of a difference. I have heard some experts say that the Denver and Salt Lake TV markets are insignificant in the network scheme of things. I have even heard people say that Colorado cannot deliver the Denver TV market because Denver is a Bronco town.

I disagree that the addition of these two schools is insignificant from a TV perspective. First of all it all it gives the league enough of a footprint that it can sell the new Pac 12 network to cable providers in every single Western state. It just isn't a coastal conference anymore - the expansion for all intents, and purposes ties up everything in two separate time zones, and that will prove to be significant in the formation of a cable network.

John Wilner made some estimates that the Pac 12 could earn up to $45-$50 million per year from having their own cable network and that the expanded league could get around $100 million for its ESPN/ABC of FOX TV package. I think those numbers are extremely conservative. He predicts another $10 million for a championship game.

The ACC by comparison surprised everyone by raking in $155 million in a recent  package that included basketball. According to Big 12 sources, Texas, Oklahoma, and Texas A&M will be guaranteed $20 million per year, while the seven remaining schools will collect between $14 million and $17 million in TV revenue in combined future deals with ABC/ESPN and Fox.

Why would the Pac 12 be only worth half the value of a watered down Big 12? That doesn't make any sense to me. Sure the Central time zone is more attractive to networks but something isn't adding up correctly here. I think Wilner's numbers are too conservative and the numbers floating around for a the Big 12 are greatly inflated.

What all this means is that while there is still a lot of work to be completed - the Pac 10 has put together a blueprint that has the potential to at least double its football revenue over the next two years without giving up its soul to Texas in the process which is significant.

Mega conference mania isn't going to go away - It is still out there - It has only been delayed a bit. While the Pac 10 didn't get the big prize this week they got close and they will be in a better position to close the next time the opportunity comes around.

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