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Old 01-06-2013, 01:32 PM   #31 (permalink)
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Re: WTF $500 Milly to C7?

Looking around, seems like people think the inequality would only be a couple years to diffuse start-up costs. That would be a completely different story. That makes sense.
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Old 01-06-2013, 03:28 PM   #32 (permalink)
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Re: WTF $500 Milly to C7?

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Originally Posted by Medford View Post
In addition to scenerio that Dash set up, there are administrative fees, consulting fees, paperwork, flights, hotel rooms, meeting rooms, etc... Real costs involved in the setup of that thing. At the moment, the CE7 are carrying the weight of those costs. I have no idea how much those costs are, how large they are, but you roll all that up w/ the potential exit fees and loss of NCAA credit money and perhaps its what they need to keep everything afloat for the first handful of years. As long as the agreement was in place up front that the CE7 got $x more than anyone else for the first handful of years to recoup their losses/costs associated with this then all TV money was split evenly going forward, I don't think too many of the considered schools would have a problem with that.

However, if its not explicitly put in writting that all TV money is split equally at some point moving forward up front, buyer beware.
If those clowns are parking themselves at the Waldorf and emptying out their mini-bars every night, I would hope that X and BU are requesting audits. They'll argue that it puts them close to St. Pat's, so that they can pray for a winning outcome. I'd suggest they don't need a 6oz. bag of cashews for $15.00.
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Old 01-06-2013, 07:08 PM   #33 (permalink)
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Re: WTF $500 Milly to C7?

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Fox Sports doesn't have any inventory. When they re-launch Versus, they're going to need programming. This conference gives them just that. As more of these sports networks pop up (Fox, NBCSN, CBSSN), they're going to start paying more in order to get sports and their games on their stations.
Versus = NBC Sportsnet
The Speed Channel = Fox Sports 1
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Old 01-07-2013, 11:08 AM   #34 (permalink)
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Re: WTF $500 Milly to C7?

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Originally Posted by Title_BU View Post
Looking around, seems like people think the inequality would only be a couple years to diffuse start-up costs. That would be a completely different story. That makes sense.
Hard to believe the start-up costs would be anywhere near the differential especially over a couple of years. Why not split the start-up costs equally? If the C7 knows which schools they want I'm sure they wont have any trouble working out a cost sharing agreement. I suspect the differential is not so much start-up related as it is exit fees, legal expenses and lost NCAA credits related. The leadership of Butler, Creighton, Dayton St. Louis and Xavier if unified really have more power then the C7. If they don't come aboard the C7 with Iona,Sienna,Wagner isn't going to get big money.
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Old 01-07-2013, 11:21 AM   #35 (permalink)
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Re: WTF $500 Milly to C7?

Nothing I've seen recently make me believe that it will be anything other than Creighton, Butler, and Xavier

With some sort of graduated schedule, after a few years. I think there's another meeting of some sort on Wednesday so there'll probably be more color soon.
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Old 01-07-2013, 12:08 PM   #36 (permalink)
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Re: WTF $500 Milly to C7?

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Originally Posted by College Hoops View Post
Hard to believe the start-up costs would be anywhere near the differential especially over a couple of years. Why not split the start-up costs equally? If the C7 knows which schools they want I'm sure they wont have any trouble working out a cost sharing agreement. I suspect the differential is not so much start-up related as it is exit fees, legal expenses and lost NCAA credits related. The leadership of Butler, Creighton, Dayton St. Louis and Xavier if unified really have more power then the C7. If they don't come aboard the C7 with Iona,Sienna,Wagner isn't going to get big money.
One possibility that I can think of, it may be at the request of the non C7 schools.

For arguments sake, lets just say they're going to 12 schools (or 10, doesn't really matter in this example) and the total start up costs to get things running is $60 million (I have no idea where the ballpark is for how much the start up fees will costs). At 12 teams, that's $5 mil a school. The C7 schools are used to running on larger operating budgets, eating that $5 mil today is no big deal. Butler, Xavier, UD, SLU, etc... are used to operating on smaller budgets. Perhaps raising $5 mil is a bit harder up front, however, they'll agree to take $2 mil less a year in TV revenue for 3 years to cover the start up money, interest, etc.. plus a little something for their effort all while enjoying the fruits of a larger TV revenue during the transition.
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Old 01-07-2013, 12:10 PM   #37 (permalink)
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Re: WTF $500 Milly to C7?

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Originally Posted by College Hoops View Post
Hard to believe the start-up costs would be anywhere near the differential especially over a couple of years. Why not split the start-up costs equally? If the C7 knows which schools they want I'm sure they wont have any trouble working out a cost sharing agreement. I suspect the differential is not so much start-up related as it is exit fees, legal expenses and lost NCAA credits related. The leadership of Butler, Creighton, Dayton St. Louis and Xavier if unified really have more power then the C7. If they don't come aboard the C7 with Iona,Sienna,Wagner isn't going to get big money.
My guess is that in addition to the start up costs, the BE 7 have some fixed costs that have to be covered these first few seasons. They've been living on caviar budgets for a while now... Hopefully they use the money to improve their basketball programs.
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Old 01-07-2013, 12:12 PM   #38 (permalink)
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Re: WTF $500 Milly to C7?

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Originally Posted by Medford View Post
One possibility that I can think of, it may be at the request of the non C7 schools.

For arguments sake, lets just say they're going to 12 schools (or 10, doesn't really matter in this example) and the total start up costs to get things running is $60 million (I have no idea where the ballpark is for how much the start up fees will costs). At 12 teams, that's $5 mil a school. The C7 schools are used to running on larger operating budgets, eating that $5 mil today is no big deal. Butler, Xavier, UD, SLU, etc... are used to operating on smaller budgets. Perhaps raising $5 mil is a bit harder up front, however, they'll agree to take $2 mil less a year in TV revenue for 3 years to cover the start up money, interest, etc.. plus a little something for their effort all while enjoying the fruits of a larger TV revenue during the transition.
I hadn't considered that possibility, but it sounds reasonable as well.
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Old 01-07-2013, 01:41 PM   #39 (permalink)
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Re: WTF $500 Milly to C7?

I thought Rovell's piece was sloppy regarding the revenue distribution and assumed that the uneven distribution would be temporary. Haven't seen anything from the media to confirm that, but I think it's likely the case. If it isn't temporary that's a different story. I haven't read the whole thread so apologies if it's already been mentioned ... when universities join a new conference they typically have to earn their way in and don't receive a full distibution of revenue until their fourth year. I suspect that the C7 see the other schools as in fact joining an existing conference, the Big East. they have never once stated that they are leaving the BE. They've talked about an "orderly evolution". IOW, they are the BE. I'm sure that's their perspective regardless of whether they retain the conference name, though I assume they expect to do so.

Beyond that the C7 are likely going to end up leaving a decent amount of money behind in order to get the three things they desire - the conference name, rights to MSG and an early exit. Assuming that's the case I can see why the C7 would want a temporary uneven distribution and why the others would agree to it. I assume this will get clarified in the coming weeks.
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Old 01-07-2013, 02:10 PM   #40 (permalink)
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Re: WTF $500 Milly to C7?

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Originally Posted by Palestra1 View Post
I thought Rovell's piece was sloppy regarding the revenue distribution and assumed that the uneven distribution would be temporary. Haven't seen anything from the media to confirm that, but I think it's likely the case. If it isn't temporary that's a different story. I haven't read the whole thread so apologies if it's already been mentioned ... when universities join a new conference they typically have to earn their way in and don't receive a full distibution of revenue until their fourth year. I suspect that the C7 see the other schools as in fact joining an existing conference, the Big East. they have never once stated that they are leaving the BE. They've talked about an "orderly evolution". IOW, they are the BE. I'm sure that's their perspective regardless of whether they retain the conference name, though I assume they expect to do so.

Beyond that the C7 are likely going to end up leaving a decent amount of money behind in order to get the three things they desire - the conference name, rights to MSG and an early exit. Assuming that's the case I can see why the C7 would want a temporary uneven distribution and why the others would agree to it. I assume this will get clarified in the coming weeks.
This. I believe you've nailed it better than anything I've read on the topic.

In summary, there will be 3 components to the uneven split:
  1. Funding of transitional hard costs away from the existing BE;
  2. Opportunity costs associated with the ability to garner the name (brand), and MSG, primarily; and
  3. The idea that newbies ramp-up to full membership.

Assuming it all leads to imbalanced payments for no more than 5 years - 3 preferably - I can live with it if the agreement is truly going to be structured for 12 years. Xavier already is a cash register when it comes to this sport. The money will obviously be accretive. X won't be at a financial disadvantage for that imbalanced period.

We'll see what happens.
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Old 01-07-2013, 02:37 PM   #41 (permalink)
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Re: WTF $500 Milly to C7?

Have no idea what the A10 exit fee is.
And, I always get the NCAA credit math messed up; but if:
Each credit is @250,000
Paid for 6 years = 1,500,000
And Xavier gets 50% of the money under A10 guidelines (??)
In the last 6 years Xavier has earned 16 credits
16@1,500,000 = $24,000,000 x .50 = $12,000,000.

That's a lot of money to walk away from if they leave the A10.
What do I have wrong in all that?

At any rate, the point is that even if the C7 schools need some extra dollars for a few years (to cover their exit fees?) it'll take us a while to get that $12 million back.
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Old 01-07-2013, 03:33 PM   #42 (permalink)
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Re: WTF $500 Milly to C7?

paulxu - the extra tv money from the C7 conference plus the ncaa units the conference gets will always swamp X's existing and potential income from the A10 even if the tv deal pays for the BE exit fees.
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Old 01-07-2013, 04:01 PM   #43 (permalink)
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Re: WTF $500 Milly to C7?

If the TV money is even remotely close to what's been reported, then, assuming inventory is still sufficient at 10 teams, this thing may go off initially with only 10 teams. The TV money would become more significant than tournament units out of the gate, and holding it at ten obviously means limiting the (distribution) denominator.

UMass87 is spot on: there's no way Xavier and Butler will pass up this opportunity, so long as they transition to full equal status at some reasonable point within the 12 yr. agreement period. The question is which school becomes #10, and would it stop there for a period of time or go straight to 12.
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Old 01-07-2013, 04:33 PM   #44 (permalink)
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Re: WTF $500 Milly to C7?

The following was posted by an individual who seems to follow the credits pretty closely on another board. Assume for the moment that it is close to accurate. On the other hand its hard for me to believe the start-up costs (thats not including exit fees etc. is substantial enough that it could not be shared equally by the C& and newbies.As a Butler or Xavier fan/alum/administrator seeing what you're giving up you still want to be on a less then equal footing then Georgetown let alone Seton Hall?

Below are the NCAA credits each C7 school and each prospective school has earned as of the end of last season.

Marquette has 12 credits = $2,880,000 per year
Villanova has 12 credits = $2,880,000 per year
Georgetown has 11 credits = $2,640,000 per year
St. John's has 1 credit = $240,000 per year
Seton Hall has 0 credits = $0 per year
DePaul has 0 credits = $0 per year
Providence has 0 credits = $0 per year

Butler has 21 credits = $5,040,000 per year
Xavier has 16 credits = $3,840,000 per year
Dayton has 4 credits = $960,000 per year
Creighton has 3 credits = $720,000 per year
St. Louis has 2 credits = $480,000 per year
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Old 01-07-2013, 05:05 PM   #45 (permalink)
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Re: WTF $500 Milly to C7?

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Originally Posted by College Hoops View Post
The following was posted by an individual who seems to follow the credits pretty closely on another board. Assume for the moment that it is close to accurate. On the other hand its hard for me to believe the start-up costs (thats not including exit fees etc. is substantial enough that it could not be shared equally by the C& and newbies.As a Butler or Xavier fan/alum/administrator seeing what you're giving up you still want to be on a less then equal footing then Georgetown let alone Seton Hall?

Below are the NCAA credits each C7 school and each prospective school has earned as of the end of last season.

Marquette has 12 credits = $2,880,000 per year
Villanova has 12 credits = $2,880,000 per year
Georgetown has 11 credits = $2,640,000 per year
St. John's has 1 credit = $240,000 per year
Seton Hall has 0 credits = $0 per year
DePaul has 0 credits = $0 per year
Providence has 0 credits = $0 per year

Butler has 21 credits = $5,040,000 per year
Xavier has 16 credits = $3,840,000 per year
Dayton has 4 credits = $960,000 per year
Creighton has 3 credits = $720,000 per year
St. Louis has 2 credits = $480,000 per year
The schools involved are making decisions that they presume to be for a long timeframe. If the TV money is even close to what is rumored, they'll all be better of financially in the long run; even with uneven distributions at the start.

And yes, the money is there for even distributions from day one, but the C7 want to be compensated for the value they've built in the BE brand, especially since they're likely to have to relinquish a lot of money (distribution of NCAA units earned by SU, Pitt, WVU etc. for example) to the BE Nomads to retain ownership of the BE brand. As I wrote upthread, their public statements have all been from the perspective that they currently constitute a conference and will be inviting others to join them. Given standard practice in that situation, I don't think there is any chance that the admins at Xavier, Butler or any other invitee are going to be so shortsighted that they would refuse an invitation.

Last edited by Palestra1; 01-07-2013 at 05:25 PM.
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