The University of Wisconsin’s new apparel contract with Under Armour — worth as much as $96 million over the next 10 years — might not even be the largest form of revenue increase heading the athletic department’s way.
College athletics continue to attract more and more money, and the Big Ten Conference and its member schools are in position to take advantage.
The conference is negotiating a new television rights contract that will begin in 2017, and reports of an impending new deal with Fox indicate the Big Ten could dwarf the dollar amount of every other major conference’s media rights deal while also having the flexibility to renegotiate again before anyone else.
While nothing official has been announced, the Sports Business Journal reported in April that Fox was close to a deal that would see the network pay the Big Ten as much as $250 million annually over the next six years for rights to half of the conference’s available football and men’s basketball games, while the other half of the package was still being negotiated.
Under the Big Ten’s current deal, it receives $112 million annually from ESPN and CBS.
If the reported numbers are accurate, revenue shares for Big Ten schools could increase by more than 20 percent and reach upward of $40 million per institution.
That would be a major boost for UW Athletics, which may need to once again increase its contributions to the university to help soften the blow of $250 million in budget cuts to the UW System.
“I think the answer is, we don’t know,” UW deputy athletic director Walter Dickey said when asked about increased revenue from a new Big Ten television deal.
“We obviously hope so. We’re technically not a part of any of those agreements. (Big Ten commissioner Jim) Delany talks about things to us, but that’s going to have to await the completion of whatever negotiations are going on and whatever sort of announcement is made.”
The conference also has remained quiet and declined comment on the negotiations, while Delany and the Big Ten’s athletic directors didn’t provide much information on the topic at the conference’s spring meetings in May.
Delany withheld specifics when speaking to reporters after those meetings but said the conference is “confident, but not overconfident” about the negotiations and that the Big Ten expects to have a series of announcements later this summer.
The reported six-year contract with Fox would allow the Big Ten to renegotiate its next deal in 2023, a year before the expiration of any other major conference. The strategy behind the shorter length is similar to UW signing with Under Armour for 10 years when many other schools sought 15-year contracts.
With television rights deals always increasing, the Big Ten could hope to maximize its revenue by re-upping for an even bigger amount six years from now.
“I think it’s going to be curious to see what the market looks like six years from now, and I think that’s what the Big Ten is counting on,” John Ourand, of the Sports Business Journal, said. “The iPad came out around six years ago. That’s how people are now watching television. It didn’t even exist six years ago. So the idea of figuring out how people are going to be consuming video and watching these games six years from now is something nobody knows.
“Six years from now, potentially Google will decide that it wants to step in, or Facebook will decide that it wants to get sports rights. Right now, they’re not really doing it. I can understand why the Big Ten did a deal that way.”
It remains to be seen whether ESPN will remain a part of Big Ten coverage by taking all or a portion of the other half of football and men’s basketball games that aren’t reportedly going to Fox.
If left out of the new deal completely, the Big Ten wouldn’t benefit from ESPN’s brand and would see more of its games shown on Fox Sports 1, which produces much lower ratings than channels under the ESPN/ABC umbrella.
“The Big Ten believes that not only will FS1 grow, but also the Big Ten is coming with big brands that people will want to see,” Ourand said. “They have brands like Ohio State and Michigan football.
“Wisconsin has developed a pretty significant brand in college basketball. The Big Ten feels like it has the type of content that people will seek out regardless of where it is.”
Recent financial troubles at ESPN could have kept the company from submitting a competitive bid for the first half of the Big Ten’s available games.
Despite the reported $250 million annual bid, Fox has experienced its own financial issues of late.
While that could have an effect on the final dollar value the Big Ten commands, the conference could be concluding a massive deal in the next few months that will significantly increase the financial support it provides to its 14 member schools.
“It certainly could have been bigger, but I find it hard to say that it was a bad deal considering that they’ve sold half the package and have already seen a pretty significant increase off of it,” Ourand said.
“The Big Ten is really sitting pretty on this. It wants more money, and it’s going to get more money, but already it’s seeing an increase over it’s average annual value than it did previously. Given the current market and given the cost-cutting measures that are going on at Fox and ESPN, that’s a pretty amazing development.”