Milking Moola From The Midwest Cash Cow

Recently the University of Michigan announced its operating budget for 2018.  Normally a red-blooded Buckeye wouldn’t pay attention to anything having to do with That School Up North, but in this case we’ll make an exception, because the operating budget included information about how much money TSUN expects to receive from the Big Ten as its conference revenue distribution next year.

1-4-7f9-49-a001329And the projected revenue number (drum roll, please) is:  $51.1 million.  That $51.1 million in expected revenue distribution will go not only to the despised Maize and Blue, but also to the good guys in Scarlet and Gray and all of the other schools in the 14-member Big Ten Conference.  Do the math, and you will quickly determine that the Big Ten will be dishing out more than $700 million to the schools that are lucky enough to be part of the Old Conference in 2018.  Say, do you think the school administrators and athletic directors at Rutgers and Maryland are happy about their decision to join the Big Ten back in 2014?

The story linked above says the big driver of the Big Ten’s enormous projected 2018 distribution is TV revenue.  The Big Ten’s TV deal is expected to produce $2.6 billion in revenue over six years, generating lots of money to dole out to Big Ten members.  The Conference has been pretty far-sighted in maximizing its TV revenue, having created its own network before other conferences did and driving a hard bargain in its negotiations with networks.  The Big Ten has two aces in the hole that give it incredible leverage:  huge schools with lots of graduates and supporters who are spread out around the country, are passionate about sports (primarily football), and want to watch their team play every weekend during the fall, and a conference that now stretches from Nebraska all the way east to New Jersey and Maryland, covering many of the biggest media markets in the country.

The $51.1 million in projected Big Ten revenue for 2018 is just each member school’s share of the Big Ten’s common revenue.  The powerhouse schools like Ohio State, Michigan, Penn State, and Michigan State also generate lots of cash from their individual merchandising, licensing and “partnering” deals.  Those schools know that their fans want to wear their school’s gear and put up school merchandise in their dens and family rooms and “man caves,” and they’ve got prized brands that also contribute lots of dough to the bottom line.   We’ve reached the point where educational institutions have developed, and now own, some of the most valuable brands, logos, and mascots in U.S. commerce.

In the largely midwestern footprint of the Big Ten, football is a cash cow that produces lots of moola.  The Big Ten Conference and its member schools are milking that cow for all it’s worth.

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