Conference USA

What can we learn about future Sun Belt television deals from the Conference USA deal?

What does the reported new CUSA TV deal mean for the future of the Sun Belt TV deals

Out in message board land there is speculation that the Sun Belt should expect to lose money or stay flat with the next television deal.

CUSA's TV deal cannot be relied upon to be an indicator of what future contracts within G5 will generate. CUSA is oranges in apple market.

Why the CUSA deal doesn't mean much to us.

1. The prior deal was over-valued. It was based on Houston, UCF, SMU, Memphis, ECU, Tulane and Tulsa being members. TV didn't bother renegotiating but much of that was based on the short time remaining. The old TV deal did not make any real valuation of UNT, La.Tech, FIU, FAU, MTSU, WKU, ODU, Charlotte, and UTSA. Now they've had value assigned. The teams that helped give the CUSA deal its value are in the AAC and outside the P5, AAC has the best contract among football leagues (Big East contract is better).

2. The power of basketball is underestimated. National basketball power Memphis was in that old deal, you can pull out the old saw that football drives the bus and I shall point you at the old Big East. Take the deal they had pre-split 2/3rds was awarded based on hoops participation, 1/3rd football. The Mega Big East was going to turn that upside down and make it 70% football 30% basketball. That helped spur the split. In the end new Big East and AAC deals worked out to about the same valuation old Big East had placed on the TV deal. If you have nationally relevant basketball it holds market power. Hoops does not draw the ratings football does but it occupies more nights of content. It's not high profit related to production costs as football can be but it can still be a profit center. CUSA 3.x is not nationally relevant basketball. The change in valuation to some degree reflects the fact that a CUSA basketball game today carries less value than when Memphis was a member, this is part of the new CUSA deal being revalued to represent what the current membership is.

3. CUSA TV partners do not appear to be using the same strategy as ESPN. The World-Wide Leader if you are paying attention is positioning for a world where the cable carriage fee is less a part of their arsenal. They are prepared for online and on-demand delivery and have so much content they can bundle so many different ways. They buy all of the rights when they can and resell and repackage the excess (see AAC and MAC games on CBS Sports Network, see multi-casting major events across many platforms). From what we know so far, CUSA's deal with Fox and CBS is a traditional pay X to get Y number of games deal. If they were following the ESPN model they would take all of the package and distribute to other vendors and online all of football and most of basketball. You cannot compare an old model package in trying to determine what you can get under the new model.

4. Audience and network matters. In the carriage fee economy, what matters is an audience that will in large numbers change TV providers to get the content they want, thus holding the TV provider hostage to the TV producer's demands.  That doesn't apply to G5 programs. While FS1 is still in growth stage and developing an audience, what matters after carriage fees is rates that can be charged to advertisers. That rate depends on the demographics of the audience (what sort of people are watching) and how many are watching. In college football it is reasonably safe to assume the demographics of a Sun Belt game are pretty similar to the demographics of a Big XII game, the difference in what advertisers are charged boils down to size of audience. The Fox networks outside of the over the air network and CBSS platforms have a hard time drawing the casual viewer that the ESPN platform draws. Fox and CBS aren't going to pay much of a premium if they cannot charge as much for thirty second spot as ESPN can. For example La.Tech vs. Rice on a Friday on FS1 drew 113k viewers, Marshall vs. WKU drew 168k, compare that to AState vs. App on ESPNU with 200k viewers and ULL vs. USA on ESPNU Thursday night with 160k. ESPNU is in fewer homes than FS1 yet Thursday night ESPNU games can draw a nice audience (and not go head to head with your recruits playing).

The differences in what went into negotiating this deal and the differences in how Fox and CBS are handling their networks just mean that you shouldn't take CUSA losing money off its past deal to be bad news for the Sun Belt. Tuesday night games have taken a beating against baseball but even then the audiences haven't been bad and the Thursday night numbers are improving, unless you are team mired in the Sun Belt cellar, then the numbers have been bad.

Taken in context, the Sun Belt should feel reasonably good about renegotiating its television deal, though a school having a breakout nationally relevant year would boost the numbers even more.