Wednesday, February 15, 2012

C-USA/MWC merger & TV revenue

Conference realignment has been driven by one thing, money, and most of that money is earned through T.V contracts. With that in mind, what kind of broadcast agreement will the new Conference USA/Mountain West merger need to produce in order for their partnership to be worthwhile?

By dissolving both leagues, C-USA and the Mountain West will forfeit their T.V contracts. C-USA signed a new broadcast agreement in 2011 with two primary partners, CBS College Sports and FOX, that paid around $14 million per year. In 2006 the Mountain West inked a ten year, $120 million contract with Versus (now NBC Sports) and CBS College sports. The Mountain West also operated it’s own network, The Mountain, that will not be part of the new mega conference.

Assuming C-USA’s T.V contract paid $14 million per year and the revenue was equally divided among 12 university’s, each school would have earned just over a million dollars every twelve months. When the MWC signed their broadcast agreement in 2006 the league had eight members. On a package that paid $12 million per year that equals out to $1.5 million for each school.

Looking at the numbers above, Mountain West members had a better television contract than their C-USA brothers. I am sure current MWC schools have no intention of moving backwards on the revenue train. In my mind, the new league needs to earn at least $1.5 million per member, per year, in T.V money to be considered a success.

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