Indiana University Athletics
Darryl Neher: Valuing The Big Ten Network
9/17/2007 12:00:00 AM | General
Sept. 17, 2007
If you are both an Indiana Hoosier fan and a Comcast subscriber like I am, you've missed out on some great Big Ten Network programming: Appalachian State upset the Michigan Wolverines, the football Hoosiers thrashed Indiana State, and the IU Men's Soccer team knocked off the #1 UCLA Bruins. And that was all within the first four days of the Big Ten Network launch.
Like so many fans, I'm frustrated by the stalemate between Comcast and the Big Ten Network. Although I'm not sure "stalemate" is quite the right word, as it implies neither party is willing to negotiate. If you've followed this drama (or is it a horror story?) you know the Big Ten Network is actively signing deals, most recently signing agreements with DISH and Insight, while Comcast sits on the sidelines trying to convince its subscribers that the Big Ten Network is to blame for the lack of progress.
Lack of progress means little to IU fans without access to the network - and for some the Comcast spin is turning frustration over the situation into anger against the Big Ten Network and the Big Ten Universities it represents. The anger is understandable, but misplaced.
The Big Ten Network appears to be the only reasonable and consistent participant in the negotiations. If we should be angry, our anger should be directed at Comcast.
Consider Comcast's claim that the network is looking to charge $1.10 per month per subscriber. Mark Silverman, President of the Big Ten Network, told me in a recent interview the $1.10 figure is a Comcast fabrication and that it grossly exaggerates the price structure sought by the network. Instead of $1.10 per cable customer, per month, the actual amount is closer to 30 cents per month per subscriber across the entire Comcast system. According to Silverman, the network is asking 90 cents per month per subscriber for homes within the eight-state Big Ten footprint, and 10 cents for all others. As a point of comparison, ESPN charges cable companies approximately $2.50 per customer, per month, while ESPNU charges 10 cents, and CSTV receives 18 cents per customer, per month.
We all know the deadlock is ultimately about money, but it is fundamentally based on the perceived value of the Big Ten Network product. Comcast continues to argue that the Big Ten Network is a "niche product," appealing to a limited number of consumers and deserving of a sports tier placement. The irony is that Comcast contradicts its own bargaining position with its existing sports programming. Take a look at the Expanded Basic package Comcast offers in the Indianapolis area. The Golf Channel, by definition a sport-specific niche channel, is an expanded basic channel. So is Versus, a sports channel most know for its coverage of Professional Bull Riding, Extreme Cagefighting, and hunting - can you get any more "niche" programming than bull riding and cagefighting?
How can Comcast make the argument that Big Ten sports have less of an appeal than Versus and The Golf Channel? Take a look at ownership and everything becomes a little more clear - both The Golf Channel and Versus are owned by Comcast.
Comcast's position is even more absurd when you consider the company's role in two other sports channels: Comcast/Charter Southeast and "The mtn." (pronounced "The Mountain"). Comcast/Charter Southeast is a regional sports channel currently carrying a wide variety of sports, including high school and college football. According to the Sports Business Journal, Comcast hopes to transform the regional channel into the Southeastern Conference Channel. Sound familiar? It gets even better. The mtn. is a dedicated channel for the Mountain West Conference, offering MWC live-event programming, as well as press conferences and numerous studio shows. Both channels are carried on the basic, expanded basic, or digital basic tier within a limited broadcast footprint - similar to the terms being requested by the Big Ten Network.
The inconsistency makes me wonder: Is Comcast bitter because it lacks a piece of the Big Ten Network financial pie?
For us Hoosier fans caught in the middle, we know the Big Ten Network isn't "niche." The network represents up to four more IU football games this season, 15 to 20 IU men's basketball games, plus 30 additional Big Ten football games, and over 100 regular season men's basketball games - not to mention the coverage of other Big Ten athletic events. The Big Ten Network represents an opportunity for greater access to Indiana University sports programming than ever before.
I'm thankful the Big Ten Network is fighting to protect the value of its brand. With Comcast's nearly 25 million subscribers representing over 24% of the entire cable market, the Big Ten Network is fighting for greater exposure for Indiana University and maximum revenue for the programs of IU Athletics. Where would you want surplus profits to end up - supporting IU athletic programs or in the pockets of Comcast?
Regardless of how Comcast conducts its negotiations, I'll be sitting in Memorial Stadium cheering on the IU Football Hoosiers as they go for 4-0 against Illinois, and visiting Yeagley Field to watch the IU Soccer Hoosiers make a run for another NCAA title. But there will come a time when we Hoosier fans will need to decide how valuable the Big Ten Network is to us. For many of us, if Comcast fails to put the Big Ten Network on expanded cable, we'll look for another provider. Maybe then Comcast will understand the true value of the Big Ten Network and its fan base.
Darryl Neher is a Senior Lecturer with the Kelley School of Business and the host of The Afternoon Edition on AM1370 WGCL. Born and raised in Indiana, Darryl is a lifelong Hoosier fan and a regular contributor to IUHoosiers.com. You can contact Darryl directly at neherd@gmail.com.
