Big Ten (Network) bonanza

Michigan State's athletic department is declaring a balanced budget for the second straight year in 2009-10, after four straight years of reported shortfalls adding up to $4.85 million.

In the past three years, the Big Ten Network has supplied about $20 million to MSU and each of the other 10 Big Ten schools.

It's easy to see, then, what the Fox-supported private network means to MSU and the rest of the conference it blankets with coverage and cash. And what its absence could mean.

"A reduction of programming," MSU athletic director Mark Hollis said, referring to cutting sports and/or services such as marketing and communications, "or dipping into our reserve fund (of about $20 million) at a very aggressive rate."

The next question is what the Big Ten Network might mean in years to come. It is one of the key factors in the league's expansion, it has the potential to bring in much more revenue and it is widely regarded as a game changer in college sports - just a couple years after it was the scourge of Big Ten fans who couldn't get it on their TV sets.

"We have definitely turned the corner," said network president Mark Silverman, who remembers being likened to Osama bin Laden, among other things, on blogs and message boards while the network fought for distribution in its first year.

"It's been amazing," studio host Dave Revsine - the face of the network and a key early score for Silverman when he plucked him from ESPN - said of the dramatic change in his employer's perception and reality. "And I have definitely sat back and marveled at it."

League of its own

The Big Ten Network delivered $6.5 million to MSU and the other Big Ten schools in 2009-10. The league's other TV deals yielded $8.4 million per school, bringing total TV money to just shy of $15 million - similar to Notre Dame's reported deal with NBC.

Add money from bowl games, NCAA sponsorships and the NCAA and Big Ten basketball tournaments, and the Big Ten paid each school nearly $25 million last year. That dwarfs the reported revenue-sharing figures from other BCS leagues.

And none of those other leagues have a network with 45 million subscribers - while available in 30 million more homes and on cable in all of the top 20 TV markets in the United States except Los Angeles.

Subscription fees account for the majority of the Big Ten Network's revenue, Silverman said, but advertising revenue increased by 30 percent last year. Both streams stand to gain considerable force from Big Ten expansion that began in June with Nebraska and could continue with larger TV markets in the future.

"This network," said John Ourand, TV reporter for the Sports Business Journal, "is at the heart of any discussion the Big Ten is having about expanding."

Powerful friends

Ourand is surprised by how quickly things changed for the network, which debuted on Aug. 30, 2007, and ended months of bitter negotiating and public derision when it reached a deal with Comcast - the nation's largest cable provider - for distribution on basic expanded cable on June 19, 2008.

That was the key moment. Time Warner and Midwest saturation quickly followed.

Ourand's publication reported that the network initially received 70 cents per month from 17.6 million subscribers within the eight-state "Big Ten footprint," and 10 cents per month from 27.5 million subscribers outside the region.

Those rates will keep rising, Ourand said, and there's no reason to think Comcast will attempt again to place the Big Ten Network strictly on an exclusive "sports tier."

There is reason to believe that cable providers will do all they can to resist the next college league that tries to push its own network onto basic cable.

"The surprising thing is the Big Ten has been so successful in saying, 'Pay us or else,' " said Richard Sheehan, a Notre Dame finance professor who specializes in the business of college sports. "It's one thing for ESPN over quite a period of time to build up a base. The Big Ten Network has done it in a couple of years, with comparatively limited (programming) selections."

Said Ourand: "I'm surprised cable operators agreed to do this deal, but I'm not surprised a network that is 49 percent owned by Fox was able to launch a channel. There's a great story here about a little network taking on big cable and winning. But let's not forget, they aligned themselves with big cable to get on big cable."

Asset potential

That alignment is what struck Revsine after his initial skepticism. A Northwestern grad and ESPN anchor since 1996, he was approached by Silverman to captain the Big Ten's endeavor.

"Once I knew he was interested, I pulled out all the stops to get him because I really needed a face of the network," Silverman said. "I think it was vital."

The fact that the Big Ten had a 20-year deal with Fox - with an estimated value of $2.8 billion - along with the confidence of Silverman and Big Ten commissioner Jim Delany helped make up Revsine's mind.

Still, the first year was difficult. Most fans initially needed DirecTV to see the network, and Revsine recalls negative comments on radio interviews, heckling from fans at the 2008 Big Ten basketball tournament and his own occasional need for reassurance from Silverman.

Late in that basketball season, MSU coach Tom Izzo summed up the feelings of many around the league when he said the network was "a PR nightmare" that "has hurt all of us."

"We weren't perceived as something that was an asset," Revsine said. "We were perceived as something that was a liability. People couldn't see it, so they said: 'Why is this a good thing?'

"But the people who had it loved it, and that's what kept me going through the whole thing."

This fall, the Big Ten Network will feature 15 programs, compared with six in its first year. It plans live coverage of 650 events in 2010-11, compared with 434 in that first year.

More money is on the way, although Hollis said he'll continue to budget expecting $6 million to $7 million a year until notified otherwise.

If the Big Ten were to expand east and get its network on basic cable in New York City, it would instantly receive 70 cents from 7.5 million subscribers - per month, and regardless of whether any of them actually watch or not.

That's why Blair Kerkhoff of the Kansas City Star recently called the Big Ten Network "one of the greatest forces in college sports today."

"With the benefit of hindsight, their strategy worked perfectly," Ourand said of Delany, Silverman and Co. "There's no way you can question it."