By The Numbers Part II: DMA Analysis Confirms SDSU’s Worth

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Last week we looked at how San Diego State lined up in the PAC-12, Big 12, and Mountain West conference metro area populations. This week we look at TV households but instead of focusing too much on SDSU we’re going to look at how badly the Pac-12 was hurt by the defections of USC and UCLA and whether or not it makes sense to add SDSU.

Is it Doom and Gloom for the Pac 12?

There’s been a recent post on Twitter by Jeffrey Fuller claiming the Pac-12 is going to take a 45% haircut on their next TV contract due to USC and UCLA leaving. He essentially takes a valuation by Navigation Research and reduces the payouts by 45% due to an article by Jon WIlner who is a Pac-12 writer for the San Jose Mercury News.

So the question is why should the Pac-12 payouts be reduced by that amount? Does the LA market contain 45% of the TV households in the Pac-12? (No, it is not.) Are the Trojans and the Bruins the most watched teams in the Pac-12? (No, they are not.)

Let’s Start with the Markets

Here’s a list from John Canzano defining the DMA markets for the Pac-12 and actually GIVING the SAN DIEGO market to the Big Ten when the two LA schools bail for greener pastures!

But let’s assume that the Pac-12 “loses” the San Diego market for now (they never really had it) and run the numbers. The first case assumes San Diego has been assigned to the LA market, and the second case assumes San Diego is its own market.

If one assumes that TV revenue is based on the total number of households with TVs, then the true figure of merit for per team payouts is Total TVs divided by the total number of teams in the league. 

SDSU’s DMA numbers are on par with the new Pac-10

So let’s walk through the charts. The first column is for the former Pac-12, and the second column is for the New Pac-10 with no additions. The third column is a new “Pac-11” that shows how much adding SDSU will affect the ratio.

Depending on how we define the San Diego market, the potential loss in revenue per team for a new Pac-10 or Pac-11 will be anywhere from 19 to 24%. This chart also shows that the Pac-10 will not be hurt one bit by adding SDSU as the Number of TV’s per team essentially stays the same.

Then it must be the TV ratings, Right?

OK, you might think that the 40 to 50% loss in revenue might be due to the fact that USC and UCLA drew more ratings than the other Pac-12 schools. It sure doesn’t appear that way according to this article. Over half a decade ago USC was a clear ratings winner, but these days it’s Oregon that generates the largest TV ratings for the league.

A Guess on Projected Revenue

Here’s the published predicted TV payouts before USC and UCLA left.

If we assume the Pac-12’s TV revenue will drop by a ratio of 0.785, the total revenue for the Pac-10/11 will be about $49 million. Sure, that’s not enough to keep up with the Big Ten and SEC, but the Pac-12 was never going to be able to keep up with those conferences.  It is, however, only $8-11 million below the Big 12 and ACC.

Would schools be willing to put their Olympic sports athletes through much increased travel for that small percentage difference in revenue? I’d guess not, and there must be a reason for  the four corner schools of Utah, Colorado, and Arizona schools to have not already bailed.

We’ll see where this goes in the future. For now it’s clear that the Pac-12 will still receive significant revenue and it’s also pretty clear that while SDSU might not help the per team averages, it won’t hurt it either and it WILL help the Pac keep a foothold in Southern California. Doing so might even force the great TV powers to remove San Diego from the Big Ten market, which would affect the LA school’s overall value to that conference.

An Aside: Who Decides Which Markets Belong to Whom?

One wonders, though, if the great TV powers consider San Diego part of LA’s market, then shouldn’t adding SDSU to a league allow the league to count the LA market? Probably not. These things only work against SDSU for some reason. 

One also wonders if the Big 12 market numbers are a tad over represented in Joe Canzano’s article. Are Austin, the home of the Longhorns, and San Antonio (home of no Big 12 team) really Big 12 markets?

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Perhaps we can answer this by looking at which teams are more popular using Google Trends. Results are in the Table below.

Note that Tampa is a different market than Orlando, and that market follows the blue-blood programs Florida and Florida State. Pittsburgh actually has its own university.

It gets even more interesting when you look at who wins the larger Big 12 markets using Google Trends. At least Kansas and Kansas State dominate their home market. Thankfully for the Big 12 they invited BYU—otherwise it would have been a clean sweep.

Note that Austin and San Antonio were absolutely dominated by Texas and Texas A&M. Those two schools dominate all Texas markets except the mighty Lubbock DMA market. Kudos to TexasTech.

SDSU compares very well to these schools, especially the four new additions. BYU and SDSU control their market at the same rate (53%), and while Cincinnati’s numbers are respectable at 44%, UCF and Houston are below 30%. It’s also very clear that calling Tampa a UCF market is wishful thinking at best. 

According to Google Trends, only three “New Big 12” schools dominate their market

Contrast this with the Pac-12 markets that are all dominated by actual Pac-12 teams  (with the exception of Utah listed above) because there is no real competition for them.

It very well could be that the Pac-12 is a bit under rated and the Big 12 a tad bit over rated. In the end, getting into either conference would result in more compelling games for SDSU – and that’s what it should really be about.

For more conference expansion watch our recent football Sons of Montezuma Podcast.
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