Garvin is right. The Pac 10\'s next TV contract is going to bring a substantial increase in TV money -- with or without Colorado/Utah. The increase is going to happen just because the market price has gone up -- regardless of expansion or a conference championship game.
The question is whether Colorado/Utah will bring in enough additional money to offset the fact that we have to split it 12 ways instead of 10. Assuming Utah is in, we\'re expanding the conference by 20%. So, for the existing schools to break even, the addition of Colorado/Utah needs to increase the conference\'s revenue by at least 20%. To add some incremental value, I would hope to see Colorado/Utah increase the conference\'s revenue by a lot more than 20%.
Colorado and Utah will add some value to the TV contract, but I really doubt that they will add 20%. I don\'t have the detailed TV rating analysis that the networks will use, but I\'m pretty sure that the numbers of viewers in Colorado and Utah isn\'t going to add 20% to the Pac 10\'s existing TV market. For what it\'s worth, I figure that the population of Colorado and Utah is about 14% of the population of the four existing Pac 10 states. My guess is that Colorado and Utah will dilute the per-school value of the new TV contract because their incremental value will not be enough to offset splitting it 12 ways instead of 10.
With just Colorado, there might not be any dilution. The Colorado market is significantly bigger than the Utah market. If we were to just add Colorado, that\'s only a 10% expansion in the conference, so we would need to get only an extra 10% from the TV deal to avoid dilution. I suspect the TV networks will view the Colorado market as adding another 10% in value. It\'s the much smaller Utah market that causes the dilution.
The other additional source of income if we add both Colorado and Utah will be a conference championship game in football. That will bring in some extra money -- maybe $1 million per school per year. That money probably will be enough to allow us to break even or have a slight benefit from expansion. But the additional dollars really are not going to be terribly significant in an overall athletic budget of $60 million or $70 million.
We would be better off not expanding. Having committed to Colorado, I\'d rather just stand pat with 11 teams, and wait to see what happens in the future. I don\'t see the addition of Utah as being in the conference\'s long-term best interest.
The question is whether Colorado/Utah will bring in enough additional money to offset the fact that we have to split it 12 ways instead of 10. Assuming Utah is in, we\'re expanding the conference by 20%. So, for the existing schools to break even, the addition of Colorado/Utah needs to increase the conference\'s revenue by at least 20%. To add some incremental value, I would hope to see Colorado/Utah increase the conference\'s revenue by a lot more than 20%.
Colorado and Utah will add some value to the TV contract, but I really doubt that they will add 20%. I don\'t have the detailed TV rating analysis that the networks will use, but I\'m pretty sure that the numbers of viewers in Colorado and Utah isn\'t going to add 20% to the Pac 10\'s existing TV market. For what it\'s worth, I figure that the population of Colorado and Utah is about 14% of the population of the four existing Pac 10 states. My guess is that Colorado and Utah will dilute the per-school value of the new TV contract because their incremental value will not be enough to offset splitting it 12 ways instead of 10.
With just Colorado, there might not be any dilution. The Colorado market is significantly bigger than the Utah market. If we were to just add Colorado, that\'s only a 10% expansion in the conference, so we would need to get only an extra 10% from the TV deal to avoid dilution. I suspect the TV networks will view the Colorado market as adding another 10% in value. It\'s the much smaller Utah market that causes the dilution.
The other additional source of income if we add both Colorado and Utah will be a conference championship game in football. That will bring in some extra money -- maybe $1 million per school per year. That money probably will be enough to allow us to break even or have a slight benefit from expansion. But the additional dollars really are not going to be terribly significant in an overall athletic budget of $60 million or $70 million.
We would be better off not expanding. Having committed to Colorado, I\'d rather just stand pat with 11 teams, and wait to see what happens in the future. I don\'t see the addition of Utah as being in the conference\'s long-term best interest.