Penn State Sports Magazine
Issue link: https://comanpub.uberflip.com/i/1454229
M A R C H 2 0 2 2 6 7 W W W . B L U E W H I T E O N L I N E . C O M E D I T O R I A L MATT HERB matt@bluewhiteonline.com W hen Penn State shocked the col- lege athletics world back in De- cember 1989 with the news that it would be joining the Big Ten after more than a century of football independence, one of the explanations university of- ficials offered was that PSU needed the stability that conference membership would afford it. From a financial perspective, officials said, the athletics department had been living dangerously. Yes, the Nittany Lion football team had played for the national championship four times in the previous 12 seasons. But there were no guarantees that its good fortune would continue, and a run of mediocre seasons and ho- hum bowl invitations could prove disas- trous to a department that depended on the revenue from a single program. In the decades since, there have been robust debates about whether the Big Ten really is the right fit for Penn State from a competitive and geographic standpoint. However, the argument that PSU's long-term financial interests would be best served by joining one of college athletics' most venerable institu- tions has proven farsighted. Since Penn State's admission into the Big Ten, the athletics department has not had to cut sports to balance its books as other schools have done. In fact, it has added two sports, albeit with the help of a billionaire alumnus who happens to have a passion for ice hockey. What's more, three of the varsity teams that have proven expendable at other schools — wrestling, men's volleyball and men's gymnastics — have combined to win 13 national championships for Penn State since the start of the Big Ten era. If a recent report in Sports Business Journal proves accurate, Penn State's decision to cast its lot with the Big Ten is about to look even more financially sound. According to the Journal's sources, the Big Ten is in an extremely advantageous negotiating position with its current media-rights deals set to expire in 2023. That's because the SEC and ACC have long-term pacts already in place, while the two other Power Five leagues — the Big 12 and Pac-12 — don't have nearly as much leverage as the Big Ten, especially with the Big 12 set to lose Texas and Oklahoma. For now, the Big Ten is negotiating exclusively with ESPN, but if the con- ference wants to shop its rights around — and it reportedly does — it could find interested suitors in CBS and NBC. CBS will lose the SEC after the 2023 sea- son, and according to the Journal, NBC would like to have a Saturday afternoon doubleheader featuring a Notre Dame game followed by another ratings- grabber. Because there's no other league in play that brings the value the Big Ten does, there's a chance that its rights will get bid up significantly over the $440 million that ESPN and Fox are currently paying annually. How significantly? The Journal is predicting that the Big Ten's next media- rights deal could be worth more than $1 billion per year. Take a moment to let that number sink in. Say it out loud in the voice of Dr. Evil: "One BILL-ion dollars." It's a stupefying amount of money. Under the current contract, Big Ten schools receive about $31 million annu- ally in revenue from the league's media- rights deals. If the reports are correct that the Big Ten's next deal will top $1 billion, its 14 schools could be in line for an annual media-rights payout of more than $70 million. For an athletics department that's already profitable — Penn State net- ted $7.17 million during the 2020 fiscal year according to the financial report it submitted to the NCAA — a roughly $40 million boost in annual revenue sounds like a pretty good deal, even if some of that money will inevitably be eaten up by the ever-increasing cost of tuition, travel and insurance. A windfall of that magnitude will give the athletics department a better chance to attract and retain coaches. That's been one of James Franklin's major priorities throughout his tenure. Might it also help get some construc- tion projects started? In 2017, the univer- sity unveiled a wildly ambitious facilities master plan, complete with renderings of a palatial new natatorium, a remodeled Beaver Stadium, an indoor practice facil- ity and an Intercollegiate Athletics head- quarters dubbed the Center of Excellence. Those projects were set back by the pandemic, and most of them were aspi- rational to begin with. A surge in revenue would create some interesting possibili- ties that don't presently exist. Because the deal making is so diz- zyingly complex, it's tempting to think about these blockbuster media-rights contracts as free money that flows into the coffers of our favorite college ath- letics programs. But, of course, that's not true. In the end, much of the cost is passed along to consumers in the form of higher cable bills. So, if you're a Penn State fan, you're going to be paying for this. If you're not a Penn State fan … well … you're going to be paying for it anyway. Stability doesn't come cheap. ■ The Pegula Ice Arena is one of several Penn State sports facilities that have been either constructed or upgraded since the start of the Big Ten era. PHOTO BY STEVE MANUEL Media-Rights Negotiations Could Bring Windfall VARSITY VIEWS