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Big Ten Network making money because of fan wishes
Question of the Day
CHAMPAIGN, ILL. (AP) - One of Kay Monigold’s first big headaches when she bought a small cable TV business in Illinois and Indiana in late 2007 was a startup cable channel specializing in Big Ten sports.
The Big Ten Network wanted her Avenue Broadband Communications Inc. to pay what Monigold will only say was “a lot of money for my little company” and make it available to virtually all her customers. She quickly learned she had to do it.
Die-hard sports fans who were also her customers demanded that she give them Indiana and Illinois basketball _ and many of their games were only to be found on the new network.
“We were in the basketball season in December of 2007, and we were losing customers. At that time we concluded that we needed to launch it,” she said.
The Big Ten Network introduced itself just before the football season started in 2007. Outside of live football and basketball games with teams not quite attractive enough for ABC, ESPN and others, its earliest programs made some viewers scratch their heads _ unpolished studio shows with few big names and heavy doses of old, taped games.
Well, the network has come a long way since then.
Neither the conference nor the Chicago-based cable network publicly talk about their finances, but, according to the Sports Business Journal, three years after it went on the air the network is delivering close to $70 million a year to the Big Ten.
With other conferences including the SEC, Pac-10 and Big East, and even the University of Texas, all talking about potentially forming their own networks, the Big Ten Network is a model for _ and some might say the envy of _ big-time college sports around the country.
“They have connected a lot of the dots and they are very powerful,” said Christine Plonsky, who is senior associate athletic director at the University of Texas and the school’s point person on its push to create a Texas-only channel.
Multiply Monigold’s unhappy customers out over millions of households across the Midwest, plus Big Ten fans spread out around the country and, in a nutshell, you can see why the network works and, some experts say, is just getting started.
Cable companies pay the network, on average, 36 cents a month for every subscriber, according to the SNL Kagan, a firm that tracks media business financials. Last year, there were almost 42 million subscribers generating $182.5 million for the network. It brought in $21 million in other revenue, mostly from ads.
According to Kagan, the network turned a 30 percent profit in just its third year, and should hit $272.9 million in revenue and a 36 percent profit in 2012.
Fans, even a relative handful of them, give sports networks like the Big Ten channel real power, Kagan senior analyst Derek Baine said. The 36 cents BTN is paid is actually small compared to some sports channels.
“Most of the regional sports networks get two to three bucks per set per month because you’ve got these rabid fans on there, and if they don’t get their sports networks, they’re going to drop,” Baine said.
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