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Mark Cuban will Fail

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I like Mark Cuban a lot. I think he brings Marketing and business savvy that most owners somehow leave at the curb when they buy a team.

But Mark's new venture is doomed. You can see it in his two posts on his blog. Dec. 17 and Dec. 18 posts.

First one starts out full of enthusiasm. Second one is retrenching.

The BCS equation is simple. Remember 3 numbers and you have it mastered. 750, 145, and 650.

750 is how many millions each year that the BCS conferences get from Football TV revenues only.
145 is how many millions each year that the BCS gets from ESPN for the 5 post-season games.
650 is how many millions the NCAA gets from March Madness TV revenue per year.

The Big Football powers have always been at war with the NCAA. Imagine a city. The NCAA is the traffic cop, the "City Hall". Everyone supports the concept of traffic cop, but no one like to see them in the rear view mirror. There are about 1100 schools as members in the "City of NCAA".

Now the Big Football powers are the movers and shakers in our little city. Although they may be a big part of city politics, they both feel the normal resentment on getting a ticket, and additionally feel that THEY should get special dispensation, because their businesses provide so many jobs and tax base for the city.

Back in the 40s, most of the revenue from College Football (CF) came from tickets sales. Schools controlled their own ticket revenue, and their own scheduling, except where they banded together in small groups or "conferences". The power and money was controlled by the Big Football Powers, not the NCAA City Hall.

Then came the 50s and the NCAA, as do all governments, tried a little power grab. The NCAA gronked the power of the tube and thought forward. They said the schools can keep the ticket revenue, but the NCAA will control all TV and Radio contracts, except for local broadcasts. The revenues go into a central, NCAA-controlled pool, with the NCAA doling out both revenue and air time.

Or to use our city model, the schools kept all cash and check sales, but all sales from these new fangled credit cards go thru the City Hall with revenues going into the City Hall coffers. In the 50s there wasn't enough credit card sales to worry about. Then came the 60s and Visa MasterCard. Then came the 70s. Soon there were more credit card sales than cash, more TV revenue than ticket sales. The Big Football schools were pissed. A lot of them knew THEY were who TV Viewers wanted to see, not the NCAA. Everyone wanted to see Michigan, no one cared about Utah. The Big Football schools were angry.

Then came the NCAA sanctions on Oklahoma. They blocked Oklahoma from post season play. Oklahoma was the #1 team in the land and couldn't play in a bowl. That was the straw.... Many of the Big Football Schools had good law schools. Guess what happened next?

In 1980 Oklahoma (ring a bell) and Georgia sued the NCAA, claiming that they, not the NCAA, owned all the rights to their games, including National TV. And guess what? Oklahoma and Georgia won. In 1984 the US Supreme Court said that the schools owned their regular season rights on all sports. But gave the NCAA the Broadcast rights on all "Post Season Championship Playoffs."

So now, Texas didn't share it's TV revenue with Bowling Green. And Notre Dame could negotiate how many times it was on TV. And the Big Football schools were happy. Oh yea, since we didn't HAVE a championship tourney in D1A Football the NCAA got those lucrative Division 3 TV Contracts. LOL.

BUT in the mean time something interesting had happened. Remember that the NCAA got broadcast rights for all sports post-season championship tournaments? Well that meant the College Baseball World Series, and the Track and Field Championships and, oh yeah.., the Men's Basketball Tournament.

In the 60s March Madness broadcast rights could be bought for change you found in the couch. Then UCLA started rolling and the broadcast rights value started growing a bit. Roll that forward to today and March Madness is 99.98% of all NCAA revenues. That $650M runs the store, and quite a bit is given back to the little schools. In fact, the little schools get MOST of their athletic budget from cutting up the March Madness money.

And roll forward to the 90s creation of the BCS. I won't elaborate on the details, but just think of the BCS Schools/Conferences (the AQ schools) as a block. In our City of NCAA, the BCS is a secret society of all movers and shakers that act as a single unit. Sort of like the Masons.

The bowls are no longer players in the mix. The bowls power only came from the TEAMS that they could put on the field on Jan 1. In the 90s they got sloppy in their contracts and lost their power. Now they are simply sub-contractors to the BCS/Masons. The BCS does the TV contracts and the bowls stand in line and say "Thank you sir, may I have another?".

Oh, BTW. The Masons have set up 4 (now 5) bowls that are MASON BOWLS and sold the package to ESPN for $145M per...

So here are the dynamics in our City of NCAA.

The Masons enjoy the power and $$$ of a $750M regular season revenue and $145M from ESPN, plus all the fame, etc.... Party Party Party.

The common citizens are enjoying the fruits of a $650M per year windfall that goes into City coffers and is spent on the 1100 citizens. Party party party.

Now the ENTIRE rest of Sports Nation hates the City of NCAA, but who cares, they don't vote in City Elections.

The common citizens are partying, but they aren't stupid. They realize one little tiny fault in their utopia. The BCS schools make up ALL of the drawing power (read TV money) of March Madness. Duke may suck as a Football school, but no one is watching Butler vs George Mason on TV. If the Masons decide to leave The City of NCAA, the city budget now becomes about $1.99. The citizens may be partying, but they know better than to piss off a Mason.

And the Masons have a worry also. They all believe deep in their hearts that they lucked out with the current setup. When challenged by SportsNation about a playoff, they all spout "Our whole season is a playoff." Which is a load, but actually sorta true. They believe that the "1 and Done" aspect of the regular season has accidentally heightened the interest from the casual fan. The Masons know that every yahoo in a plaid hat is watching every Bama game, but for the BIG tv bucks you need the casual fan to watch. And for that you need DRAMA, and DRAMA every week.

lo and behold, that is what fell in the Mason's lap. 1 and Done means at least a couple of EXCITING matchups every week. A chance to watch The Mighty Fall, which is always good TV.

So now back to the OP. Mark Cuban will fail. Because of 750, 145, and 650.

If Mark tries to appeal to the common citizens of The City of NCAA to overthrow the Masons and make a CF playoff, then his carrot better be a lot bigger than the Status Quo of the current $650M that the citizens get from March Madness, because the citizens fear that the Masons will just make a BCS Basketball tournament and go to ESPN. Take a look at Mark's initial post, he doesn't even have the right number of zeros in his carrot.

If Mark tries to appeal to the Masons, then he also has to be bigger than the Status Quo of $750M + $145M, because the Masons worry that a playoff will lessen the value of their $750M regular season, which I agree with.

So very simply, Mark needs about a $2B per year carrot for someone to chuck the status quo and gamble on Mark. And so far Mark has no way of building a $2B/year carrot. The TV rights are only worth $145M per year for a CF playoff. Wrong number of zeros, Mark.

There will be no carrot-based College Football playoffs.

Will there be a stick-based one? Go ask Obama.

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