Message from Athletic Director Bill Martin
10/16/2007 12:00:00 AM | General
I want to take this time to update you all on the progress of the Big Ten Network ("BTN"). The issues are complex and the debate has many facets. I want to do my best to fully explain our perspective and respond to the positions being taken in this debate.
The Michigan vs. Purdue football game on Saturday was our fourth appearance on the Big Ten Network. This Saturday's game against Illinois will be on ABC and our game on October 27th against Minnesota will be televised on ESPN Classic. It is possible we could have another appearance on the BTN this fall. How does this happen Learn more
Through distribution partnerships with DIRECTV, DISH Network, AT&T U-Verse and more than 150 cable operators, the Big Ten Network reaches over 30 million homes. That figure represents the largest audience for any network in cable television history after its first month. All of these agreements call for the network to be carried on the expanded basic level of service.
Explaining the Network's Position
Unfortunately, the BTN has been unable to reach agreements with the four larger cable companies. For these four major cable companies, including Comcast, the central issue of disagreement has been carriage on the "expanded basic" level of cable service. Comcast has not shown a willingness to carry the BTN on an expanded basic level of service. While the BTN is open for inclusion on a sports tier for systems outside the Big Ten region, the BTN cannot agree to be shown on a sports tier within the Big Ten footprint. Many of our fans have asked why the BTN has taken this position, as some fans would gladly pay for this level of service.
There are several reasons for the BTN's position:
- The conference is committed to broad distribution of the BTN's programming. Only 4% of households currently have what would be considered a "sports tier."
- We believe that no one within the Big Ten footprint should have to subscribe to a higher level of service and pay an extra $60 a year (if you already have digital cable) to $200 a year (if you do not have digital cable and need to upgrade) to see the BTN. A sports tier typically costs $4.99 or more per month and requires a digital level of service.
- The programming on the BTN has broad appeal within the Big Ten footprint and deserves to be broadly distributed. BTN's ratings for its Saturday football games have consistently ranked among the top-12 programs among all cable programs across all networks.
- Finally, the Big Ten Conference has committed to an unprecedented level of coverage of Big Ten events. The cost structure of producing 400 live events, almost all in high definition, requires an ability to sell advertising and generate revenue that a sports tier would be unable to provide. The network would not be able to exist on a sports tier. Comcast knows this, given that of the 11 sports networks it owns, none are on a sports tier.
About Regional Sports Networks
Although the BTN is the first network of its kind, it is very similar to a regional sports network (commonly known as "RSN's," such as Fox Sports Net, or Comcast SportsNet Chicago). Virtually all regional sports networks are carried on expanded basic cable and not a "sports tier." Even CSS, a RSN owned by Comcast and Charter, is on expanded basic cable. If you went to their "about CSS" web page, you would see this:
We deliver a mix of live sports programming, sports news and in-depth sports analysis that is exclusively geared towards you - the Southeastern sports fan. We have more collegiate sports coverage than any other regional sports network in the country, reaching 5.8 million households across 12 states.
CSS is a partnership between Comcast Corporation and Charter Communications, the nation's largest and third-largest broadband communications companies. For more than five years, CSS has taken Southeastern sports fans inside the huddle and into the locker room for more news and more coverage of the top teams from throughout the region.
CSS is your ticket to Southeast sports, and we're available exclusively through cable.
Don't miss:
100+ NCAA football games
ACC & SEC football game replays
200+ NCAA basketball games
NCAA baseball, softball, soccer, volleyball and gymnastics
Minor league baseball and hockey
Weekly coach's and preview shows
Outdoor programming
Auto racing
Sound familiar It seems that Comcast and Charter feel great about putting their own sports network on basic cable, but not the BTN. And by the way, please note that the ACC and SEC games are on tape-delay! The ACC and SEC games air live on other networks!
What Comcast Isn't Telling You
While I'd prefer to stay on the "high road," I also feel compelled to respond to Comcast's extensive negative advertising in our region. Comcast executives suggest that the Big Ten Network is only carrying "second tier" games. While we find it interesting that Comcast has to resort to paid advertising if there is no interest in these "second tier" games, Comcast executives have also been quoted in the papers saying that there doesn't seem to be a lot of people who want the network. Based on the email traffic that hits my office every day, I would say that most of our fans disagree. Our fans want to see our football games, period.
Comcast goes on to say that they "want to carry the Big Ten Network on our sports and entertainment package without forcing all consumers to pay for it." For those of you not familiar with the Comcast sports and entertainment package (it includes Fox Soccer Channel, NFL TV, NBA TV, and CSTV, among others), it costs $4.95 extra per month and requires digital service (at an added monthly cost). Comcast is clearly motivated to steer networks such as the BTN to a sports tier. If the BTN is available only on a sports tier, they would receive a financial windfall, as the rate paid to the BTN would be a fraction of the incremental monthly revenue to Comcast.
Beyond their profit motivation, we find it mysterious why the cable cartel refuses to even talk about an expanded basic cable agreement. The 150 cable agreements prove that the BTN is flexible enough to get deals done. If 150 cable companies can agree to carry the network on expanded basic, then the larger companies should be able to as well.
If you live in the eight-state region that is Big Ten Country you currently receive 50-70 channels as part of your expanded basic cable service and very few of them are local. The Big Ten Network is local and we feel it should be one of those channels.
Big Ten Network Offers Broad Programming
The Big Ten Network is about more than just the 40 football games produced each year. We will have at least 13 men's basketball games on the BTN, at least seven of which are conference games. In total the BTN will broadcast 140 men's basketball games and 55 women's basketball games. In the past, coverage of our men's basketball game was sporadic at best (last year 10 games weren't covered at all, and 11 games were syndicated with limited local coverage), and coverage of women's basketball was virtually non-existent. When the BTN achieves its distribution goals, coverage for all of our sports will be much broader and deeper.
The Big Ten Network is also more than just sports - it is really an extension of our schools, with 660 hours of campus programming and a dedication to no alcohol advertising and event-equity for men's and women's sports. We believe the network is totally in line with the values of our conference, institutions and fans.
It is true that not everyone will be interested in every game or every program on the BTN - just as not everyone watches or is interested in other cable channels that are on the 50-70 channels that are common to expanded basic cable service. The cable industry has decided that "bundling" channels is the best way to offer consumers the widest possible variety at the best price. In the Big Ten footprint, the Big Ten Network should be one of those channels, right along with the jewelry channel, the food channel, the speed channel, and other channels commonly found on expanded basic.
While Comcast and others have deliberately tried to mislead the public on what it will cost cable companies to bring the network to their customers, the network's rate, specific to the Midwest, is a third of what the market has determined is appropriate for regional sports networks. And, these sports networks are all carried on expanded basic. The cost to operators everywhere else is less than at least 65 other national networks including CNN, TBS, TNT, Lifetime, Oxygen, A&E and just about any other station that appears on your area's basic cable package.
"Free TV"
Comcast also alleges that "most of these games were on free TV last year, so the Big Ten is really taking those games away from the fans." Last season, we had 3 national games on ABC or NBC. One other game was on ABC regional coverage. Another game was on ESPN regional (commonly known as "ESPN +" and syndicated to stations such as Channel 7 in Detroit). The remaining 7 games were on the various ESPN platforms (including one on ESPNU). A total of 5 games last year would have been available on "free TV," that is, the kind of television where you have an antenna or rabbit ears. I don't know about you, but my household doesn't consider the $100 we used to pay Comcast each and every month "free TV." The fact of the matter is that many factors go into your basic cable bill, not just the fees to cable channels such as ours and ESPN. Coverage of all games on "free TV" never existed and probably never will.
Of course, economics are at the heart of this dispute. We do not apologize for the fact that the combined revenue stream to the conference for the two new network contracts (that is the new ABC/ESPN and BTN arrangements) exceeds the previous stand-alone contract with ABC/ESPN. The revenues generated from each of our broadcast contracts are critical for the long-term financial stability of the conference athletic programs. Our Michigan athletic department is self-supporting, and charged with continued academic and athletic excellence without utilizing core university resources or state funding that must be directed to education and research.
Our department is often criticized for the state of our basketball arena. While we pledge to make improvements to Crisler Arena, the necessary improvements will take time and resources. Revenues from our broadcast contracts will provide needed resources that can be dedicated to major facilities renovations such as Crisler Arena, as well as other upgrades to our athletic campus.
U-M Committed to the Big Ten Network
The conference has a 20-year contract with the BTN, and we are committed to making it a broadly distributed network within our region. However, the distribution of our network is dependent on cooperation from cable providers; it takes both parties to resolve the problem of getting our games delivered on your cable systems.
In previous messages the athletic department has asked you to call your cable company to encourage them to pick up the BTN on basic cable. When discussions with the cable cartel over several months indicated that the BTN was not going to be on basic cable anytime soon, we advised you to seek alternatives to your cable company. We appreciate those efforts from our fans, and we acknowledge that it is a tremendous burden on you to be impacted like this. Even though Comcast's resources ($26.3 billion of revenue and operating cash flow of $10.5 billion were noted in their annual shareholder report last year) appear limitless and it looks like they will continue to distribute their propaganda through paid advertising, we will continue to work at getting our games on basic cable and broadly distributed.
At this point, all we can ask is your patience and support of the BTN. The BTN has come a long way since the announcement of its formation in June of last year, and the University of Michigan community will continue to support it. We are proud of the BTN, its programming, and its goals. We just need to work at expanding its current distribution well beyond the 30 million homes already established.
If you have any comments or questions about the Big Ten Network, please direct them to bigtennetwork@umich.edu. We have had numerous messages already, and we may not be able to respond to them all, but we are always interested in your feedback.
Go Blue,
Bill Martin
Football Television Selection Process
As part of our agreements with ABC/ESPN and the Big Ten Network, football television assignments are based on a selection process by the networks. ABC has a Big Ten national game each week and is the first to select. The Big Ten Network rotates selection of the other games with ESPN and ESPN2. Half the time, the Big Ten Network will choose the second or third game. Typically, two to four conference games each week will end up on ABC/ESPN and the rest will be carried by the Big Ten Network.
The games held the first few weeks of the season, as well as selected night and/or national games later in the season, are picked prior to July 1. As the season goes on, ABC, ESPN and BTN will select their televised games under a rotation where the BTN gets three "#2 picks" and three "#3 picks." As a result of the selection process, four of our games already have been selected by the BTN. The BTN still has additional picks for later in the season.
