The Big Ten, running out of room to grow financially in the Midwest, expanded into eyeball-rich East Coast media markets last month with the addition of Rutgers and the University of Maryland. Maryland is expected to join in 2014; the Rutgers date is as yet undetermined.
The conference's land grab for the New York and Washington television markets is part of a frenzied national realignment of teams as institutions chase the huge pot of cash, about $16 billion, that ESPN, Fox Sports, and other media companies will spend on college-sports TV rights during the next dozen years.
The Pac-12, the SEC, and the Big Ten have carved up the national viewing market by poaching teams from the Big East, the ACC, and the Big Twelve, creating a domino effect of college winners and losers while enhancing their marketability during TV-rights negotiations.
The process is transforming collegiate athletics. Coaches' salaries are soaring. Non-football sports are being cut.
"TV is at the core of everything that is going on," Rutgers athletic director Tim Pernetti, a former sports-programming executive at ABC and CBS, said in an interview. "It's at the core of the conference expansions, it's at the core of the national-rights contracts, and it's at the core of the postseason playoffs."
The Big Ten's annual revenue has more than tripled, to $265 million, over the last decade, according to documents from the Internal Revenue Service. With its expansion, the conference is "building a bridge through Penn State and now Rutgers" to the Washington/Baltimore and New York/New Jersey TV markets, Pernetti said.
The move enhances the organization's media position on two levels: It will bring the Ohio State Buckeyes, the Wisconsin Badgers, and other powerhouse Midwest gridiron squads directly into the New York/New Jersey and Washington/Baltimore markets to play, which should boost stadium ticket sales and TV ratings. The Big Ten will be able to pitch the higher ratings in negotiations for a national sports-rights package. Its current sports-rights deal with ESPN, Fox Sports, and CBS extends to the 2016-17 season.
Expanding into New Jersey and Maryland also should pump more cable-TV fees into the Big Ten Network, the 24-hour cable channel that is 49 percent owned by the Big Ten Conference and 51 percent owned by Fox Sports.
The Big Ten Network is now available in 52 million homes. The network's policy is to be distributed broadly to pay-TV homes, as CNN, USA, and ESPN are, in states where there is a Big Ten university.
Penn State is part of the Big Ten, and the Big Ten Network is available in Philadelphia and the Pennsylvania suburbs. The cable channel costs about 37 cents a month per home, research firm SNL Kagan says.
On Thursday night in the tailgating "blue lot," Will Schroeder, a 2007 Rutgers graduate, said he was "ecstatic" over the school's joining the Big Ten.
"There is more of an aura of legitimacy," he said of the Rutgers football team. "In 2003, it was us coming around here and getting drunk and not even going to the game because they always lost."
Older Rutgers graduates recalled the 1970s, when Rutgers played Princeton and Yale and did not aspire to big-time athletics.
Away from the pregame hoopla Thursday afternoon, Rutgers economics professor Mark Killingsworth was taking a more cautious view of the benefits of the new conference affiliation.
Big Ten revenue may not fully eliminate an athletic-department deficit that runs $25 million to $30 million a year, he said, because Rutgers will have to spend more on its teams to compete with Big Ten teams.
"You always have to feed the beast. Every time the athletic department gets a dollar, they have to spend it," Killingsworth said. "Past history tells that if the money lands in the athletic department, it's exceedingly unlikely to make its way to the academic program."
With Rutgers joining the Big Ten, athletic director Pernetti said, "our intent is not only to reduce the deficit, but to do it at a more rapid rate."
Contact Bob Fernandez at 215-854-5897 or firstname.lastname@example.org.