September 20, 2024 | Read Online

Hawaii, gambling, and the potential future of TV rights valuations

There's a lot of money out there in that late-night TV window. Can Hawaii, or others, claim it?

Good morning, and thanks for your continued support of Extra Points.

Figuring out the potential value for college athletic media rights can be a complicated process. Valuation is heavily influenced by who is in the market to buy rights, how those entities plan to monetize those rights, and what sports rights those companies already have.

But there’s also some regular ol’ math involved, regardless of who the broadcaster partner might be. Consultants, schools and media companies typically look for similar types of data. They might decide to weigh it differently, but typically, valuation includes looking at information like historic broadcast ratings, total addressable fanbase size, local media market, demographics of fanbases, and how folks are watching the games.

I worked on a story about how mid-major rights are typically created last year, speaking to several consultants and academics. Back then, I was cautioned to pay more attention to not just the topline Nielsen rating number, but who, and how, those folks were watching:

This gets reiterated to me every time I talk to a professional in this space. Nielsen numbers are important, and while imperfect, are probably more wildly respected and used than any other single viewership metric.

But one can’t exactly just try to add up all the viewers across football games over a given season and proclaim, “this conference is worth X dollars.”

I’m repeatedly told that it isn’t just how many people watch a broadcast that’s important. It’s who is watching, how long are they watching, and what can we do with that data.

A broadcast that carries a slightly lower viewership rating, but with a wealthier and more educated audience, could very well be more profitable on the ad market for rightsholder. A broadcast that carries a high number at kickoff, only for the viewership to bail in the 3rd quarter, is a very different thing than a broadcast with a slightly lower viewership rating that is sustained over three and a half hours.

Where the viewing audience is may also matter, depending on the broadcaster and advertising strategy.

How people watch isn’t just a function of whether a fan is watching at a bar, on a TV at home, or on a mobile phone…or how long they may decide to watch a broadcast. And now, there’s potentially a new metric entering the equation that could significantly change how some rights are perceived in the marketplace.

How many people are betting on the games?

And you know who that information could specifically benefit?

Hawaii.