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Everybody Agrees: An SEC Network Would Make It Rain

Longtime readers of this site know that we first mentioned the possibility that the league could still start its own network — despite its 2008 contracts with CBS and ESPN — a little more than two years ago.  Readers this week also know that the SEC is indeed engaged in talks with the four-letter network regarding some form of co-owned channel.

Revenue estimates for such a network have ranged anywhere from $500,000 million to $1 billion to even more depending on the source you read and the data they use.

David Climer of The Tennessean goes the simple route in explaining why an SEC Network should be worth more than the already highly successful Big Ten Network and the start-up Pac-12 Networks (there will be six channels focusing on two member schools each):

 

“Getting toeholds in Texas and Missouri pushes the total population in the SEC’s 11-state footprint to 91 million, according to the latest census figures. Compare this to the Big Ten (69.5 million) and the Pac-12 (62.8 million).

That means if Slive, who is in his 11th year as commissioner, can strike an agreement that would put the SEC Network into every cable and satellite subscriber’s house, it should eclipse the revenue of the Big Ten and Pac-12 TV deals.”

 

This is nothing new to our readers who’ve seen our “reason for expansion” pieces over the years.  It does, however, further explain why Missouri got an SEC invite over West Virginia, a fine athletic department that just happens to be located in a tiny state.  Many Mountaineer fans took it as an insult when we tried to explain that dynamic a year ago.

As expansion talk continues to roil, maybe it will become more and more clear to those few holdouts who don’t quite get it — television is driving this bus.

 


5 comments
cmd
cmd

Merlin

 

The SEC channel isn't getting on basic cable in Texas, or Missouri.

 

Time Warner, Cox, Comcast are ALL trying to reduce the number of lightly watched channels in their standard bundles.  The biggest reason is the cost of sports programming plus the expense of carrying lightly watched channels like WE or OWN.Their business is hurting.

 

SEC TV might very well get on basic cable in Alabama, Arkansas, Georgia, TN etc. Not disputing that...But it possibly won't in Florida and it certainly won't in Texas or MO.

 

The cable providers are not at all happy with the cost of sport content. They aren't trying to add more right now. You add SEC TV to basic cable, people's bills have to go up or your profit goes down. One or the other. No way around it. I don't think the Espinoza family in San Antonio Texas will be happy when they learn that Joker Phillips highlights just caused their bill to grow.

 

I think the SEC TV economics will ONE DAY normalize to what the Big Ten gets, despite the population difference.   I don't see the viability of/demand for the product in much of Texas or MO.

merlinsedge1
merlinsedge1

I would assume an SEC network would work the same way the Big Ten's does.  Cable providers, DirecTV, etc pay more for subscribers in a conference "footprint" than outside of it.  The Big Ten network receives $1.00 per month I believe from each subscriber whether they ever watch it or not.  However, they receive about a nickel from states outside that footprint.  The trick is getting it on your basic cable package, which Slive and company may well be powerful enough to get done.  That's been the big failure of the Longhorn network.  But if you have an SEC channel in with the rest of the ESPN networks sitting on basic cable, you've just discovered a gold mine.  It doesn't matter how many people watch it, you're still being paid for it.

cmd
cmd

Have any of these people ever been to Texas, or Kansas City, Mo for that matter?  Saying the SEC footprint is now 90mm households (so let's calibrate TV revenue based upon the difference between 90 and 60mm) is simply not true. While I am aware that not everybody in Chicago is an Illinois fan, nor is everyone in Detroit a Michigan fan, or even college sports fans for that matter, it is far more likely that a sports viewer in those cities would all of a sudden begin watching Big Ten programming all year long, today, than it is that a resident of Houston, Texas is all of a sudden going to start watching the SEC programming, of which A/M is, ostensibly, only a 1/14th of the content anyway.Whether you are a college sports fan or not, those midwestern TV markets and viewers have been Big Ten country for decades.

 

The overwhelming majority of people in Texas do not really care about A/M....They care about the Longhorns, Cowboys, Texans, Spurs, Mavericks, Astros, Rockets, and on and on and on... Yes, they will watch the SEC football games on Saturday because the SEC matters and is always in your face on every channel, but I can assure you they have NO desire to watch the Mark Richt spring practice wrap-up show or the May 24th reply of the 1997 Kentucky South Carolina game. They do not care about UF women's gymnastics. And they NEVER will.   (this is nothing against A/M. They have a great, large alumni base and following)

 

Saying you"have" Texas because of A/M is just not true. It probably won't be true even 25 years from now. Certainly not in the next 10. Saying you have Kansas City because of Missouri joining is just not true. Same deal. Those people do not care how James Franklin's recruiting is going this year.

 

25mm people in Texas will not consume one half as much of the SEC network as 5mm people in Alabama will. 

 

And just assuming it will be added to sports packages is NOT true. CEO of Comcast is already on record bitching about the rising cost of sports programming (while his own business is getting hammered due to people not consuming TV like they used to). They are not looking to pay ESPN even more money every year....Time Warner guy said just yesterday, that he wants to move to smaller bundle options for his markets....This is going to be a call me up and order directly for 4 bucks a month deal.

 

I hope ESPN pays the SEC, and I quote, 500,000 million, more money is great. I'm an SEC fan...but if I'm running that network I'd price the SEC as a 60mm person market. There are 20mm people in Texas that just don't care if Ole Miss and Vanderbilt are playing football/basketball/or snow boarding (when there are 95 other games, including tons of other SEC programming, on that day, as well)

poofyhairguy
poofyhairguy

Where does the SEC Network inventory come from?

 

My understanding was that ESPN basically stopped a SEC Network last go-round by buying all the conference football inventory (Tier 1 &2), unlike the Big 10 which keeps Tier 2 for their network. I thought part of the point of expansion was to create more inventory- all the conference games A&M and Mizzou would play- so that the league would have 16 extra games of inventory a year to support the SEC Network.

 

In short, I have been under the impression that expansion was the way to rectify the mistake that the SEC locked itself out of the Big 10 business model last time with (in retrospect) bad contracts.

 

But now we hear that that CBS will pay a “per diem” increase. Does that mean that they will then buy some of that 16 game inventory with that increase, or does it mean CBS pays more for the same inventory (x amount of primetime spots)?

 

On the ESPN side, the negotiations imply that the extra inventory CBS doesn’t get will be rolled into a SEC Network that is partially owned by ESPN. Does that mean that ESPN is basically allowing the SEC to get out of the bad contractual situation it is in (to ESPN’s current advantage) to make sure that they get a cut of the next SEC cash cow (unlike the Big 10)?

 

To expansion, two more teams would mean 16 more games of inventory. Is there a limit to how much a single network can utilize? Or is the SEC going down the PAC path of multiple networks that can handle 16 teams worth of content?

 

So many questions about this SEC network stuff.

 

GeoffDawg
GeoffDawg

Something else to take into account beyond pure population is the likely college football viewer per capita. I would imagine that football/basketball watchers in SEC territory prefer college over professional sports by a wide margin compared to other areas of the country.

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