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Report: SEC Getting Closer To Starting Its Own Television Network

Way back in the summer of 2008, when the SEC inked twin contracts with ESPN and CBS, it was noted that as part of those deals the conference had agreed not to start its own television network.  At the time, the Big Ten was having issues getting its channel off the ground (but then came a partnership with Fox that turned the network from loser to big, big winner practically overnight).

But while most dismissed an SEC network as an impossibility at that point, we wrote way back on May 19th of 2010 that Mike Slive’s league could still launch a new network if it expanded and added new inventory (meaning games).  Well, that expansion has now come to pass.  The new inventory will come into existence this fall.  And now an SEC Newtork is once again being discussed by the Southeastern Conference.

According to The SportsBusiness Journal, the SEC is not only trying to get more money from ESPN and CBS but it’s also discussing the launch of a cable channel by the fall of 2014.  Naturally, ESPN — which owns the majority of SEC programming and is already a co-owner of the University of Texas’ Longhorn Network — is in negotiations to partner onthe  potential channel.

The Journal reports:

 

“It remains to be seen if the SEC will be an equity partner in the channel, like the Big Ten, or if the conference will simply sell the rights to ESPN for an additional fee.

There are several different paths the SEC could take on a channel. It could follow the Big Ten model, where the conference is a 49 percent owner of Big Ten Network with Fox and shares in its revenue. Or it could go the Pac-12 route, which owns all of its regional networks. Texas, on the other hand, sold its rights to ESPN for a fee and ESPN owns all of the Longhorn Network.

All of those models are believed to be in play for the SEC, but any channel couldn’t be launched until 2014 at the earliest, when ESPN gets back syndication rights it sublicensed to regional sports networks operated by Fox Sports and Comcast. A decision on whether to go forward with a new SEC-focused network would be made by the SEC-member university presidents and ESPN. A final decision on a network will be made by ESPN in conjunction with SEC Commissioner Mike Slive and the presidents.”

 

The magazine’s sources believe the SEC’s new rights agreement with CBS will be finished up more quickly than the one with ESPN.  That makes sense… CBS pays less money for fewer games.  Those games are the best of games of the week, in most cases, however.

The Journal claims CBS “has balked at paying any type of significant increase,” saying that the addition of Missouri and Texas A&M does not change their original agreement with the SEC.  The network claims that Mizzou and A&M aren’t the television draws that Alabama, Florida and LSU are.

While that’s true, the same could be said for Ole Miss, Kentucky or any number of other SEC schools in football at the present time.

You can bet that Slive’s counterpoint in negotiations has been that ratings for SEC games in top television markets like St. Louis, Kansas City, Dallas, Houston, and even Austin will go up with the Aggies and Tigers now in the league.  Increased ratings mean increased advertising revenue for CBS and its affiliates.

Also, The Journal believes that the SEC can argue that “the collegiate market has been reset” since it first negotiated its own bar-raising contracts in ’08.

But make no mistake, the big money is in the network.

Someone recently sent me an email claiming that Slive and the SEC had erred in their initial deals with CBS and ESPN.  Instead of selling their own “widgets,” they cut a deal with “Wal-Mart” to distribute their widgets for them.  Jim Delany and the Big Ten had wisely found a way to sell their own widgets.

Well, sort of.

While the Big Ten’s model is now being copied elsewhere because its clearly worth a lot of money, the Big Ten did not get national exposure for darn never every game played by every league member.  Yes, Delany sells his own widgets, but his sales are for the most part limited to the Midwest.

Slive partnering with Wal-Mart — that would be CBS and ESPN, by the way — allowed him to take his product nationwide.  The result: Texas A&M and Missouri will play more nationally-televised games this fall than just about any Big Ten schools not named Ohio State or Michigan.

With the addition of an ESPN-partnered network, Slive and the SEC can have the best of both worlds.  One, most of the league’s games will continue to be broadcast nationally rather than on regional sports networks.  But two, the league would also have a means of printing its own money a la the Big Ten Network.

So even if the SEC’s negotiations with CBS result in a minimal increase in payout, the launch of a network — aided by grabbing major brand name schools in states featuring millions of cable households — should result in a windfall of cash.  Not to mention continued national exposure greater than that received by any other conference.

You might remember our expansion coverage back on May 28th of 2010 in which we looked at numerous factors driving expansion and actually pushed Missouri as a possible SEC candidate because of — wait for it — the St. Louis and Kansas City television markets (as well as proximity).  Television has been at the heart of Slive’s actions since the first shot in this realignment warfare was fired.  This summer, all of those moves should come to fruition in the form of increased funds for the league with continued massive exposure. Exposure that could include a joint venture network with ESPN.

A network we told you was still a possibility more than two years ago.

 


9 comments
dchauncey21
dchauncey21

I would like the SEC to go to a 16 team league which I believe would allow for traditional rivalries to continue. As a Gator, I would like to play Auburn again every year and enjoy our rivalry with Tennessee that has developed over the past 25 years. I also believe adding Florida State might be the best move for the SEC. Florida State is a brand name that CBS will pay for! FSU fits in culturally and locks in the state of Florida which is by far the largest state in the Southeast. Virginia Tech also provides a brand name I think CBS would pay for as well as opening up the Virginia/DC market.

RoadTrip
RoadTrip

Silly question. If this were to happen would ESPN then support the SEC schools not named Bama, LSU or Florida with their announcers and media corp? They all openly prefer the Big 10 and PAC 12 and worship the Rose Bowl.They will talk up a mediocre Penn State and ignore a good South Carolina every day. If not those leagues they always talk up the Big 12 and ACC before the SEC. It's not just football we are talking about here. Sounds like the SEC would be making another deal with the devil if they did this with ESPN in my opinion. Understand it's the devil we know - but it's still the devil. As you point out they are your friend as long as you are perceived to be on top. Is there a way to get the national exposure by owning your own network without having to stay in bed with those guys?

safety guy
safety guy

ESPN needs a partner to go with the longhorn network so if they get the SEC Network, they will be able to leverage that to have cable companies pair up the two for distribution.  No way can they distribute the longhorn network on its own merit. ESPN tried to strongarm cable companies to attach it to other ESPN products for distribution but the cable companies did not bite and there is no widespread demand for the lhn. It is niche programming with no broad appeal.  That is why the high school content was going to be so important.  With the lhn and an SEC Network, cable companies will be more apt to pair the two up in a Tier for subscribers to purchase.  But I still say that the lhn should be a stand alone network that should be supported by the longhorn faithful and not by non-interested parties.

WillieT
WillieT

Lots of things going on across college football. Mike Slive is a shrewd businessman & his legal training & history have honed his skill at deception while keeping him focused on securing a favorable outcome for his clients, namely, the SEC.

 

Slive has moved deliberately and has increased the value of the league exponentially. It hasn't hurt that the likes of LSU, Florida, Auburn, & Alabama have gathered a half-dozen crystal footballs or that UK & Florida have brought home NCAA banners to hang in their basketball arenas.

 

Expanding into Texas & Missouri added television markets and TV drives revenue. Creating the Southeastern Conference Television Network (SECTV)  regardless of the structure, should be a huge cash cow - as long as the league continues to produce a top quality product. We obviously expect this to continue.

 

Wonder if the SEC can claim breach of contract if CBS continues to balk at renegotiating in good faith under contractual provisions? Could their preferred rights to the best match-up be lost? What else might be at stake?

 

I personally find CBS's treatment of the SEC game to be insulting. They always assign a lousy broadcast team to this game. Of course, they don't actually have a good broadcast team do they.

 

In the end, we fans of the SEC should get more and better viewing options with the creation of a new network.

AllTideUp
AllTideUp

Are there any projected figures on the revenue from an SEC Network?  I've heard some throw out the idea that within 10 years the league could be raking in over $1 Billion annually from such a venture.  I believe those figures were based on inclusion in the NC and VA markets though so it if that doesn't happen it would obviously be less.  Any idea if that was just bluster?

gatorwhisperer
gatorwhisperer

Isn't a league-owned network simply one more reason the ACC $ucks? And one more reason for Free Shoes University to get out of it? 

 

If it's all about money:

* A confernce championship game that they can't sell out

* No "Champions" bowl affiliation/ ownership

* Inferior TV payout for Tier 1 rights

* Little value/ ability to pool Tier 2 rights

* Recruiting disadvantages because of all of the above

 

I'm with MrSEC - I hope realignment slows down... not for tradition (or fear of nuclear war), but for fear of FSU (or Miami) getting parity with the Gators.

AllTideUp
AllTideUp

 @safety guy If Texas and ESPN were smart they would renegotiate the LHN deal to form a Big 12 network instead.  It was their tunnel vision from the outset that aided in the big 4 leaving.

John at MrSEC
John at MrSEC moderator

 @AllTideUp 

 

There are folks throwing out all kinds of numbers ($500m, $1b, etc) based on other deals and projected negotiations, but it's all talk right now.  There's no telling how such a network would even be formed -- who controls what percentage of it? -- how it would be sold, how much distribution it would get, etc, etc.

 

The bottom line is, IF the SEC and ESPN do partner on a network, those fans who've fretted that other leagues have passed the SEC in TV dollars (even though the SEC's 3rd tier rights have never been included in those comparisons) can stop fretting.  The SEC would be as rich or richer than anyone.

 

Right up until the next round of expansion and TV negotiations, that is.

 

It's a lot like NFL quarterback salaries.  QB 1 sets the bar with his deal in 2010.  In 2011, QB 2 passes him.  Then QB 3 passes him in 2012.  And on and on.

 

Bottom line: It appears that the SEC will be financially secure well into the future as a 14-school league.  

 

If it and others go to 16... then all bets are off.

 

Thanks for reading,John 

AllTideUp
AllTideUp

 @John at MrSEC Thanks.  I'd have to believe the SEC would be the most valuable league-oriented product out there just based on demand.  Hopefully there are huge windfalls.

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