Report: SEC Getting Closer To Starting Its Own Television Network

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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.