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The New SEC-ESPN Partnership Is About Much More Than A TV Network

trees in forestFor more than a year the sporting world has been talking about a potential SEC/ESPN-owned television venture known as the SEC Network.  Or as SEC types once called it: “Project X.”

Since May of 2010, we’ve been pointing to the possibility of an SEC-owned network (though some sites that launched well after 2010 would have you believe they were the first to cover the topic).  Money has always been the driving factor behind such a channel.  And now the talk all revolves around how much cash the network could bring in for the league and its teams.

But the SEC’s new deal with ESPN is about so much more than just the new SEC Network.

As we showed you yesterday, The SportsBusiness Daily reported on Monday that the SEC has bought back all of its third-tier television rights from groups like IMG, Learfield Sports, and CBS Collegiate Sports Properties.  In addition, the conference also bought back its digital rights from XOS Digital, the group currently behind the SEC Digital Network and SECSports.com.

Moving forward, ESPN will be allowed to sell all of those rights together.  Instead of XOS Digital selling this chunk, IMG selling that chunk, and ESPN selling another chunk, now the league will have an ESPN sales force packaging all its products.

That aspect of the deal — even more than the new SEC Network alone — will fill the conference’s coffers like never before.  The television network will be a big part of it, to be sure, but it’s the ability to bundle television, digital (internet), and syndication rights together that is at the heart of this new SEC/ESPN coupling.

In the past, the SEC has taken the easiest approach to making cash — it’s held out its hand.  If a Learfield or an XOS or an IMG offered the most money for some portion of the league’s multimedia rights, Mike Slive smiled, said “thanks,” lit a cigar with a hundred dollar bill, and then put the rest of the loot in the bank.  Every spring the league’s presidents would convene in Destin, grab a nice fat check from the league office, and then return home feeling pretty doggone good about things.  As they should have.

But now the SEC has gotten even wiser.  ‘Tis better to package everything together, they’ve realized.  Better for sales, better for league revenue, better for the future.

Consider the following scenario.

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The SEC Has Bought Third-Tier Rights Back In Preparation For New Network

handing over cashThe 14 schools of the Southeastern Conference will no longer be selling their third-tier television rights.  With a new SEC Network on the way — and a need for programming of all sorts — the league office has already completed buying back each school’s rights from groups like IMG, Learfield Sports, and CBS Collegiate Sports Properties.

The SEC and ESPN will announce their new television network tomorrow in Atlanta.

According to The SportsBusiness Daily, the third-tier television rights include “one football game, eight men’s basketball games, baseball, women’s basketball and all other nonrevenue sports that are not picked up by ESPN or a syndicated partner” for each school.

The SEC has also taken control of all its digital and sponsorship rights.  Those too will go to ESPN as the network will now package television and digital advertising when selling the league to corporate sponsors.  Obviously, the league’s partnership with the four-letter network is getting much, much stronger.  And according to IMG College President Ben Sutton, all of these moves will benefit the SEC:

 

“The conference and the schools will be strengthened by this new arrangement.  It was a very productive negotiation.  There’s always a little pain along the way, but both side worked really hard to get this done.”

 

Sutton’s company had handled sales of SEC corporate partnerships in the past.  IMG will continue to manage multimedia rights (radio, on-campus signage, etc) for a number of its existing SEC partners.  Schools’ multimedia — non-TV — rights were not part of the SEC’s buy-back process.

The previous rights-holders — IMG, Learfield, CBS Collegiate — agreed to give back $15 million worth of television rights during negotiations.  In exchange, those rights-holders will drop each school’s guaranteed income by about $1 million per year “for the next several years,” according to The Daily’s industry sources.

The new network and larger corporate sponsorship packages should bring in quite a bit more per school than the $1 million being yielded.  As we wrote in December, our sources project that the SEC — taking every revenue stream into account — should be writing checks to member institutions for $30-35 million in the not-so-distant future.  That’s about $10-15 million more than the league’s current annual payout.

We’ll have much more on the new SEC Network later today and tomorrow.

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UK To Open New Brooklyn Arena?

Next fall, the New Jersey Nets will complete their move to Brooklyn where they’ll begin play in the new $1 billion Barclays Center.  Scheduled for a September 2012 opening, the new arena’s first basketball game might actually feature a team from the SEC.

According to Crain’s New York Business report: “A major highlight will be the site’s first basketball game, a college matchup of Kentucky versus Maryland, according to sources.”

For more than a year, John Calipari has voiced his desire to coach in the new arena.  On March 13 of 2010, UK’s coach was quoted in a press release announcing IMG’s play to bring college basketball to Brooklyn:

“Basketball is really the heart of Brooklyn, and there is no place that has developed more all-time great players than the borough.  There’s not question about it.  We want to play there first.”

Sounds like he’s going to get his chance.

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SEC Headlines – 6/14/11 Part One

1.  Florida’s Patric Young and Scottie Wilbekin are trying to make Team USA’s U19 team.

2.  Wilbekin might make two international trips this summer.

3.  So Prince William — England’s Prince William — had a football scholarship offer to Auburn?

4.  Massive sports marketing group IMG is diving into the football recruiting fray.

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More Questions For UT Now That Hamilton Is Out

With Mike Hamilton’s resignation come a number of questions for Tennessee’s athletic department:


* Will Tennessee try to heal rifts in its fanbase by chasing a UT grad?  Former coach Phillip Fulmer has told people in Knoxville that he would be interested in Hamilton’s job, but those closest to the man believe he only wants to be wanted and would not accept the post if offered.  Ironically, chasing Fulmer might only split the fanbase — and athletic department — further as many in the UT community felt it was time for Fulmer to go in 2008.

* Hamilton landed the UT job in 2003 as an internal, fall-back candidate.  At the time, the school was going through turmoil at the presidential level.  With the likelihood of NCAA probation now hanging over the program — and another new president at the helm — will Tennessee be a better draw this time around?

* Might Tennessee make a run at UT graduate and senior vice president with IMG Mark Dyer?  Dyer’s background as a businessman — success at Host Communications, NASCAR, and now IMG — in sports-related fields should make him an attractive candidate — if he is a candidate — to the powers-that-be in Knoxville. 

* Would Tennessee try to make a run at Kentucky athletic director Mitch Barnhart?  (Some UK fans just cheered that notion.) Barnhart was recently given a raise and extension by outgoing UK president Lee Todd.  Would he have any interest — or the contractual opportunity — to speak with Tennessee?  Barnhart was UT’s senior associate athletic director in 1998 and had spent 12 years in Knoxville at the time of his departure.

* Derek Dooley and Cuonzo Martin likely knew when they came onboard at Tennessee that Hamilton’s job was in peril.  Now they will have to work for a new boss.  That’s never a comfortable spot for a coach to find himself in.  What does an AD change mean for the futures of UT’s new coaches?

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Texas Inks $300M Deal With ESPN For Longhorn Network

The rich are getting richer in college sports.

In a move that will cause seismic quakes across the landscape of college athletics (and future conference expansion plans), the University of Texas and ESPN have finally reached an agreement in their efforts to build a television network geared exclusively toward Longhorn sports.

Texas will make $300 million over the course of its 20-year deal with ESPN and its new Longhorn Network will be the first of its kind.  Think Big Ten Network (which is a partnership between that conference and Fox) but with one school earning all the proceeds.

Texas is an IMG school and once that group’s multimedia rights fees are sliced out, the Longhorns should receive about $15 million per year in new revenue.  That’s on top of its existing “biggest piece of the pie” cut from Big 12 revenues.  Which has already helped Texas fund the biggest sports budget in the country for 2010-11.

With this kind of financial advantage — plus a great recruiting base, tremendous facilities, and a history of winning — SEC fans had better get used to seeing Texas in BCS bowls and Final Fours.  The Longhorns are about to become uber-rich… which should help them to become even stronger in athletics.  If that’s possible.

On another front, Texas was very much at the heart of 2010′s conference expansion talks.  The Big 12 nearly broke apart because the have-nots in that league were sick of being controlled (and out-spent) by the one very big have down in the Lone Star State.

The Pac-10 almost expanded to 16 teams in order to land the Horns.  The Big Ten also flirted with Bevo and company.  This summer was all about Texas.  And now Texas has even more power.

At some point the Big 12 will finally come apart.  When that happens, every league out there will race to land the Longhorns.  But Texas will have the power to demand whatever it likes from its new partners, thus setting up a new conference that will face the same revenue-sharing issues that have plagued the Big 12.

In other words, everyone will want Texas because they’re so rich and powerful.  But landing Texas might actually be a bad thing in the long haul… because they’re so rich and powerful.

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SEC Headlines 12/04/2010

1. Details on Urban Meyer’s new 6-year $24-million dollar contract.

2. Mark Richt and Dabo Sweeney break down the Auburn-South Carolina matchup.

3. Georgia holds off UAB 66-64. Bulldogs go to 5-2 on the season.

4. North Carolina may be 4-3 and unranked but when they meet Kentucky, it’s always a clash of titans.

5. Kentucky claims it has new information regarding the eligibility of Enes Kantor.

6.  Vanderbilt basketball gets a visit today from a cross-town team.

7. Tennessee AD Mike Hamilton: “Feedback from the bowl reps has been very positive.”

8.  In the wake of a lawsuit, sports powerhouse IMG issues an anti-gambling policy on college sports.

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