SBJ Report: SEC And ESPN Nearing Deal On New Network; No Other Partners Expected

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Ol’ Project X — the SEC Network — yeah, it’s happening.  (While others will claim that they were the first to realize that the SEC could start its own network, we actually pointed out that a network might still be a possibility in spite of the SEC’s deals with CBS and ESPN… and we did so way back in May of 2010.)  Now The Sports Business Journal is reporting that the SEC and ESPN are “nearing their final stages” of negotiations for an SEC channel.

First, some details from The SBJ:

1.  The expected launch date for the network is August, 2014.

2.  Obviously, the SEC will need to get all its schools’ Tier 3 broadcast rights for the first time in order to make the network a reality.  If the league is this far down the pike, then it shows that Mike Slive and company have already shown the league’s 14 presidents that each school can make more money with a network than by selling off their own Tier 3 rights individually.  Now, this would suggest that Florida’s monetary advantage over Vanderbilt, for example, would close a bit as both schools would presumably take home an even share of network revenue.  Missouri and Texas A&M, welcome to the all-for-one, one-for-all conference.  (Florida, of course, will still make more cash than Vandy on merchandise sales, attendance, etc… but in terms of TV dollars — unless there’s a surprise clause in there — all 14 schools will grab an equal slice of the pie.  That’s good news for all the league’s schools as they all want more cash.  That’s great news for the lower-level SEC schools who can’t sell their Tier 3 rights like Alabama and LSU can.)

3.  The SBJ reports: “ESPN is not likely to partner with another media company on the SEC channel.”  That would a disappointment for NBC/Comcast.  (Full disclosure: I do occasional work for CSS, but the tea leaves I’m about to read come from my brain alone and do not represent the views of anyone at that network.)  NBC/Comcast recently gave CSS a more SEC-centric feel to its programming.  The goal?  To prove to ESPN that NBC/Comcast would be a good partner to bed down with on a new SEC network.  Remember, the key to any new network is getting carriage on cable/satellite outlets.  That was the initial problem for the Big Ten Network.  The NFL Network still fights that battle to some extent.  And just Google the Longhorn Network for pages and pages of stories on its start-up troubles.  Partnering with NBC/Comcast — something MrSEC.com mentioned last week — would provide ESPN and the SEC with immediate access to all those Comcast viewers across the SEC footprint and beyond.  And Comcast is the top cable provider inside that footprint.  If, however, ESPN does not partner with NBC/Comcast or some other cable partner, it could mean that the SEC Network will be in for the same rough type of start those three aforementioned channels experienced.  Yes, SEC fan passion is through the roof.  But there are a heckuva lot of NFL and Texas fans, too.  This will be an interesting side story to keep an eye on.  It’s a bit like playing chicken.  ESPN and Texas have wound up in a ditch — to date — with their Longhorn Network.  Might cable operators try to drive ESPN and the SEC off the road in similar fashion?  Most certainly.  To what extent those cable/satellite providers are willing to go will depend on what the SEC and ESPN decide to charge as a carriage fee.  That’s the price that will get passed along to you, the viewer.

4.  Interestingly, “sources familiar with the negotiations say that ESPN Regional Television’s Charlotte office likely will become the headquarters for the new SEC channel because it already has the infrastructure and talent to get the channel up and running efficiently.”  Meaning: The SEC Network could actually emanate from outside the league’s own footprint.  (And, no, that should not have any impact on conference expansion or realignment.)

5.  ESPN would likely take over the league’s marketing rights from IMG.  In addition, the network would take over television ad sales for the league.  This type of deal would really marry the SEC and ESPN.  Ironically, while folks across the nation complain of ESPN’s bias toward the SEC, the fans at all 14 SEC schools — at least the ones I hear from — all believe passionately that ESPN hates the SEC and specifically their own favorite school.  No surprise.  SEC fans would tell you ESPN loves Ohio State.  I lived in Columbus, Ohio and can tell you that Buckeye fans believe ESPN despises them.  It’s all a matter of perception.  But since ESPN will eventually own and cover every conference and team in the country — that’s the real problem, folks — bias probably won’t be an issue when it comes to “liking” one team or league more than another.

So what’s all this mean for you?  In the summer of 2014, you’ll probably be asked to call your local cable/satellite provider and demand access to the SEC Network.  That provider will tell you that ESPN and the SEC are asking for too much money.  Things will go right down to the wire and you might actually miss a few SEC games because of the hardball the SEC, ESPN, Comcast, DirecTV, Dish and more will be playing with one another.  But someone will eventually blink.

When they do, your monthly television bill will go up $2-3 bucks a month.  In return, you’ll get to see more SEC action.  Now, those games will likely be the worst 14 football games on the SEC schedule in a given year.  The Tier 3 games, after all, are the ones you have to purchase via pay-per-view.  So think LSU-Idaho.

And let’s face it, most of you probably aren’t going to watch a whole lot of gymnastics, softball, soccer and the like.  Which means two things could drive up the SEC Network’s appeal.  First, the number of Tier 3 basketball games is nearly 100 contests per season.  SEC hoops fans will be able to see more games from all over the league with an SEC Network.

Second, just a couple of weeks ago, SEC scheduling guru Larry Templeton told The Birmingham News that he would be interested in seeing the SEC create a Thursday night package with ESPN.  Well, if the SEC and ESPN want to get mean with the cable/satellite providers, use you the fan as leverage and show — sorry for the expression — brass balls, a good Thursday night contest aired on the SEC Network would be a clear way of doing so.  How much heat would the providers take for not airing, say, South Carolina at Vanderbilt on a Thursday night?  (But again, that will come down to how much money ESPN and the SEC are willing to risk losing.  Put that game on ESPN and the revenue and exposure would be huge.  Put such a game on the SEC Network and the revenue and exposure would drop… but it might force more providers to pick up the network.  In turn that would raise revenue in the long-term.)

Bottom line: Project X is on the way.  The SEC Network will arrive in time for the 2014 football season.  It looks like the SEC and ESPN will be running the thing all by themselves.  Oh, and your television bill is about to go up.  (Even that has a plus-side, though.  Currently, let’s say pay-per-viewing your favorite school’s lone Tier 3 game costs you $50.  Well, if your cable/satellite provider up your rate by $4 per month, you’d still be adding tons of SEC programming — football games, basketball games and more — for less than you’d pay for one PPV football game in the current environment.)