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New SEC Network To Be Co-Owned? Not So Fast

Pay-MeThere’s an assumption, an expectation, that many folks seem to be jumping to with regards to the soon-to-be-announced SEC Network.  That belief is that the Southeastern Conference and ESPN will split ownership of the new channel.  And, yes, we’ve made that very same assumption.

Well, as Mama always said, “Never assume…”

As we’ve covered on this site before, there are at least three different ownership models open to the SEC when it comes to its new network.

 

1.  The SEC could follow the path taken by the Big Ten.  Jim Delany’s league owned 51% of its network with the other 49% owned by FOX Entertainment Group, when the network was launched.  (That ownership split flipped in favor of FOX — 51% to the Big Ten’s 49% — some time since 2010.)  By far the most successful of all the conference- or school-specific sports networks, many have jumped to the conclusion that the Southeastern Conference will just copy this set-up.  Again, we were one of those jumpers earlier this week.

2.  The SEC could opt to do what the Pac-12 has done and launch a network all on its own.  The SEC could own it while paying ESPN to run it.  The Pac-12 has a deal in place with Comcast Media Center to help with the production of its national channel and its six regional networks.

3.  Finally, the SEC could follow in the University of Texas’ footsteps and simply take home a fat check from ESPN every year.  The network would own the channel in that scenario, not the conference.  In Texas’ case, the school is set to receive $300 million from ESPN over a 20-year period.

 

You can likely scratch Option #2 from the list as the SEC certainly won’t want to incur all the start-up costs involved in a network launch.  Long-term, ownership might be a gold mine, but out of the gates it could be a nightmare scenario.

Option #1 — the one most have simply taken for granted will the path most likely to be taken — has its drawbacks, too.  As a co-owner of the network, the SEC’s cash intake would be tied to what the channel is bringing in… and up front, that might not be a whole lot.  Carriage battles with cable and satellite providers could be quite messy.  They have been for everyone else who’s launched a network (the Big Ten, the Pac-12, Texas, the NFL, etc).  Those fights delay a network’s growth and earnings.

Which brings us to Option #3, the Longhorn Network model.  It’s a plan that’s obviously already being used by ESPN, the company that the SEC will work with on its network.  It’s a plan that would guarantee the SEC is making X amount of dollars right from the outset, regardless of whatever struggles ESPN might have in carriage negotiations.

Yesterday a friendly tipster pointed out an additional tidbit to us — the Southeastern Conference owns nothingHere’s a breakdown of SEC revenues and expenses as of 2011.  Page down and you’ll find a spreadsheet showing exactly what the league owned through 2007.  If you look under land, building, equipment, other assets… you’ll find zeroes.

Since 1948 the SEC has had its offices in Birmingham.  The city has provided office space to the league in exchange for a $1 per year lease.  When the league moved the SEC Championship Game from Birmingham to Atlanta in 1994 there was some talk of the lease going up, but the city backed down when the SEC let it be known it was willing to pull up stakes and move.  There has been talk of moving the league’s headquarters from time to time since, but the SEC is still currently residing in 30,000-feet worth of leased property.

Add it all up and it seems likely that the SEC will simply allow ESPN to own the network in exchange for a hefty annual check.  Such a set-up would appear to be much more of a win-win for the conference.  The SEC would be guaranteed money up front, regardless of the struggles ESPN might face in launching the channel, getting it carried, and selling advertising for it.  On the back end, built-in escalators in the contract could guarantee that Mike Slive’s league will get even richer if the network outperforms its cash projections.

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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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SEC Headlines 4/16/13

headlines-tueSEC Football

1. President Barack Obama on Alabama: “I expect I just might see these guys again before I leave.”

2. Alabama’s defensive linemen are gaining experience and working on trust.

3.  (UPDATE) Tide freshman running back Derrick Henry will miss Saturday’s spring game after suffering a broken tibia in last weekend’s scrimmage.

4. How good is Auburn’s group of wide receivers? It’s the best, according to Sammie Coates.

5. Auburn’s Kenneth Carter has performed well since moving from defensive tackle to end.

6. Who’s the No. 1 player to watch this year in the SEC? Johnny Manziel, according to SI.com.

7. ESPN.com’s Chris Low asks, “Where’s the respect for LSU’s Les Miles?

8. Young players stepped up at South Carolina this spring.

9. Mississippi State is hoping redshirt freshman Beniquez Brown will make an impact this fall.

10. Seth Emerson makes his best projection of Georgia’s defensive depth chart.

11. Mark Story has 10 quick takeaways from Kentucky’s spring football game.

12. Here are some answers that were discovered during South Carolina’s spring practice.

13. Tennessee’s Jordan McRae wants to get to the NBA but knows it’s a challenging process.

14. Tennessee cornerback Justin Coleman is improving as he prepares for his junior season.

15. Dave Matter inspects Missouri’s offense as the Tigers enter their final week of spring practice.

Extras

16. From earlier: ESPN and the SEC made the right call to postpone their network announcement.

17. How will Florida’s former players fare in next week’s NFL draft? Here’s a look.

18. A recent study shows players respond poorly to verbally aggressive coaches.

19. Here’s a profile of Richard Cross and Matt Wyatt, the co-hosts of “Head to Head” radio in Mississippi.

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SEC, ESPN Make The Right Call In Postponing Network Announcment

gfx - honest opinionKudos to the Southeastern Conference and ESPN.  What I’d plan to write as a “we’ll talk about the new SEC Network, but who really cares today?” column has been rendered unnecessary.

Today isn’t a day to worry about television networks and media rights fees.  Hell, it’s not the kind of day that makes us want to spend time writing about some team’s depth at linebacker, either.  But if we can help a few folks take their minds off the more troubling aspects of our age, so be it.  We’ll bring you our daily look-see at what’s making news in the SEC just as we always do.

We just won’t care as much about what we’re discussing.

 

“In light of the tragedy in Boston today, we have decided to postpone Tuesday’s SEC/ESPN press conference in Atlanta.  Our thoughts and prayers go out to all of those affected by these horrible events.”

 

That was the joint SEC, ESPN statement that arrived in the MrSEC.com inbox yesterday around 5pm ET.  Simple.  Short.  Smart.  Right.

As a nation, we are impacted once again by violent tragedy.  Whether it’s a shooting in a theater, children murdered in a school, or devastating bombs set off at a marathon’s finish line, these all-too-common events of senseless bloodshed bring us together as one American family stretching from coast to coast.  For a day or two we will all lock arms.  Our differences will be buried.  The fact that we are all drinking from the same bitter cup will draw us all closer.

Briefly.

But it won’t be long before we’re once again being nasty to one another because some other fan is wearing a different school’s colors.  In five years of working on this site, it’s become abundantly clear that there are just as many people out there who follow sports in order to be angry as there are those who simply need an escape from our often painful existence.

After tornadoes ripped through Tuscaloosa in April of 2011, Auburn and Alabama fans worked together to aid the displaced and rebuild a community.  Two years later, just read the comments under any Alabama or Auburn story written on this site and you’re guaranteed to see at least one person make an ass of himself by hurling insults at some person he’s never even met.  All because the other person is a “Bammer” or a “Barner.”  (Twenty bucks says we’ll get at least one nasty email claiming we used those words because MrSEC.com hates both the Tide and the Tigers.)

There are some — many, actually — who believe being ugly to one another is actually part of the fun of sports.  Taunting the other team’s fans when they come to town.  Egging cars.  Even throwing liquor bottles at the opposing team’s buses.  That kind of nonsense has become part of the grand show.  Insulting people we don’t know while hunkered down under a veil of anonymity has become a big, witty, wonderful joke.

Oh, and it’s all the better when it’s done in 140 characters or less.

Sorry, but I just don’t get that.  And I don’t get those of you who do get that.  At all.

As a lifelong fan of the New England Patriots and Boston Celtics — and as someone who loves Boston more than any place on Earth — I prefer to try and make new friends when visiting with fans of other teams.  I’ve got enough enemies.  Life is miserable enough without looking for reasons to be upset.

While I might root against the guys in the other uniform on the field, I don’t want that to carry over into the stands or tailgates… into real life.  I can “dislike” the New York Jets team — and I do — as an entity without hating all Jets fans.

I’m not alone in that feeling today.  Today, I’m preaching to the choir.  The Pollyanna bit sounds good when we’re all in mourning together.  But give it a few days and the choir loft will be empty.  Life will go on.  Fans will go back to being ugly to each other over meaningless damn games.  Most everyone will forget that there are much, much worse things in life than blown calls and missed free throws.

Worse even than someone pulling for a rival team.

Sports should be a distraction.  Lord knows there are enough things in the real world to keep us fretting, crying, screaming and hurting without us having to turn sports into an additional hatefest.

So again, a tip of the cap to the SEC and ESPN for keeping things in proper perspective today.  Here’s hoping a few of us can maintain that perspective once this latest tragedy begins to fade from our memories.

 

Our thoughts and prayers go out to the people impacted by the events in Boston yesterday.

SEC news will come your way shortly.

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So What Will The SEC’s New Network Mean For You?

question-marksTomorrow, the Southeastern Conference and ESPN will formally announce their partnership in the new SEC Network, a television channel focused on providing more content to sports-lovin’ Southerners and making a helluva lot more cash for those folks’ favorite schools and teams.

But what will it mean for you?  Judging from our email inbox, many of you have questions.  Some are basic, some are more in-depth.  We’ll give you our take on them here.  And for our purposes, we’ll also keep the focus on football.

 

When will the network launch?

It’s expected that the channel will debut in August of 2014.  That gives the league and its partner a full year to create an infrastructure — sales staff, on-air staff, behind-the-scenes crew, on-air sets, etc — and to sell massive sponsorship packages to clients.

 

Who will be in charge of it?

ESPN will handle the day-in, day-out television duties, most likely from its regional hub in Charlotte.  Who knows television better than ESPN, after all?  The network’s subscription fee is over $5 and some expect it to go to $7.  As of last year, there was only one other national cable network — TNT — that even charged more than a dollar.

ESPN can charge that much due to America’s demand for sports.  It’s also due to the fact the network owns the broadcast rights to darn near every sport from yak racing to cross-country ballroom dancing.  In addition to broadcasting sport after sport, the network has created a niche of point/counterpoint shows that fill programming slots and bring in ratings each afternoon.

ESPN is an expert when it comes to television and an even bigger expert when it comes to self-marketing.  The SEC will hand the reins to ESPN and say, “go get ‘em.”

 

Who will own it?

ESPN and the SEC together are expected to own it.  Just as the Big Ten Network belongs 51% to the Big Ten and 49% to FOX, the SEC Network will likely be split down the middle, too.  Most believe the league will control 51% and ESPN the remaining 49%.

When factoring in the amount of money the network will be worth to SEC schools, many are forgetting that ESPN will be taking home an enormous chunk of the profits, too.  The folks in Bristol, Connecticut aren’t doing this as charity work.

 

Will a stronger tie with ESPN keep the network off SEC’s schools’ backs?

Outsiders will say yes, but insiders probably won’t notice a difference.  There is already a belief outside the SEC — pick a messageboard — that ESPN has helped drive the SEC to the top of the BCS mountain.  Of course, the SEC had already won BCS crowns in 2006, 2007, and 2008 before the league’s contract with ESPN began.  Additionally, it doesn’t seem that ESPN has been boosting SEC basketball very much, does it?

Inside the league, the feeling is different.  Every fan in the US of A feels that ESPN is out to get his or her favorite school.  That’s because the network covers scandals and digs into bad news.

Was ESPN The Magazine’s recent expose on Auburn and an alleged 2010 synthetic marijuana scandal proof of the network’s hatred for the SEC?  Was it proof, all you non-SEC fans, that the league is always covering up for its Southern business partners?

Scandals will still be covered by ESPN so the reality is most fans won’t notice any changes in the network’s coverage.  If you believe ESPN loves the SEC, that’s what you’ll see.  If you believe the network hates the SEC, that’s what you’ll see.  Texas A&M fans will be especially conflicted as ESPN is now in bed with both the Aggies and Texas (as partners in its Longhorn Network).

That said, what ESPN chooses to cover and why has always been open to debate.  Over the years the network has drawn criticism for refusing to cover some stories (Ben Roethlisber allegations, Brett Favre allegations) while beating the holy hell out of others (Mike Rice video, Penn State scandal).  The network also once cancelled its own dramatic series, “Playmakers,” under pressure from the NFL, a massive partner of ESPN.

There’s no denying that a conflict of  interest will exist when the news division of ESPN covers stories that won’t please the SEC or its member institutions.  But ESPN has so many contracts with so many leagues and schools that the conflict with Mike Slive’s league will be but a drop in the bucket.

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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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Wow Sunday Headlines 4/14/2013

SEC and ESPN will announce plans for new SEC television network on Tuesday…
New channel expected to launch in August of 2014
Security detail to monitor Auburn players curfew cost the University approximately $75,000 last fall
Ole Miss basketball coach Andy Kennedy getting a raise and contract extension…will be seventh-highest paid coach in SEC
Tennessee running back Marlin Lane away from team for unspecified “disciplinary reasons”
Record crowd of more than 50,000 attend Kentucky’s spring game
Spring game record crowd of more than 45,000 at Texas A&M spring game
Follow SEC news year round at MrSEC.com and on Twitter at Twitter.com/mrsec

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Wow Weekend Headlines 4/13/2013

SEC and ESPN will announce plans for new SEC television network on Tuesday…
New channel expected to launch in August of 2014
Status of Tennessee running back Marlin Lane unclear…missed practice time dealing with family illness
LSU officials dispute story that former cornerback Tyrann Mathieu failed at least 10 drug tests before being suspended
Kentucky expects record crowd for spring game this weekend
Follow SEC news year round at MrSEC.com and on Twitter at Twitter.com/mrsec

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SEC And ESPN Set To Announce New SEC Network On Tuesday

slive on 100 dollar billAfter months of talk — heck, after years of talk — the SEC Network is just days away from being formally announced.  At noon ET, Tuesday in Atlanta, the SEC and ESPN will publicly share their plans for the new channel. 

SEC commissioner Mike Slive, university presidents and athletic directors, and ESPN executives will all be on hand for the presser.  According to The SportsBusiness Daily, the two parties have already begun calling “key constituents” and inviting the SEC’s corporate sponsors to the event.

The new channel is expected to be based in Charlotte at ESPN’s regional television hub.  (Note to self: If/when league expands into the Tar Heel State, prepare for cries of local bias.)  Sales for the channel are expected to be handled out of Atlanta.

It’s still believed the network will launch in August 2014, just in time for football season.

As we first reported in December, it’s expected member schools (and the SEC office which gets an even split) will bring in yearly shares of $30-35 million once the league’s television and bowl contracts are all re-worked and signed.  A USA Today sports analysis projected the same numbers in January.  Currently, the average payout for SEC schools is $20.1 million.

There is certainly the possibility for the league to bring in even more cash with its network down the road, depending on distribution agreements.  For a start-up network, however, it’s difficult to imagine ESPN — which has been stung by distribution troubles with its Longhorn Network — placing too large a subscriber fee on cable/satellite providers and their viewers right off the bat.

It is expected the SEC and ESPN will co-own the network with one party holding 51% ownership.  The SEC will likely be the one holding 51%, just as the Big Ten controls 51% of its network with FOX owning 49%.

 

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    SEC Headlines 4/11/2013

    headlines-thuSEC Football

    1. The Egg Bowl, Thanksgiving night, and the difference between ESPNU and ESPN for Ole Miss and Mississippi State.  “The last three years the Egg Bowl has averaged 481,000 viewers on ESPNU, while ESPN’s Thanksgiving games averaged 3.6 million viewers during that same period.”

    2. Ole Miss tight end Christian Morgan has a knee injury that will require surgery – expected back for start of practice in August.

    3. The Rebels have depth in receiving corps – three of the top 12 returning receivers in the SEC  and the nation’s top wide receiver prospect is coming this fall.

    4. Alabama linebacker Trey Depriest was in a cast at Wednesday’s practice – underwent surgery to repair a stress fracture in his foot.

    5. Auburn running back Tre Mason didn’t scrimmage Saturday and appeared to be favoring his left leg Wednesday.  Gus Malzahn: “Just want to make sure he’s 100 percent healthy before we put him back in there.”

    6. Auburn wide receiver Melvin Ray left baseball for football.  L.A. Dodgers paying the tuition for the Auburn walk-on.

    7. Soaring booster fees have some Florida season ticket holders upset.

    8. New LSU offensive coordinator Cam Cameron is focused on a quicker pace and quarterback Zach Mettenberger is adapting: “We’re setting the building blocks for what we’re going to go off of in August.”

    9. Whoever ends up starting at quarterback for Kentucky will most likely be taking snaps from a redshirt freshman center.

    10. Stamina an issue along the Georgia defensive line last year?  New line coach Chris Wilson wants to spread the snaps around.

    11. Texas A&M sophomore Donnie Braggs is moving from weakside linebacker to the middle.

    12. Arkansas wide receiver Mekale McKay on finding out Jim Chaney was hired as offensive coordinator: “It was a big relief off my shoulders.”

    13. “Tennessee’s receivers have a LONG way to go.”

    14. Profile of Alabama A.D. Bill Battle recalls his day at Tennessee, cutting edge computer analysis, and coaching against Bear Bryant.

    SEC Basketball

    15. Louisville fell down early against Michigan and rallied to win a title.  Florida trailed early against Michigan and wilted.  Coach Billy Donovan:  ”I’m not so sure in the Michigan game if we even deserved to win that game.”

    16. Kansas coming to Gainesville next season?

    17. Missouri guard Phil Pressey declared for the NBA draft yesterday.  But what if he goes undrafted? “You have to be ready for that, but I just think I’m ready. I’ve been working my tail off.”

    18. Johnny O’Bryant’s decision to return to LSU helps give the Tigers plenty of options next year.

    19. Seth Davis has his early 2013-2014 projections - Kentucky is No. 1. “If John Calipari also adds Andrew Wiggins, it could be the greatest freshman class ever.”

    Extras

    20. Lindsay Vonn at Augusta to watch boyfriend Tiger Woods.

    21. Peyton Manning sends a bill to a teammate.

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