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The SEC TV Contract - What it Means to The Big 12

the ACC, Big 10, Big East and the Pac 10.

Heading into the 2009 football season, the Southeastern Conference is begining a 15-year deal with ESPN and CBS that makes the conference "A First Among Equals" in the BCS. While the numbers are staggering in terms of money flowing to SEC schools, the ramifactions of the contracts reach beyond the bottom line. But first and foremost, it is the money that catches your attention.

REVENUE

"Timing Is Everything"

While other leagues are talking about cost-cutting measures such as not publishing media guides, the SEC is opening its own private bank. The new TV contracts with ESPN and CBS which take effect this season, will bring in almost $3 Billion to the conference members over the next 15 years. ESPN will shell out approximately $2.25 Billion over the length of the contract, while CBS will pick up the rest of the tab.

The SEC negotiated their new contracts in early 2008, before the bottom fell out of the economy. It also didn't hurt that the Big 10 Network reached an agreement with the major cable outlets (Time-Warner, Comcast, and Mediacom) to carry the channel, which made the bottom line for the Big 10 very respectable. That got ESPN's attention, and they moved to lock up the SEC and keep that league from starting its own channel as well.


For the next 15 years, the SEC will collect over $205 million each year for its TV rights.

That $3 billion works out to each SEC school collecting $17 million per year from TV money alone. That means that Vanderbilt will collect over $8 million more a year in TV revenue than Notre Dame gets form its NBC pact.

What can SEC schools do with all that money, aside from being in prime position to deal with street agents?

They have more to spend on the nuts and bolts of a collegiate program -- coaching, recruiting and facilities.

According to the Orlando Sentinal, the SEC has six of the Top 15 paid coaches in D-1, including three of the Top Five.

1. Pete Carroll, USC $4.4 million
2. Charlie Weis, Notre Dame 4.2 million
3. Urban Meyer, Florida $4.0 million
4. Les Miles, LSU $3.8 million (has a clause in his contract stating he will be the highest paid head coach in the SEC - so he is due for a raise).
5. Nick Saban, Alabama $3.8 million

It isn't just the head coaches who are benefiting from the cash flow. At Tennessee Lane Kiffin will oversee a staff of assistants who will collect an unprecedented $3.3 million a year, including his dad, Monte, who will be paid $1.2 million as Defensive Coordinator.

Saban will pay his staff over $2.6 million for the coming year.

Gene Chizik begins his tenure at Auburn this fall with a 5-19 record as a head coach. He will be paid $2 million in 2009.

It isn't just that the SEC schools now have larger bank accounts to hire the best, they also can make their mistakes go away more easily than other leagues. Which means that the pressure to win, and win now makes any 5-year plan laughable, and a 3-year plan seem long term.


The new flow of TV cash makes it easier for Auburn and Tennessee to accept that they will pay Tommy Tuberville and Phil Fulmer a combined $11 million for not coaching.

The cash flow that has opened up in the SEC allows the individual schools to decide what is important -- and where to spend their money. And at Kentucky, that is basketball, where new coach John Calipari pulls down $4 million a year with a chance to bump that to $5 million through bonuses and perks.


Kentucky is paying John Calipari almost 3 times what football coach Rich Brooks makes.

There is one other key element to the SEC TV package. The conference will divide all the TV revenue generated by their new contracts evenly. Just like the NFL, the SEC has decided that revenue sharing makes the league stronger from top to bottom, and is good for the long-term survival of the conference.

EXPOSURE

Starting this season, every football game controlled by the SEC will be televised. CBS will get the first pick from the inventory of games on each Saturday, with ESPN owning every other contest. Most of those games will be placed on the WWL's platforms (ESPN, ESPN2, ESPNU, ESPN.360 broadband, ESPN Classic). Games that aren't covered by those outlets will be sub-contracted out to other outlets, such as Comcast/Charter Sports Southeast (CSS) or Fox Sports South.


Virtually every SEC football contest will be available on the internet at ESPN360.com.

ESPN has brokered deal to where ESPN.com will be available through Comcast.net, which means that is is available to over 41 million subscribers, almost two-thirds of the 66 million homes with broadband.

There will be more SEC contests in prime-time, and there could be more than one early game conflicting with at least a part of the CBS broadcast some weeks. ESPN learned that when ABC began their Saturday Night College Football package that the WWL's ratings for their cable games actually went up as well.

CROSS PROMOTION

ESPN isn't about to drop $2.5 Billion on a product and not promote it to the hilt. All national programming on ESPN will be branded as the "SEC on ESPN."

Think Sportcenter might find more time for SEC highlights at the head of the show? Think College Football Today won't find more time for SEC features?

This exposure for the SEC trancends all sports, and will bring added coverage for basketball, baseball, and the other "Olympic" sports as well. Fox Sports Net is a sub-contracter for ESPN and they have an agreement to broadcast a minimum of 91 athletic events. There are even provisions for programs about academics in the SEC.

ESPN's new over-the-air syndication home for its SEC package is called "The SEC Network," and it will reach into Big 12, Pac 10 and Big 10 media markets.

WHY THE DEAL MAKES SENSE FOR ESPN

While the economy may be in the doldrums, ESPN believes that the multi-billion dollar deal will be profitable almost from the start. That's because ESPN has something the broadcast networks don't -- dual revenue streams. Ad sales will obviously be a major force, but affiliate fees gives the WWL a huge advantage when bidding for major products. For example, ESPN is expected to be able to demand $4 per subscriber from cable operators. That is the highest fee in the industry. Since ESPN is in more than 98 million homes that is an additional $4.7 Billion in revenue that broadcasters don't have available to them.

But it is the other platforms in the ESPN family that have potential for growth with the SEC package.


The SEC TV package could double the revenue that ESPNU produces.

Currently, ESPNU is in a little over 30 million homes, and cable operators pay about 16 cents per subscriber per month. There are indications that distribution could double for ESPNU, and as the contract goes along, the subscription rate could also increase.

THE BCS FACTOR

The BCS switches over to ESPN in 2011 and the WWL will be primed to promote the series like March Madness -- with the SEC as their crown jewel of college football product.

Unlike Fox, who treated the BCS as an afterthought, ESPN will promote the hell out of it on all its platforms. You can expect a primetime program for the weekly BCS standings. As the end of the regular season draws near, no doubt ESPN will have its own "Football Bracketology Specialist," who will be all over the airwaves.

You don't have to be paranoid to think that the SEC will have a public relations advantage over the other BCS schools on the WWL (Isn't that right Pete Carroll?)

THE SEC VS OTHER BCS CONFERENCES: ADDITION BY SUBTRACTION

By making this deal with ESPN, the SEC made a preemptive strike against the other BCS conferences in getting new TV contracts. It forces the other leagues to look at other alternatives that are not as attractive.

Fox has shown no interest in making any real commitment to college football, NBC is perfectly happy with its small monetary package with Notre Dame, and CBS obviously is taken by the SEC as well.

Since Disney ownes both ESPN and ABC it is highly unlikely that ABC wants to spend the money to showcase any other league.

ESPN has given the ACC, Big 12 and Pac-10 assurances that the WWL would be "competitive" when the bidding for their TV contracts comes up in a couple of years.

Then there is the problem of air time. ESPN is already under contract to show every SEC football game and 25 Big Ten football games every year, and even with all the different platforms available, there is still a limited amount of air space.

Which is why there is talk among those three conferences about starting their own channel. They understand that someone is going to be left with limited money and limited time slots if they are all depending on ESPN to give them anything close to the SEC package.

With that, I am off to Vegas Wednesday armed only with Trips early college football betting lines.


Pray For Me.