SBD/May 6, 2013/Media

ESPN Banking On SEC Brand To Deliver Network To Cable, Satellite Distributors

Missouri will be reimbursed for money it was to receive from Learfield Sports
Univ. of Missouri AD Mike Alden has "expressed confidence in ESPN's ability to negotiate with the nation's most powerful carriers" for carriage of the SEC Network, though it has "struggled to do the same for the controversial Longhorn Network," according to Terez Paylor of the K.C. STAR. Alden said that ESPN is "banking on the power" of the SEC and ESPN brands to "aid it during negotiations with cable providers, something other conferences -- like the Pac-12 -- don't have." Alden said, "It's difficult for the Pac-12 Network, knowing it doesn't have a national brand, at least according to analysts, to be able to deliver on that (and get broadcast) to the state of Iowa or Arkansas. Whereas the brand of the SEC, because it resonates in California, it resonates in Nevada, it has more of a chance for greater exposure.” Paylor reported Alden "essentially confirmed reports that ... the SEC has ceded ownership of the network" to ESPN. He said of the positives and negatives stemming from that decision, “By owning, you have opportunity for more extended control over content and scheduling and you have a chance to generate more revenue. But the risks associated with that can be significant, and I think they're finding that out in the Pac-12 right now." Alden said that the SEC had to "buy back the third-tier television rights" to "get the network off the ground." Alden added that the SEC will "reimburse Missouri for the roughly $4.3 million it stood to make annually" from Learfield Sports for the next five years. Alden: "[The] SEC will make us whole so it will continue to be $4.3 (million) so it won't impact our budget" (K.C. STAR, 5/5). In Georgia, Aaron Brenner noted Comcast, Time Warner, Dish Network and DirecTV "combine for 68 million subcribers," and the negotiations "better start sooner rather than later." Brenner: "Just ask the Big Ten and Pac-12 how difficult it is to get their ducks in a row and avoid angering fans who can't watch their favorite team immediately" (Columbus LEDGER-ENQUIRER, 5/3).

EXPANDING ITS PRESENCE: In Tuscaloosa, Cecil Hurt reported while the network's live football games will "attract headlines" and subscriptions from various cable carriers will "translate into cash for the league and its 14 members, it is the overall pervasive presence of the SEC brand that many coaches see as the primary nonmonetary benefit of the new arrangement with ESPN." The network financially would "likely be viable on a regional-only basis," and this is "particularly true since the SEC region, as it is now defined, includes 15 of the top 50 television markets in the United States." That is a "crucial revenue base if, as expected, the SECN revenue distribution resembles that of the Big Ten Network, which gets a little more than $1 per customer within its regional 'footprint' and 10 cents per customer outside." However, that does "not mean the SEC schools will instantly become wealthy from the Network." Alabama AD Bill Battle: "It will take time." The key for the network will be "penetration in those other markets" if it wants to be "considered a true success" (TUSCALOOSA NEWS, 5/5). In K.C., Blair Kerkhoff wrote there is "no hotter market today than the SEC," and ESPN will "bank on the allegiance of college football’s most devoted and passionate fans to fund this new relationship." Announcing the network 16 months in advance "gives the league a big advantage by allowing it to line up nationwide carriers" (K.C. STAR, 5/4).

MONEY MATTERS: Alden said that MU's athletic department "expects to receive about" $20.7M from the SEC for FY '12-13. The K.C. STAR's Paylor noted the money "reflects Missouri’s share of the SEC’s TV revenue, NCAA Tournament and bowl money." In comparison, Alden said that UM "stood to receive roughly" $19M during its last year in the Big 12. Alden was "confident the SEC Network would increase the school’s annual payout." Alden: “You’re conservatively looking at -- with very conservative growth -- a couple million in additional revenue in 2015. But that’s very conservative." He added, "In order for us to gain on South Carolina, Arkansas, Tennessee and Kentucky -- those schools that are in that next tier -- we’ve got to sell more tickets, raise more money in our capital gifts, corporate sponsorships and on and on. It’s still an uphill battle" (K.C. STAR, 5/4).
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