SBJ/July 21-27, 2014/Media

SEC Net dodging major battles on distribution

Editor’s note: This story includes updates to the print edition.

It looks like the ESPN-owned SEC Network will be able to sidestep the normally combative distribution battles often associated with the launch of new sports channels.

The network’s carriage talks are progressing so fast that sources with two of the country’s top distributors said they expect to have carriage deals in place by the channel’s first football game on Aug. 28, if not earlier.  The channel officially launches Aug. 14.

It is common for new channels to be mired in public distribution disputes during their launch periods. For the first year of its existence, Big Ten Network did not have carriage deals with either Comcast or Time Warner Cable; and Pac-12 Networks still hasn’t been able to cut a DirecTV deal, two years after the channel’s launch.

But those problems do not seem to be affecting SEC Network, which has distribution deals with AT&T, Cox and Dish Network in addition to the deal it signed with Comcast late last week.
 
While DirecTV and Time Warner Cable still are hammering out several deal points for a network that launches in 3 1/2 weeks, the distributors largely have agreed on the channel’s rate card, which is $1.40 per subscriber per month within the SEC’s 11-state footprint, and 25 cents per month outside of it, sources say.

If all of these distributors sign a deal by the channel’s Aug. 14 launch, the network will open with a footprint of around 75 million homes, which would be the biggest network launch in cable TV history. ESPN executives have said they expect SEC Network to launch with a similar footprint as ESPNU, which is
in 74 million homes.

Sources said the remaining distributors are not as focused on the Aug. 14 launch as they are for the channel’s first football game on Aug. 28, which will be between South Carolina and Texas A&M — two schools in Time Warner Cable markets. Later that day,
the network will carry Vanderbilt, in a Comcast market, against Temple, which is in Comcast’s hometown of Philadelphia.

SEC Network programming before the start of football season primarily will focus on live Olympic sports events, such as soccer and volleyball, as well as analysis about football.

Privately, distribution executives grumble about the continued trend of networks slicing and dicing content. Distributors believe that they are having to pay for a new channel that uses content that was available on other channels in past years. But several executives cited the fervency of SEC fans as a reason why negotiations are progressing.

The DirecTV deal is proving to be the most complicated. The satellite operator’s overall deal with Disney/ESPN concludes at the end of this year. SEC Network talks are part of that bigger deal, providing the SEC Network a level of leverage most new channels don’t enjoy.

It’s likely that DirecTV will strike a deal to carry SEC Network before reaching its larger deal with Disney/ESPN.

Negotiations with Comcast and Time Warner Cable hit snags over ESPN’s insistence that cable operators carry the channel on a digital basic tier, even in non-SEC markets.

Another holdup came from Texas, where ESPN is looking for a full in-market rate — $1.40 per sub — because of the presence of Texas A&M. That means Time Warner Cable would pay an in-market rate in Austin, home to the University of Texas, and Comcast would pay the same rate in Houston, not a hotbed for Texas A&M fans. So far, ESPN has not backed down from the entire state as in-market.

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