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Will adding A&M cost SEC teams money?

Posted on 9/14/11 at 8:20 am
Posted by Dr Drunkenstein
Washington DC
Member since May 2009
2918 posts
Posted on 9/14/11 at 8:20 am
LINK

quote:

BillisKing Bill King
Darren Rovell says TV execs tell him that A&M to the SEC adds only about 3% to the TV deal the league has.
Posted by Dice
Dallas, TX
Member since Nov 2007
896 posts
Posted on 9/14/11 at 8:29 am to
That's simply dumb - see recent TV deals for Big 12 and Pac 12. Those other conferences have a higher population base but don't have the viewers/ ratings that the SEC carries on a national level. People in the south watch TV - this guy is just dumb.
Posted by mre
Birmingham
Member since Feb 2009
3124 posts
Posted on 9/14/11 at 8:32 am to
Which has been one reason why I don't understand the rush to expansion. Any school that we bring in has to add at least $18.3m in value to the league (to use 2010-2011 numbers), just for the SEC to break even, and I think that there are very few universities that can add that much value by themselves. In order to be worth expansion the team has to bring in significantly more value than the break-even amount.
Posted by Fububutsy
Lake Charles, LA
Member since Jan 2007
4077 posts
Posted on 9/14/11 at 8:35 am to
Yeah, that may be one exec's thoughts on it, but let several stations start bidding on it and see what happens.
Posted by Dice
Dallas, TX
Member since Nov 2007
896 posts
Posted on 9/14/11 at 8:47 am to
Dr. Drunken - I'm not saying you are dumb - just the guy that is giving this guy info. Adding Texas A&M to the SEC and giving the SEC an added reason to take a look at the existing contract - is HUGE for the SEC. The SEC was already in motion to take a look because of the recent events by the PAC 12 and Big 12 TV contracts. SEC started the process with a huge contract but based on pure ratings numbers the SEC contract should be much larger than the Big 12 and Pac 12's so they must take a look and renegotiate. Plus - instead of the weak ESPN SEC Channel - they now want a dedicated SEC Channel like the BIG Network and will get it.
Posted by Camp Randall
The Shadow of the Valley of Death
Member since Nov 2005
17236 posts
Posted on 9/14/11 at 8:50 am to
LOL

Poor Texas.
Posted by HubbaBubba
North of DFW, TX
Member since Oct 2010
50943 posts
Posted on 9/14/11 at 8:57 am to
Longhorn Network sucks. I know. I have it. It was forced into my channel selection by Verizon. Seriously.... it blows. Lame.

TU may as well resign themselves to OU running the show, capitulate, revenue share, bend over and shove that Longhorn Network up their asses and beg forgiveness from Ken Starr for starting this mess!
Posted by GerryDiNardo
Bringing Back The Magic!
Member since Mar 2004
5779 posts
Posted on 9/14/11 at 9:00 am to
quote:

Dr Drunkenstein


A C C!! A C C!! A C C!!
Posted by Camp Randall
The Shadow of the Valley of Death
Member since Nov 2005
17236 posts
Posted on 9/14/11 at 9:17 am to
Texas admin greed and arrogance might further strengthen the SEC in the end.
Posted by Smoke Ring
Scenic Highway Crackhouse
Member since Dec 2010
4338 posts
Posted on 9/14/11 at 9:34 am to
Drunkystain,

You've obviously been in Washington DC too long, where markets don't work and economics don't matter.

In the real world, the Pac12 and B1G 10 have surpassed the SEC in media revenue. Minnesota will make more from TV than 'Bama will this year.

But the SEC is locked into its contracts. And you watch--adding A&M and another team will allow the SEC to renegotiate, and if the CBS/ESPN execs play hardball, the SEC will win in arbitration, pointing to the Pac12 and B1G 10 contracts as "comparables" or "comps" in today's markets.

A&M doesn't solely make this deal--it's the fact that networks have made the market much richer that will benefit the SEC in renegotiation efforts.
Posted by twk
Wichita Falls, Texas
Member since Jul 2011
2847 posts
Posted on 9/14/11 at 9:42 am to
A&M and the 14th team will bring enough to earn their keep just through the renegotiation. The real payoff will come whenever the SEC gets around to forming its own network, as the Big Ten and Pac 12 have done. That's when adding 40% more population (with just A&M, not taking into account a 14th team) to the leagues geographic footprint will really pay off. Go check out how much more the Big Ten gets per subscriber within its geographic footprint versus what they get outside the league's geographic footprint. That's where the real money in this deal can be found. Going to 14 or 16 teams will provide the content needed to make such a channel viable (something that ESPN should have thought about before agreeing to pay $300 million for a single team network with limited programming options).
Posted by Ralph_Wiggum
Sugarland
Member since Jul 2005
11021 posts
Posted on 9/14/11 at 10:16 am to
quote:

A&M and the 14th team will bring enough to earn their keep just through the renegotiation. The real payoff will come whenever the SEC gets around to forming its own network, as the Big Ten and Pac 12 have done. That's when adding 40% more population (with just A&M, not taking into account a 14th team) to the leagues geographic footprint will really pay off. Go check out how much more the Big Ten gets per subscriber within its geographic footprint versus what they get outside the league's geographic footprint. That's where the real money in this deal can be found. Going to 14 or 16 teams will provide the content needed to make such a channel viable (something that ESPN should have thought about before agreeing to pay $300 million for a single team network with limited programming options).


I thought that the SEC contract with ESPN prevents any SEC network for the life of the contract. The SEC took the billion plus from ESPN in return for ESPN becoming the "SEC Network".

College football is still a regional sport though. Penn State versus Illinois on BTN will get more viewers than any SEC game on ESPN in the big markets of Chicago and Philadelphia.

I would love to see an SEC network, but don't know how possible it is in the near future even with Aggie given ESPN is now the SEC Network.
Posted by LSUisjustOK
Baton Rouge
Member since Feb 2011
3506 posts
Posted on 9/14/11 at 10:27 am to
quote:

I would love to see an SEC network, but don't know how possible it is in the near future even with Aggie given ESPN is now the SEC Network.


With the deal the SEC has with ESPN and CBS, an SEC network is completely unnecessary. Any fan can watch a conference match up from anywhere in the U.S. Especially considering the streaming option on cbs.com SEC fans should be happy with they have in the way television contracts because its not going to get much better for the fan.
Posted by JPLSU1981
Baton Rouge
Member since Oct 2005
28326 posts
Posted on 9/14/11 at 11:02 am to
Did anyone expect the TV execs to come out and say "the addition of A&M will significantly increase what we're going to have to pay the SEC."





Anyone that believes the addition of A&M doesn't increase the SEC's TV deal significantly in the short-run and longrun doesn't know WTF they are talking about. Of course ESPN/CBS are going to downplay the addition and balk at ponying up tons more cash and of course the SEC is going to want megabucks increase, that's all a part of the negotiations.

Regardless what the short-term increase in TV money is for the duration of the current contract, the next contract(s) in the 2020's will certainly see an exponential increase, part of which due to Texas A&M.
This post was edited on 9/14/11 at 11:08 am
Posted by RedHawk
Baton Rouge
Member since Aug 2007
9534 posts
Posted on 9/14/11 at 11:05 am to
quote:

Those other conferences have a higher population base but don't have the viewers/ ratings that the SEC carries on a national level.


Would like to see proof of this. Not saying it isn't true, but I've never heard that the SEC gets higher ratings.
Posted by twk
Wichita Falls, Texas
Member since Jul 2011
2847 posts
Posted on 9/14/11 at 11:13 am to
quote:

I thought that the SEC contract with ESPN prevents any SEC network for the life of the contract. The SEC took the billion plus from ESPN in return for ESPN becoming the "SEC Network".

College football is still a regional sport though. Penn State versus Illinois on BTN will get more viewers than any SEC game on ESPN in the big markets of Chicago and Philadelphia.

I would love to see an SEC network, but don't know how possible it is in the near future even with Aggie given ESPN is now the SEC Network.
The contract is confidential, so nobody who is discussing it on the internet has seen it, but, from going back and reading the statements when the deal was consummated in 2008, it would appear that the contract does not actually prohibit an SEC network, it just made in highly unlikely under the then-existing parameters. Essentially, the CBS and ESPN deals provided enough windows to accomodate all SEC football games. However, if you keep the same number of windows and add more teams, you're going to end up with more games than you have windows, and those games would go to an SEC network. This is even more likely if you go to 16.

It's not just college conferences that have figured out that there is money to be made by cutting out the middleman (ESPN and CBS); the NFL, MLB, NBA, NHL all have their own channels. Regionally, a number of pro sports franchises are also strking out on their own (Yankees have been leaders at this--Houston teams are leaving Fox to start their own channel). This does seem to be the wave of the future--the key is coming up with enough programming to make the channel worthwhile and live sporting events are the number one target. With 14 teams, and multiple sports, an SEC channel would be positioned to provide live events pretty much every day for about 9 months, which is something that the pro sports channels struggle with.
Posted by LSU GrandDad
houston, texas
Member since Jun 2009
21564 posts
Posted on 9/14/11 at 1:14 pm to
basically, what i see is that people that against this move inflate a&m's value to the big 12 and deflate it's value to the sec. balderdash! you are correct, sir, in saying that it is CORRECT to assess their value going forward with a new contract. while it is possible adding them will cost some money going in but will pay handsome dividends in the future. duh. like an investment.
Posted by SG_Geaux
Beautiful St George, LA
Member since Aug 2004
80521 posts
Posted on 9/14/11 at 1:17 pm to
quote:

Dr Drunkenstein


You have become just plain comical on here.
Posted by KaiserSoze99
Member since Aug 2011
31669 posts
Posted on 9/14/11 at 3:02 pm to
quote:

Darren Rovell says TV execs tell him that A&M to the SEC adds only about 3% to the TV deal the league has.


3%? Three pecent? Tres porciento?

Digital Syndicate's top 100 TV Markets

Here is just the top 10:

1. New York, NY

2. Los Angeles, CA

3. Chicago, IL

4. Philadelphia, PA

5. San Francisco-Oakland-San Jose, CA

6. Dallas-Fort Worth, TX

7. Boston, MA (Manchester, NH)

8. Washington, DC (Hagerstown, MD)

9. Atlanta, GA

10. Houston, TX

Adding A&M increases the SEC's footprint in the top 10 by 300%!!! JUST THOSE TWO MARKETS add a potential for 7-10 million viewers. But it doesn't stop there.

37. San Antonio

49. Austin (Yes. Loads of Aggies in Austin and more-than-admitted obsession from the nutless bovines)

94. Waco-Temple-Bryan

98. El Paso

So, I don't know where that guy is getting his information. The SEC contract would NECESSARILY be torn to shreds and an new, MUCH BIGGER contract would be negotiated. That new contract could include deleting the term that prohibits an SEC network (which is necessary for non-football sports).

My estimates are an increase of at least 24%, even though they already broadcast the SEC in Texas. It's all about the ability to charge more $$$ for advertising. Even if A&M actually brought ZERO new viewers, advertising rates are based on POTENTIAL viewers.

I saw estimates that each school would get an increase of $12-15 million a year, or close to $34 million for each school, which is about an 83% increase. Even if we take the percentage increase at market rates back when the SEC contract was signed, each team would get about $22.5 million (24% increase), a $4 million increase, not a measly $500,000.

Maybe the guy is basing it on the already-available, national coverage of SEC football, but that is NOT how advertising rates are estimated. Either way, 3%? The guy is telling us that we should carve out an exception for A&M on potential viewers because A&M will only have the potential to draw less than 10% of the Texas population.

You can dry that out and fertilize the lawn with it. That is bullshite, especially given that they count all the potential viewers in every other state.

Here is a good article posted by our soon-to-be-SEC Jawja brotha's.

SEC Expansion by the Numbers
This post was edited on 9/14/11 at 3:06 pm
Posted by LSUisjustOK
Baton Rouge
Member since Feb 2011
3506 posts
Posted on 9/14/11 at 3:06 pm to
quote:

Adding A&M increases the SEC's footprint in the top 10 by 300%!!! JUST THOSE TWO MARKETS add a potential for 7-10 million viewers. But it doesn't stop there.



Methinks you don't understand television viewership. Of those 7-10 million people, there are only so many that actually watch college football. This is true of any major market. Of the people that actually watch college football, a good amount are probably already watching SEC games to an extent.

Given the overall numbers SEC games already get, a 3% rise in viewership sounds about right.
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