OKTC has told you the SEC Network is coming and we've told you that its payout could be stratospheric, approaching a billion dollars a year within the next 10-15 years.
But what we haven't talked about as much is how many football games the SEC Network could carry. The number of football games that a potential network would carry is the single most important detail that determines the value of the SEC Network. Why? Because fans have to demand the programming on the network. There have to be enough games that will keep local cable operators from leaving the SEC Network off its tier of channels.
What's the best way to ensure that SEC football fans flood cable companies insisting that the games be carried?
Lots of football games.
And the SEC Network will have a lot of football games.
Via multiple sources OKTC has learned the SEC Network is poised to carry between 40 and 50 football games beginning as soon as 2014.
That's at least three a week throughout football season.
Putting 40-50 games on its own network is massive for the SEC.
Stop all comparisons with the Longhorn Network now, people will actually want to watch this conference partnership with ESPN.
Given that there are presently 112 SEC football games a year -- 56 contests between two SEC teams and 56 out of conference games, this means the SEC is prepared to take nearly half of its football inventory and place those games on its own channel.
Where do these games come from?
Mostly, ESPN's partnership rights.
Presently there are just 27 SEC football games that ESPN doesn't have the rights to carry every year.
Thirteen of those games air on CBS and will remain on the national network once a new rights fee is negotiated. The other 14 games are more interesting, individual games retained by the individual schools to distribute on their own pay-per-view telecasts within their own state markets. Typically these games are poorly produced local telecasts that leave fans fuming. They also cost a lot of money -- individual games can retail for as much as $50. Eventually these retained, so-called third tier games, would roll into the existing framework of the SEC Network. Rather than pay $50 per game, SEC fans would get all 14 of these games to watch for around $1 a month, or $12 a year in subscriber fees buried in existing cable bills.
Yep, a much better deal.
ESPN owns everything else, but these 27 games. That's in the neighborhood of 80-85 games a year.
(There are rights held by other networks, but these are rare and one-off schedule games. For instance, if a Pac12 school hosts an SEC school or Notre Dame hosts an SEC school, those school's television rights packages would receive these games to air. But if the SEC hosts a Pac12 school or Notre Dame, the SEC schools would receive those games to air on ESPN. With many SEC schools now playing eight home games a year, the number of games that ESPN doesn't control is very small).
Basically, ESPN has everything with the SEC that matters except the CBS games.
And ESPN loves the partnership with the SEC.
Indeed, ESPN wants as much SEC football as it can get to televise.
Now, stop with the emails. I know you watch SEC games on CSS or FoxSports or other non-ESPN channels, but those are sub-rights that ESPN has sold to those companies.
And those sub-rights expire beginning in 2014.
Just in time for those rights to roll back into the mix for a new SEC Network.
Convenient, right?
ESPN wants to put big SEC games on its networks, but it can do that and still schedule a few big-time contests on the SEC Network, which will be in partnership with ESPN. Instead of paying out $150 million a year or more, ESPN will be making money off subscriber fees, turning a fee into a positive return just in time for playoff bidding.
What's more, if the SEC is meeting with difficulty from cable companies, the league can load up the SEC Network with games from that region.
Can you imagine if a cable company didn't carry the SEC Network in Alabama and the SEC put games featuring Alabama and Auburn on the same day? Would the cable network offices still stand in the state by sundown?
The SEC's ultimate trump card is fanaticism. Other regions of the country like to watch their teams play, SEC fans must watch their teams play. With fanaticism comes the SEC's own insurance that cable companies will carry their product. Immediately, the SEC Network would become the most popular channel other than ESPN for sports fans in the South.
And just how lucrative could the SEC Network be for conference coffers?
Multiple sources have said the SEC Network could be one of the most lucrative regional sports networks in the country. (The Big Ten Network, while successful, isn't the best comparison for the SEC Network because most Big Ten schools aren't the most popular teams in their respective states, the SEC teams are. This means the SEC's Network is more akin to other regional sports networks like Comcast SportsNet Washington or the New England Sports Network than it is the Big Ten Network.)
What's that worth?
Try this math.
Pegging the average revenue at $1 a month from cable and satellite subscribers in the SEC footprint, which is conservative in the long run given that regional sports networks like Comcast SportsNet Washington bring in $3.36 a month, means that the SEC could easily do revenue from this Southern subscriber base of around $360 million a year.
That's well over double the $150 million the SEC does right now from ESPN. (CBS presently pays $55 million a year to the conference and that number will probably increase to around $70 million a year post-expansion).
That doesn't include additional revenue streams for subscribers in the rest of the nation -- SEC broadcasts were the top three regular season ratings winners in the country this year -- where the SEC has turned itself into the second most valuable brand outside of the NFL. It also doesn't consider how incredibly lucrative advertising sales would be for the network.
Over the next decade of its existing partnership with ESPN the SEC Network could easily climb to $2 a month in the 11 state subscriber base. That's still just $24 a year, less than half of what many fans pay for a single football game on pay-per-view every year. Indeed, you could easily justify $3 a month, or $36 a year in the 11 state SEC footprint.
Once the third-tier rights, the single football game that each school retains, are rolled back in, SEC fans would get every game all year long in every sport for less than a single pay-per-view game of their favorite school costs right now.
What kind of revenue are we talking about then?
At $2 a month in the SEC footprint, an SEC Network would do $720 million a year in revenue just from subscriber fees.
At $3 a month, still less than Comcast SportsNet Washington and the New England Sports Network presently charge subscribers in their regional footprints, the SEC Network would bring in over a billion dollars a year.
A billion!
The SEC Network is coming, get ready.
And it's bringing 40 or 50 of its football games along for the ride.
