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Friday, June 11, 2010

Expansion Talk & Links (6/11)

As the dominoes started to fall, it was simply a matter of time before the SEC made a move.

The Orlando Sentinel is reporting that those initial moves have already happened, with the SEC contacting Oklahoma and Texas A&M. How likely either scenario would be remains up in the air, and as the paper reports, it all likely depends on Texas.

Kyle King at Dawg Sports has some thoughts on the recent moves by the Big Ten and Pac-10, as does Senator Blutarsky HERE and HERE (the former being on the lighter side, the latter being of more serious interest). Georgia Sports Blog writes about what the addition of Texas A&M might mean.

Amid all the hype, however, there are still some practical issues to keep in mind. Here's what The Senator wrote:

"I only point this out to highlight the fact that the calculations for conferences now without championship games, at least the two that are driving radical realignment currently, are different from those with such a game. That’s really why I’m not surprised that the Big Ten may stop and catch its breath after landing Nebraska and not continue on and try to annex a goodly chunk of the Big East to force Notre Dame into the fold. It’s relatively easy to calculate what that twelfth school brings to the table; that’s not so for numbers thirteen through sixteen."

Indeed. In fact, the numbers are pretty easy to find for the SEC. The conference's championship football game created $14.5 million last year -- or roughly half what the entire basketball season generated. (So it's not too hard to see why football is driving the bus here.)

So for conferences like the Pac-10 and Big Ten operating without a title game, the potential increase in revenue from simply getting to 12 teams makes these moves sort of a no-brainer. For the SEC, however, it becomes a gray area to discuss just how much money can be made by moving beyond 12.

The general assumption that expansion is inevitable rests on a simple theory: More teams = More revenue.

But is that true? The SEC's deal with ESPN is huge, and while it's not impossible to envision an even richer TV contract, there's certainly no guarantees that will be the case. Even monster networks run out of money at some point, and just in the past few months we've already read stories about CBS wanting to bail on college basketball coverage and NBC losing a ton of cash on its Olympics coverage.

College football is likely a bit less recession-prone than those two offerings, but that doesn't mean there isn't a breaking point.

Last year, the SEC's TV revenue was $109.5 million. That amount is divided evenly between the 12 member institutions. So, while that's a hefty chunk of change -- what happens if the SEC adds four schools? The TV revenue would -- theoretically at least -- still be divided evenly, only there's more pieces of the pie to slice.

Now, the question then turns to: How much could the league up its deals with CBS and ESPN? Mike Slive wouldn't comment directly on contract renegotiations due to confidentiality clauses in the deals, but he said that typically there are clauses in these contracts that allow either side to ask for a review of the deal should a major issue -- such as expansion -- arise. And given the names being considered, no doubt ESPN would be happy to listen.

But... this year, each of the 12 SEC schools received $9.1 million in national TV revenue from the SEC, and expansion only makes sense if that number is going to increase for everyone. Doing some math that's surely a bit on the elementary side of things, that means that, in order to make a 16-team league as lucrative to individual schools, that TV revenue would need to jump from $109 million to around $146 million.

Now, is that an impossible leap to make? Maybe and maybe not. (CNBC actually has some good info on that.) But, as Slive said, the SEC's footprint is already pretty big -- more than 105 million households each Saturday -- so how much more would ESPN, CBS or the SEC benefit from adding teams like Georgia Tech, Clemson or even Florida State -- each of which competes for essentially the same viewing audience as Georgia, South Carolina, Auburn and Florida.

To go beyond 12 teams has to be about expanding a viewing audience, not simply expanding the league. I guess that's obvious to most people, and yet I still hear so much about the SEC's potential interest in Tech or Clemson or Florida State.

I don't know. After the past few days, I'd say virtually anything is possible. And while TV revenue is the biggest cog in the machine here, there are other factors at work, too. (And, isn't it funny how little any sport other than football has been mentioned here?)

But at the end of the day, while all hell breaks loose around the country and the potential of 16-team conferences becomes closer and closer to reality, I'm still far from convinced that a 12-team SEC isn't better off than a 16-team Pac-10, just as that 12-team ACC didn't do a whole lot to put a dent in the SEC's dominance five years ago.

Some more linkage...

-- This is definitely not what Georgia fans will want to hear: Christian LeMay could be facing a 30-day out-of-school suspension by his high school, according to the Charlotte Observer's preps blog. A decision will apparently be made at a hearing on Monday.

-- UGA self-reported nine secondary violations to the NCAA this year, just one in football. As Damon Evans has told me, if you're not reporting any secondary violations, you're covering something up. And these all fall under the umbrella of minor and unintentional infractions.

-- Mark Richt is one of five SEC coaches to post a winning record vs. top-25 teams during his current tenure.

-- Team Speed Kills looks at Tennessee's potentially brutal start to the season.

-- Matt Hinton looks at the flaming embers of what once was the Big 12.

-- R.I.P. to ESPN Zones nationwide. Can't say I'm too sad to see them go. Although, I used to date a girl who worked at the one in Baltimore, which led to at least a couple funny stories about Mel Kiper, who did many of his radio spots from there.

-- Speaking of ESPN, Aaron Rodgers isn't a big fan of the network's NFL coverage.

-- Did you know that Comic Book Store Guy from "The Simpsons" actually has a real name? Captain Crunch, too. Mental Floss has a whole list of the real names of popular fictional characters that rarely were used.

-- Apparently beer sales are way down in the U.S. despite my attempts to finish my beer card at Pauley's. Terrible.

-- And finally, picture this: You're in New York this weekend. You find yourself alone in an alley. It's quiet... too quiet. A few nearby children scatter, shouting something like, "Omar comin', yo." Suddenly in the distance, you hear it. Whistling. What's that tune? "The cheese stands alone"... But as soon as you recognize it, it's too late. Rat-tat-tat... paint all over the front of you. You just got got.

Now, tell me that wouldn't be worth at least $750. Oh, indeed.

9 comments:

Buster said...

That paintball thing WOULDN'T be worth $750!

Anonymous said...

where does the SEC footprint come close to 105 mill households? The SEC comprised of 9 states with total population (per US Census est 2009) of 58,500,000

David Hale said...

Not the "footprint" but the TV footprint... SEC games reach 105 million homes (roughly) according to Slive. BUT... I agree on your point. What's important is how many of those homes actually care about the SEC. Tech, Clemson and FSU aren't adding a lot to that total. A&M or Miami or Va Tech likely would.

Pete said...

People watch quality games, period. It doesn't matter what "footprint" they are in. If your league consistently has two really good teams playing on TV, people will watch it. That's what I believe the SEC will be focusing on.

Anonymous said...

i think an excellent article would be educating the SEC fan on what the Big 10 has done w/Big 10 network (curr 67 mill subscriber population), why the Pac wants to expand and form their own network ( Tx, CA and other states are 87 mill subscriber population) and why those two options will make more than the SEC gets now....which previously the SEC ESPN deal looked like the best deal. I dont think the avg SEC fan knows the big 10 is making more off tv than the sec

MauiDawg said...

Out of all this expansion talk I have yet to hear any explanation of how and when these schools will be incorporated into their new leagues....and what will immediately happen to the Big 12 for the upcoming season with members already out of association?

When will the scheduling changes come into effect? What happens to the non conference games that teams have signed deals with over the next two years? Let's say the SEC only adds two teams, such as OU and T A&M out West?...then how would the East/West divisions get realigned...? Bama and Auburn to the SEC East...?

MauiDawg said...

One other thought....the Pac 10 needs (if I remember correctly), 9 out of 10 schools to approve an addition. What happens if two schools vote no....? It could happen.

Same thing with the SEC, except we need all schools to approve (if I remember correctly)...right? I don't see a school like UGA or UF being too thrilled about a major SEC West team getting pushed into the EAST as a result of adding a Texas team to the West.

David Hale said...

SEC only needs 9 of 12 schools to approve an addition.

MauiDawg said...

Ok so you take UGA, UF, Bama and one other such as Tenn or Auburn....schools that already have HUGE football revenues. Factor in the impact on the low or negative revenue sports at each school such as baseball, softball, etc.

Is the extra few million/year from split TV revenue as a result of adding another team really worth it for those school? I'd have to say no...

Am I missing something here or what? Taking in all the facts I've read out there..I just don't see it being worth the money for the major revenue schools in the SEC to approve it.