Why the SEC can’t ignore what the Big Ten might do

 Why should the SEC care if the Big Ten expands? It’s a reasonable question and I get it a lot.

Obviously, the SEC has a great thing going with four straight national championships in football. The league has 14 years remaining on a $3 billion TV contract with CBS and ESPN. The SEC has sold out football stadiums from Athens to Tuscaloosa and competes on a national level in every sport it sponsors. Life is good.

So why mess with a great thing? Why not let the Big Ten do its thing while the SEC keeps doing what has made it so successful?

Here’s why: “If you are a commissioner your No. 1 job is not to take care of today,” said former SEC commissioner Roy Kramer. “Your No. 1 job is to look at least 10 years down the road to where your conference is going to be and where the competition is going to be.”

SEC Commissioner Mike Slive told me recently that the his conference will have a plan in place should the Big Ten expand to 16 teams, which could totally change the landscape of college athletics as we know it in just a few years. The SEC may never execute the plan, but there will be a plan.

The SEC cannot rest on its laurels because they have seen the numbers that I am about to share with you. These come from some very good reporting by Phil Miller of the Minneapolis Star Tribune and Teddy Greenstein of the Chicago Tribune.

Right now it is a given that from its various shared revenue sources (TV, bowls, NCAA basketball tournament, etc.)  the Big Ten pays each of its schools about $22 million per year while the SEC’s numbers are somewhere around $17 million per school.  But:

**–The Big Ten Network has already succeeded beyond anybody’s hopes in a short period of time. Right now 45 million people subscribe to it, but and additional 75 million homes have access to it. It is available in 19 of the 20 largest TV markets in the country.

**–The Big Ten received a $60 million rights fee up front last year for the BTN from Fox Sports (which owns a 49 percent stake). Then the BTN made an additional $66 million in profit. Advertising revenue was up 30 percent last year in a down economy.

**–Greenstein reports that if the Big Ten expands and chooses the right schools, league officials have seen estimates of revenues doubling by the 22015-2016 academic year.

**–And this is the best one of all from Greenstein: For every BTN subscriber in the eight-state footprint of the Big Ten, the league gets 70 to 80 cents a month. For every subscriber outside the footprint it is about 10 cents. So guess what happens if the Big Ten starts adding states like Nebraska, Missouri and New Jersey to their footprint? Not only do the subscriptions increase  but the income the Big Ten gets from those  subscriptions goes up as much as eight-fold in that state.  If Nebraska joins the Big Ten, how many homes in that state will sign up for the BTN? I’d say just about all of them.

If you are Mike Slive and the SEC presidents, do those numbers get your attention? You bet they do.

Yes, the SEC has the competitive advantage now. But remember that there has been a spike in coaches’ salaries in the SEC because the funds were available from the new TV contracts. Remember we told you that a year ago only two coordinators in this league were making $500,000 or more. Now there are a bunch of them in that salary range. And that number will grow.

What if every Big Ten school is suddenly making $35 million a year and the SEC is still at $17 million?  Over ten years that’s $180 million more per school that is invested. Would that not make a competitive difference over a decade?

That is why the SEC can’t ignore what the Big Ten may do.

 

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212 comments Add your comment

First

May 24th, 2010
8:41 am

Go Jackets

May 24th, 2010
8:49 am

That’s a nice article Tony. I realize the universe revolves around the SEC, but how do you think this might impact the ACC and Georgia Tech, you know, the home town school?

mootpoint

May 24th, 2010
8:49 am

No amount of money is going to change the fact that the southeast has better overall athletes, that players prefer playing in warmer weather, and that the economy is killing cities in the midwest. Less people, less blue chip talent to choose from.

TommyJack

May 24th, 2010
8:49 am

Very informative, TB. As usual.

s5

May 24th, 2010
8:52 am

It’s all about the $$$$$$$.

Beast from the East

May 24th, 2010
8:53 am

I agree that the SEC should not ignore what’s going on. I do think that we should still have a wait and see approach about all of this first. Don’t think we should jump the gun and make any hasty decisions. If we do expand, I’d really go HARD after Texas and Florida State. Texas would bring our product to a whole new market…..a huge one at that. FSU would just solidify our market share in the largest state in the SEC. The other two schools would probably have to be Texas A&M (to appease Texas) and maybe Clemson? Who knows?

Beast from the East

May 24th, 2010
8:58 am

Go Jackets,
I really think that this could be a major problem for the ACC if it does happen. Could possibly dissolve a couple of conferences. I would like to think that the ACC would be okay, but if they get a few of their elite teams “cherry picked” then it could spell disaster from a competitive standpoint. I’m sure they’re doing the same thing the SEC is…..having a contingency plan ready to go. I think their bets bet would be to jump on some of the Big East schools to help keep their basketball package the strongest around.

Beverly Harrison

May 24th, 2010
8:59 am

As long as the SEC has Saban we will be ok.

Concerned

May 24th, 2010
9:01 am

Which is why I said that the SEC was wrong and lazy when it came to the TV package. If they had started their own network, the revenue would have been far greater than what they will end up getting. While there are less homes in the SEC foot print, people would pay far more per month in Atlanta for SEC football than people in Chicago would pay for the Big 10.
Just like the administration at UGA, the answer is always what can make us the most amount of money with the least amount of work.

Dink

May 24th, 2010
9:08 am

Good read Tony, thanks.

Bulldog59

May 24th, 2010
9:15 am

Good read Tony.

And Concerned, good point. Should the SEC investigate following the Big Ten in both areas, expansion and creating it’s own network? Can you imagine how many households would subscribe and how much they would pay?

Chris

May 24th, 2010
9:27 am

How about the Big 10 add just one school, Georgia Tech and add the whole atlanta market. I’d rather be in the SEC, but the money would be HUGE. All of our non-revenue programs could travel first class with the extra dough. The SEC should think about adding Tech just to keep the Big Ten out of the South.

Miles

May 24th, 2010
9:28 am

Mike Slive has a plan. Only a fool would think otherwise.

GATORZONE

May 24th, 2010
9:29 am

Ignore expansion and focus on an SEC network that would be similar to the NFL network. Should be easy to do and generate tons of $$$

D B Cooper

May 24th, 2010
9:30 am

you want revenue from a SEC Network? Go get Texas and TCU

[...] says something else we’ve been saying again and again: “If you are a commissioner your # job is to look at least 10 years down the road to where your conference is going to be and where the competition is going to be.”While the [...]

Charlie Bama

May 24th, 2010
9:33 am

Tony, Tony, Tony. How many time am I gonna have to explain this to you? Big 10 is NOT going to 16 teams. This is all a sports media sideshow to convince Norte Dame to join the Big 10 fold. The whole discussion is little more than air cover as ND works it out with the Big Tin chumpsters. Fun to speculate, fun to dream —but don’t bet money on the idea. And, yes, the SEC would have to respond it if the Big 10 thing ever happened, which it isn’t, which you already know, ‘cuz I told you.

Homer

May 24th, 2010
9:34 am

Its still diluting your brand. I agree an SEC network would be killer. The Big Ten network is a great, put together network and a marketing machine. But, if you have 16 teams, its just another huge espn show and teams get lost in the shuffle.

Tony Barnhart

May 24th, 2010
9:36 am

Good point, Go Jackets. We wrote about the possible impact on Georgia Tech last week.

Understand that in this process the dominoes are going to fall in a certain order.

The Big Ten will go first. If it goes to 12 teams, no big changes. If it goes to 16, the SEC has a decision to make.

If the SEC expands to match the Big Ten, it may tap into the ACC to strengthen its Southeastern footprint. So Georgia Tech may get an invitation from the SEC or, Georgia Tech may be facing an ACC without schools like Florida State or Clemson. The ACC may have to look to former Big East teams to get back to 12.

That’s how this could impact Georgia Tech and the ACC. Like it or not, the Big Ten and the SEC control the game. I don’t see any other conference making a move before them.

TB

[...] Constitution who refers to himself as Mr. College Football (@MrCFB on twitter) writes this morning The SEC Can’t Ignore What the Big Ten Might Do. I think it’s the other way [...]

Kid Ray

May 24th, 2010
9:42 am

SEC has better football. B10 has better business model.

XpatHeel

May 24th, 2010
9:42 am

Thanks Tony, you nailed it. The whole reason the $ec has aingst over what the Big 10 is doing is because of peni$ envy. The bumkins who predominate the dixie league just can’t stomach the thought that some other conference might be making more money than they are.
Why not be a big boy about it and give a “hats off to ‘ya” to the Big 10?
Instead, all $live and his minions want to do is get behind their closed doors and concoct a scheme to run out and $teal back the $potlight. WE’re the big bad $ec, and nobody is going to make any more money than we do!!
Why not take your lumps, you whiner$? You’re moaning already about how you’re going to continue to pay your assistants when the Big 10 will have a huge per team money gap. Well…now you know how the ACC, Pac 10, Big East and all the other conferences felt when you got in bed w/ e$pn and came upon you sudden glut of benjamins. You couldn’t wait to raise the stakes in the “pay the coaches” game and force the rest of the players/conferences off the table.
Now, the Big 10 is about to give you a dose of your own medicine.
Why not take it like a man?

NCAA Statistician

May 24th, 2010
9:44 am

Can’t help but laugh at everyone who wants Texas! The Big 11 will push for Texas first and will not get them. The SEC will then come sniffing and they can’t pay anywhere near what the Big 11 can! Texas already comes in around 20 million, they get to play a mostly cream puff schedule, and they dictate what the Big 12 does. Why lose all that power and take a pay cut to join the SEC? Texas A&M also has to come into any coversation about Texas which simply adds to complexities in trying to lure the Longhorns elsewhere. Much more likely that the Big 12 and the PAC 12 eventually join together to start their own tv network but that is still years away. The one league that is facing some serious difficulties because of all the North Carolina teams within the conference is the ACC. If they had say Louisville, West Virginia, and UConn in lieu of NC Stata, Duke, and Wake the ACC would have a much better opportunity to create their own network as well….but currently there simply is not enough markets.

OB-1

May 24th, 2010
9:48 am

Frankly I think the Big 10 is blowing smoke and will go to either 12 or 14 at most. They will ask Missouri, ND, Pitt, Nebraska, and Rutgers and will settle for either 1 or 3 of these. All of these are AAU schools except ND, which will probably turn it down any way.
Everyone talks about how lame the ACC is but I’ve read how different conferences are going to poach anyone from VT and FSU to Duke and UVA. If the ACC is so lame why is everyone so interested in the ACC schools?
The SEC is looking at FSU, Miami, GT, Clemson, and VT, also wanting the entire Tobacco Road.
The Big 10/11 is looking at GT, Maryland, UVA, and Boston College.
The PAC is looking to align with the entire ACC.
Again why so much interest in the lame ACC?

DP

May 24th, 2010
9:57 am

Tony, I think one point makes your analysis seriously flawed, that is the assumption that if the Big 10 expands to New York/New Jersey via Rutgers that it will pay $.60/$.70 per NY/NJ TV subscriber just like the existing Big 10 markets. You don’t seriously think Iowa-Northwestern is going to draw ratings in NY comparable to what it draws in the existing Big 10 footprint do you? Most people in the Northeast don’t care about college football. Rutgers is the oldest college football program in the U.S., sits in the biggest market in the U.S. and rarely can fill up a 52,454 seat football stadium.

How do the expansion economics of the Big 10 look if the revenues from cable TV subscribers in new Big 10 markets pay something like $.10-$.20 instead of $.60-$.70 to reflect the likely difference in TV ratings?

Go Jackets!

May 24th, 2010
10:03 am

Tony, so I guess the ACC is sitting idly by and just hoping they don’t get run over by the Big 10 and SEC? You seem to be very focused on the SEC. If I’m running the ship at the ACC, I too would have a plan. You seem to imply that the ACC has no leverage in deciding it’s own fate.

Savannah Jacket

May 24th, 2010
10:03 am

It seems like you have written this same article at least 7 times. I sure wish they would decide which path to take and take it so that we can read something other than these wild guesses which will never happen.

How about cap conferances at 12 and setup a play-off system? There is a new topic for you.

The numbers do not lie...

May 24th, 2010
10:09 am

…but these might “The Big Ten Network has…now 45 million people subscribe to it,…and additional 75 million homes have access to it”.

Now I am not disputing your numbers, Tony, as you just report what you find. But, think about how many cable subscribers have “regular” cable through the various providers, and how many “total” satellite subscribers there are. Then you will see my skepticism re: these numbers….

RxDawg

May 24th, 2010
10:22 am

“The SEC has sold out football stadiums from Athens to Tuscaloosa”

Hehe, this made me laugh. How many other stadiums are in between these too cities? :)

freehawk

May 24th, 2010
10:23 am

I don’t know. I think a lot of that financial talk is like a pyramid scheme. So if the Big Ten adds Ga Tech, that makes Ga a footprint state and so the Big Ten gets more because the Big Ten Network is on my cable plan (I never watch it). Fine – but does it make sense to add Ga Tech to the Big Ten? I am not in any way denigrating GT, just that this is a tail wag dog sort of logic.

Mike

May 24th, 2010
10:25 am

If the SEC is not proactive when the B10 acts, they could get left behind not only academically, but competitively. They will have the most money for facilities, coaches salaries etc.

Go Jackets!

May 24th, 2010
10:32 am

How bout the ACC adds Vandy, South Carolina, Pitt and WVU and they go ahead and make the offer before the Big 10 moves. Forget waiting. Then the ACC renegotiates the big deal it just made with ESPN (I’m assuming the ACC was smart enough to add a clause regarding expansion or change of conference members). If I’m the commish of the ACC, that’s the kind of thinking I do now. Tony, how bout you call up Swofford and see if he’s got any ideas or if he’s just got his head in the sand.

OB-1

May 24th, 2010
10:32 am

Mike, the only conference the worse academically is the Big 12 and that won’t change if the Big 10 expands.

Delbert D.

May 24th, 2010
10:33 am

Nothing short of the SEC East (- Kentucky) + Alabama and Auburn merging with the ACC would interest me. And dump Miami and BC, they are too far away from everywhere. Maybe Ga. Tech would be picked by the Big Ten, but that’s okay, too.

McDawg

May 24th, 2010
10:33 am

who watches Northwestern play Indiana-i get Michigan-OSU, Michigan-Michigan-St. but there is a mighty large drop off after that

Phil Steele has LSU at #26 with all that talent-Les is on the hot seat

OB-1

May 24th, 2010
10:35 am

Go Jackets, WVU is out as it is a Tier 3 school, I just don’t see it happening but U Conn would be a good pick-up.

sugarpikegang

May 24th, 2010
10:36 am

If this all takes place and the ACC/Big12 are cherry picked it seems to me that the SEC would do better from a market share perspective to invite someone like UNC than someone like GT, FSU or Clemson. I’m guessing that the Big-4 in the ACC will be untouchable but it begs to reason….

It makes sense to me that the SEC would invite Texas and Texas A&M (which I abhor) into the West. What will be interesting to me is will the SEC ask FSU, Clemson or GT? It makes sense to me that they would ask FSU (good fit for SEC culture). I also think that Clemson is a better fit for the SEC culturally.

As a Tech Alumnus I’d like to see GT go to the SEC but it makes no sense to me why they would need us given UGA in this market.

Go Tech!

OB-1

May 24th, 2010
10:39 am

Delbert, how about the ACC with new members U Conn, Kentucky, Alabama and Auburn, and trading Miami for UGA.

McDawg

May 24th, 2010
10:41 am

RX-there is the GA dome, Birmingham, and grant field when UGA plays there

kgator79

May 24th, 2010
10:47 am

The SEC does have an SEC network. Now its not like the Big 10’s but in my opinion even better where its all online for FREE. Go to secsports.com and if you select video you can choose what school’s videos you want to look at and can watch all of last seasons games, 2008 games, 2007 games. Great SEC games from the past. Inside shows on your schools program ect…Basically all the SEC football you want on demand for free. Big 10 charges your tv package for you to watch their channel.

Ben

May 24th, 2010
10:49 am

Tony, if the SEC does expand, do they have the ability to renegotiate their contract with ESPN? The Big 10’s annual payout fluctuates each year based on the profitability of their TV network. You said yourself their payout went up from last year by $60 million. Isn’t the SEC’s TV payout a fixed amount that cannot change? If the current TV deals are not renegotiable, then expansion hurts the other conferences that don’t have their own TV network by eliminating their ability to expand. If the SEC has to wait until the end of their 15 year TV deal (which they’re only a few years into), the Big 10 will be miles and miles and miles ahead of them in terms of money. So will the Big 12 and Pac 10 if they start their own TV network. If the SEC tries to expand before that deal expires, they only widen gap by decreasing everyone’s share.

So that’s the big question that nobody seems to be able to answer. Does the SEC have an out-clause of any kind with their ESPN deal, would they be legally entitled to renegotiate if they have to? Because 15 years is a long time to wait if somebody else is getting a paycheck twice the size of yours.

romebuzz

May 24th, 2010
10:49 am

texas and texas am say no thanks.fsu and climpson says yes. that means the u and ga.tech get in the acc

romebuzz

May 24th, 2010
10:50 am

check that the sec

$uspended SEC Officiating Crew

May 24th, 2010
11:07 am

We need higher salaries, just like the coaching staffs.

Beast from the East

May 24th, 2010
11:09 am

XpatHeel,
I guess your not a business major? Why would any conference sit idly by and watch someone else take revenue dollars without reacting? Why “take it like a man”? Why not take it to ‘em? You must work for the government. You’d never survive in the private sector with your viewpoint.

Athlon Sports

May 24th, 2010
11:11 am

……NESBITT for Heisman……

kgator79

May 24th, 2010
11:16 am

Tony….

Correct me if Im wrong but hasn’t it been reported from Jimmy Hines in Knoxville that Mike Slive and the SEC have met with CBS representatives and have stated to them that they plan to match the Big 10 team for team if they expand with their top targets being Texas, Texas AM, FSU and Clemson?

If thats true clearly the SEC is not ignoring what the Big 10 is doing.

frankly

May 24th, 2010
11:25 am

Based on the facts in your article, the REAL solution for the SEC is to develop an SEC network rather than expanding to 16 teams. Thats the only reason the Big 11 has the revenue advantage over the SEC at this point.

The fact that this is all about $$$$$ leaves me with a sinking feeling that the end product will not necessarily be the most beneficial for schools, students and fans.

murfdawg

May 24th, 2010
11:27 am

If the Big 10(11) has all this money and will will be making more money in the future than the SEC, how long will it be before Saban, Miles, and Urban bolt for the promise land?

The SEC does own the Atlanta market. There are more UGA, AU and even Fla alums in the area than there are GT. The SEC doesn’t need GT, unless it wants to increase the number of Asian and Indian students in the conference.

If I were snowed in from November until April, I would subscribe to the BTN and watch a bunch of average to awful teams play each other in basketball, volleyball, baseball, swimming and diving etc.
Or I would move to Atlanta and enjoy going outside and participating in sports. Give the BTN credit for having a successful product and making a lot of money. But does that make it a better product?

Boss

May 24th, 2010
11:34 am

GT is going to end up in the Big 10. The SEC will never catch up to the Big 10, they are locked into that ESPN deal forever.