 |
|
Why I think SEC expansion is unlikely, at least soon
Posted on: July 8, 2022 at 14:17:35 CT
Tiger4Life36 MU
Posts:
783
Member For:
17.46 yrs
Level:
User
M.O.B. Votes:
0
So I've seen all sorts of hypotheticals about schools that could move into the SEC (normally, it's Clemson, FSU, UVA, Va Tech, GA Tech, UNC; or some variation). Other possibilities are ND and a larger SEC strategy to go westward and pick up some of remaining PAC-12 schools (OR, WA, AZ, ASU, CO, UT seem to the most likely, but would all need to be approved by ESPN). Outside of that, here's why I think SEC expansion is not that likely until the 2030s.
And even then, I think it will focus on a very small set of schools in markets in which they don’t operate.
(1) Everyone forgets this, but the SEC learned a valuable lesson when adding Mizzou and TA&M: after added, they went to their TV partners and asked for more money. They refused, so the existing members were required to divvy the existing pot up among 14 members, not 12. In the new round of TV negotiations, the SEC added a clause (negotiated with ESPN), that if they added new members, the TV rights pot would increase on a pro-rata basis, but the prospective members that would result in an increase were clearly defined. The article I read didn't go into detail, but did say there was a Tier A grouping of schools and TX and OU were listed in that grouping. Tier A schools resulted in a pro-rata increase to TV rights, so now the pot is expanded and no existing SEC school takes a decrease.
Similar to the Big Ten, I think Fox and ESPN are the ultimate gatekeepers on this – conferences are not going to simply pay more for any school unless pre-approved by the networks and an increase was already contractually negotiated (or the school comes in as part of a new rights deal).
(2) Since ESPN owns 100% rights of the ACC and required them to enter into a long-term 20 year deal with a grant of rights to create the ACC network, I doubt the SEC (with ESPN) would list any ACC members in the SEC tiers. It would probably be a legal basis for breach of contract and/or tortious interference. ESPN would probably allow the SEC to focus on schools in which ESPN did not/does not have all the rights (like the Big 12 and PAC12 which are split with Fox). I've never seen the ACC's agreement, but from what I've read, it appears implausible to get out of the agreement without a large buy-out and surrendering future revenue from the new conference.
(3) The ACC already has buyers’ remorse with the ESPN deal since it’s long-term and the Big 10/SEC look to double the revenue ACC schools are getting. It’s a great deal for ESPN. We saw a similar situation with CBS and their game of the week with SEC – the SEC tried to renegotiate it, CBS said no, and CBS will lose the rights shortly, but they had a great deal for many years. Why would ESPN let the ACC out of a great deal and pay more for schools they already have rights to?
(4) The ACC conference schools will suffer significantly from revenue disparity and I expect the schools to look at other options after the GOR expires in 2036. Big 10 and SEC schools are expected to hit $100M in the near future, with ACC schools expected to get less than half of that. Look at the chart here: https://footballscoop.com/news/data-firm-projects-sec-100-million-revenue-end-of-decade
(5) What schools the SEC takes, if any, will need to be pre-approved by ESPN (assuming they are still the partner then) and validate their ROI and revenue projections. Just like what ESPN did with TX and OU. The SEC also does not gain as much by adding schools in states in which they already operate because they earn more in cable fees in new markets (there is a difference in in-state vs. out-of-state rates). It makes more sense to expand into new states/markets, which is what the B10 did with Rutgers, Maryland, and now USC/UCLA. For that reason, I think the SEC will prefer to target UNC/NC State or UVA/Va Tech or a state in which they don't already have a presence (The remaining PAC-12 members are interesting for a western expansion). Clemson would be worthwhile, assuming their football stays competitive. Both Miami and FLA State are past their prime, in existing markets, and dilute Florida's brand. For that reason, I don't think they're that likely.
https://awfulannouncing.com/ncaa/adding-usc-and-ucla-could-be-huge-for-big-ten-network.html
Edited by Tiger4Life36 at 14:20:30 on 07/08/22
And even then, I think it will focus on a very small set of schools in markets in which they don’t operate.
(1) Everyone forgets this, but the SEC learned a valuable lesson when adding Mizzou and TA&M: after added, they went to their TV partners and asked for more money. They refused, so the existing members were required to divvy the existing pot up among 14 members, not 12. In the new round of TV negotiations, the SEC added a clause (negotiated with ESPN), that if they added new members, the TV rights pot would increase on a pro-rata basis, but the prospective members that would result in an increase were clearly defined. The article I read didn't go into detail, but did say there was a Tier A grouping of schools and TX and OU were listed in that grouping. Tier A schools resulted in a pro-rata increase to TV rights, so now the pot is expanded and no existing SEC school takes a decrease.
Similar to the Big Ten, I think Fox and ESPN are the ultimate gatekeepers on this – conferences are not going to simply pay more for any school unless pre-approved by the networks and an increase was already contractually negotiated (or the school comes in as part of a new rights deal).
(2) Since ESPN owns 100% rights of the ACC and required them to enter into a long-term 20 year deal with a grant of rights to create the ACC network, I doubt the SEC (with ESPN) would list any ACC members in the SEC tiers. It would probably be a legal basis for breach of contract and/or tortious interference. ESPN would probably allow the SEC to focus on schools in which ESPN did not/does not have all the rights (like the Big 12 and PAC12 which are split with Fox). I've never seen the ACC's agreement, but from what I've read, it appears implausible to get out of the agreement without a large buy-out and surrendering future revenue from the new conference.
(3) The ACC already has buyers’ remorse with the ESPN deal since it’s long-term and the Big 10/SEC look to double the revenue ACC schools are getting. It’s a great deal for ESPN. We saw a similar situation with CBS and their game of the week with SEC – the SEC tried to renegotiate it, CBS said no, and CBS will lose the rights shortly, but they had a great deal for many years. Why would ESPN let the ACC out of a great deal and pay more for schools they already have rights to?
(4) The ACC conference schools will suffer significantly from revenue disparity and I expect the schools to look at other options after the GOR expires in 2036. Big 10 and SEC schools are expected to hit $100M in the near future, with ACC schools expected to get less than half of that. Look at the chart here: https://footballscoop.com/news/data-firm-projects-sec-100-million-revenue-end-of-decade
(5) What schools the SEC takes, if any, will need to be pre-approved by ESPN (assuming they are still the partner then) and validate their ROI and revenue projections. Just like what ESPN did with TX and OU. The SEC also does not gain as much by adding schools in states in which they already operate because they earn more in cable fees in new markets (there is a difference in in-state vs. out-of-state rates). It makes more sense to expand into new states/markets, which is what the B10 did with Rutgers, Maryland, and now USC/UCLA. For that reason, I think the SEC will prefer to target UNC/NC State or UVA/Va Tech or a state in which they don't already have a presence (The remaining PAC-12 members are interesting for a western expansion). Clemson would be worthwhile, assuming their football stays competitive. Both Miami and FLA State are past their prime, in existing markets, and dilute Florida's brand. For that reason, I don't think they're that likely.
https://awfulannouncing.com/ncaa/adding-usc-and-ucla-could-be-huge-for-big-ten-network.html
Edited by Tiger4Life36 at 14:20:30 on 07/08/22
Please explain why this message is being reported.
MESSAGE THREAD
Why I think SEC expansion is unlikely, at least soon - Tiger4Life36 MU - 7/8 14:17:35