Monday, August 25, 2008

SEC, ESPN squash future RSNs

With apologies to Don MacLean, today is the day the music died, or, at least, the day the RSN craze died. The breadth of today's announcement between the SEC and ESPN may be the beginning of the end for the RSN (Regional Sports Network) set. Earlier this year, the Sports Business Journal reported 127 RSNs existed and speculation was rampant that the SEC Network was the one network people really wanted to see.

However, with one 45-minute press conference today, the SEC and ESPN burst the RSN bubble and, indirectly, gave Big Cable companies a victory in their feuds with the Big Ten Network and the NFL Network. Mike Slive, commissioner of the SEC, confirmed today that going it alone with a network is too big a risk. During his conference call comments, he alluded to starting an RSN as 20-25 year commitment. Instead, he and his band of athletic directors and presidents took the money - $2.2 billion of it.

Slive would not divulge finances, saying instead that the deal guaranteed the "long-term financial stability" of the conference and its institutions. But, $2.2 billion for 15 years averages to $150 million per year, creating a rough payout to each school of $12.5 million per year, before the conference takes a little. I doubt the Big Ten Network yielded that for its institutions this past year.

And, schools still have some rights. Schools can sell one non-conference football game per year on a pay-per-view basis (presumably, this Saturday's game here in Fayetteville, Ark. between Western Illinois and the Hogs would be that type of game). Schools still hold the rights to sell non-conference men's basketball games to local networks. Schools can stream these live on their athletic websites.

Ultimately, I think the SEC made the right decision. Unlike the Big Ten Network, the SEC geographic footprint is mostly rural with institutions in places like Oxford, Starkville, Fayetteville, Gainesville, Lexington, and Knoxville.

Big Ten schools are in eight states, including three of the nation's top 15 DMAs (3-Chicago, 11-Detroit, 15-Minneapolis). SEC schools are in nine states, but only two of the nation's top 15 DMAs (9-Atlanta, 12-Tampa; and Atlanta competes with Georgia Tech and the ACC and Tampa is a Big East city with South Florida). That would have greatly affected distribution of a possible SEC Network.

I think, at the college level, the RSN craze is done. Three other BCS conferences (Big East, Big 12, Pac-10) recently extended rights deals well into the next decade. The ACC does not have the football drawing power of the SEC or the Big Ten and would not command per subscriber fees the Big Ten Network is seeking.

Moral of the story, take the money, avoid the headache.


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