At a recent SEC spring meeting in Sandestin, Florida ESPN president Jimmy Pitaro addressed a room full of SEC presidents, athletic directors, and league executives and said ESPN had three main sports priorities: the NFL, the NBA, and the SEC.
Now Pitaro has put his money where his mouth is, inking a massive deal with the SEC.
Just in time for the end of the year, a major shift arrives in sports media: Disney/ABC/ESPN has stolen away the SEC game of the week from CBS. I’m told the rights fee will be north of $350 million per year and could approach $400 million per year, a huge increase from the $55 million a year the league receives now for this TV package.
Putting this into financial context, the SEC game of the week — and the title game — standing alone will bring each of the 14 SEC schools somewhere in the neighborhood of $25 million+ each, which is up from roughly $4 million each under the current deal.
ESPN went big to forestall bids from Fox Sports, who was scheduled to meet with the SEC at league offices in January to make their pitch, and CBS, which wanted to extend its existing relationship with the SEC.
While the deal hasn’t been announced yet, CBS walked away from the bidding table last Friday in a story broken by John Ourand of the Sports Business Journal. CBS’s offer topped out at over $300 million per year, but the company balked at increasing its payout for any of the four remaining years on the deal. (The CBS deal still runs for four more years, which is discussed below and if they were going to stay on CBS the SEC wanted the increased pay to begin immediately).
On Sunday I tweeted out that Disney had won the bidding for the SEC’s premier television package, the highest rated games in college sports, and would now air the SEC on ABC, but now I’m putting a bit more context on the deal.
“Credit to Disney/ABC/ESPN for getting this rights package done. This is a monster win for them that locks up the SEC for years and years to come. And it gets them the preeminent rights package in the entirety of college football.”—@ClayTravis pic.twitter.com/PWzXhjKby6
— Outkick the Coverage (@Outkick) December 24, 2019
Put simply, this is a massive win for Disney/ABC and ESPN because it now puts all of the SEC’s broadcast rights for football (and basketball) all under the ABC and ESPN umbrella.
And it’s a huge loss for CBS, which deserves credit for locking in the sports right steal of the 21st century, but also deserves blame for severely misjudging the market when the SEC expanded and added Texas A&M and Missouri. At the time the SEC believed it would be relatively easy to revise and extend the CBS deal with the expansion to 14 teams.
ESPN immediately leapt at the opportunity to extend the SEC, adding ten years to the existing rights deal — which now runs until 2034 — and launching the SEC Network. While ESPN’s decision-making under John Skipper wasn’t always great, he was brilliant to expand and extend the SEC deal in 2014.
Well, CBS, to be kind, blew it when the SEC expanded to 14 teams.
Instead of expanding and extending their relationship with the SEC, they fought to maintain the rights fee at $55 million and refused to even add any pro rata money. The SEC was stunned that CBS wasn’t willing, for instance, to go to $65 million a year based on the addition of Texas A&M and Missouri. If CBS had been willing to go to $100 million+ for a ten year extension the SEC would have been forced to consider, and potentially accept that offer.
Instead CBS balked at any increase and now has lost the most profitable sports rights deal of the 21st century.
While their initial deal was a goldmine, their refusal to revise and extend that deal a few years ago was a business catastrophe.
SEC commissioner Greg Sankey, courtesy of his negotiating partner Nick Khan at CAA*, has delivered the biggest and best sports rights TV deal in college history to his 14 members.
This is an extraordinarily massive win for Sankey.
It’s a Merry Christmas for the SEC, indeed.
But many questions remain.
Among those questions:
1. Will Disney/ABC/ESPN be able to pry away the CBS rights earlier than four years from now?
Remember this deal runs through the 2023 SEC title game.
Will CBS air the next four seasons or sell them away to Disney?
I’m told negotiations on this issue are ongoing.
It appears that some version of this idea I floated back in 2014 will happen.
Many of you, by the way, are insisting that ABC should negotiate for the SEC on CBS intro music. I’d echo that thought. This is a must-have part of the deal.
2. How many SEC games will air on ABC?
It seems pretty clear the 3:30 eastern game will air on ABC, but could there be more games on the network?
For instance, why not have a noon eastern SEC game that leads into the biggest game at 3:30 et on ABC?
Remember, one of the most impressive parts of the SEC’s huge ratings for the CBS game is it’s a standalone contest. That is, there is no lead-in of a live game.
Imagine how big the number on an LSU-Alabama — which drew 16 million+ nearly more than every Monday Night Football game this year — could be if there was another game as the lead-in.
Could there be an evening SEC game on ABC occasionally? That would seem likely as well.
Heck, you want a real wild card? Could the SEC ask for an occasional Thursday night ABC game and Monday Night game? Why not.
In fact, a really interesting angle to follow here is what if, for instance, ESPN/ABC lost Monday Night Football? Could they air an SEC game of the week on Monday night head-to-head with the NFL in some weeks?
It seems a bit wild, but putting every game under the same ownership umbrella provides a great deal of scheduling flexibility for the SEC.
Particularly in the opening weekend of college football, when ABC could elect to put a ton of SEC games in prime time for a nationwide audience.
3. Will College Gameday be simulcast on ABC?
Remember, these games are primarily being purchased by ABC.
It’s important to the SEC to provide their best games for free to the largest possible audience. So this isn’t an endorsement of ESPN’s cable audience, it’s an endorsement of broadcast television.
So if Disney/ABC/ESPN is investing big money in college football, wouldn’t it be a no brainer to put College Gameday on ABC and ESPN simultaneously?
Especially since Fox has put its own college kickoff show on at noon as well?
In the years ahead the battle for college football supremacy may start at nine in the morning and extend back to broadcast television on Saturdays.
4. Does this herald the return of broadcast TV?
For years and years cable stole away big sporting events. But now, with cable and satellite cordcutting accelerating and the number of cable and satellite subscribers declining, it may very well make more sense to put all big games on broadcast television to maximize the largest possible audiences.
In other words, what’s old is now new again.
Broadcast TV is back, baby!
5. Streaming companies still haven’t stolen away a crown jewel in the world of sports.
The SEC — and I suspect the NFL as well — continue to crave the broadest possible audiences.
Right now that’s found on ABC, CBS, NBC, and Fox.
There remains a big streaming tech question that still can’t be answered — how many live event concurrent streamers can a streaming company handle?
Certainly we know the answer is several million.
But what about tens of millions?
We just don’t know.
It’s unlikely that, for instance, the Super Bowl could air on streaming networks, no matter how robust those networks might be, without freezing for much of the country. The same could be true for big events like the AFC and NFC title game and, maybe, the SEC game of the week.
There remains a great deal of unknown when it comes to streaming capabilities.
Television doesn’t have any of those tech issues.
Combining that with the fact that the live audience is severely diminished when streaming occurs makes streaming still a risk the biggest companies won’t take with their best product. For major sports leagues focused on reach — i.e. the total number of eyeballs on their products — it’s a big risk to go with streaming exclusivity.
That’s not to say these leagues are tech averse — certainly streaming companies will continue to grow in both size and scope — but the biggest leagues continue to view streaming as a supplemental part of their media income as opposed to the entirety of the income. (This is different for big one-off events like boxing and MMA matches, where I suspect streaming will continue to dominate).
6. So what’s the risk here for CBS and ABC, it can’t all be a huge win, can it?
The risk, I’d say, is two-fold.
First, for the SEC, the league has now put all its eggs in one Disney basket.
It’s harder to grow your brand with only one broadcast partner. Because now what incentive will Fox, NBC, or CBS have to promote the SEC? None at all. That’s why the NFL, Major League Baseball, the NBA, the Big Ten, Pac 12, Big 12 and (likely the NHL in its next deal) all have multiple broadcast partners.
Second, for ABC/ESPN, this will lead to rampant charges of bias on the part of Disney/ESPN/ABC. Disney is now massively incentivized to promote the SEC; some would argue that promotion will come at the expense of other college leagues.
In a sport where perception is reality, that’s a major issue going forward.
Especially when other leagues may follow the SEC’s lead and pledge exclusive rights to individual networks. The Big Ten could end up all at Fox, the Pac 12 and Big 12 to CBS or NBC? (The ACC was already at ESPN).
But for now it’s a very merry Christmas for the SEC, which isn’t just rich, it’s richer than any college sports league has ever been in the history of the sport.
Turns out, there’s ratings gold in Southern football.
*Full disclosure: Nick Khan is my agent as well. If you want to give me lots of money, you should contact him.