Another hectic travel day for me but that doesn’t mean no reading material. I’ve held off from commenting so far on the SEC Network deal because there is so much detail and I didn’t feel like anyone was explaining it fully. Clay Travis wrote an excellent piece on the subject that’s easy to read and makes it crystal clear. MSU and OM are both benefitting greatly from the last deal to the tune of approximately $25 million a year. It’s easy to see the push that money has given the athletic departments. The new deal goes until 2034 and all we can do is guess about the money it will generate at maturity but Travis predicts it could almost triple. Seeing the changes with $25 million a year makes it staggering to think about what we’ll see at $70 million. I suggest reading the whole story by clicking on the highlighted text.
As part of this new deal, I think ESPN has guaranteed the SEC a substantial payment as a floor before the revenue share kicks in on the network. What would that guarantee be? I’m certain it’s more than what any other conference is presently receiving for its television rights. My guess is that the guarantee is around $350 million. So bottom line, I believe that each SEC team is now guaranteed around $25 million a year from ESPN. I believe that the 50/50 split would kick in once we get above that guarantee on the SEC Network in the years to come. If you hit $3 a month on the subscriber fee in the SEC footprint over the next decade, then we’re talking about a billion dollars plus another $333 million in ad sales. That’s $1.333 billion a year in revenue. Take off the $350 million guarantee and the SEC and ESPN would be splitting right at 1 billion. That’s $500 million for each. So we’re talking about $850 million being split among 14 teams in the SEC, that’s nearly $61 million a year per team just from ESPN. As I said earlier, the CBS package will hit the market in 2023/24 and be worth another $250 million a year at least. That would be another ten million for each team. That’s $70 million or more in television money per team in a decade or so. Bottom line? The SEC is poised to make it rain in college athletics.