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November 7, 2011

Grading Slive on Expansion

With the SEC's addition of Missouri, I go back and forth on what I think of Slive's handiwork. My strong preference initially was for Virginia Tech to join as the league's 14th member. Geographically, I felt that made more sense. However, the Missouri addition does have merit in terms of football and men's basketball. More importantly, it made sense from a financial standpoint.

Slive has added the following TV markets (by national rank*):
    #5 Dallas/Ft. Worth
    #10 Houston
    #21 St. Louis
    #31 Kansas City
    #37 San Antonio
Said differently...the SEC added 31 million more potential viewers in the states of Texas and Missouri...or almost 10 percent of the US population.

From a TV standpoint, it should be a win. The rumored move from eight conference games across 12 teams to 9 games across 14 teams means a 31% increase in quality SEC conference games for the league's TV partners.

The additional TV sets should mean a massive renegotiation for the SEC and it's TV friends. How much more?

The SEC's current TV deal pays the league $200 million per team. The Pac 12 deal pays $250 million per year to its members. It's not an apples to apples comparison as schools like UGA and UF have side deals for multimedia rights that pay millions per year above and beyond the TV deal. However, the Pac 12 deal is a good starting point for looking at financial opportunity for the SEC in expansion.

With the increase in game inventory and TV sets, it's not unreasonable to think the SEC can get to $300 million per year (a 29% spike in revenues).

With equal revenue sharing, the SEC's deal needs to at least jump from $200 million to $233.3 million just to break even given that we're going from splitting the pie 12 ways to 14 ways.

All of this distrupution wouldn't have made sense if all we were going to do was tread water financially. Slive needs to come back with something in the neighborhood of a 30% bump in TV revenue per school to have made this worth the effort.

So...how do we grade Slive? We'll have to see the new TV deal before we pass judgement.

PWD


TV Info Source: StationIndex.com

6 comments:

FisheriesDawg said...

Missouri does almost nothing for me, but in the end I reckon they're worth picking up Texas A&M. I also preferred Virginia Tech. I would have rather had West Virginia than Mizzou as well, but I understand why the presidents wouldn't want another Mississippi State (academically speaking).

If we go to 9 conference games, it is most certainly worth it.

Anonymous said...

Well, it seems we're sticking with 8 conference games, and for UGA in particular, that really sucks. We only get to see Bama and LSU in Athens every 12 years under that arrangement. We already have arguably the worst home schedule in the SEC due to the Cocktail Party and in conjunction with McGarity's preference for weak OOC games, it's only going to get worse. Look at this year's schedule and next year's is god awful too. This expansion is horrendous in terms of quality games UGA season ticket holders get to watch in Sanford Stadium. Thanks Greg.

Anonymous said...

They have to go to 9 conference games. If they don't, everyone will be cycling 6 cross-division teams through 1 slot in the schedule (we currently cycle 5 through 2 slots). That means we would play each of the 6 teams in a home & home every 12 years (we currently play a home & home with those teams every 5 years).

Anonymous said...

I've already sent a letter to McGarrity on this. Anyone not wanting NMSU and Coastal Carolina need to make themselves heard constantly. The only alternative, if it's 8 conference games and not 9, is to get out of Jacksonville. One thing is sure, based on where this is heading the need for those "extra 2 season's tickets" is almost nil. Take next year's schedule for example:
Buffalo $10.00 tickets easily found if patient(I gave away 6 to NMSU and Coastal Carolina because nobody wanted them).
Florida Atlantic $10.00 Ditto
Vandy - That's a premium ticket $20 apiece.
Tennessee - You might sell these for $60 provided Tenn isn't 2-2(Very possible)when they come to town.

OLE Miss - Another premium for $20 apiece
Ga. Southern $15 to some Geo southern Tix holder.
Tech By this time Tech is done and we sell our extras for $40. The way I count it I get$175 max for that season ticket that cost me $200(GEEF donation) + $280 = $480

I think I take my chances on scalping for any tickets above my 4. So much for the 8 I have now.
Aladawg

Jordan said...

I do not understand the over reliance on media markets for justification for expansion. If the heads of conferences are using that as a barometer for the success of current and future expansion I think they'll fail (perhaps horribly). The idea that bringing in Missouri and Texas A&M gives you the above media markets is absurd. What you get by bringing in those schools is their fans and alum tuning in to watch SEC events moreso than in the pass. You're not bringing in the St. Louis media market or the San Antonio media market. How many Missouri fans / A&M fans do you think live there? There's fans of all schools across the region living in those cities. They'll be watching their team, their team's rivals, and whichever other games (most likely conference games) that interests them. Just because there's an alumni base located in the city, does not mean you're bringing in that specific media market.

With that said, do you think the SEC didn't have pull in those media markets before? The SEC has been one of the most watched football conferences whole having Atlanta, Birmingham, and New Orleans as their only "media markets" for some time now. These cities aren't why the SEC is getting high ratings - its the product put onto the field. People in Seattle tune in to watch SEC games because of the product, not because the University of Washington plays in the league. I think the target of expansion should have been to continue to bring a similar schools (ie. Clemson, VT, FSU, etc.) to strength the product regardless of what media markets they bring.

I understand the concept of, hey, UofM is in Missouri, so now we get all their media markets! But I think that logic is absurd. As I said before, people tuned in to watch the product (a great product with a unique cultural identity) not because some random school within the state is in said conference.

Paul Westerdawg said...

Jordan - Texas, Baylor, TTU, TCU, SMU, and Rice fans all hate TAMU to varying degrees. They'll watch TAMU and hope to see them lose.

No different than GT fans watching UGA games to see us lose.

 
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