What’s another $15 million a year?

Not exactly chump change:

How much will the network cost me to get?

According to Sports Business Journal, carriers in the 11-state SEC footprint are expected to pay $1.30 per month per subscription. In non-SEC states, the license fee would be only 25 cents, according to SBJ.

How much is the network going to be worth to each school?

It’s hard to count that high.

Based on the rate within SEC states alone, if you multiply $1.30 times 12 months times the estimated 30 million subscribers in that footprint, you get $468 million. That would be $33.4 million per school — per year. And that’s without counting advertising revenue or subscribers from non-SEC states. Factor that in, and the SEC Network could easily be worth $500 million per year or $35.7 million per school once full distribution is achieved.

Easily.  And what’s that going to mean for the fan?  Ask Joe Alleva.

Currently, each SEC school gets about $20 million per year in TV revenue, so it’s easy to see what a huge impact the network will have on SEC bottom lines. LSU Athletic Director Joe Alleva has said he hopes revenue from the SEC Network will reduce or at least postpone the need for raising ticket prices.

Well, we can always hope.  But I think that’s about as likely as a hope that beer sales will reduce or at least postpone the need for raising ticket prices.

At least they’ll be able to afford to fund that tenth football coaching position now.  So there’s that.

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20 Comments

Filed under It's Just Bidness, SEC Football

20 responses to “What’s another $15 million a year?

  1. Beer Money

    Once again, it costs everybody more money each year for a consistently diminished experience.

  2. The other Doug

    What happens if the cable tv goes the way of the phone company or radio station?

    • James

      I used to think like this, and after watching what these providers have been able to pull off on the net neutrality front, I have a feeling de-bundling is much further away than people think. I can think of a lot of money that doesn’t want it to happen, and I’m not sure who’s putting in the couple billion in lobby fees to counter that.

        • James

          I agree with the conclusions but the basic assumptions are way wrong. This:

          “But now consider what would actually happen to prices. The cost of maintaining the wires to your house and keeping the lights on at the cable company wouldn’t go down, even as you order fewer channels. After all, it costs just as much for the cable company to deliver four channels as it does 189. There is good reason to expect your cable company to raise your basic service charge to cover those expenses, offsetting part of your per-channel savings.”

          …is totally out of touch with how monopolies set prices.

      • The other Doug

        I agree that it isn’t going to happen tomorrow or maybe not ever, but I’m a little worried about what the school presidents will do when $30 million of easy money just evaporates.

      • The other Doug

        As for unbundling, I doubt that is what brings an end to cable tv. I think it will be an exodus to another technology. One of the only things that is keeping the current system in place is the sports though. Kind of makes you wonder how far the ESPN and the cable companies will go to keep the status quo.

  3. Go Dawgs!

    See, Joe, if the schools get more TV money AND raise ticket prices then they’ll have even MORE money! And once they figure out that simple equation, ticket prices will continue to go up until they find the magic price point where people stop buying.

  4. Lamont Sanford

    “It will cost the provider $1.30 per subscriber.” The providers will no doubt pass that low price on to us for a $19.99 monthly fee.

    I didn’t see DirecTV on this list either. Any word on whether you can purchase and watch online–outside of the cable companies?

    • Sanford222view

      Not likely. ESPN is currently about three times that per subscriber to the providers. Most likely it will be in your current Digital package or Sports Tier if your provider offers one.

      • 69Dawg

        I’ve got Comcast and I live in Florida. They don’t include the B1G or the PAC-12 in even the top of the line regular service. You must buy the Sports Package to get them. I fully expect the SEC Network will be in there too. This will mean paying an additional $20+ per month for it. Kind of hard to swallow if you are on a fixed income.

        DirecTV does include the B1G in the regular preferred package, so there’s one who does.

        • Sanford222view

          Comcast doesn’t include PAC 12 or B1G in a normal package because you live in Florida most likely. If you’ve got a Sports Tier where you are it will most likely be in that package although it will cost Comcast more per subscriber to position it there so they may not choose to do so in an SEC market.

    • Notice how it says “state footprint”. That’s why Missouri. And that’s why Tech, Clemson, FSU, aren’t going to be considered if we expand again.

      • Macallanlover

        Good point, most likely expansion area is North Carolina or Virginia. Both have large populations and schools that would fit, imo.

  5. PTC DAWG

    Go ahead, don’t show the Troy game on anything but the SEC Network, see if I GAS.

  6. Big Shock

    Isn’t this guy forgetting the expense side of the equation. I’m sure every school is going to make a lot of money, but I don’t see it being anywhere near what he says. You’ve got to pay announcers and Tebow and John Parker Wilson and cameramen and buy cameras, etc. That said, I hope we get SEC TV in Montana. If not, they’ll probably let me watch it online for $19.99/mo.

  7. So with all of that TV revenue, ticket prices can be held in check for the foreseeable future, right? What a relief!

  8. PatinDC

    I am still confused. Won’t there still be games on “regular” TV? CBS and ESPN? How do those of us outside the deep south know if we can get the pkg? Is it only on ATT and Dish Network everywhere? Looking for Verizon here.

  9. mp

    Isn’t the incremental revenue greater than the $15mm in the title of the post? Of the existing $20mm, you could see some reduction (but certainly not erasing it) from the ESPN contract as your new partner on the SEC network, but CBS money should still be there. Forget the new coaches, maybe they will be able to fund the extra ref!