Tuesday, August 16, 2011

SEC Expansion: The New World of College Sports

The SEC is the equivalent of the Super Bowl, the World Series and the NBA Finals all rolled into one conference in college sports.

In the “Big Four” sports -- football, men's basketball, women's basketball and baseball – the SEC has won half of the national titles since 2005-2006: five in football, three in baseball, two in men's basketball and two in women's basketball. Six SEC schools won those 12 titles – no other conference won more than three in those four sports combined over the past six years.1

The SEC has also won national championships in the last six years in women’s gymnastics (five), men’s indoor track & field (three), women’s indoor track & field (one), women’s outdoor track & field (one), men’s swimming and diving (three), women’s swimming and diving (three), men’s tennis (two), women’s tennis (one), women’s bowling (one), rifle (one), and equestrian (all six-not yet official NCAA). Only softball and women’s volleyball titles have eluded the SEC.2

So, why would the SEC consider expansion when it is already the supreme conference in sports achievement? The SEC did not fire the first shot in recent conference paradigm shifts.

The Pac-12 strove for revenue supremacy with its 2010 conference expansion, TV contract deals and talk of a Super 16 conference. The Big Ten followed with its own conference expansion and TV deals for conference championship games. The Big 12 received help from ESPN and Fox to sweeten its revenue deals and save its conference.3 The Big East is also expanding and with TCU grabs a larger market share in advance of its upcoming TV contract negotiations – and already leads in basketball revenue. Larry Scott, the Pac-12 Commissioner, and Jim Delany, the Big Ten Commissioner, continue to hint at further expansion. Scott has even talked of expanding the Pac-12’s market to the Pacific Rim/Asian markets.

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The SEC cannot remain in expansion isolationism

-- standing on its current strength --

and not expect continued encroachment by other conferences

on the monetary value of its sports.

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SEC revenue from TV contracts has already been moved into third place behind the Pac-12 and Big Ten, even though SEC teams are six of the top ten schools in Division 1 FBS attendance. In men’s basketball, the SEC is third in income even though it is one of only three conferences to generate more than $10 million in revenue per school. Only two of the top ten revenue generating athletic departments are SEC schools.4,5,6,7,8

Faced with a disadvantage in revenue, the SEC must take action to bring parity to the TV contracts. SEC Commissioner Mike Slive has suggested using the conference’s “look-ins” to ensure the contracts live up to expectations.9  One avenue to fuel renegotiation is by expanding to 14 schools or even 16 schools to increase market share and take advantage of built-in “expansion” payout incentives.10  But what guidelines would Slive follow to choose new schools to bring into the SEC? In his own words:

  1. Academics;11
  2. Geography;12
  3. Market Share;13 and
  4. Technology.14

Following up on the initial recommendations presented by Slive, the NCAA just this week increased the APR (academic progress rate) to 930 from the previous cutoffs of 900/925; failure to maintain will be an automatic bowl/tourney ban in football and basketball.15 Based on academic and geographical proximity to the current SEC, Big 12 and ACC teams are the most likely candidates to receive an offer from Slive.

The nearest proximity ACC and Big 12 schools that would NOT meet academic requirements:

  • Florida State, Georgia Tech, North Carolina State, Oklahoma State.16

In TV market share, the SEC currently ranks last in Top-10 national TV markets, fourth in Top-20 and sixth in Top-30. The Leather Helmet Blog has an excellent, in-depth article on SEC expansion and grabbing a bigger TV market share.

Big 12 and ACC schools academically acceptable and best bets to bolster market share are:

  • Duke, Texas A&M, Miami, Missouri, Oklahoma, Virginia Tech. (NC State football APR would have to be improve).

Current SEC games are broadcast by ESPN, CBS, Comcast/Charter Sports Southeast (CSS) (merged with NBC in January 2011) and Fox Sports Network (FSN).17 However, the SEC owns the copyright to any game broadcast. This gives it the ability to allow other networks to rebroadcast previously televised games, and games can be streamed directly to computers and hand-held devices (SEC had the second largest iPhone sports app, only behind ESPN). It also allows fans in other countries to watch games.18

NBC in the recent past had almost no presence in college football or basketball. Since the CSS merger, speculation is that NBC/CSS may develop the Versus channel as an ESPN competitor.19,20 CSS had already been rebroadcasting SEC games the day following the original broadcast. An expanded SEC would offer more games available for original broadcasts. Also consider that ESPNU became an extremely profitable channel as a direct result of SEC broadcasts. NBC/CSS could choose to lay out a big investment with the SEC, knowing it has already shown itself a proven commodity in increasing the strength of sports networks.

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"We were the major catalyst for ESPNU moving from 23 million homes to 73 million homes in one year.” – Mike Slive

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In addition to football and basketball, there is greater viewership interest in SEC baseball, softball and gymnastics thanks to recent high profile games and championship repeats – events just waiting to be broadcast by an aggressive sports outlet. More sporting events equals more revenue.

Most Big 12 and ACC schools have the sports facilities and technological skills necessary to seamlessly merge into the SEC’s broadcasting structure (and most smaller conference schools do not). Most definitely the SEC will at a minimum add pairs of schools, taking one from the West and one from the East so as to negate any shifting within the existing SEC divisions in football.

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The most likely candidates for expansion:

Texas A&M - Duke

Missouri - Virginia Tech

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Other possibilities are Clemson and Miami from the ACC, and Baylor and Oklahoma from the Big 12. But those schools are not as attractive based on consideration of all the factors. Also, Texas A&M and Missouri would theoretically not “overburden” the already ultra-competitive SEC West.

Side benefits of any schools accepting an expansion invitation to the SEC would include equitable revenue distribution, increased share of revenue distributions from the NCAA (nationally $433 million in 2009-2010)21, more revenue to allocate to capital improvements such as expanding stadiums and other sports facilities, more revenue to offset any decrease in state funding, and more revenue to support underfunded sports programs.

While the expansion process is complicated, it is not necessarily injurious to other conferences. The Big 12 can easily add smaller conference teams to maintain its 10 school conference, or expand. The ACC can raid the Big East to offset any attrition in its conference – since basketball is more the priority anyway. The Big East can easily add smaller conference teams to offset any schools lost to the ACC – since basketball is the sport that matters. The smaller conferences won’t suffer because they’re largely supported by the NCAA, and any teams that move up to larger conferences will do so with increased revenue and TV exposure.

If the SEC expands to 16 teams, it will be ahead of any other conference in revenue for many years to come. If it expands to 14 teams, observers should expect more movement within the next ten years.

Welcome to the bigger, better SEC world.

On Twitter @LivingCrimson

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