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Blog Entry

Can the SEC renegotiate its TV contract or not?

Posted on: July 20, 2011 12:23 pm
Edited on: July 20, 2011 12:39 pm
 
Posted by Jerry Hinnen

The SEC's feeling pretty good about itself these days, and you don't even need to see the league's impressively unsubtle media guide cover (or equally to-the-point Media Days T-shirt) to know it. When you're in the middle of a streak of five-straight national titles, distributing record amounts of revenue to your member schools, watching your most prominent critic scramble in the wake of the Ohio State scandal, and just generally becoming more and more college football's resident 500-pound gorilla, a little bit of chest-puffing is going to come naturally.

In fact (assuming the continuing NCAA investigation into Cam Newton's eligibilty doesn't gain any more traction), there's really only one black lining to the SEC's giant silver cloud: its television contracts.

Yes, the same contracts primarily responsible for all that record-breaking revenue. The money they're generating today isn't a problem; it's the money they'll generate in the year 2023 that might be, when the 15-year deals the SEC signed with CBS and ESPN in 2009 will still be in effect.

As the even-more-lucrative deal signed by the Pac-12 this year illustrates -- a deal that still allows Larry Scott's league the right to start its own network, an option the ESPN-locked SEC doesn't have -- by the time 2015 or 2016 rolls around, the SEC will be being paid far less than market value for its product ... to say nothing of the start of the next decade. That the Big Ten's and Pac-12's conference networks promise to produce exponentially increasing revenue during the life of the SEC's (finanically static) contract must make the situation even more uncomfortable for Mike Slive.

Which is why he addressed the topic head-on in yesterday's chat with the Associated Press, promising that his conference would not be simply twiddling its televised thumbs for 13 more years (emphasis added):
"Obviously when we did our deal we set the pace, and in our contract we have a concept called look-ins," Slive said. "At periodic points during the life of the contract, we can sit down with ESPN and take a look-in and look at the status of television, technology, all aspects of television, and at that point make adjustments that the parties agree are appropriate to make sure that everything that we intended to achieve with the contracts would in fact be available to us."
Are we wrong in thinking this is Slive's veiled attempt at asserting that, yes, they will be asking ESPN for more money? That once that "status of television" has changed, the "look-in" will give him the opportunity to renegotiate the deal?

We don't think so. And if that's Slive's intent, it could make for some very interesting discussion at these "look-ins." Because when asked to comment on the SEC's contract in June, ESPN official Burke Magnus didn't sound particularly open to altering the basic terms of the contract (emphasis added):
"We knew when we made a 15-year deal that time was not going to stand still so we purposely built in these look-ins," Magnus said. "They don't reopen the deal. There's no outs. It's an opportunity for both of us to really take stock of where we are and see what we could be doing better."
There's a lot of wiggle room in both of these statements, of course, even before we account for the possible game-changer that would be SEC expansion. Slive could simply be referring to digital distribution or kickoff times on ESPN2 or any of a dozen other things. Magnus could simply be indicating that the SEC won't be jumping to another network, not ruling out his network giving the SEC a raise. But the plainest reading, we think, is that Slive is going to want some fundamental monetary change to the contract ... and that ESPN may dig in its heels against "reopening the deal."

As SEC Media Days begins today, Slive will have plenty to celebrate. But until he secures the same financial footing for his league that the Big Ten and Pac-12 enjoy -- not just today, but for the future -- he'll still have one major question hanging over his tenure. Here's to hoping SEC Media Days gives us something approximating an answer to it.


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