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Good stuff, thanks
Vertical networks...but with the best games on broadcast (similar to the Big Ten today, but with much, much better economics for the institutions). My hope is that the SEC holds back more of the best inventory than the Big Ten did. My back of the envelope numbers are for at least $100m/annum/institution upon full distribution (several years out)...plus an above rate of inflation escalator. That's what I told Bowen that I thought the SEC could get -- and that they shouldn't settle for less. The keys will be:
1. Retaining in house rights to some very good games
2. A distribution deal with a DBS provider
3. Do the whole thing in house -- no equity partner (as the Big Ten did w/ Fox Sports)
4. Must think BIG -- take what the Big Ten and be much, much more aggressive than they ever dreamed about
For the record, the Big 12 target for A&M was $20m/annum. At $100m/institution for just the vertical integration project is at least 400% more. Then there is the broadcast rights, NCAA tourney, bowl games, hoops, championship games. To do this, the SEC will have to buy back existing 3rd tier deals...which is a complexity...but can be done.
They thought the demand nationally would be higher for the LHN? Someone would have to explain to me why they thought anyone outside of Texas and maybe some bordering states to some degree would give 2 chits about the LHN. They thought people in NY or NJ cared about watching Horn sporting events?
Did they think the Sips were the college version of the Dallas Cowboys or NY Yankees?
Happy to help.
DBS = DirecTV or DISH. Direct Broadcast Satellite. Locking up one of those 2 before going live is key to distribution. Once you're on DirecTV (or DISH), cable pretty much has to pay up. Imagine if week-in and week-out, DirecTV has live games of Florida-A&M, Alabama-Vandy, Georgia-Arkansas...cable MSO's will lose customers to DirecTV. And, not just any customers, but the high ARPU ones who have HD, movie channels, sports channels, DVR's, multiple boxes, etc. Anyway, at that point, there's a lot of pressure on Comcast, TWC, etc. to pay up. If you try to go cable first, it's a slow arduous process. Satellite first puts pressure on all cable operators at the same time because satellite's footprint covers 100% of cable service areas. And cable has the larger installed base. The Big Ten went live on DTV first. ESPN screwed up the LHN by not concluding a DBS deal.
The plan I have is that the really, really big games -- the conference championship, the Bama-LSU game, etc. -- those are on CBS or NBC or whatever (broadcast). Of the next biggest games -- Bama-Tenn, LSU-Ark, A&M-Aub -- half of those games stay in-house and are exclusively on the vertical networks (a SEC East Network and a SEC West Network)...and the other half go to CBS and ESPN. The better the inventory that you don't license to a 3rd party (such as ESPN), the better your distribution and the economics. There is some initial risk -- what if distribution is slow and some fans can't see some good games at first? -- but, with great games guaranteed, I think you'll get both wide distribution as well as high fees. In this business, that's perfection. That's what ESPN has.
I wouldn't put last year's Bama-LSU game in there. Don't need it. But, also don't want to rely on Vandy - So Miss to drive distribution (with high fees). You need "passion" games in there.
Always appreciate you breaking it down instead of talking over those of us that don't know much detail about tv
I just can't wait for it to happen. If it follows the recent trend for us, we'll knock it out of the park
When can we write "Fck you John" letters to DeLoss on $100 bills?
And somehow get the A&M-LSU Thanksgiving game on a broadcast system that puts out lots-o-cash and tells tu to stick it while they piddle KU at home.
That is all. Thanks.
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