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The SEC’s New Market Power and Heightened TV Leverage

Updated: Oct 18, 2022

Even before the news came down that the University of Texas and the University of Oklahoma were leaving the Big 12 to head to the SEC, the SEC was already universally recognized as the premier conference in college athletics. While the other conferences have great collections of athletic programs, the SEC’s slogan stating “It Just Means More” reflects the reality of the landscape of college athletics. In a report from USA Today listing the top revenue generating athletic departments, 9 of the top 17 and 10 of the top 20 were SEC members. This influx of revenue allows these schools to invest heavily into their programs, which strengthens the chances of success on the field. Moreover, adding Texas (#1 on the USA Today report) and Oklahoma (#8) only widens the gap even more.

A big reason why the SEC schools generate so much revenue is due to the media rights contracts the league is able to secure. Currently, CBS possesses the rights to SEC football games. The deal might’ve seemed fair when it was struck in 1996, but now has grown to be a tremendous bargain for CBS. Evidence for this comes in the fact that the SEC currently rakes in approximately $55 million per year until the deal expires in 2023.

Beginning in 2024, ESPN and ABC will have the rights to 15 football games throughout the season along with 8 basketball contests. In the deal, the SEC is expected to receive around $300 million annually (This could increase with Texas/OU addition), nearly a 445% increase. This figure would blow away any of the other conferences by a long shot. Why does the SEC stand to have such an upper hand in television revenue? The answer may seem a lot simpler than what people make it out to be.

In thinking about this issue, we need to focus on where the sources of revenue come from each party involved. In acquiring the media rights for games, networks make their money from selling advertisements to companies. Companies decide to invest in advertising because they believe many potential customers are watching these ads, which generates more sales. So in simple terms, it’s all about getting the most eyeballs on the product as possible. In today’s generation with all of the sources and forms of entertainment, people are watching less live television than ever before.

In an era of recordings, Netflix, Hulu, etc., sports are one of the few things people watch as it's happening in today’s environment. So, what drives people to watch a particular sporting event, especially college sports, more than any other factor? Matchups.

In the current state of college athletics, there are many games that don’t draw people in because they’re not that interesting. Whether it’s a non-conference matchup between a power program and a mid-major or a conference game between bottom feeders, outside of the fans of those particular teams, people aren’t tuning in. The evidence shows that viewers want matchups featuring two big brands pitted against each other.

In the last two seasons, the most watched college football games in each of them reportedly featured the most popular brands in college sports. Alabama, Notre Dame, Clemson, Ohio State, Georgia, and LSU appear up and down the list. The large majority were top 10 matchups with high postseason significance. In picturing an SEC that includes Texas and Oklahoma, the potential matchups we could see on a weekly basis figure to be amazing. In the other conferences, there are only one or two popular brands that generate a lot of interest from networks or providers. In the Big Ten, it’s Ohio State and Michigan. In the ACC, it’s Clemson and Florida State. In the Pac 12, it’s USC. Quite frankly, the networks are willing to invest in the entirety of those conferences just to get those brands.

In taking the two bell cows out of the Big 12, the SEC stands to have a surplus of big brands which will supply matchups that will lead to high viewership. Any combination of Alabama-Texas, Oklahoma-LSU, Texas-Texas A&M, Oklahoma-Georgia to go along with the already popular matchups like Auburn-Alabama, Florida-Georgia, etc. would trump almost any matchup another league could offer with possibly the exception of Ohio State-Michigan. This is the upper hand the SEC has and will continue to have if the other conferences don’t act fast. People were blown away when they saw the SEC’s new deal with ESPN/ABC, but when you break it down to its roots, the deal makes perfect sense because that’s where many eyeballs will go on Saturdays in the Fall.

Unless the other conferences find a way to expand or somehow pull Notre Dame out of independence to join their league, the SEC will likely continue to make more revenue which will produce more success on the field/court/pitch. All due respect to certain schools in the Big Ten, Pac 12, ACC, and what’s left of the Big 12, the games don’t draw anywhere near the national attention that SEC matchups do, especially in football. It will be interesting to see where things go from here, but it’s looking very profitable for the conference that claims, “It Just Means More.”

You can find Brendan on Twitter @_bbell5

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