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Staples Details How CBS Pays So Little For SEC Package

“The current agreement has the network paying the conference $55 million annually for the league’s best games, week in and week out, totalling 15 broadcasts.”

Jack Ferris

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No matter where it is you call home, or what colors you wear on Saturdays in the fall – it’s universally understood that the SEC seems to have everything figured out.  While diehards in the midwest or along the Atlantic Coast may not freely admit it, the Southeastern Conference has top to bottom the biggest fanfare, the most sellouts, and the highest television ratings by a considerable margin.  While fans don’t shy away from citing statistics that help the case for their conference’s superiority, SEC administrators are left stewing in frustration because there’s one area in which they’re far from best; revenue.  

Andy Staples of The Athletic released an article this week breaking down the economics and history behind the CBS-SEC deal.  The current agreement has the network paying the conference $55 million annually for the league’s best games, week in and week out, totalling 15 broadcasts.  That breaks down to $3.67 million a game.  That figure might seem laughably low in 2019, and it is, but when the paperwork was signed things were much different.

With hindsight being what it is, we can now say the financial crisis of 2008 put the SEC in an uncomfortable negotiating position and CBS in the driver’s seat.  It was that summer, when countless Americans were losing their homes and jobs, that the current deal was negotiated.  On top of that, this was several years before conference networks were commonplace.  The Big Ten Network had launched the season prior, but the data at the time did not indicate that was a model that would pay off as much as it has.

Finally, CBS and the SEC had history.  As the conference was producing powerhouse programs the likes of Florida, LSU, Alabama and Auburn year in and year out fans across America were able to watch on CBS.  Vern Lundquist’s voice became associated with the SEC, and several administrators felt they had built a brand worth continuing with their current network parter.  All those factors led to the signing of a 15 year contract.  In under 5 years, it was clear CBS walked away with one of the best deals in sports.

To put things in perspective, the SEC’s thrilling championship game in which Alabama came back to defeat Georgia 35-28 in Atlanta drew 17.5 million viewers.  Several weeks later, Alabama took care of Oklahoma in the Cotton Bowl, a CFP National Semifinal, by a count of 45-35.  That game drew 16.8 million viewers.  Some quick math would show Disney paid roughly $118 million for the broadcast rights for that one game – more than double the number CBS pays for it’s annual SEC rights.

Clearly, we’re headed for a biblical bidding war come 2023 when the current deal expires between FOX and ESPN.  That is, of course, if CBS can’t reach an agreement with the SEC in the next few years.  They’re in the driver’s seat and could appease their partners in the south by torching the current deal and paying market value for their product in the next few years.  Until then, the SEC can claim their number one in ratings, number one in game attendance, and number two in television revenue.  

Sports TV News

The NFL Still Considering Multiple Offers For Sunday Ticket

The NFL has had the respective bids of Disney, Apple and Amazon for weeks now. DirecTV has not bid for the package but has stated it is willing to partner with the new rightsholder for a potential deal.

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Sunday Ticket Negotiations

DirecTV currently has the rights to Sunday Ticket. That deal expires at the end of this upcoming football season. The NFL is expected to make a boatload of cash when they decide which media organization gets the next rights to the package. The only question is… who will that be?

Alex Sherman of CNBC reports that the NFL has had the respective bids of Disney, Apple and Amazon for weeks now. DirecTV has decided not bid for the package. However, they are interested in partnering with the new rightsholder for a potential deal. DirecTV knows that Sunday Ticket is a staple in bars and restaurants and is interested in maintaining those relationships.

Outside of the bar/restaurant industry, success has been limited for the satellite provider with the football package. Fewer than two million subscribers signed up for Sunday Ticket each year which made the package a money-loser for the satellite TV provider.

According to the report, the NFL wants more than $2 billion for the rights and a stake in NFL Media, which is being packaged with Sunday Ticket. Also on the table is the NFL’s mobile rights. The league’s previous mobile agreement with Verizon has ended.

An interesting piece of the negotiations is Sunday Ticket price. According to the report, a buyer would have limited flexibility on pricing. The NFL signed contracts with CBS and Fox and within the framework of those deals, language mandates Sunday Ticket have a premium price. That’s to prevent loss of viewers from the networks that feature local market Sunday afternoon games. So essentially, the price is the price for the consumer.

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Sports TV News

F1 Renews With ESPN For U.S. Media Rights

ESPN was reportedly in a three-way bidding battle with Amazon and Comcast. According to the report, F1 told both Amazon and Comcast on Friday that they had decline to accept either one’s offer.

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F1 ESPN

The racing series F1 has decided to stick with ESPN through 2025.

ESPN was reportedly in a three-way bidding battle with Amazon and Comcast. According to the report, F1 told both Amazon and Comcast on Friday that they had decline to accept either one’s offer.

The reported value of the three-year contract is set to pay F1 $75-90M per year for the U.S. media rights. Amazon had offered to pay roughly $100M per year, with the right to sublicense to a linear broadcast network. Comcast’s offer was similar to ESPN’s in terms of value and the structure. They also wanted to put select races on it’s streaming service, Peacock.

Netflix was in on the negotiations, as well. The makers of Drive to Survive, the streaming series that many credit with the sport’s explosion in popularity in recent years, wasn’t close on on their financial offer. Also, it seems F1 executives were not ready to put all of its races on a streaming service just yet.

Currently, F1 receives $5M per year for ESPN to broadcast it’s races. ESPN has grabbed about 1.0 million viewers per race. That makes F1 a more than viable option for the network to invest into again. ESPN will be able to put a small number of races on its ESPN+ streaming service exclusively. The vast majority being on ABC or ESPN.

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Skip Bayless Says He And Stephen A. Smith ‘Sorted Out’ Their Disagreement

“Brothers fight. We have fought before. I’m assuming we will fight again.”

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Skip Bayless

Stephen A. Smith and Skip Bayless were locked in a war of words last week following the First Take host’s appearance on JJ Redick’s Old Man and the Three podcast.

The origins of their partnership were discussed and Bayless admitted he did not like the way Smith characterized the state of First Take before he arrived on set. Smith insisted that Bayless simply misunderstood what he meant by saying that he was told the show needed him.

Over the weekend, Skip Bayless says he and Stephen A. Smith got together at the Bayless home in California to talk things out in private.

“He was in LA, he came over, we sat by the pool,” he said on the latest episode of The Skip Bayless Show. “It wasn’t the easiest conversation for a while, but we slowly but surely sorted it out. We got through it, and we have been through so much together.”

Bayless reiterated that he considers Smith a brother. They love each other. That doesn’t mean they are always going to remember events the same way or see eye-to-eye all the time.

“Brothers fight. We have fought before. I’m assuming we will fight again.”

Fighting doesn’t mean the relationship is fractured. In fact, Skip Bayless was adamant that he remains closer to Smith than he is to most people in his life.

“I don’t trust easily because of the way I was raised, but I do trust Stephen Anthony Smith. Trust him with my life. Always have and always will. I trust he will always be there for me, and you better believe I will always be there for him.”

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