Chuck Williams: Cable networks, ESPN know we're willing to pay for SEC Network

July 14, 2014 

The Southeastern College football games have not started, but Royce Ard knows the high-stakes game that is being played as the SEC Network prepares to launch.

Ard spent 13 years with Knology before it was sold to WOW two years ago. He was vice president of sales and marketing for Knology and was named the industry's 2012 Independent Marketer of the Year. He's out of the cable business right now, but he has an insider's perspective of what is happening as ESPN negotiates with the various cable networks across the nation and in the 11-state SEC footprint.

As ESPN prepares to launch the much-anticipated college sports network in a month, deals with cable providers are not in place. Auburn-Arkansas kick off at 4 p.m. Aug. 30 and the SEC Network is broadcasting it.

If Ard were a betting man, he suspects the cable television subscribers in the Columbus area will have that game on their TVs.

"Historically, these things kind of take care of themselves," Ard said.

But Ard also knows where the advantage in these talks rests.

"The programmers always have the leverage," he said.

And the leverage in this deal is the best conference in college athletics. The flagship sport in that conference is football.

And what's at stake is money - and lots of it.

According to a Fox Sports online report last week, the SEC Network was seeking $1.30 a month per subscriber in the 11 SEC states which has about 28 million cable and satellite subscribers.

The Fox article assumes that the SEC Network gets half of those and the cable companies only pay $1.10 per subscriber. That's $184.8 million a year in subscriber fees in SEC territory, according to Fox.

Then you got the rest of the nation where ESPN could pick up .25 cents per subscriber, per month. That could generate an additional $108 million a year.

And that is before you start counting ad sales.

This is big, big money.

"The one thing that I haven't seen mentioned in all this is that some of the companies are likely saying, 'We don't want to offer this to all of our subscribers, we want to put it on a tier,'" Ard said. "What ESPN is saying is, 'Absolutely not. We want all of that revenue.'"

If ESPN gets $1.30, which is the high end of the deal, it will likely cost each subscriber an additional $2 per month. And the cable companies will do their best to pass that cost onto the customers, Ard said.

"You should have a higher bill, but there is going to be a lot of pressure on the cable companies to keep the bill down," Ard said.

Ard knows SEC fans are anxious about knowing if their cable provider will have the network. His advice, relax the next few weeks and enjoy baseball season, and let this thing play out.

"As a consumer, the longer the cable companies hold out on ESPN, the better for you," Ard said. "These types of negotiations will typically involve not only the new channel, but all of the ESPN channels -- which are some of the most expensive channels in your lineup."

Ard suspects the negotiations for the SEC Network also include a new long-term deal on all of the ESPN networks.

"So these negotiations will affect your cable bill for many years to come," he said.

Great -- just great.

But like many of those in this part of the country, I'm willing to pay for it.

And everyone in this deal knows that,

Chuck Williams, senior reporter, chwilliams@ledger-enquirer.com

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