So much has changed in just a few short years. A&M has found a new conference in the SEC, has a 20-6 record over the past two football seasons, and is about to reap monster profits from their new TV network. Recently described by Disney CEO Bob Iger as “the best cable channel launch in history”, the SEC Network will launch tomorrow with agreements from over 9 major cable providers combining for over 92 million subscribers.
Life wasn’t always this good. Just a few years ago, A&M was staring down the barrel of the Longhorn Network and the problems that it would cause. Texas already had better facilities, a stronger football tradition, and more money; way more money. Not only was their athletic department the top grossing unit in the nation, but they were about to increase that bottom line with the ground-breaking Longhorn Network. The network was announced as a 20 year $300M deal between Texas and ESPN. This news was troubling to top A&M brass. However, it wasn’t just the financial impact that had A&M worried. Rumors surfaced that Texas would be able to show high school games on their network; a move that could definitely influence a recruits decision on which school to attend.
The writing was on the wall. A&M already lagged behind Texas in recruiting, facilities, and TV revenues. The Longhorn Network was just going to widen that gap. A&M’s ‘100 year decision’ was to break free from Texas’ shadow and join the SEC, a move many media personnel considered rash and ill-advised. The general consensus was that the Aggies would get their heads bashed in by the likes of Alabama, LSU, and Florida each year. If A&M couldn’t compete in the Big 12, they didn’t stand a chance in the nation’s premier conference.
A funny thing happened though. The Aggies traded in their entire coaching staff, their starting quarterback, and a disappointing 7-6 season in their final year in the Big 12. In return they gained Coach Kevin Sumlin, Heisman winning quarterback Johnny Manziel, and a 10-2 inaugural SEC season highlighted by a win at #1 Alabama.
And just like that, everything switched.
The Aggies became the “it” program in Texas. Top recruits suddenly wanted to come to A&M instead of Texas. That 2013 recruiting class was ranked 8th nationally, while Texas pulled together just the 16th best class. This marked the first time in over a decade that the Aggies had beaten their in-state rivals in recruiting. The gap only widened in 2014 with the Aggies improving to #4 in the nation and the Longhorns unchanged at #16. The facilities received an upgrade with Kyle Field undergoing its 2 year renovation and the Bright Complex getting completely remodeled (if you haven’t yet seen the pictures click here). The Aggies now have the biggest stadium in Texas, the largest jumbo-tron in the nation, and newly renovated facilities that have recruits buzzing about playing in Aggieland.
The final piece to the puzzle involves the revenue A&M pulls in. Enter SEC Network. According to Clay Travis on Fox Sports, the SEC Network is estimated to bring in $20M per school annually. That amount is for 3rd tier rights alone. 1st tier rights, which CBS currently owns, bring in about $12M per school annually. However, this contract is currently being renegotiated due to the additions of A&M and Missouri along with the increased exposure both schools have provided.
Last year, A&M was the 2nd most watched team in the nation (only behind Alabama) and Missouri was the 8th most watched team. Both schools ranked 2nd and 6th in the SEC and accounted for nearly 20% of total viewership. Factoring in the increased exposure along with the unprecedented value of the SEC brand, Mike Slive could be renegotiating CBS’s 1st tier to the tune of $15M per school annually. Finally, ESPN owns the 2nd tier rights and has an agreement in place for $8M per school annually. For those counting, the Aggies will be looking at around $40M per year with the start of the SEC Network with that amount only increasing with the renegotiation of the CBS contract.
In comparison, the grass on 40 Acres isn’t as lush as our Longhorn friends would like the Aggies to believe. Their ground-breaking deal with ESPN in the Longhorn Network proclaimed a deal worth $15M a year. However, a closer look by Ranger222 shows that their network only pulled in just under $8M for its first year. This lower amount was on a pro-rated basis for 11 months instead of 12; however, it did not fall far from their annual projections. Furthermore, this revenue is split between the athletic department and university upon receipt. So really, the Texas athletic department only made $4M in its first year carrying the Longhorn Network; certainly a far cry from the $15M that everyone was trumpeting. On the other hand, the Aggie athletic department gets to keep all of the revenue that it receives from its respective TV contracts and is poised to take full advantage of the SEC Network.
Using these projections as well as the closer examination of the Longhorn Network, the A&M athletic department can expect to surpass the Longhorns in this final category of TV revenue.
There are a few things noted from this graph:
- A&M did not move to the SEC until 2012, which is shown using the green shading.
- In that first year in the SEC, A&M’s revenue immediately increased from $15M to $20M.
- The Big 12 reported a banner years in 2012-2014 with its conference member’s receiving $22M each. However, West Virginia and TCU only received $11M each since they were only classified as half-members. They become equal partners in 2014 which will spread that TV money to $19.8M per school.
- The Longhorn Network has been picked up by several cable providers as a package deal with the SEC Network. This increased exposure should lead to increased revenue from ESPN. It could be as low as $10M per year or as high as $15M per year.
- Even if it was $15M per year (unlikely), the SEC Network will still put A&M ahead of Texas in total TV revenue earned.
While the SEC Network is being labeled as the best cable launch ever, the Longhorn Network is largely considered the worst. ESPN gravely miscalculated the demand for the network and are locked into a bad deal that no one would dare touch. Don’t be surprised if ESPN decides not to renew when the contract expires. The Texas administration has always cared about their own benefit rather than the good of the conference. Their unwillingness to have equal TV revenue distribution drove Nebraska and Colorado away. Then Missouri and A&M left for the SEC following the announcement of the Longhorn Network. Not only did this network kill any chance of a conference wide network, but it also forced all other Big 12 members to follow the same model. The only problem was that no other school was going to get ESPN to pick up their network and the Longhorns knew that. They didn’t care.
And neither do the Aggies. Texas A&M administration made the right move at just the right time. Their move to the SEC has led to increased exposure, more money, better facilities, and better competition. These factors will only increase with the SEC Network, a true game-changer in every sense.