SEC/CBS Deal Bundles Rights for a Digital Future

By Carolyn Braff

CBS and the Southeastern Conference have extended their broadcast contract by 15 years, an unprecedented length for a collegiate deal, but more impressive than the length of the contract is its breadth. Beginning with the 2009-10 season, CBS Sports will continue to be the exclusive network broadcaster of SEC home football and regular-season basketball games, but the contract announced last week also covers digital, Internet, wireless, video-on-demand, data, and highlight rights across all CBS platforms, including the CBS College Sports Network.

“We had several scenarios for six, eight, 10 years for the contract,” explains Mike Aresco, executive VP of programming for CBS Sports. “The conference seemed to be leaning toward a longer deal, so we took that cue.”

Since 2001, when CBS took a gamble on its national college-football package, centering it on a single conference, the network benefited as the SEC climbed to the top of the national scene.

“We’ve seen our ratings really explode outside the region,” Aresco says. “We’re finding that people are so interested in the BCS standings that, when Florida or Georgia or LSU is No. 1, [viewers in other parts of the country] are watching these games.”

To better serve those fans, this new deal covers all digital rights, with plans to build on the streaming experiments done in earlier seasons by CBS College Sports.

“When you do these agreements you have to make sure your product is exclusive,” Aresco explains. “The future is cross-promotion, putting it on various platforms.”

An Early Jump Into Streaming

CBS may begin utilizing one of those platforms immediately by exercising its streaming rights a year early, putting games on CBSSports.com in a March Madness On Demand-style offering. Because streaming rights were not clarified in the previous deal, CBS experimented with pay-per-view models through CBS College’s online division last season, but the network decided that an ad-supported, free-to-view model would work best.

“We didn’t feel that the pay-per-view package was ultimately the way we wanted to go,” Aresco says. “If we’re going to do streaming, it would be ad-supported with CBS commercials or other sponsors. We’re talking to the conference about streaming games this season, but we want to see what the impact is on our affiliates.”

With the highly successful MMOD model already in place, Aresco does not fear that streaming games live would take away from the TV broadcast, especially because the national SEC football deal is a much smaller offering than March Madness. He sees an opportunity to serve an audience with a dual-screen attention span.

“We’ve seen what MMOD has done in creating its own revenue stream and not cannibalizing what we’re doing with CBS,” Aresco says. “These are national games; people are going to watch on TV where they can and watch on their computer if that’s the other alternative.”

CBS College Joins the Team

With the CBS College Sports Network still finding its footing in the cable landscape, portions of the new SEC deal were negotiated with direct benefits to the College network in mind.

“CBS College made it a more complex negotiation,” Aresco says. “With this deal, we have the ability to help brand CBS College with the SEC, which will help grow a fledgling network. They’re going to be a more important and prominent part as this deal goes on.”

Cross-promotion will certainly be in the cards for CBS College, both on the pre-game Tailgate and studio shows. CBS’ pre-game shows, as well as the games themselves, may be simulcast on CBS College, which will be able to re-air SEC games during the week.

“Those re-airs will be really valuable for them,” Aresco says. “A lot of people that miss the games will want to see them. [The network] may edit them and make them easier to watch, but it’s good product.”

CBS College will also be able to take advantage of the video-on-demand portion of the deal, as it already has the necessary relationships within the cable industry to utilize those rights. The deal covers sharing of archival rights by CBS and the SEC as well, so the conference will have access to footage from the CBS library that it couldn’t previously use, and vice versa.

The 15-year deal also encompasses rights to basketball games and Olympic sports that were not previously available to CBS College.

“The SEC has outstanding baseball and some other sports that are popular in the Southeast,” Aresco says. “This will help their Southeastern affiliates, without question.”

Working Around a Player To Be Named Later

The process of writing an inclusive 15-year broadcast agreement was complicated even more by the issue of cable rights. Although rumors of an SEC-branded channel have been swirling ever since the Big Ten unveiled its network, no decisions have been made, so CBS had to leave the conference some room to maneuver.

“Throughout this negotiation, the SEC has had a parallel negotiation trying to decide what their cable deal would be and whether they were going to start a channel,” Aresco explains.

He expects the SEC to come up with a major cable deal of some sort, either its own channel or continued syndication. By offering one game each week on the national package, CBS leaves the SEC free to choose the cable deal that works best for the conference.

The Power of Patience

Although the digital rights are effective with the 2009-10 season, the conference is realistic about the rate of return on the new technologies.

“At the SEC, they realize that a lot of it isn’t necessarily going to be monetized in the near future,” Aresco says. “But they are valuable rights because they enable you to cross-promote and bring attention to the conference, which has now become a national conference.”