Texas A&M's Addition To SEC Wouldn't Mean Much To TV Contracts
There's been much talk about the SEC's television contracts and how the addition of Texas A&M would change the conference.
If the conference is different, even by one member, the thinking goes that the SEC could re-open its television deals with CBS
and ESPN, deals that were signed in 2009 and now seem to be below market value.
But adding A&M won't mean that CBS and ESPN will automatically have to pay more than the $825 million and the $2.25 billion they respectively agreed to pay for 15 years of rights. Why? Because there's already protections in its current contract.
It's called a composition of conference clause and it says that if the composition of the conference changes, the networks and the conference has to prove whether the change makes the conference TV rights more or less valuable.
Texas A&M adds some of Texas, but it does not deliver the state of Texas like the Longhorns do. And the SEC already has a lucrative championship game.
"Adding one or two teams does not cause the entire agreement to be renegotiated," said Neal Pilson, former CBS Sports president, who now consults on television deals.
While Pilson said it's hard to argue that A&M's addition would dilute the conference, he says the Aggies have "minimal impact." "There are smart people at both ESPN and CBS and I would anticipate that they foresaw this type of contingency," Pilson said. "Based on their record over a period of time, it doesn't appear like Texas A&M is going to be in the top tier of teams in the SEC. So if there's any adjustment to the TV deals, I would anticipate that it would be a very modest adjustment, if anything."
If A&M was added as an equal partner, the TV deals would have to be bumped up by 8.3 percent in order for the SEC members to make the same money they make now off the TV deals. It's not a guarantee that will happen.
Questions? Comments? SportsBiz@cnbc.com