The Devil's Advocate: Why SEC Expansion Can Work

So by now you've seen the rumors circulating the interwebs. They started out at Orangebloods.com with the breaking news of the Pac-10 going on the aggressive by deciding to offer six Big Twelve schools an invitation. Then, this rumor was confirmed by Colorado AD Mike Bohn as he talked somewhat candidly about the possibility of a Pac-10 invitation. Essentially the Pac-10 is doing what your's truly suggested last month, going on the offensive to stop the Big Ten from playing the role of "decider."

The Big XII has the rumors swirling and the Pac-10 has all the heat in this battle as they currently hold the keys to a 16 team mega-conference. However, as is always the case, the SEC will not, nay, cannot be outdone. Thus how the great Mike Slive would approach expansion has already been speculated upon. GT, Miami, Florida State, Clemson and now Louisville are the probable targets for the conference that -gasp- plays the best football in all of the land.

A few weeks ago I talked about the fixed nature of the SEC's megabillion dollar contract and why it would slow Slive in his race to keep pace with an expanding Big Ten. Well, let's play the other side now. The SEC goes to match the Pac-10 and/or the Big Ten instead of standing pat. The league reaches out to any four of the rumored schools to add to their mix in order to reach that magic number of 16.

Georgia Tech, Miami, Florida State and Clemson c'mon down, you are now members of the Southeastern Conference!

Now what?

How do the league's teams maintain their $17 million payout with the addition of four schools that are already well within their regional footprint?

Read more to figure out how the SEC can make this work...

First and foremost they'll have to restructure the contract because as it stands now just adding teams would reduce the payouts from $17 million to $12.75 million per team and that just won't do. Especially for schools like Ole Miss and Mississippi State that aren't living the Alabama, Georgia, Florida good life.

So what does the league look at when they're trying to add $68 million to their current $204 million payout to at least maintain the $17 million dollar figure?

Inventory and quality of the games. None of the four; GT, FSU, Miami and Clemson are worth $17 million dollars in added revenue on their own. Only Texas and Notre Dame are expansion candidates currently capable of carrying that number on their own in "added value" to a league.

What this means is the foursome must work in concert with the SEC's current twelve members to somehow lift the conference profile up, yet another $68 million. Unlike the Big Ten network that makes cash off of subscribers' fees the SEC is an ESPN/CBS deal that bases the root of its cash flow on the projected ability to charge for advertising.

As it currently stands the league's games or "inventory" sits at 144 regular season contests in football. In "real time" advertising that is roughly 504 hours of live football each season (3.5 hours per football game). Adding 48 more games by bringing 4 teams into the league adds roughly 168 more hours of live television to the mix. Bringing the grand total of ad time from 504 hours to approximately 672 hours of live programming.

The total live programming is the first thing Slive and Co. can bring to the table when it comes to renegotiating the SEC's tv contract post-expansion. More tv time = more ads to sell = a higher total revenue to be made. Simply put; if you have more inventory to sell you can make more money.*

Increasing inventory is the simple method by which they'll start bargaining, however the most interesting aspect of the possible SEC expansion is the quality of the inventory. While FSU, GT, Clemson and Miami don't stand alone as high dollar, major tv audience grabbing entities the way Texas, Notre Dame or even a USC might they do stand to "add" to the SEC.

Each of these ACC teams is currently saddled with non-tv draws such as BC, Maryland, Wake Forest, UNC, Duke, NC State and Virginia on their schedules on a yearly basis. This season alone these four teams boast twenty games against these non-traditional football draws. 20 of their 48 games or 42% of their schedules is bogged down with not-so-great football.

Entering the SEC would immediately bolster the quality of this inventory; removing BC, Maryland, Wake, Duke, UNC, NC State and UVA and replacing them with the current SEC slate is an instant upgrade. The possibility of games against Florida, Tennessee, Georgia, South Carolina, Auburn, Bama, LSU and Arkansas as replacements boosts the television draw.

Not only does this make Georgia Tech, Clemson, Florida State and Miami more valuable a commodity it also creates a position where ESPN can flood their primetime and midday regional lineups with more quality match ups AFTER CBS takes their first pick of the midday game. More quality match ups = a higher asking price for advertising = more revenue generated.

This means ESPNU and ESPN3 will be showing more Vanderbilt, Kentucky, Mississippi State and ACC games while the SEC can put the major powers, new and old, on ABC, ESPN and ESPN2; more attractive options to advertising buyers. In short, moving Vanderbilt-Kentucky to ESPNU to show "new inventory" such as Clemson-Tennessee or Georgia Tech-Alabama creates an environment where ESPN has more reason to increase their premium ad-rates.

So while Slive will have to do his due diligence in deciding to pursue expansion it does seem to be plausible for the SEC to bolster their revenue package. The question is does the increase in inventory and improvement in quality of inventory truly warrant a $68 million per year in additional revenue. If that answer is no then we'll likely see the SEC stand pat BUT if that answer is yes, then ACC look out as the SEC stands to gain power by raiding the ACC.

*before you economist all start in with supply and demand, I get how that works but this isn't widgets we're selling and advertising for primetime ads during football season don't go down just because there's more SEC football*