Both Mike Slive and Disney CEO Bob Iger hailed the SEC Network as the best and most successful cable TV launch in history. It was available to more than 90 million households at launch, and it doesn't come cheap.
The deal with the SEC and ESPN is unique among conference networks, though, because the league reportedly doesn't own any equity. The Pac-12 fully owns its networks, while the Big Ten splits ownership with Fox Sports. As a matter of business, that arrangement limits the upside to the conference—it can only get from it what it can negotiate from ESPN—but it limits the downside as well. If things go sour for conference networks in the future, the SEC won't be holding the bag.
And speaking of going sour...
I can't help but wonder if the SEC Network is the new No Strings Attached. NSYNC's second album dropped on March 21, 2000, and it became the fastest selling album of all time. In its first week alone, it sold 2.4 million copies. It was the absolute peak of the CD era, but by the time it came out, Napster had already been operating for almost a year. Sales of albums has been dropping ever since, to the point that only two albums outsold No Strings Attached's first week in all of 2014.
The SECN may have smashed records, but traditional pay TV's killer is already out there and has been for much longer than a year. Mobile devices like smartphones and tablets have passed up TV as the favorite source of entertainment for children. Some parents now, as a punishment, take away the devices and make their kids watch TV instead. Like NSYNC, Mike Slive has set a record that will never be touched again.
No one knows how exactly the future of visual media will turn out. It's not that TV networks are so much competing with each other, though they are, but they're competing with non-consumption. They're competing with not-TV for the attention of people, and billions of dollars are at stake.
One entity that doesn't have to figure out that future is the SEC. It doesn't own any of its network, so it can just sit back and cash checks while the Big Ten and especially the Pac-12 have to figure out what to do with theirs. Maybe ESPN, as the largest incumbent sports network in pay TV, will use its considerable resources to build its online offerings into something that can weather the coming storms. Even if it can, though, it likely won't be as profitable as the old cable and satellite system. The trend with traditional media moving to the Internet is that it's always less lucrative. Newspapers made more in the dead tree era, record labels make more in the CD era, and movie studios made more in the DVD era.
If traditional pay TV collapses in the future, the SEC won't be stuck with expensive studios and broadcast equipment to liquidate and contracts with talent to buy out. Its institutions will have to deal with a loss of revenue, but so will everyone else, and the conference won't have to worry about writing off the considerable losses that winding down a TV network would mean. I'm sure that Greg Sankey is a good person to be running an athletic conference, but I don't see anything in his background that suggests he's the person to figure out the future of broadcasting where to date all others have failed.
We're still in the early stages of all of this, so everything is up in the air. We might look back in 10 years and see that the Pac-12's complete ownership of its networks allowed it to be nimble and innovative, while the SEC's marriage to the old guard of ESPN held it back. For now, though, the SEC's decision not to own its network is aging well. The rewards of the deal are plentiful so far, and it doesn't have to directly deal with a lot of the risk.