Expanded SEC could match NCAA intake in revenue
A 16-team Southeastern Conference that includes Texas and Oklahoma would be such a financial powerhouse that its revenue quickly would become equivalent to the NCAA’s, a USA TODAY Sports analysis of conference and association financial records shows.
The figures and timing would depend on the speed at which various developments occur, beginning with when the schools depart the Big 12 after taking the initial step Monday of notifying the conference that they will not be renewing their grants of media rights following expiration in 2025 and then applying to the SEC for membership on Tuesday. There also are questions related to TV entities’ reaction to the expected moves and the College Football Playoff’s proposed expansion to 12 teams.
However, based on the documents and interviews with industry experts familiar with the finances and revenue capabilities of Power Five conference schools, a path can be drawn to a 16team SEC with Texas and Oklahoma having close to $1.3 billion in revenue for its 2024-25 fiscal year. That’s likely where the NCAA will be, assuming it remains on schedule for the payout from its multimedia and marketing rights agreement with CBS and Turner for the Division I men’s basketball tournament to increase to $990 million in what would be the first year of an extension made in March 2016.
Yes, Texas’ and Oklahoma’s grant of media rights to the Big 12 runs through 2024-25, but if the schools and the SEC want to get together, it seems likely that will happen sooner. Similarly, while the CFP’s current set of agreements for a four-team event run through the 202526 season, the management committee already is formally discussing the expansion to 12. Based on those assumptions, here’s how the SEC reaches NCAA-level revenue.
NCAA
The association’s most recent audited financial statement showed it had $1.12 billion in revenue for the 2018-19 fiscal year, which was before the pandemic. Of that amount, $867.5 million was attributed to TV and marketing rights fees, nearly all of which come from the CBS/Turner agreement. The notes to the statement say that the NCAA is scheduled to get $990 million from the CBS/Turner deal in 2024-25.
If the association’s other revenue sources – a combined $251 million before the pandemic – grow at a rate of 3% annually, that would give the NCAA about $1.28 billion in revenue for 202425. (While inflation is currently running at around 5%, it was at 3% or less for nearly all of the previous decade, according to the U.S. Bureau of Labor Statistics.) This figure could be impacted by changes in ticket revenue from championships, investment income and other sources.
SEC
Setting the most recently available baseline: The conference’s federal tax records for its 2019-20 fiscal year – which may use a slightly different accounting procedure than an audited financial statement – show that the conference had $497 million in revenue from what it called “TV/radio rights fees” out of $729 million in total revenue.
Where Saturday afternoon football
TV revenue is heading: The SEC announced in December that, beginning with the 2024-25 season, ESPN/ABC will be taking over the Saturday afternoon football TV package that CBS currently holds. ESPN/ABC will pay the SEC “in the low $300 million range” annually, according to Sports Business Journal, a significant increase on the $55 million the league makes per year from its contract with CBS. So, without Texas and Oklahoma, the SEC already is headed toward an incremental revenue increase of about $245 million in 202425. That would put its total revenue at $974 million.
Where other TV revenue is heading: Based on the conference’s reported $497 million TV/radio for 2019-20 and the $55 million attributed to the CBS football package, there was $442 million in other TV/radio revenue. If that amount increases by 3% annually, it becomes $512 million in 2024-25. That’s an incremental increase of $70 million and puts the SEC at $1.044 billion.
Where non-TV revenue is heading: The NCAA reported $231 million in revenue not related to TV/radio in 2019-20. Again using a 3% annual growth rate, that would give the SEC an incremental increase in this revenue of about $37 million – and that figure likely is low because of the pandemic. That puts the SEC at $1.081 billion.
The impact of an expanded CFP: In June, USA TODAY Sports reported that an expansion from four teams to 12 could increase the average annual value of the event from about $600 million to more than $2 billion, according to a projection provided by Navigate, a firm specializing in college and professional sports rights valuations. For the 2019-20 season, , the Power Five conferences each received base amounts of about $67 million, according to figures on the CFP’s website. A conservative view would have the Power Five conferences’ base amounts increasing by a multiple of 2.5, assuming there are still five leagues, putting the payout at about $167 million and putting the SEC at $1.181 billion.
The impact of adding Texas and Oklahoma: Recapping the amounts mentioned earlier, a projection of the SEC’s overall TV/radio revenue for 2024-25 without adding any schools is around $812 million. That’s based on the $300 million from ESPN/ABC for Saturday afternoon football and $512 million for the rest of its TV/radio revenue. At $812 million, that would mean the SEC and its partners seeing these deals being worth $58 million per school. If the respective values of Texas and Oklahoma are negotiated by the SEC and its partners as adding just slightly above average value – say $60 million apiece – it would add $120 million. That puts the conference’s total at $1.301 billion.