With Comcast, DirecTV, Charter deals elusive, Disney's SEC Network a major test for regional sports

With just over four weeks until the Aug. 14 launch of its new regional sports channel, and six weeks away from the first highly anticipated Southeastern Conference football games Aug. 30, Disney has a long way to go before it has ubiquitous carriage of the SEC Network.

On Wednesday, Disney confirmed a flurry of carriage deals with independent pay TV operators, including LUS Fiber, Wilkes Telephone and PCT Communications. It also secured carriage for the ESPN-backed network via a broader licensing renewal deal with the National Telco Television Consortium.

These agreements come after an announcement one week prior that the new network, dedicated to coverage of SEC collegiate sports--including the sport the SEC is most known for, college football--would be carried by Cox Communications.

The SEC Network has booked about 25 million subscribers, with previously announced deals with Dish Network (NASDAQ: DISH), AT&T U-verse (NYSE: T) and Google Fiber (NASDAQ: GOOG) also in place. However, the regional sports platform has many more yards to go, with deals still outstanding for mega-operators Comcast (NASDAQ: CMCSA), DirecTV (NASDAQ: DTV) and Charter Communications (NASDAQ: CHTR).

According to Sports Business Daily, Disney is seeking carriage fees averaging out to around $1.33 per subscriber in the 11 Southern states the SEC is focused in, with regions outside of that footprint paying around 25 cents per subscriber.

"Four weeks is a long time in the distribution world, especially when a network of this scope is launching," noted Justin Connolly, the ESPN executive heading the SEC Network, speaking earlier this week at Southeastern Conference Media Days, a weeklong session focused on the conference's upcoming football season.

"We continue conversations," he added. "It's one of those [situations] where you really don't say it's done or they're on board until the contracts are signed. … When they sign a deal like Cox or Dish Network or AT&T U-Verse (did), we'll obviously let people know. But until that moment, we don't have a deal in place. I'd say we're confident about the conversations, and our confidence is really based on the demand that is out there among SEC fans."

Analysts have noted the toned-down rhetoric with which DirecTV has approached the negotiations--contrasting, say, talks with Time Warner Cable (NYSE: TWC) in Los Angeles earlier this year over SportsNet LA, during which the satellite carrier publicly called TWC's fee demands for the new channel "irrational."

The SEC Network poses a key litmus test in terms of the U.S. pay TV system's ability to handle more regional sports networks. DirecTV, for example, has not only passed on licensing Time Warner Cable's Dodgers-focused SportsNet LA in Los Angeles, but also Pac-12 Network. And the Comcast-backed CSN Houston, home of the NBA's Rockets and Major League Baseball's Astros, had to declare bankruptcy due to its lack of carriage.

Of course, anybody familiar with the rabid nature of SEC fandom, particularly as it relates to college football, knows that the SEC Network caters to an entirely more motivated subscriber base than, say, the West Coast-oriented Pac-12 Network. Further, the channel is backed by the content leverage of The Walt Disney Company.

Bottom line: If the SEC Network can't get full carriage, no other regional sports channel can likely do so either, at this point. 

For more:
- read this Atlanta Journal-Constitution story
- read this Kansas City Star story
- read this Multichannel News story

Related links:
Report: DirecTV won't shun the SEC Network
Dish offers to distribute carriage-starved CSN Houston a la carte
Report: TWC-DirecTV deal for Dodgers channel needs Comcast to happen