ESPN to use AT&T U-verse deal to demand expanded basic slot for SEC network

AT&T (NYSE: T) agreed to carry a new college sports network that ESPN and the Southeastern Conference will launch in August 2014 on its U-verse TV systems, setting the stage for a distribution battle with Comcast (Nasdaq: CMCSA), Cox, Charter Communications (Nasdaq: CHTR) and other distributors with systems in states with SEC schools.

Source: ESPN

ESPN executives said Thursday that they will push distributors for expanded basic carriage near SEC schools, including those in Florida, Georgia, Louisiana, Mississippi, Kentucky, Tennessee and Alabama. "We will target the widest distribution possible in the 11-state SEC footprint--so carried on a similar level of service as ESPN," SVP Justin Connolly said at a press conference Thursday afternoon, according to a transcript provided by ESPN.

Connolly, a former affiliate sales exec for ESPN who will run the network from an office in Charlotte, N.C., said ESPN would allow affiliates outside SEC markets to put the network on sports tiers "comparable to where ESPNU is today."

Signing AT&T as the first affiliate could give ESPN and the SEC leverage, as U-verse TV is in 4.8 million homes after picking up 232,000 subscribers in the first quarter. The National Football League used a similar strategy when it added regular season games to NFL Network, with AT&T using its distribution deal in subscriber acquisition campaigns targeting football fans.

"It's still very early days in terms of our discussions with distributors. I will say that having the fastest-growing distributor on board 16 months in advance of launch certainly provides us a whole lot of optimism when it comes to having those conversations," Connolly said.

The SEC network follows the 2008 launch of Big 10 Network and last summer's debut of Pac-12 Network, which both waged public battles with cable and satellite providers. DirecTV (Nasdaq: DTV) still doesn't carry Pac-12 Network.

ESPN and SEC officials said the network will focus on multiplatform programming options, similar to Pac-12's strategy of offering subscribers the ability to watch live programming on tablets and smartphones. SEC content will also be available on gaming consoles such as Microsoft's (Nasdaq: MSFT) Xbox.

The SEC network will focus on top college football and basketball games, including matchups featuring Kentucky basketball games and Alabama football games. ESPN said the network will also feature track and field, tennis and softball.

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