Monday, February 06, 2012

Timing of the ACC TV deal

The ACC expanded for two reasons: stability and money. Short-term stability is ensured as the dominoes fell and all the logical dance partners moved spots. A looming 16 team SEC or 16 team Big Ten could happen, but not for at least five more years. The money related to a new TV deal is a little more complicated. According to the Sports Business Journal, the ACC is only likely to get an additional $1-2 millions for the new teams. Considering that the ACC expanded to trigger an opening in their TV deal, a small bump seems dissappointing. There are multiple factors in this, but timing is the biggest one.

When the ACC signed its current deal, the SEC had the biggest TV contract. The ACC willingly took a smaller deal in exchange for a deeper partnership with ESPN. The ACC also forgoed the Big Ten's path of creating its own TV network. The only real alternative for the ACC was Fox. Fox provided a good deal but all things being equal ESPN made more sense from a financial and marketing relationship. What no one predicted is that the ACC deal would become antiquated less than a year after it was signed. First Texas got its own TV network from ESPN (the same company that talked the SEC and ACC out of TV networks). Then the PAC 10 expanded, got their own TV network and a blockbuster deal from ESPN and Fox. Most of those moves were defensive as ESPN and Fox didn't want NBC/Comcast encroaching on their territory of college sports. Since they were watching their peer conferences get rich, it was only natural for the ACC to ask for more. Expansion was a trigger, so the ACC expanded. But ESPN doesn't seem to have any more blank checks.

Since the PAC 12 deal, NBC has been less aggressive in acquiring college content. The NFL has also announced they will be showing games on Thursday night all season, which devalues ESPN's college football timeslots. Mix in the continued economic uncertainty and suddenly it looks like the ACC missed out again on a big pay day.

The ACC deal allows ESPN the opportunity to match any offers. So I assume this initial increase is an effort to placate and scare the ACC. I don't know how Swofford and company will play their hand, but I think they have to ask for more or reopen the contract. While it may seem like the ACC is operating from a position of weakness, bold moves (like the ones made by Big Ten, Pac 10 and Texas) have been rewarded in these deals. The ACC might be "down" but they still have some assets that won't change like Big TV markets, really popular national teams in football and basketball and the ability to play in timeslots that other conferences might not due to timezone issues or unwillingness to play on weekday nights. If ESPN or the other networks don't budge, start your own TV network. It has worked for the Big Ten and would finally make the conference truly stable and independent.


EL MIZ said...

i'm confused as to why they wouldn't start their own network. how else are they going to get leverage if the market is down (NBC not offering, fox apparently not either)?

ACC football is what it is -- barring florida state or miami returning to prominence, or clemson actually putting together all the top 10 recruiting classes and being a factor on the national stage, the ACC will be a second-rate league compared to the SEC (bama, LSU, florida, auburn, georgia, etc), the PAC-12 (USC, oregon, stanford), and the Big "12" (texas, oklahoma, ok state, and soon west virginia). the ACC just doesn't have the heavyweights to compete right now.

ACC basketball, however, especially adding in pitt and syracuse, is going to be insane. some really great home atmospheres, top prospects every yr at the big 4 (duke, NC, cuse, pitt), plus the prospect of losing the duke/NC games should be enough of a carrot to get a few million more out of ESPN.

how about splitting the two just as a negotiating tact, and shopping the ACC basketball to fox or TNT (which has NBA on tues/thurs). there has gotta be ways to get more money out of ESPN. if we are poaching conferences and ruining classic big east hoops, we might as well get more than an extra $1-2 million per year, right?

Scott said...

The ACC has to overcome three big problems to make reopening the contract viable, and idon't think we have the leverage to do it.

1) how many networks can legitimately compete with ABC/ESPN/Disney on the total package of dollars, national reach, time slots, and number of channels in the basic and preferred cable/DBS packages in most households. Using ESPN as your exclusive distribution and marketing partner has advantages to the conference's prestige and relevance.

2) The one advantage of ESPN owning all rights to both the ACC and SEC is that ESPN won't allow piaching between the two ... But that changes if we sign CBS or NBC, meaning FSU and Clemson would be in play. Staying with ESPN is free insurance against poaching, and possibly motivation to grab ND.

3) are media markets are much worse than everyone realizes. The big culprit is having 4 teams in a small state like north Carolina .... By comparison the PAC 12 has 4 teams to own California. And the big 12 has 4 to own most of Texas. Think about that, nearly 1/3 of our conference devoted to a very small state that prefers basketball. and we're second fiddle in Georgia, south Carolina and penn ... And arguably Florida. That's tough