Tuesday, May 18, 2010

great news for the acc

I'm referring, of course, to the ACC's TV deal with ESPN that hit the waves yesterday. In a world where it suddenly matters how much money each conference is paying its members, the important number is this: $13 million, per year, per team.

That's a hell of a lot more money than we were getting before. Over twice as much. The ACC brass must be doing cartwheels and raising a glass to Fox, whose presence turned the negotiations into an auction and cranked the price up about $40 million a year more than people expected. In a perfect world, business deals like this should stay in the boardroom and we fans should just worry about who's going to start at quarterback in the fall, but this kind of thing has a big say in the look of the landscape, so it's left to us to try and make sense of it with a set of imperfect facts.

BC Interruption beat me to the punch with a lot of things I was thinking about this whole deal. The major thing is that it makes the ACC a lot more pilfer-proof than it was before. When the dust settles on this round of TV contract renegotiations, the ACC will have the third-best setup of the major conferences, behind the Big Ten and SEC but probably ahead of the Pac-10, Big 12, and Big East. Unless those conferences come up with something revolutionary, that's the way it'll be; such is the value of ACC basketball. I keep ganking their stuff, but BCI brings up the point of shelf space: that is, there are X games to be played in a weekend and only so many time slots and channels on ESPN, so they're not likely to be as big a player in the bidding for the Big 12 and Pac-10. I agree where the Big 12 is concerned, but the Pac-10 has entirely different timeslots available because of the time difference; it's conceivable that Fox and ESPN will get after it again on the West Coast. They still won't be paying as much, though, because 10 PM games are a lousy way to get ratings in the Eastern Time Zone where everyone lives, and Pac-10 basketball is worth a fraction of the ACC's style.

Now. People forget a lot of common sense facts when discussing the idea of conference expansion, and one is that conference revenue sharing is only a portion of athletic department revenue. Another is that cash for cash's sake is not the goal; the cash is merely a means to make your athletics more competitive. Yes, there's more money to be made in the Big Ten and the SEC; but all the schools in those conferences are getting that money, and you can't be competitive on the national scene if you can't be competitive in your conference. I've already discussed how I think UVA athletics would be nuked into permanent armageddon in the Big Ten; the same is true for a school like, say, Clemson, which is being bandied about as a potential SEC expansion target. Here's a breakdown of every I-A school's athletic department revenue; the numbers are from 2008, but usable.

Take Clemson, which brings in about $60 million. Now that the ACC will hand out $13 million from its TV deal, a jump to the SEC would only bring in about $4 million extra since the SEC's current deal is worth about $17 million per school. The ACC is a conference where just about any school has a shot at the championship in football; could Clemson say that if they were competing with Florida, LSU, and Alabama every year? Could Maryland say that if they were competing with Michigan and Ohio State?

The SEC isn't as much of a danger to expand as everyone thinks it is, anyway. That TV deal is capped out. Unlike the Big Ten, which can increase its Big Ten Network revenue by expanding into new markets, the SEC is stuck at a particular number. Any new teams in the conference only cut into the number that can be handed out, so the SEC, if it's set on expansion, has got to find schools that aren't just new mouths to feed. Clemson and Georgia Tech would be mouths to feed. SEC commissioner Mike Slive is making noises about expanding, but I think what they'll end up doing if they expand is waiting to see if the Big Ten burns the Big East to the ground and then pick up the scraps (West Virginia, Louisville) by offering terrible deals that they can't refuse because they no longer have a conference. Or they'll try and entice Texas, which has actual honest-to-god value. The southern ACC teams would be way down on the list.

And the northern ACC teams, thanks to this new deal, would be way down on the Big Ten's list. The Big Ten knows it can get teams like Rutgers and Missouri to agree to uneven revenue sharing for a while. An entrance fee, if you will. Now that Maryland, UVA, and Boston College will be getting a good deal from ESPN, they don't need to take the Big Ten's guff about a smaller share than the old Midwestern boys. That smaller share probably wouldn't be any better than what they get in the ACC anyway. If there were ACC teams on the Big Ten's list, they just got crossed off.

That should make the Big East nervous. When it comes time to renegotiate that deal, ESPN will chuck a few nickels at the Big East and tell 'em to take it like a man. That conference's football has almost no value at all compared to the rest. There are now three conferences with great TV deals surrounding them. Any conference serious about expansion is probably serious about expanding at the expense of the Big East, and the brunt of the pain is going to fall on any team that's left out of the feeding frenzy. Think South Florida, which in the event of Big East disintegration is probably headed back to Conference USA. You think the SEC is going to take them on when it could have West Virginia and Louisville?

Ultimately, the new TV deal is one of the best survival tools the ACC now has. It didn't need to draw level with the SEC and Big Ten, it just needed to close the gap, and it did that. You don't need to be faster than the bear, you just need to be faster than the other guy. The new deal changes the calculus from wondering which ACC schools might be expansion targets to wondering which schools might be ACC expansion targets.

1 comment:

Brian said...

Thanks for the links. Like you said, I think the TV deal was much better than we had hoped.