ESPN will launch an ACC digital network next month (ACC Network Plus) and a 24-hour linear channel in August '19 (ACC Network), according to sources. Modeled on the SEC's digital offering that ESPN launched two years ago, ACC Network Plus will be fully owned by ESPN and available to authenticated subscribers through WatchESPN and the ESPN app. ACC games that appear on ESPN3 will move to ACC Network Plus. When it launches in August, the digital channel will carry at least 600 events from Olympic sports per year, with individual schools producing an undetermined number of the events. When the linear channel launches in '19, it will carry at least 400 events, including 40 football and 150 men’s and women’s basketball games each year. ESPN has not decided where the channel will be based, although both ESPNU and SEC Network operate out of Charlotte (Ourand & Smith, Staff Writers). ESPN.com's Brett McMurphy cited sources as saying that the ACC and ESPN also have "agreed to a 20-year deal and rights extension" through the '35-36 academic year. A source said that the ACC also "extended its conference grant of rights deal nine years" through '35-36. The conference's grant of rights makes it "untenable financially for a school to leave, guaranteeing in the 20 years of the deal that a school's media rights, including revenue, for all home games would remain with the ACC regardless of the school's affiliation." A source said that the new grant of rights also "automatically extends Notre Dame's contract with the conference as a member in all sports but football" through '35-36. If Notre Dame forgoes football independence in the next 20 years, they are "contracted to join the ACC." A conference spokesperson said that ACC Commissioner John Swofford "would provide an update Thursday on the ACC Network at the ACC's Football Kickoff in Charlotte" (ESPN.com, 7/18).
BRINGING HOME THE BACON? What the channel will mean for the conference’s media revenue remains to be seen, but there will be an immediate impact. The ACC had a clause in its ESPN deal that provided for a raise if ESPN could not commit to a channel by August. Absent a channel, ESPN would have owed the ACC a reported $45M a year on top of the current rights fee, or about $3M more per school. While the conference is forsaking that boost, the long-term revenue benefits from a digital network and a linear channel are expected to far exceed those numbers. The Big Ten Network provided about $8M per school in FY '15, while the SEC Net paid around $7.5M per school in its inaugural campaign. The ACC Net is expected to be structured similarly to the SEC Net (which goes until the '33-34 academic year), meaning ESPN will own it and share profits 50-50 with the conference. Distribution deals accounted for close to 95% of the revenue for the SEC Net in its first year (Ourand & Smith).
JOINING THE MOVEMENT: In Virginia, David Teel noted Swofford has "shepherded this project since the conference added Syracuse, Pittsburgh and Notre Dame, expanding membership to 15 schools and broadening the league’s geographic reach to nearly half the U.S. population." The ACC will become the fourth of the Power Five with a linear cable channel, joining the Big Ten, SEC and Pac-12. Windfalls from those nets "have separated the Big Ten and SEC from their peers financially, and administrators at ACC schools have made clear the need for additional television revenue." Conference officials "have been plotting this rollout for weeks" (DAILYPRESS.com, 7/18). In Raleigh, Luke DeCock noted some in the TV industry "have questioned the viability of another college sports network in the current television climate, but ACC administrators and coaches have pushed hard for a network for not only financial but competitive reasons" (NEWSOBSERVER.com, 7/18). In Tallahassee, Safid Deen noted ESPN "encouraged member schools to improve their video production capabilities pending an announcement." Florida State has spent $3M in "renovations and upgraded Seminole Productions, located inside Doak Campbell Stadium on campus" (TALLAHASSEE.com, 7/18).
DIGITAL DETAILS: Sources said the ACC's syndicated over-the-air packages will continue until '19, when they will move to the linear channel launches. Fox’ RSN package will remain through '19. The ACC currently has a digital network that is run by Charlotte-based Raycom and White Sox-owned Silver Chalice, but ESPN will take over those digital rights next month. Raycom also previously had the rights to sell ACC corporate sponsorships. The loss of those rights leaves considerable questions about the future of Raycom, which has relied heavily on its ACC relationship. ESPN will sell the sponsorships and pay the start-up costs for the channels (Ourand & Smith). RE/CODE's Peter Kafka wrote it will be "interesting to see what exactly goes into the new ACC channel." It "won’t be the league’s most popular stuff" (RECODE.net, 7/18).
TWITTER REAX: FoxSports.com's Clay Travis: "By 2019 ESPN will have lost another 10 million subscribers. Doubt they ever launch ACC Network as channel. ... Three years is a lifetime in media right now. Fact they're waiting until 2019 for ACC Network tells me they hope to just keep it OTT." SI's Stewart Mandel: "More so than the other leagues, the ACC Network's true value is in hoops. What if ESPN can put 15 Duke games a year on there? ... That's going to get you on basic cable a lot quicker than 3 FSU or Clemson football games." SB Nation's Mark Ennis: "So in the last round of realignment Swofford got the ultimate basketball league, a grant of rights through 2036, Notre Dame, and a Network."
