Sidearm’s pitch well-received Help for athletes to manage stipends ‘Prototypical AD for the 21st century’ For Jackson, D.C. visit never gets old IMG-Learfield venture adds 3 schools Pac-12 schools get help with analytics Learfield courts minority talent Beavers ticket model targets new alums USOC hire to help with college system NCAA tabs agency for Final Four events
SBJ/February 6-12, 2012/Colleges
ACC expansion will pay off in new TV deal
$1M to $2M increase annually per school
Published February 6, 2012, Page 1
WANT MORE GREAT STORIES LIKE THIS?
CLICK ON ONE OF THESE BUTTONS
ACC expansion will mean at least $1 million to $2 million a year in additional revenue for each of the conference’s existing schools, according to sources privy to discussions between the league and ESPN.
The addition of Pittsburgh and Syracuse, which will increase the number of teams in the ACC to 14, allowed the league to reopen its current 12-year, $1.86 billion media rights deal with ESPN. Those terms provide each of the 12 existing schools with an average of $13 million a year over the life of the deal.
That would help the ACC close a fairly significant annual revenue gap with other major conferences. The Pac-12 and Big Ten each are distributing close to $21 million per school a year. The SEC’s deal provides $17 million per school, and the Big 12’s schools
|Recent TV deals created a gap between the ACC and other conferences, a driving force in the addition of Syracuse (top) and Pittsburgh.
That has made it imperative for the ACC to re-negotiate its deal with ESPN, even though it just went into effect this academic year. It also was a driving force in the league’s decision to grow by two schools.
Neither the ACC nor ESPN would comment on the talks, but industry sources said that in exchange for the financial increases, the ACC likely will give ESPN three more years on the contract, which would take the deal out to 2026.
The ACC’s current 12-year contract with ESPN started with the 2011-12 academic year and was negotiated in 2010.
These new contract talks between the ACC and ESPN come at a time when the dynamic college media rights landscape is heating up again. This fall, both the Bowl Championship Series and the Big East will be taking their rights to market in hopes of big increases over their old deals.
Both are currently in contracts with ESPN, but the specter of competition from Fox and NBC Universal has college properties confident that these huge rights fee increases will continue.
The SEC, which also expanded with Texas A&M and Missouri, is in a similar position as the ACC, with the ability to go back to the negotiating table with ESPN and CBS. Those two contracts combined currently pay the SEC $205 million annually.
The ACC, which did its original ESPN deal in 2010, was one of the unfortunate conferences that signed off on a long-term contract before the Pac-12 scored the mother lode. The Pac-12’s $250 million-a-year deal with ESPN and Fox last year totally re-set the market.
That put the ACC in a position of needing to expand, or else its schools would have to live with sub-standard revenue numbers that would have put them behind schools in other conferences.
By expanding, the ACC triggered a clause in the TV contract that allowed the ACC and ESPN to go back to the table to negotiate new terms. Those talks have been ongoing since Pitt and Syracuse were added.
Any new terms, however, will not kick in for the ACC until the two schools begin competing in their new conference. That date remains uncertain.
Big East Commissioner John Marinatto has said the league will enforce its bylaws, which prevent departing schools from leaving for three years. In that scenario, Pitt and Syracuse wouldn’t join the ACC until 2014-15, which is when the new TV deal and the financial increases would kick in.
ACC Commissioner John Swofford said his conference will let Syracuse, Pittsburgh and the Big East work out the schools' exit.
If the ACC is able to push the per-school average to more than $14 million, that would take the annual value of the deal from its current $155 million for 12 schools to more than $200 million for 14 schools.
That’s a much more competitive position financially for the ACC.
The ACC’s ability to re-open its contract is the result of a standard “composition clause” in its contract with ESPN that most conferences have. It states that new terms can be negotiated if membership increases or decreases by at least two schools.
The agreement does not permit the ACC to take its rights to the open market. If the ACC and ESPN didn’t reach a deal, both sides could go to an arbitrator for resolution.
The ACC behind the scenes is using IMG's Barry Frank and Wasserman Media Group for consultation and analysis.
|College television deals through the years|
|CONFERENCE||TERMS||CONTRACT YEARS||NETWORK(S)||DEAL SIGNED|
|BIG TEN||$1 billion/10 years||2007-08 through 2016-17||ESPN/ABC||June 2006|
|NA*/6 years||2011-12 through 2016-17||CBS||June 2011|
|$2.8 billion/25 years||2007-08 through 2031-32||Big Ten Network||August 2006|
|Notes: With the addition last year of former Big 12 member Nebraska, there are 12 schools in the Big Ten. The Big Ten Network debuted in 2007. The conference and News Corp. jointly own the network and share expenses.|
|BIG EAST||$200 million/6 years||2007-08 through 2012-13||ESPN/ABC||August 2006|
|Note: Pitt and Syracuse will be moving to the ACC, and West Virginia is leaving to join the Big 12. In response, the Big East will add Houston, Southern Methodist, Central Florida, Boise State, San Diego State and Navy.|
|SEC||$2.25 billion/15 years||2009-10 through 2023-24||ESPN/ABC||August 2008|
|$825 million/15 years||2009-10 through 2023-24||CBS College Sports||August 2008|
|Note: Texas A&M and Missouri will join the conference later this year, giving it 14 members.|
|ACC||$1.86 billion/12 years||2011-12 through 2022-23||ESPN/ABC, ACC Network/Raycom||May 2010|
|Note: Pitt and Syracuse will join the ACC, giving it 14 members.|
|BIG 12||$1.17 billion/13 years||2012-13 through 2024-25||Fox||March 2011|
|$480 million/8 years||2008-09 through 2015-16||ESPN/ABC||April 2007|
|$78 million/4 years||2008-09 through 2011-12||FSN||April 2007|
|Note: Last year the conference lost Nebraska and Colorado, reducing it to 10 members, and this year it will lose Texas A&M and Missouri to the SEC. In response, it has added West Virginia and Texas Christian, keeping it at 10 members.|
|PAC-12||$3 billion/12 years||2011-12 through 2022-23||ESPN and Fox||May 2011|
|Note: Former Big 12 member Colorado and former Mountain West member Utah became the 11th and 12th members of the conference last year.|
NA: Not available
* Before an extension in 2011 as a result of the addition of Nebraska, the original deal signed in June 2006 was $200 million over 10 years, from 2006-07 through 2015-16.
Sources: Conference Form 990s filed with the IRS; conference officials