The Atlantic Coast Conference will have to generate about $20 million more a year just to have revenue to its existing members stay the same if Miami and Virginia Tech join the league.
Conference officials believe they can meet that number.
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| Swofford |
"One principle we've maintained in this process is that we want to keep our current members whole from a financial standpoint," said ACC Commissioner John Swofford. "That is achievable particularly over the long haul. There may be some transitional years. ... But we felt that staying at nine schools and maintaining our relative financial place and influence would be riskier than going to 10, 11 or 12 [schools]."
On the revenue side, the ACC last year generated $98.1 million, according to the league's Form 990 tax filing. Almost $88 million of that revenue was split among its nine members for an average conference distribution of $9.7 million per member.
For existing schools to continue receiving similar dollars, the league will need to increase its total distribution by more than $19 million, since revenue would be split 11 ways instead of nine.
The ACC's revenue increases will have to come largely from increases in its television contracts until the NCAA changes its rule on the number of teams a league needs to play a football championship. Current rules say a league needs 12 teams to play a football championship. That game would increase league revenue by another $7 million to $10 million, according to various estimates.
Last year the ACC generated $28 million in television rights fees from basketball and $21.1 million from football, according to tax filings.
The consensus among industry sources is that the ACC's football television contract will be more valuable with football powerhouse Miami and Virginia Tech in the mix. Conversely, sources speculated that the league's basketball contract could end up being worth less than its current agreement, since Miami and Virginia Tech have not been known for their strength on the basketball court.
"There's a potential of having less attractive games," said one source. "It depends on how they handle the scheduling. For example, if you don't have two Duke-Maryland games every year and instead you have one Duke-Maryland game and a Duke-Virginia Tech game, that could have a negative impact. There is value in having those teams play twice."
Swofford said the conference is not likely to split into divisions for basketball and will also likely adopt a policy in which certain schools will always play each other twice a year.
"From a business standpoint, obviously there needs to be some sensitivity to marquee games," Swofford said. "We want to be fair and equitable, but at the same time need to keep an eye on maintaining the terrific value that ACC basketball has had in the marketplace. So that will be a bit of a challenge."
Maintaining current revenue distribution to existing members was key, but equally if not more important was the question of how expansion would position the league for the future, conference officials said.
Last Wednesday's decision to extend official invitations to Miami and Virginia Tech is an effort to make the already solid basketball conference a more solid football conference, which in turn will mean more power and influence for the conference when the current Bowl Championship Series contract expires in 2006 and the future of college football's postseason is re-examined, Swofford said.
"The guiding principle throughout this process has been placing the ACC in a favorable position for the future," said Wake Forest Athletic Director Ron Wellman. "Sometimes [conference] movement is necessary to maintain that strength."
Wellman said the conference's decision to expand was not made for an expected financial windfall. For Miami and Virginia Tech, however, moving to the ACC will mean financial gain.
Sure, Miami and Tech will have to pay an exit fee of $1 million or $2 million depending on when they leave the Big East, and they will have to pay a to-be-determined entrance fee to join the ACC, but in the long run, the schools will be on more solid financial ground.
Last year Virginia Tech received only $3.9 million from Big East Conference distribution. The league distributed $55.4 million to its 14 members. Miami's numbers were unavailable because it is a private school.
