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Apr
28
2013

So why did ESPN agree to a new TV deal and a likely conference network with the ACC?

coplesPlenty has been written the last few days about the ACC and their new GOR deal.  The reasons for the ACC doing this are obvious… to provide and prove the stability conference.

Without ESPN though, I don’t believe a GOR is possible. As we’ve said, before the ACC schools all committed to a long term agreement, they had to have some assurances from ESPN for an increase in their television revenue and some positive feedback on an ACC Network.

Reportedly the increase will bring the ACC”s per-team average from $17.1 Million to in excess of $20 Million.

What really hasn’t been discussed is what did ESPN see in the ACC that said to them let’s invest in the Atlantic Coast Conference? Here’s my take on this…

First and the biggest reason ESPN was willing work with the ACC was they were tired of renegotiating TV contracts. There were multiple quote to this effect…

In an interview with the Democrat, Florida State president Eric Barron said the new pact was necessary to proceed with long-term re-negotiations with ESPN. He said the network executives were growing “tired of conference realignment because they’re being asked to pay more for what they already own. Every year, they’re being asked to renegotiate their contracts.”

and from CBS Sportsline a quote from ESPN executive Burk Magnus. 

The commissioners, fans, media, everyone — even ESPN — is tired of conference realignment.

“The best evidence I can posit to you now,” said Burke Magnus, senior vice president, college sports programming, “is that it has done nothing but cost us money.” 

Depending on TV rights levels, ESPN has deals with every major conference. Consider the aggravation for ESPN had realignment occurred  The Big 10 takes Virginia and Georgia Tech. The SEC gets NC State and Virginia Tech, and the BIg 12 ends up Clemson and Florida State. UNC and Duke end up somewhere. The Pac 12 gets nervous and adds a couple of more teams. That 5 deals that would need to be re-done if realignment armageddon had happened. Still though the ACC had to provide some value to ESPN.

Clemson AD Dan Radakovich had this to say to the Orange and White.

“Over the last few months, the ACC has looked hard at their demographics with the new footprint that is associated with the league,” said Radakovich, “and put together some things that made our partner (ESPN) stand up and take notice and say – ‘Hey, this could be a very good business opportunity for not only ESPN, but the Atlantic Coast Conference and its member schools.’

I’ve found it funny when people say for example that the only states that will watch an ACC network are North Carolina and Virginia, because for example Georgia is a Georgia Bulldog state. I agree UGA is the dominant school in Georgia, but the state of Georgia has over 55,000 Georgia Tech alumni within its boarders combined with around 20,000 students. There are nearly 10,000 Clemson alumni in Georgia. This doesn’t include additional Georgia Tech and Clemson fans in the state plus alumni and fans of the other ACC schools. I’m just talking about alumni too. Every state in the ACC’s footprint has to considered a potential location for the ACC Network.

The conference has over 100 Million people living in it’s footprint. That is the most of any conference, and it doesn’t have to be only about football. All you need are Syracuse, Pittsburgh, Notre Dame and Lousiville fans that want to watch their basketball teams. Consider the reach of the ACC with actual syndication numbers from a 2011 article from SportsBusinessJournel.

“By virtue of the new sublicensing contract with ESPN, we’re permitted to distribute games outside of the ACC states now,” said Ken Haines, CEO of Charlotte-based Raycom Sports. “We’re going into markets now that we never dreamed of and that’s all new exposure for the ACC. We’ve got much greater flexibility to sell and it certainly has taken the ACC to a wider audience.”

Raycom began branding its broadcasts “The ACC Network” last season, and those telecasts are now in six of the top 10 TV markets, 13 of the top 25, and 25 of the top 50…

…nearly all of the TV stations in the ACC Network signed on for the entire 13-week package,

What is this? There is demand for ACC sports even outside the ACC’s footprint? It certainly seems that way. Just look at Raycom’s affiliate list for a fairly non-descript Wake Forest Virginia football game. There are TV stations in Arizona, California, Wisconsin, Texas, Ohio plus the ACC footprint showing ACC games. These aren’t the national games either. Somebody is finding value in ACC sports in these regions. It’s not much of stretch to say the ACC and Raycom have gained tremendous experience distributing ACC content. Certainly ESPN is well aware of the potential of ACC even outside of it’s footprint.

As with any conference network the issue is really not content, but about distributions and carriage. Already with the SEC Network and Lonhhorn Network is it not impossible to think ESPN could bundle all three for maximum distribution? The Pitt fan in Pennsylvania that wants the ACC network has to pay for the LHN and SEC Network. The Arkansas fan to get the SEC Network will have to get the LHN and ACC Network. On my cable system I have the Big 10 Network, because I wanted ESPNU and haven’t watched 5 minutes of it in 3 years, but I’m paying for it. Of course this is only speculative on my part, but I don’t think it’s out of the question.

As you can see first and foremost ESPN was tired of renegotiating their TV deals. That helped get the ACC deal done, but with the largest footprint, and experience pushing ACC content outside of the conference’s footprint ESPN saw several reasons to agree to a new TV deal and begin work in earnest for an ACC network.

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1 ping

  1. Basketball and Baseball may be the hidden keys to starting the ACC Network. » All Sports Discussion says:

    [...] So why did ESPN agree to a new TV deal and a likely conference network with the ACC?  [...]

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