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Apr
28
2017

Will the ESPN layoffs affect the upcoming ACC Network?

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Yesterday was a dark day for ESPN. They had a massive layoff of their journalistic talent base.  Times are tough at the 4 letter network. In recent years they’ve lost over 10 Million subscribers. ACC fans are right to wonder if ESPN’s issues could affect the upcoming ACC Network. Syracuse blog NunesMagician has some concerns whether the ACC Network will ever launch.

“No one’s said as much, and obviously there’s legal stipulations that probably force the ACC Network onto the air now, in some form. But you’d have to think ESPN would be better off if it never happened.”

Let me put our friends at Syracuse and any other ACC fans worries to rest. There isn’t any reason to think the ACC Network won’t be coming. Why would Louisville still be planning an $8 Million production facility as reported by Courier Journal?

All ACC schools will need to have their own production studios, according to the resolution document distributed Thursday to the U of L Athletic Association board, which approved the measure unanimously. The studio will be funded through future television revenue from the ACC, with $800,000 per year being allocated to the project beginning with the 2017-18 budget.

ESPN may be losing subscribers, but they are still making money – and lots of it. The real issue for Disney and ESPN is that analyst profit projections have been higher that actual results. That’s still not good, but hardly the doomsday scenario some are predicting.

Syracuse AD John Wildhack, a former ESPN executive had this to say from Syracuse.com regarding the ESPN layoffs.

Wildhack also told Axe he expects the changes at ESPN to have no impact on Syracuse and the ACC Network, which is scheduled to launch in 2019.

“It won’t impact our deal with the ACC,” Wildhack said. “Our deal runs through 2036. The ACC Network will launch as scheduled in 2019. I think ESPN will put all their muscle and support toward making sure the launch is a success because they are a partner and they have a vested interest in making sure the ACC Network is a financial success…

“Don’t cry for ESPN,” Ourand said on NPR. “They are still profitable. And they still bring in a lot of money. The problem is they just don’t bring as much money as they did before and that’s something that’s concerning.”

Wildhack, for the most part, agreed.

Conference networks are still a profitable business. The SEC and Big 10 networks are paying out well over $5 Million per team, and even the struggling Pac 12 network has shown enough profit to payout $1 Million per conference member, and that’s with fewer than 15 Million subscribers. It actually seems like if you are ESPN, the ACC provides an investment opportunity to add revenue.

That’s doesn’t mean ESPN doesn’t need to modify their distribution practices. The linear cable model is obviously still profitable, but is in slow decline. They have to stay on the on the cutting edge of online packages which is the likely future of sports viewing, and it does seem they are aware of this as ESPN is part several skinny online bundles. I would expect some synergies with the other ESPN family of networks to reduce costs. Possibly there will be announcers on both the ACC and SEC network. There could be more remote announcing – which has already started.

You may see the schools handle more production in house. I expect ESPN will re-double their efforts with the ACC to reduce overhead, and perform other cost cutting methods. ESPN certainly has to be more aware of cost than they have been in the past, and I surmise they will be.

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