Greensboro, N.C.—The ACC expanded in 2004 to add Miami, Boston College and Virginia Tech for one very important reason: The league wanted to go to 12 teams in order to make sure it didn’t lose its seat at the table—both competitively and financially–with the big boys of college football.
In most aspects, expansion has been a success for ACC football. No, the league has not been in the national championship discussion lately, but it has done very well at the bank. In 2005 it signed a new seven-year television contract with ABC and ESPN for a reported $258 million. Simply because of expansion, the ACC went from making about $21 million per year on televised football to about $37.6 million per year. Last year the ACC sent a record 10 teams to bowl games. So from a purely financial standpoint, expansion has worked.
But that was then and this is now. And right now the SEC has changed the entire landscape of college sports with its staggering 15-year, $3 billion agreements with ESPN and CBS.
“The SEC deal is certainly huge in terms of the dollars and the length of the agreement,” Swofford said when I met with him at the ACC Football Kickoff. “There is usually a separation of some kind that is inevitable when new deals are struck. But I will admit that this separation is larger than most.”
The SEC deal impacts everything and everybody. Conservatively, SEC schools expect to see their annual shared revenue jump from about $11 million per school to over $16 million per school per year. That is a game changer in a competitive market. While other conferences like the ACC are cutting costs (the ACC cut its budget by 6 percent for the coming year) the SEC is suddenly flush with cash. There is more money to attract the best coaches. There is more money for recruiting. The increased exposure gives the SEC an edge in recruiting.
The ACC’s television deals expire after the 2011 season and Swofford made it clear that his league must find a way to close that gap in the next television contract.
Here is the problem. The SEC agreed to its deal in the summer of 2008, right before the bottom dropped out of the economy. The ACC is trying to negotiate its new deal in a lousy economy.
And in order to maximize its dollars in the next television contract, the ACC may have to get creative—and a little bold. It is only a concept right now, but the ACC could eventually join forces with another conference–say the Pac-10–to give greater negotiating power with the networks.
By design, the ACC’s lucrative men’s basketball contracts are up for renewal at the same time as football. In the past, these contracts have been negotiated separately because basketball carried so much weight. Swofford said that the two sports may be joined into one contract next time around. So basketball could be used to as leverage to maximize football revenue.
Swofford made it clear that his first choice in these negotiations is to stick with the ACC’s current television partners: ABC, ESPN, and Raycom. But the SEC said goodbye to some of its TV partners when it sold everything to ESPN and CBS. Because of what the SEC has done, the ACC is going to face some tough choices in the next two years.
“We just have to see how this plays out, but yes, these are important negotiations for us. What it’s about is doing the best with what you have, whether it’s a lot or a little,” said Swofford. “With all that said, I’d rather have a lot than a little.”
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