ACC AD Meetings - New Revenue Distribution Model?

[DeepSnap]

This model has been tried before with a couple of places you might have heard of... Texas & Oklahoma in the SWC & Big8/XII, respectively...... "We bring in more, so we should get more." It caused a ton of heartburn. hate & discontent after the breakup of the old SWC & the subsequent merger of a few schools (originally not Baylor, TCU, SMU, or Rice) into the Big8.... and now Texas & OU are moving on for "mo money, mo money, mo money."

The more things change, the more they remain the same.

Now get off my lawn. Harumph, harumph, harumph.

 

[stinger 1957]

This model has been tried before with a couple of places you might have heard of... Texas & Oklahoma in the SWC & Big8/XII, respectively...... "We bring in more, so we should get more." It caused a ton of heartburn. hate & discontent after the breakup of the old SWC & the subsequent merger of a few schools (originally not Baylor, TCU, SMU, or Rice) into the Big8.... and now Texas & OU are moving on for "mo money, mo money, mo money."

The more things change, the more they remain the same.

Now get off my lawn. Harumph, harumph, harumph.

CFB was about money in the 50s, just not as much money because there was very little TV money at the time. The Mississippi schools hated GT because we would not play them and that was all about the money. We filled BDS, Auburn used to play GT every year in Atlanta because the money was bigger for them coming to Atlanta. Their fan base hated that it was always in the ATL, we were beating them every year during that period so that added to their dislike about it being in ATL every year.

 

[ThatGuy]

This model has been tried before with a couple of places you might have heard of... Texas & Oklahoma in the SWC & Big8/XII, respectively...... "We bring in more, so we should get more." It caused a ton of heartburn. hate & discontent after the breakup of the old SWC & the subsequent merger of a few schools (originally not Baylor, TCU, SMU, or Rice) into the Big8.... and now Texas & OU are moving on for "mo money, mo money, mo money."

The more things change, the more they remain the same.

Now get off my lawn. Harumph, harumph, harumph.

My wife is a Nebraska Cornhusker, and her take on Texas is...well, not nice. In her opinion, the Longhorn Network blew up the Big 12. All because Texas decided "We're Texas, eff you" to the rest of the conference.

It's been interesting to see Texas' trajectory since then (read: flat); and the move to the SEC seems hilarious. Mainly because Texas will want to come in and throw its weight around, only to discover they're seen as a lightweight. Still, they've been a cancer to every conference they've been a part of, and I see no reason to think they won't bring that same thing to the SEC.

Which brings us to teams like FSU. I'm getting the same vibes from them in this whole scenario we're seeing playing out right now. Finally had a successful season last year after crossing the desert for 5+ years, and are acting like they're still the team with Bobby Bowden as HC and Chris Weinke as their QB. Not saying they won't be successful in the future - just saying, some familiar dynamics to the Big 12 seem to be at play here as well.

 

[Vespidae]

The Big wants to be the National Conference in CFB, they want media mkts and they require AAU membership.

I think jumping conferences is the wrong approach. Despite all the handwringing, the ACC is till the third best conference in the country. It's problem is not revenue distribution, it's revenue generation.

The average number of viewers (which influences ESPN contracts) varies from $5+ million (Ohio State, Bama) to UNC, NC State, GT (749K, 703K, 615K). The problem is not COVERAGE as much as it is having a product people want to watch ON THAT DAY. B1G is not going to displace the SEC in the regional markets (and ESPN College Football is all regional ... it is not organized as they do the NFL coverage.)

Compare Tech's average viewers per week (615K) to the Chick-Fil-A Classic at 4.9M! (Yes, Tech had one of the most viewed games, right up there with Alabama.)

Why? No competition. Tech played on Monday (Labor Day). Let's face it, the SEC OWNS the 330pm slot and that's never going to change. Or not for a long time.

If I were the ACC Commish, I would ...

• Require ACC teams to play 12 games, 8 in conference, 4 out of conference.
• All out of conference games must be against SEC or B1G opponents (or reasonable quality)
• Require 1 of the out of conference games to be West Coast.
• Play the best possible matchup games on Thursday night. (All other games can be Saturday).

What happens? The ACC will OWN Thursday night. With 2 games ... one East Coast, one West Coast .. you have a great night of football sans competition.

Imagine Miami vs. FSU at the 6pm game and Tech-USC at 930pm. Or Boston College - VT followed by Miami- USC. Ratings would explode. That would allow for dramatically higher payouts. And rankings.

No, don't change conferences. Create a better product, one that folks want to see, and are willing to pay to do so.

 

[ME22]

I think jumping conferences is the wrong approach. Despite all the handwringing, the ACC is till the third best conference in the country. It's problem is not revenue distribution, it's revenue generation.

The average number of viewers (which influences ESPN contracts) varies from $5+ million (Ohio State, Bama) to UNC, NC State, GT (749K, 703K, 615K). The problem is not COVERAGE as much as it is having a product people want to watch ON THAT DAY. B1G is not going to displace the SEC in the regional markets (and ESPN College Football is all regional ... it is not organized as they do the NFL coverage.)

Compare Tech's average viewers per week (615K) to the Chick-Fil-A Classic at 4.9M! (Yes, Tech had one of the most viewed games, right up there with Alabama.)

Why? No competition. Tech played on Monday (Labor Day). Let's face it, the SEC OWNS the 330pm slot and that's never going to change. Or not for a long time.

If I were the ACC Commish, I would ...

• Require ACC teams to play 12 games, 8 in conference, 4 out of conference.
• All out of conference games must be against SEC or B1G opponents (or reasonable quality)
• Require 1 of the out of conference games to be West Coast.
• Play the best possible matchup games on Thursday night. (All other games can be Saturday).

What happens? The ACC will OWN Thursday night. With 2 games ... one East Coast, one West Coast .. you have a great night of football sans competition.

Imagine Miami vs. FSU at the 6pm game and Tech-USC at 930pm. Or Boston College - VT followed by Miami- USC. Ratings would explode. That would allow for dramatically higher payouts. And rankings.

No, don't change conferences. Create a better product, one that folks want to see, and are willing to pay to do so.

That’s great, but why would espn give us any more money in that situation

 

[bobongo]

I think jumping conferences is the wrong approach. Despite all the handwringing, the ACC is till the third best conference in the country. It's problem is not revenue distribution, it's revenue generation.

The average number of viewers (which influences ESPN contracts) varies from $5+ million (Ohio State, Bama) to UNC, NC State, GT (749K, 703K, 615K). The problem is not COVERAGE as much as it is having a product people want to watch ON THAT DAY. B1G is not going to displace the SEC in the regional markets (and ESPN College Football is all regional ... it is not organized as they do the NFL coverage.)

Compare Tech's average viewers per week (615K) to the Chick-Fil-A Classic at 4.9M! (Yes, Tech had one of the most viewed games, right up there with Alabama.)

Why? No competition. Tech played on Monday (Labor Day). Let's face it, the SEC OWNS the 330pm slot and that's never going to change. Or not for a long time.

If I were the ACC Commish, I would ...

• Require ACC teams to play 12 games, 8 in conference, 4 out of conference.
• All out of conference games must be against SEC or B1G opponents (or reasonable quality)
• Require 1 of the out of conference games to be West Coast.
• Play the best possible matchup games on Thursday night. (All other games can be Saturday).

What happens? The ACC will OWN Thursday night. With 2 games ... one East Coast, one West Coast .. you have a great night of football sans competition.

Imagine Miami vs. FSU at the 6pm game and Tech-USC at 930pm. Or Boston College - VT followed by Miami- USC. Ratings would explode. That would allow for dramatically higher payouts. And rankings.

No, don't change conferences. Create a better product, one that folks want to see, and are willing to pay to do so.

I have to say, those seem like some very good proposals. I think our schedule is balanced and tough enough as it is, but I can see the reasoning behind making it stronger. Some teams would get their heads handed to them, but as Frederich Nietzsche said, "That which does not kill us makes us stronger".

 

[Root4GT]

I think jumping conferences is the wrong approach. Despite all the handwringing, the ACC is till the third best conference in the country. It's problem is not revenue distribution, it's revenue generation.

The average number of viewers (which influences ESPN contracts) varies from $5+ million (Ohio State, Bama) to UNC, NC State, GT (749K, 703K, 615K). The problem is not COVERAGE as much as it is having a product people want to watch ON THAT DAY. B1G is not going to displace the SEC in the regional markets (and ESPN College Football is all regional ... it is not organized as they do the NFL coverage.)

Compare Tech's average viewers per week (615K) to the Chick-Fil-A Classic at 4.9M! (Yes, Tech had one of the most viewed games, right up there with Alabama.)

Why? No competition. Tech played on Monday (Labor Day). Let's face it, the SEC OWNS the 330pm slot and that's never going to change. Or not for a long time.

If I were the ACC Commish, I would ...

• Require ACC teams to play 12 games, 8 in conference, 4 out of conference.
• All out of conference games must be against SEC or B1G opponents (or reasonable quality)
• Require 1 of the out of conference games to be West Coast.
• Play the best possible matchup games on Thursday night. (All other games can be Saturday).

What happens? The ACC will OWN Thursday night. With 2 games ... one East Coast, one West Coast .. you have a great night of football sans competition.

Imagine Miami vs. FSU at the 6pm game and Tech-USC at 930pm. Or Boston College - VT followed by Miami- USC. Ratings would explode. That would allow for dramatically higher payouts. And rankings.

No, don't change conferences. Create a better product, one that folks want to see, and are willing to pay to do so.

The NFL now owns Thursday night for football. Thursday night college games were once a good draw, now not so much and that won’t change as long as the NFL is in on Thursday nights. Suck as Thursday night games were great 20+ years ago

 

[Vespidae]

That’s great, but why would espn give us any more money in that situation

When your average viewer ship changes from 615K to 2M+ … that will impact fees.
The whole strategy of the SEC is create enough matchups that can rank compared against the lowest NFL games.

 

[CEB]

That’s great, but why would espn give us any more money in that situation

Good point. They don’t have to. They have a contract and we’re all locked in... that said;
1. the contract allows for bonus and incentive payments as well as annual escalations. If we put ourselves out there and grab ratings, it can pay off even in the current structure. I haven’t researched the bonus and escalation provisions, but they are there, as indicated by increasing annual revenues.

2. I’m also of the mindset that it may be cheaper and at the same time better for ESPN to come up with more cash for the ACC to stay whole as we draw closer to the end of the deal. It still doesn’t make sense to me to pay bigger money to the FSUs and Clemsons of the world if they move to the SEC; ESPN already has FSU and Clemson programming. If those guys go to BIG instead, ESPN loses that programming. Either way, ESPN is losing something. Why not give the ACC a bump that levels the field? It’s cheaper and guarantees a product. If the ACC sweetens the deal by drawing more eyeballs, it just makes even more sense.

I honestly thought the end game for FSU and Clem was to show that the GOR COULD get blown up and try to force ESPN to come to the table. I’m not totally convinced that’s not the play ultimately because the little bit of unequal revenue doesn’t seem to move the needle much.

 

[Vespidae]

The NFL now owns Thursday night for football. Thursday night college games were once a good draw, now not so much and that won’t change as long as the NFL is in on Thursday nights. Suck as Thursday night games were great 20+ years ago

That’s because ESPN features Sun Belt and others.

Football is now programming content. Create a significantly better product (and it’s not just the game .. it’s how the game is played, halftime, etc.)

Just noodling …
- speed the game up. There are a lot of voluntary things you can do.
- add user engagement. Get rid of halftime reporting (yawn) and add in Real-time DraftKings action. More customer engagement leads to greater use.
- Some people just prefer the college game. Exploit that.

One of the best rules in marketing is Be Distinct, or Be Extinct.

 

[Vespidae]

Good point. They don’t have to. They have a contract and we’re all locked in... that said;
1. the contract allows for bonus and incentive payments as well as annual escalations. If we put ourselves out there and grab ratings, it can pay off even in the current structure. I haven’t researched the bonus and escalation provisions, but they are there, as indicated by increasing annual revenues.

2. I’m also of the mindset that it may be cheaper and at the same time better for ESPN to come up with more cash for the ACC to stay whole as we draw closer to the end of the deal. It still doesn’t make sense to me to pay bigger money to the FSUs and Clemsons of the world if they move to the SEC; ESPN already has FSU and Clemson programming. If those guys go to BIG instead, ESPN loses that programming. Either way, ESPN is losing something. Why not give the ACC a bump that levels the field? It’s cheaper and guarantees a product. If the ACC sweetens the deal by drawing more eyeballs, it just makes even more sense.

I honestly thought the end game for FSU and Clem was to show that the GOR COULD get blown up and try to force ESPN to come to the table. I’m not totally convinced that’s not the play ultimately because the little bit of unequal revenue doesn’t seem to move the needle much.

They don’t have to but, it’s in their interest IF ratings can be shown to increase.

If the ACC fails, the remaining 2 will have enormous leverage. A healthy alternative is good in the long run.

 

[RonJohn]

When your average viewer ship changes from 615K to 2M+ … that will impact fees.
The whole strategy of the SEC is create enough matchups that can rank compared against the lowest NFL games.

What is the format of the current ESPN with the ACC? I have a hard time believing that the money ESPN pays to the ACC changes at all with viewership numbers. ESPN doesn't get a lot more revenue with more viewers, and the ACC would have known that ESPN could change viewership numbers by the games they broadcast in different time slots. The ACC would not have wanted to give ESPN the power to arbitrarily change the amount paid on the contract.

The big revenue problem is that the ACC signed a 20 year deal with ESPN for the same money that the Big 10 and SEC were getting at that point in time. Everybody knew at the time that the TV deals for those conferences were going to expire more than a decade before the ACC deal. Everybody knew (or should have known) back then that the other conferences were going to get better deals at the next negotiation.

 

[bobongo]

What is the format of the current ESPN with the ACC? I have a hard time believing that the money ESPN pays to the ACC changes at all with viewership numbers. ESPN doesn't get a lot more revenue with more viewers, and the ACC would have known that ESPN could change viewership numbers by the games they broadcast in different time slots. The ACC would not have wanted to give ESPN the power to arbitrarily change the amount paid on the contract.

The big revenue problem is that the ACC signed a 20 year deal with ESPN for the same money that the Big 10 and SEC were getting at that point in time. Everybody knew at the time that the TV deals for those conferences were going to expire more than a decade before the ACC deal. Everybody knew (or should have known) back then that the other conferences were going to get better deals at the next negotiation.

Maybe they wouldn't want to kill the goose that laid the golden egg. At any rate, it couldn't hurt to increase viewership.

 

[ME22]

Good point. They don’t have to. They have a contract and we’re all locked in... that said;
1. the contract allows for bonus and incentive payments as well as annual escalations. If we put ourselves out there and grab ratings, it can pay off even in the current structure. I haven’t researched the bonus and escalation provisions, but they are there, as indicated by increasing annual revenues.

2. I’m also of the mindset that it may be cheaper and at the same time better for ESPN to come up with more cash for the ACC to stay whole as we draw closer to the end of the deal. It still doesn’t make sense to me to pay bigger money to the FSUs and Clemsons of the world if they move to the SEC; ESPN already has FSU and Clemson programming. If those guys go to BIG instead, ESPN loses that programming. Either way, ESPN is losing something. Why not give the ACC a bump that levels the field? It’s cheaper and guarantees a product. If the ACC sweetens the deal by drawing more eyeballs, it just makes even more sense.

I honestly thought the end game for FSU and Clem was to show that the GOR COULD get blown up and try to force ESPN to come to the table. I’m not totally convinced that’s not the play ultimately because the little bit of unequal revenue doesn’t seem to move the needle much.

Ahhh point 1 is definitely reasonable enough for the ACC to be aggressively pursuing more viewers

 

[Vespidae]

What is the format of the current ESPN with the ACC? I have a hard time believing that the money ESPN pays to the ACC changes at all with viewership numbers. ESPN doesn't get a lot more revenue with more viewers, and the ACC would have known that ESPN could change viewership numbers by the games they broadcast in different time slots. The ACC would not have wanted to give ESPN the power to arbitrarily change the amount paid on the contract.

The big revenue problem is that the ACC signed a 20 year deal with ESPN for the same money that the Big 10 and SEC were getting at that point in time. Everybody knew at the time that the TV deals for those conferences were going to expire more than a decade before the ACC deal. Everybody knew (or should have known) back then that the other conferences were going to get better deals at the next negotiation.

The SEC is exploited that very issue. More viewers leads to higher ad rates leads to more demand for ESPN which leads to a greater willingness to pay higher tv contracts.

THAT is driving everything.

The ACC HAD to sign a long term deal because of the ACCN. The SEC already had a network.

Regardless, … simply copying what others are doing as No. 3 is a losing marketing strategy.

 

[Techwood Relict]

I’m not totally convinced that’s not the play ultimately because the little bit of unequal revenue doesn’t seem to move the needle much.

Solid point. Contracts only get modified when actual leverage exists.

 

[slugboy]

The NFL now owns Thursday night for football. Thursday night college games were once a good draw, now not so much and that won’t change as long as the NFL is in on Thursday nights. Suck as Thursday night games were great 20+ years ago

Unless you have different luck than me, Thursday night NFL games are terrible. Almost any Thursday NFL game I’ve watched, I swapped to a college game within the first quarter.

 

[Vespidae]

Solid point. Contracts only get modified when actual leverage exists.

That’s not exactly true. The word “Only” is a slippery slope.

 

[RonJohn]

The SEC is exploited that very issue. More viewers leads to higher ad rates leads to more demand for ESPN which leads to a greater willingness to pay higher tv contracts.

THAT is driving everything.

The ACC HAD to sign a long term deal because of the ACCN. The SEC already had a network.

Regardless, … simply copying what others are doing as No. 3 is a losing marketing strategy.

ESPN's revenue is still more reliant on subscriber fees than it is advertisement. Having more viewers for a Saturday night broadcast, which raises ad rates, is a small amount of the ad revenue, which in total is smaller than subscriber fees. I am not saying that more viewers equals zero additional revenue, however I am saying that more viewers is less than pennies on the dollar compared to overall revenue.

ESPN has played games with cable/sat/internet distribution companies. There are not infinite SEC fans in the Southeast, but there are a large number of rabid SEC fans in the Southeast. They are able to charge very high fees for ESPN and for the SEC network because distributors know that some percentage of their subscribers will leave if those channels are not on the service. Fans in North Dakota are not rabid SEC fans, and the SEC doesn't have the same influence in the rest of the country.

The ACC didn't push for a network when the SEC and Big10 did, and then submitted to the whims of ESPN in order to try to catch up. The biggest problem that I see, is that they paid a huge price to catch up to where the SEC and Big10 were at that time. It would be like signing a 10 year salary contract in order to match the current salary of a coworker whose contract expires in a couple of years.

If the ACC wants to get more money, they need to come up with other revenue streams than broadcast media rights. It will be impossible to catch up to the SEC and Big10 trying to copy the way they are doing it (As you said), especially since there are still 13 years left on the media contract. If the ACC wants to catch up, they need to get ahead in other areas.

 

[Vespidae]

ESPN's revenue is still more reliant on subscriber fees than it is advertisement. Having more viewers for a Saturday night broadcast, which raises ad rates, is a small amount of the ad revenue, which in total is smaller than subscriber fees. I am not saying that more viewers equals zero additional revenue, however I am saying that more viewers is less than pennies on the dollar compared to overall revenue.

ESPN has played games with cable/sat/internet distribution companies. There are not infinite SEC fans in the Southeast, but there are a large number of rabid SEC fans in the Southeast. They are able to charge very high fees for ESPN and for the SEC network because distributors know that some percentage of their subscribers will leave if those channels are not on the service. Fans in North Dakota are not rabid SEC fans, and the SEC doesn't have the same influence in the rest of the country.

The ACC didn't push for a network when the SEC and Big10 did, and then submitted to the whims of ESPN in order to try to catch up. The biggest problem that I see, is that they paid a huge price to catch up to where the SEC and Big10 were at that time. It would be like signing a 10 year salary contract in order to match the current salary of a coworker whose contract expires in a couple of years.

If the ACC wants to get more money, they need to come up with other revenue streams than broadcast media rights. It will be impossible to catch up to the SEC and Big10 trying to copy the way they are doing it (As you said), especially since there are still 13 years left on the media contract. If the ACC wants to catch up, they need to get ahead in other areas.

I don’t disagree with much of that.

ESPN manages its college football properties and programming differently than how it approaches the NFL. It does regard CFB as regional and acts such.

But the fact remains, the ACC has a product that is less in demand than that provided by others. So, you can either innovate and market your product non competitively or … be at the whims of the leader. Which is where we are at.

I‘m all for “other“ revenue streams. But realistically … there aren’t any. The only real options are to offer a product with limited direct competition … and that means changing game days where it’s demonstrated the ACC has done much better.

If the ACC doesn’t, it will not survive as a conference.

As to jumping to the B1G, it’s inconceivable until the ACC implodes.