Conference Realignment

[orientalnc]

I think you’re right about that, everyone says that espn is getting this great deal with the ACC contract but the ratings for fb games that don’t include fsu, clemson, miami, and ND are God-awful Compared to the SEC or BIG games. Even ND game ratings vs. ACC other than fsu and Clemson are way lower than their norm. What good is all that content if nobody watches 90% of it? They could potentially be better off to snag the best teams or markets and add them to the SEC for max ratings. Keep the products that sell, dump the rest, then maybe resign whats left for peanuts when they come begging and put them on the filler channels or streaming.

I don't disagree, but they don't have more SEC games to show. What can ESPN show in place of the ACC games that have potentially higher ratings?

 

[RonJohn]

I think the option is for the ACC Network, not the games themselves.

It could be. The only reference we have to it is FSU's filing. That filing didn't include actual text of contracts, only the FSU lawyer's interpretation of what they have been told by FSU. The ACC nor ESPN are going to comment on it because it is what they are claiming that FSU broke confidentiality agreements by discussing in public. Maybe I am too skeptical, but far too many people 100% believe this because of one side's unsubstantiated filing in a lawsuit. It may be true that ESPN can completely walk away from the entire broadcast contract, but it also might not be true.

Your interpretation would also make more sense as to why ESPN was allowed to extend the decision. If it is about the ACC Network, then waiting to make the decision instead of making it in 2021 would give the ACC at least a few more years of the network if ESPN decided to drop it.

 

[RonJohn]

I think you’re right about that, everyone says that espn is getting this great deal with the ACC contract but the ratings for fb games that don’t include fsu, clemson, miami, and ND are God-awful Compared to the SEC or BIG games. Even ND game ratings vs. ACC other than fsu and Clemson are way lower than their norm. What good is all that content if nobody watches 90% of it? They could potentially be better off to snag the best teams or markets and add them to the SEC for max ratings. Keep the products that sell, dump the rest, then maybe resign whats left for peanuts when they come begging and put them on the filler channels or streaming.

The analysis of the ACC being better was regarding the cost/benefit of the games. I haven't gone through the data myself so can't say that it is true. What they are getting at is that even if there is more ad revenue for the SEC games, the difference in media payments to the SEC are greater than the difference in ad revenue. That the net profit per ACC game is higher because the cost is lower. It is easy to believe that ESPN would want bigger, bigger, and bigger. However from a business perspective what they would want is the SEC level revenue for the ACC (or even MAC) level costs. I don't know what the numbers are, but it isn't hard to fathom that the ACC is more profitable for ESPN. Especially when you consider that TV subscriptions still account for the majority of ESPN revenue and ads are a much smaller portion.

 

[ThatGuy]

I do not buy that FSU has a home waiting for them. The Big10 is very unlikely to pay a full media payout until the end of the current contract. They didn't for Oregon. ESPN has reportedly rejected requests from SEC for more money. Why would ESPN pay a full SEC share for FSU, when they already have FSU content at a lower price? Why would either the SEC or Big10 have actual on-the-record discussions and offers when it opens them up to lawsuits for tortious interference? The only argument I have heard about FSU actually having an offer in hand, is that they wouldn't be crazy enough to file this lawsuit if they didn't. However, if you read their initial filing, it does not read like a well thought out legal action. It reads more like a fanboy forum post that goes into emotional detail about how FSU was screwed over. I think it is more likely that FSU believes that if they make things difficult enough, that the ACC will cave in and let them have everything they want.

Agreed with all of this. No matter what happens, I think we can all agree that it will be interesting to look back at this time in a few years as a business case study. The question is, will it be about "what to do"? Or "what not to do?"

 

[ThatGuy]

It could be. The only reference we have to it is FSU's filing. That filing didn't include actual text of contracts, only the FSU lawyer's interpretation of what they have been told by FSU. The ACC nor ESPN are going to comment on it because it is what they are claiming that FSU broke confidentiality agreements by discussing in public. Maybe I am too skeptical, but far too many people 100% believe this because of one side's unsubstantiated filing in a lawsuit. It may be true that ESPN can completely walk away from the entire broadcast contract, but it also might not be true.

Your interpretation would also make more sense as to why ESPN was allowed to extend the decision. If it is about the ACC Network, then waiting to make the decision instead of making it in 2021 would give the ACC at least a few more years of the network if ESPN decided to drop it.

The whole "White glove treatment" of the ESPN contract always seemed kinda strange to me. I mean, I could see that it wanted to keep the negotiations close to home to prevent FOIA requests of its public school members. But that has never seemed enough of a reason - what benefit is there in keeping it secret?

Your above point would also point to a potential reason for a lot of the confidentiality, at least in recent years. If ESPN was looking at mounting losses and looking to shed cost centers in 2021, deciding to shut down the ACC Network might have been on the table. This could have been solely a defensive measure on the ACC's part, to deal with the reality of ESPN overcommitting itself and paying too much for its SEC contract. Or (worst-case) to deal with ESPN not seeing us as valuable enough to make a better commitment to the ACC. That would mean from the beginning, we recognized that we were negotiating from a weaker position.

Unfortunately, if that is confirmed, it would be disastrous for both the conference and ESPN...as well as FSU. Hence, the "everything under lock and key" side of things.

Hope I'm wrong on that one. Power dynamics are weird. And as I mentioned before, in the first GOR/ESPN contract, the ACC had the second best contract of all of the conferences...behind the Pac12. So that doesn't add up, either.

Sigh. I feel like I need a flowchart.

 

[WreckinGT]

I don't disagree, but they don't have more SEC games to show. What can ESPN show in place of the ACC games that have potentially higher ratings?

They do have more SEC games to show. Two new big name teams are joining the SEC and ESPN now has all rights to the SEC. That 3:30 SEC timeslot that used to go to CBS is now an ESPN time slot. This will pretty heavily affect the ACC next year as well. Getting good Saturday time slots on ESPN/ESPN2/ABC will be difficult.

 

[orientalnc]

Near the end of my career we had a software contract with an outside vendor. We also had a lot of internal work going on to support the software. We hoped this project would eventually make a ton of money for us, but we wanted the projected costs and savings to be internal to us only. So we had everyone who had seen the contract to sign a non-disclosure agreement. This was my first time ever hearing that term. When my colleagues said "NDA" I had no idea what they meant. But, financial terms in contracts between companies are not normally public and are often closely held secrets. Corporations have to disclose the bottom line to shareholders, but rarely the nitty gritty details. If ESPN has a unilateral option to renew the ACC Network it might be important to both sides to keep that information private. I can see that the ACC and ESPN could view the disclosure of that proprietary information with a very negative eye. There might be financial penalties in the contract to deter employees of either the ACC or ESPN for disclosing the contract terms. I believe the representatives of FSU who saw the ESPN contract (and disclosed the terms) would fall under the ACC umbrella. The penalties ESPN might be demanding could be the "substantial damage" the ACC claims in their lawsuit. No matter how one sided the contract terms might be, disclosing information covered by an NDA is a serious faux pas.

 

[RonJohn]

.... what benefit is there in keeping it secret?

What ESPN contracts are open? Can you read the ESPN/SEC contract? We know highlights, but not the details. Can you read ESPN contracts with any cable/sat/streaming provider? There are "insider" estimates about the terms, but I haven't seen any of the contracts in the public. Can you read the NBC/ND contract? Can you read the Fox/CBS/NBC contracts with the Big10? This isn't an ACC issue or an ESPN issue. It is simply the way the business is done.

 

[orientalnc]

They do have more SEC games to show. Two new big name teams are joining the SEC and ESPN now has all rights to the SEC. That 3:30 SEC timeslot that used to go to CBS is now an ESPN time slot. This will pretty heavily affect the ACC next year as well. Getting good Saturday time slots on ESPN/ESPN2/ABC will be difficult.

Adding two teams to the SEC does not replace the programming of a 15 team conference.

 

[WreckinGT]

Adding two teams to the SEC does not replace the programming of a 15 team conference.

Speaking in terms of football only, ESPN already offloads a large number of ACC games onto the ACC network and their third party deal that currently shows games on the CW. If ESPN decides as a business they aren't interested in moving forward with the ACC network, and they aren't showing the third party games anyways, how much of the remaining content do they need? How much of that content can be replaced by the additional incoming SEC content?

 

[billga99]

I'm not sure ESPN is as in love with the ACC as everyone seems to think. They have chosen not to exercise their 2027 option up to this point. If FSU were to leave the ACC and possibly others then ESPN can simply not exercise that option and scoop up the remains of the ACC at a lesser rate while putting their primary focus on the SEC.

I don't think they are in love with the ACC.. SEC by far first. My point is they don't want the Big Ten competed in their playground. FSU and then others would dilute their hold on their monopoly in the South.

 

[RonJohn]

Speaking in terms of football only, ESPN already offloads a large number of ACC games onto the ACC network and their third party deal that currently shows games on the CW. If ESPN decides as a business they aren't interested in moving forward with the ACC network, and they aren't showing the third party games anyways, how much of the remaining content do they need? How much of that content can be replaced by the additional incoming SEC content?

How much additional SEC content is coming? Two teams equals one game per week.

 

[RonJohn]

How much additional SEC content is coming? Two teams equals one game per week.

@WreckinGT I'll expand a little more. I missed the 3:30 game, so that would be two additional games per week in the ESPN inventory.

Look at the available time slots. Adding up Saturday only time slots, there are at least 23 slots for ABC and ESPN stations. During regular season, discounting early season OOC games, the SEC can have a maximum of 8 games, and the ACC can have a maximum of 9. If every one of those games was on Saturday, there would still be six time slots available for other games. Some of those games will be on Thursday or Friday, which could bring the total available time slots up to 27 to 29 slots. ESPN will also be broadcasting Big 12 games, but they only have 60% of those games, so about four games per week. If ESPN broadcasts every SEC, ACC, and Big12 game in their inventory on Saturday they would still have two time slots to fill with something else.

 

[gtbb]

I do not buy that FSU has a home waiting for them. The Big10 is very unlikely to pay a full media payout until the end of the current contract. They didn't for Oregon. ESPN has reportedly rejected requests from SEC for more money. Why would ESPN pay a full SEC share for FSU, when they already have FSU content at a lower price? Why would either the SEC or Big10 have actual on-the-record discussions and offers when it opens them up to lawsuits for tortious interference? The only argument I have heard about FSU actually having an offer in hand, is that they wouldn't be crazy enough to file this lawsuit if they didn't. However, if you read their initial filing, it does not read like a well thought out legal action. It reads more like a fanboy forum post that goes into emotional detail about how FSU was screwed over. I think it is more likely that FSU believes that if they make things difficult enough, that the ACC will cave in and let them have everything they want.

Also, there are programs in the ACC that are more attractive to the Big10. There has been a lot of speculation that both the Big10 and SEC want UNC and UVA. To get into Florida, I think the Big10 would rather have Miami as a member than FSU. Miami shows up higher on most of the "brand" rankings that I have seen. Miami is an AAU member. Both are in the state of Florida. IF Miami were to join the Big10, there isn't a need for another member from Florida. I am pretty certain that there isn't an immediate home with a higher media payout than they are currently getting from the ACC. I think it is only questionable whether FSU would find a home in either of the top 2 conferences at all if the ACC collapses.

I think the best option for FSU to get what they want would be for the NCAA to fall apart or split, and cause a complete realignment of college sports and conferences. If that happens, the FSU would need this lawsuit.

First, I'm not talking about the SEC for FSU, or ESPN. I'm only talking about the Big 10 and FOX. The Big 10 wants into Florida. FSU brings more TV eyeballs than Miami. Miami's brand is old & withered at this point. FSU will need a partner to travel with them to the Big 10. I think the B1G will give Notre Dame an opportunity, and ND will once again turn them down. At that point, I think Miami comes into the picture. The AAU thing is not going to be as important as it has been. FOX will drive this moreso than AAU status. Once FSU's situation is sorted out with the ACC lawsuit, they'll leave and go to the Big 10.

I think UNC is attractive to both the SEC and the Big 10. Their main issue might be politics within their state, and being able to separate from NC State. But once we see how the FSU situation settles, then I think UNC will follow a similar path, except they'll wind up in the SEC. The SEC will definitely want UNC. If they don't, then I think the Big 10 would be fine with taking them. I think UVA is just a travel partner for UNC and nothing more. UVA might be more valuable to the SEC, because they bring the SEC into Northern Virginia & DC area, whereas the B1G is already there with Maryland.

Tech brings the Atlanta market. We could maybe leverage that with the B1G.

 

[gtbb]

I must be the only one who doesn't care if this happens. Whatever grouping Tech is in when the dust temporarily clears (and nothing is ever permanent of course) I just want Tech to be competitive.

I'll support Tech no matter where we land. I personally would like for the ACC to keep a seat at the table in the highest division, and for Tech to be in the mix. If that's not the case, we'll still be playing football against someone, and I'll be following along & supporting the program.

 

[Northeast Stinger]

Near the end of my career we had a software contract with an outside vendor. We also had a lot of internal work going on to support the software. We hoped this project would eventually make a ton of money for us, but we wanted the projected costs and savings to be internal to us only. So we had everyone who had seen the contract to sign a non-disclosure agreement. This was my first time ever hearing that term. When my colleagues said "NDA" I had no idea what they meant. But, financial terms in contracts between companies are not normally public and are often closely held secrets. Corporations have to disclose the bottom line to shareholders, but rarely the nitty gritty details. If ESPN has a unilateral option to renew the ACC Network it might be important to both sides to keep that information private. I can see that the ACC and ESPN could view the disclosure of that proprietary information with a very negative eye. There might be financial penalties in the contract to deter employees of either the ACC or ESPN for disclosing the contract terms. I believe the representatives of FSU who saw the ESPN contract (and disclosed the terms) would fall under the ACC umbrella. The penalties ESPN might be demanding could be the "substantial damage" the ACC claims in their lawsuit. No matter how one sided the contract terms might be, disclosing information covered by an NDA is a serious faux pas.

But NDAs can be tricky, no?

I’m not suggesting that this particular situation falls under the “tricky” category but such situations have existed and have been seriously litigated in court.

What if the NDA covers up something criminal? What if the NDA causes provable damages to the reputation of one of the parties? What if the originating party to the NDA violates some aspect of the agreement, even a very minor one? What if there was something inappropriate in the way the NDA was required of parties to a contract?

Again, color me in the camp of skepticism when it comes to FSU’s legal case. But they are barking up some kind of tree here, I just don’t know what it is. They either believe they’ve found something or this is a colossally high stakes poker bluff.

 

[orientalnc]

But NDAs can be tricky, no?

I’m not suggesting that this particular situation falls under the “tricky” category but such situations have existed and have been seriously litigated in court.

What if the NDA covers up something criminal? What if the NDA causes provable damages to the reputation of one of the parties? What if the originating party to the NDA violates some aspect of the agreement, even a very minor one? What if there was something inappropriate in the way the NDA was required of parties to a contract?

Again, color me in the camp of skepticism when it comes to FSU’s legal case. But they are barking up some kind of tree here, I just don’t know what it is. They either believe they’ve found something or this is a colossally high stakes poker bluff.

I betcha ESPN has NDAs with all their contracts. Especially with the financial agreements. NBC did that with the Notre Dame agreement last year and the scuttlebutt is that ND is getting $50 million per year. But no one who's talking will say for sure what that number is. I am pretty sure these types of agreements are prevalent with startups getting money from big investors. They don't their ideas broadcast to the world before they are ready to market them. Trade secrets are only secrets if people don't talk. People like to talk, so making it expensive helps to keep people quiet.

 

[WreckinGT]

@WreckinGT I'll expand a little more. I missed the 3:30 game, so that would be two additional games per week in the ESPN inventory.

Look at the available time slots. Adding up Saturday only time slots, there are at least 23 slots for ABC and ESPN stations. During regular season, discounting early season OOC games, the SEC can have a maximum of 8 games, and the ACC can have a maximum of 9. If every one of those games was on Saturday, there would still be six time slots available for other games. Some of those games will be on Thursday or Friday, which could bring the total available time slots up to 27 to 29 slots. ESPN will also be broadcasting Big 12 games, but they only have 60% of those games, so about four games per week. If ESPN broadcasts every SEC, ACC, and Big12 game in their inventory on Saturday they would still have two time slots to fill with something else.

If you look at week by week TV networks the ACC only gets 3-4 ESPN/ESPN2/ABC games per week now. Most of those are Thursday/Friday night games, and the ones that aren't usually involve Clemson, FSU, or Notre Dame. If Clemson and FSU were to leave the ACC and the SEC claims two of those time slots on Saturday then where does that leave the ACC? ESPN would obviously have to fill those Thursday/Friday slots with something but im not arguing they would cut the ACC off completely but that they would potentially abandon the current deal, end the ACC network and take their chances on signing a new deal to fill some of their other slots.

I guess another way to put it is I don't see why they would continue paying the ACC 40+ million a team for lower tier content.

 

[bobongo]

Again, color me in the camp of skepticism when it comes to FSU’s legal case. But they are barking up some kind of tree here, I just don’t know what it is. They either believe they’ve found something or this is a colossally high stakes poker bluff.

I used to think FSU had no case. Based on what was talked about, I couldn't see one. But then came talk about alleged Swofford/Raycom shenanigans. If that has legs, it could crack the GOR wide open.

 

[forensicbuzz]

But NDAs can be tricky, no?

I’m not suggesting that this particular situation falls under the “tricky” category but such situations have existed and have been seriously litigated in court.

What if the NDA covers up something criminal? What if the NDA causes provable damages to the reputation of one of the parties? What if the originating party to the NDA violates some aspect of the agreement, even a very minor one? What if there was something inappropriate in the way the NDA was required of parties to a contract?

Again, color me in the camp of skepticism when it comes to FSU’s legal case. But they are barking up some kind of tree here, I just don’t know what it is. They either believe they’ve found something or this is a colossally high stakes poker bluff.

I think this is for the court of public opinion (and by public, I mean the FSU fans).