Conference Realignment

[RonJohn]

Someone correct me if I did not understand the Commissioner correctly concerning the ''option". I Paraphrase the discussion with one reporter below.

Phillips said that the ACC had a great relationship with ESPN. A Reporter referred to the February option date, then asked why ESPN wouldn't just publicly say that the contract was firm through 2036 assuming the relationship with the ACC was so good.

Phillips replied that he could not discuss specifics of the contract, but he could say that "ONE ITEM in the contract had been reviewed and that ESPN was not going anywhere".

To me, he was telling us that the Option had been revised to protect the ACC through 2036, but he could not discuss details due to confidentially of the contract.

Am I misreading what was said?

What he said could be taken many ways. He answered much like a politician. "progress on one component of the contract" could mean discussions that ESPN is not going to opt-out of the ACC. It could mean discussions that ESPN is not going to opt-out of the ACCN. It could mean that they are close to an agreement on future payments after a look-in. It could mean that they have had "positive discussion" only about one component of the contract and that they can't agree on anything else. He said a lot of words without actually saying anything. Something I did find interesting though was the discussion about monetizing things that are not currently being monetized. Here is a transcript of that answer that I found. I left out discussions about Coach K that he had with the reporter before this answer.

We have a great relationship. I'm not just saying that. We have a great relationship with ESPN and the ACC Network, all of rest of that. We've had significant positive discussions and progress on one component of the contract.

Our partnership with ESPN is not going away. It's not going away. We have talked to them about additional resources and how do we monetize it.

We're 50/50 partners on that. They're as motivated as we are to generate more revenue for the overall television deal. I'm very optimistic about where we're going with them. They understand the importance.

I'll just leave it at that.

 

[forensicbuzz]

Your reply above is a very rudimentary and simplistic understanding of contract law. The GOR was signed (twice) knowing that 1. ESPN would be the media partner (GOR specifically points to and names ESPN multiple times), and 2. All schools had a minimal expectation of revenue payouts which is clearly spelled out in the ESPN media contracts.

IF (big IF) ESPN exercises their unilateral option and the ACC has to find another media partner, ACC schools (not just FSU and Clemson) will have a case if:

1. The ACC can only find a media partner only willing to pay substantially LESS than the terms outlined by the original ESPN media contract. An ACC school can make the case that they assigned their rights to the ACC with the understanding that they (the ACC schools) would have a minimal revenue expectations based on the ESPN media contract ACC schools signed.

[Spanish accent] "You keep using that word. I don't think it means what you think it means."

Shouldn't your response talk about "IF" ESPN has a unilateral out? No one on the outside knows what's in the ESPN contract or what the 2027 option is. If it's just the ACCN, then the contract runs through 2036 and all this wrangling is a moot point.

 

[LT 1967]

What he said could be taken many ways. He answered much like a politician. "progress on one component of the contract" could mean discussions that ESPN is not going to opt-out of the ACC. It could mean discussions that ESPN is not going to opt-out of the ACCN. It could mean that they are close to an agreement on future payments after a look-in. It could mean that they have had "positive discussion" only about one component of the contract and that they can't agree on anything else. He said a lot of words without actually saying anything. Something I did find interesting though was the discussion about monetizing things that are not currently being monetized. Here is a transcript of that answer that I found. I left out discussion about Coach K that he had with the reporter before this answer.

Thanks for the transcript. I will say that I was pleased with the Commissioner's more forceful tone and his defense of the ACC. He made some pretty blunt comments concerning FSU and Clemson. He also defended former Commissioner Swafford concerning FSU's accusation of nepotism in their filing.

David Hale asked Phillips about his more Forceful and Emotional tone as he discussed the FSU and Clemson situation. He answered that the current situation called for a forceful response.

The reporter from the "Clemson Insider" made a comment about the Commissioner's strong comments concerning Clemson and FSU. The reporter acted like everyone should just be nice and sweet to the two deserters. Personally, I wish he had been tougher.

Even though nothing can be done about the situation, I am glad he let everyone know how much it was hurting the conference!

 

[iceeater1969]

You are right. The feb date was mentioned.
Then Phillips danced , extended, but could not show any where that espn said something positive

Actually ESPN has to avoid taking sides ( harming the case of either party.

Phillips has to say we will fight for acc and we,are great and getting better.

Loved how he ended with high hopes,for great ACC conference games and acc wins in out conference games.

Yea, its possible but not likely that
1. Gt starts season besting the acc rebellion leader fsu.
2. Gt beats the premadona ND in the benz in prime time .
3. Gt goes to athens and beats the probable national champion UGA.
ACC rules!

 

[Richard7125]

I totally agree. I will absolutely enjoy the season like I always do. I just actually see the big picture. There will be a lot of fanbases crying after they have a great season and then don’t get in because of conference affiliation. All these fans who laughed and took so much joy in seeing FSU left out will be whining big time when it’s them. Everyone will see, fairly early in the season, how the polls are suddenly different from the past.

No one laughed and took joy at seeing FSU being left out of the playoffs. People didn't start poking fun at FSU until their entire team opted out of their bowl game and then grew a lot louder when FSU sued the ACC.

 

[UgaBlows]

This thread would die down if Techster and RonJon could just ignore each other lol

 

[Techster]

This thread would die down if Techster and RonJon could just ignore each other lol

I vow to take this thread to 1000 pages with my BFF @RonJohn !

We are not going to let the haters keep us from reaching our goals!

 

[Augusta_Jacket]

I vow to take this thread to 1000 pages with my BFF @RonJohn !

We are not going to let the haters keep us from reaching our goals!

Note to self: "Lock this thread when page count equals 999..."

 

[slugboy]

Note to self: "Lock this thread when page count equals 999..."

Or all 6’s.

 

[Techster]

I'll chime in.

All I can say is that in my experience with lawyers, they try to avoid using the term “guarantee” because it can to open up a can of worms.

I seriously doubt that the ESPN agreement uses that word. There may be a payment schedule tied to some performance criteria, but the payment schedule would be to the conference and is unlikely to mention the member school’s shares.

The GOR does not guarantee anything to the member schools. The “exchange of value” is simply the media rights in exchange for the ability for the conference to have media revenue per whatever the ESPN agreement says.

It could be argued that the media rights granted are predicated upon the ESPN contract being in force, since it is specifically called out. Therefore, if ESPN declines to extend, the GOR could be invalidated at the expiration of the ESPN deal, but no earlier.

Technically, contracts themselves are "guarantees", otherwise we wouldn't need them.

I have to sign off on multiple contracts per day, although most of them are typical form contracts, there is definitely "guarantee" language that protects both sides.

Here's an old media contract between UNC and Learfield communications (ironically on an ESPN site). Scroll to page 8:

https://a.espncdn.com/i/mag/blog/2010/thefile/unc/unc1.pdf

Notice the "Guaranteed" payout schedule. My best guess is that there is a similar "guaranteed" payout schedule for the ACC as a conference, and there's language in the media contract that sets up the formula of how each member of the ACC is paid out from that "guaranteed" schedule. There's most likely a formula for any additional revenue over and above the "guaranteed" amount.

The other good clue on how we know what each school is guaranteed is future forecasts for each member of each conference. How do we know that? Most media contracts are structured the same way (for the most part), so reporters are making an educated guess based on past experience of how each member was paid.

Current College Sports Television Contracts

Trying to figure out which network has tv rights for which conference and for which sports or games? Check our updated list.

businessofcollegesports.com

No good lawyer is going to let their client sign anything without clear language of how they will be compensated.

Like I said, none of us has seen the actual ESPN agreement, so our best guess is the information available to us, and our own history of how contracts work. In my experience, if you're signing your most valuable possession away (a school's media rights), you're most certainly going to know the minimum amount expected as compensation. This is how each school sets their sports budget annually.

********

As an aside, the average ACC member payout is surprisingly not too far behind the SEC...at the moment:

https://www.news10.com/sports/ap-acc-commissioner-promises-to-fight-for-as-long-as-it-takes-amid-legal-battles-with-clemson-fsu/

ACC: $44.8 million/member

B1G: $60.3 million/member
SEC: $51.3 million/member
Big 12: $44.2 million/member

The interesting part of that is the ACC isn't that far ahead of the Big 12. If FSU and Clemson (among others) leave, I don't expect the ACC to hold the small advantage over the Big 12. The Big 12 is also an example of why media markets still matter. Even though some of their new members were brought in from outside the P5 (UCF, Cinncinnati, Houston) or came from another P5 conference (Arizona, ASU, Colorado, Utah), they were all taken from strategic media markets. This is why the Big 12 was able to lose Texas and Oklahoma, two of the biggest blue blood names in college football, and still maintain a striking distance to the ACC.

 

[stinger78]

P

Technically, contracts themselves are "guarantees", otherwise we wouldn't need them.

I have to sign off on multiple contracts per day, although most of them are typical form contracts, there is definitely "guarantee" language that protects both sides.

Here's an old media contract between UNC and Learfield communications (ironically on an ESPN site). Scroll to page 8:

https://a.espncdn.com/i/mag/blog/2010/thefile/unc/unc1.pdf

Notice the "Guaranteed" payout schedule. My best guess is that there is a similar "guaranteed" payout schedule for the ACC as a conference, and there's language in the media contract that sets up the formula of how each member of the ACC is paid out from that "guaranteed" schedule. There's most likely a formula for any additional revenue over and above the "guaranteed" amount.

The other good clue on how we know what each school is guaranteed is future forecasts for each member of each conference. How do we know that? Most media contracts are structured the same way (for the most part), so reporters are making an educated guess based on past experience of how each member was paid.

Current College Sports Television Contracts

Trying to figure out which network has tv rights for which conference and for which sports or games? Check our updated list.

businessofcollegesports.com

No good lawyer is going to let their client sign anything without clear language of how they will be compensated.

Like I said, none of us has seen the actual ESPN agreement, so our best guess is the information available to us, and our own history of how contracts work. In my experience, if you're signing your most valuable possession away (a school's media rights), you're most certainly going to know the minimum amount expected as compensation. This is how each school sets their sports budget annually.

********

As an aside, the average ACC member payout is surprisingly not too far behind the SEC...at the moment:

https://www.news10.com/sports/ap-acc-commissioner-promises-to-fight-for-as-long-as-it-takes-amid-legal-battles-with-clemson-fsu/

ACC: $44.8 million/member

B1G: $60.3 million/member
SEC: $51.3 million/member
Big 12: $44.2 million/member

The interesting part of that is the ACC isn't that far ahead of the Big 12. If FSU and Clemson (among others) leave, I don't expect the ACC to hold the small advantage over the Big 12. The Big 12 is also an example of why media markets still matter. Even though some of their new members were brought in from outside the P5 (UCF, Cinncinnati, Houston) or came from another P5 conference (Arizona, ASU, Colorado, Utah), they were all taken from strategic media markets. This is why the Big 12 was able to lose Texas and Oklahoma, two of the biggest blue blood names in college football, and still maintain a striking distance to the ACC.

Do these numbers include any additional media payouts from now being in the Dallas and San Francisco metroplexes? If not, that should add more to the pot. Is sEcSPN going to take a look-in and update the contract?

 

[Techster]

P

Do these numbers include any additional media payouts from now being in the Dallas and San Francisco metroplexes? If not, that should add more to the pot. Is sEcSPN going to take a look-in and update the contract?

I would guess not since the new schools were just added...but same goes for Big 12, SEC, B1G and their new additions.

 

[stinger78]

I would guess not since the new schools were just added...but same goes for Big 12, SEC, B1G and their new additions.

The SEcheat was already in Tejas and UTA has their own network. They did add OK.

The ACC added the #s 1 and 2 states ranked by population.

The SECheat already had the #2 state (TX) and added OK (#28).

I would think that the ACC should catch up a bit, but what do I know?

 

[roadkill]

Technically, contracts themselves are "guarantees", otherwise we wouldn't need them.

I have to sign off on multiple contracts per day, although most of them are typical form contracts, there is definitely "guarantee" language that protects both sides.

Here's an old media contract between UNC and Learfield communications (ironically on an ESPN site). Scroll to page 8:

https://a.espncdn.com/i/mag/blog/2010/thefile/unc/unc1.pdf

Notice the "Guaranteed" payout schedule. My best guess is that there is a similar "guaranteed" payout schedule for the ACC as a conference, and there's language in the media contract that sets up the formula of how each member of the ACC is paid out from that "guaranteed" schedule. There's most likely a formula for any additional revenue over and above the "guaranteed" amount.

The other good clue on how we know what each school is guaranteed is future forecasts for each member of each conference. How do we know that? Most media contracts are structured the same way (for the most part), so reporters are making an educated guess based on past experience of how each member was paid.

Current College Sports Television Contracts

Trying to figure out which network has tv rights for which conference and for which sports or games? Check our updated list.

businessofcollegesports.com

No good lawyer is going to let their client sign anything without clear language of how they will be compensated.

Like I said, none of us has seen the actual ESPN agreement, so our best guess is the information available to us, and our own history of how contracts work. In my experience, if you're signing your most valuable possession away (a school's media rights), you're most certainly going to know the minimum amount expected as compensation. This is how each school sets their sports budget annually.

********

As an aside, the average ACC member payout is surprisingly not too far behind the SEC...at the moment:

https://www.news10.com/sports/ap-acc-commissioner-promises-to-fight-for-as-long-as-it-takes-amid-legal-battles-with-clemson-fsu/

ACC: $44.8 million/member

B1G: $60.3 million/member
SEC: $51.3 million/member
Big 12: $44.2 million/member

The interesting part of that is the ACC isn't that far ahead of the Big 12. If FSU and Clemson (among others) leave, I don't expect the ACC to hold the small advantage over the Big 12. The Big 12 is also an example of why media markets still matter. Even though some of their new members were brought in from outside the P5 (UCF, Cinncinnati, Houston) or came from another P5 conference (Arizona, ASU, Colorado, Utah), they were all taken from strategic media markets. This is why the Big 12 was able to lose Texas and Oklahoma, two of the biggest blue blood names in college football, and still maintain a striking distance to the ACC.

Thanks for sharing. Based on your example, I stand corrected regarding the use of the term "guarantee" in media contracts. Perhaps we will be able to confirm if it is used in the ESPN agreement if the redacted version being given to FSU is made public.

 

[roadkill]

P

Do these numbers include any additional media payouts from now being in the Dallas and San Francisco metroplexes? If not, that should add more to the pot. Is sEcSPN going to take a look-in and update the contract?

This is from a reporter so take it for what that's worth - but it specifies what the additional schools should bring to the ACC'c media deal.

 

[stinger78]

This is from a reporter so take it for what that's worth - but it specifies what the additional schools should bring to the ACC'c media deal.

So about $4.8M each. $72 / 30 half shares (14 full shares plus half share for ND and Cal/Stan together)? That would move the ACC per-team payout to roughly $50M per team, with the SECheat at $50M and the B1G at $60M. However, that doesn't include the increases they will get as a result of adding UTA/OU and USC/UCLA/OU/UW respectively.

 

[roadkill]

So about $4.8M each. $72 / 30 half shares (14 full shares plus half share for ND and Cal/Stan together)? That would move the ACC per-team payout to roughly $50M per team, with the SECheat at $50M and the B1G at $60M. However, that doesn't include the increases they will get as a result of adding UTA/OU and USC/UCLA/OU/UW respectively.

Sounds about right. It's also reasonable to assume that the other conferences have similar pro-rata clauses, so the ACC is not really closing the gap with our recent adds. Although there is likely a small relative benefit to the ACC from SMU taking nothing for 7 years, but I haven't done the math.

 

[stinger78]

Sounds about right. It's also reasonable to assume that the other conferences have similar pro-rata clauses, so the ACC is not really closing the gap with our recent adds. Although there is likely a small relative benefit to the ACC from SMU taking nothing for 7 years, but I haven't done the math.

I can’t (haven’t tried to) remember if the new B1G deal includes the 4 west coast teams or not. Maybe it does? The SECheat may indeed get a good bump, but unless UTA opens up shares with the LHN I can’t see them hugely impacting the media package. Will OU bring that much? OK is in the bottom half of states by population.

 

[RonJohn]

So about $4.8M each. $72 / 30 half shares (14 full shares plus half share for ND and Cal/Stan together)? That would move the ACC per-team payout to roughly $50M per team, with the SECheat at $50M and the B1G at $60M. However, that doesn't include the increases they will get as a result of adding UTA/OU and USC/UCLA/OU/UW respectively.

That also does not take into account that the Big10 and SEC are now under new media contracts. Their payout schedule is significantly more in the next few years than just a percentage increase per year. The Big10 is on track to be around $100 million per school per year by 2030. The new payment schedules for those two conferences is the reason that ACC teams were not happy with the ACC contract last year.

 

[forensicbuzz]

According to Jim's speech yesterday, there is a potential for up to another $25MM for teams that perform at the top. So, if FSU runs through football and basketball in the ACC and wins the NC, they could earn $75MM next year. I guess they should shut up and play to win.