Conference Realignment

[slugboy]

I’m not sure I’m following you. Are you saying Comcast and Dish/Direct TV don’t make money providing service? Maybe Cox doesn’t make much money, I don’t know, but industry is littered with some companies succeeding while others don’t. I am not saying there isn’t a market for Streaming. I’m simply saying there is a market for Cable/Satellite services too. I know there are many who love streaming, but there a many who also enjoy consuming content via one provider, one user interface, instant channel changing, one payment plan, etc.

A few years ago cutting the cord was the rage because it was significantly cheaper, however that is slowing down as streaming services become more expensive. Again, I think an equilibrium on how people consume content is much more plausible.

As a subscriber, cable companies bill the heck out of you. As their customer, it sure looks like cable companies make a ton of money.
As an investor, cable companies aren't money machines. They have a lot of labor costs, they have upstream expenses, they have to upgrade their plant and equipment all the time just to keep up. The reason why Comcast and ATT bought NBC and Time Warner is because they wanted the content for profitability. They wanted to take the cash from their subscriber bases and use that to move into more profitable services.
If you read books like Christensen's "The Innovators Dilemma", Microsoft made a ton of money on high-profit software while Seagate scraped by on much tighter margins making disk drives. You needed both for your PC to work, but Microsoft was in the position where they got the lion's share of the profits from PCs, Dell and HP made less, Seagate had even thinner margins, and the poor company making power supplies was just selling a commodity.

Fifteen years ago, Comcast was in the Seagate portion of the Cable TV market, while ESPN and Disney were in the Microsoft part of that market. Comcast made a long-term plan to move into the profitable ESPN and Disney "Content" part of the marketplace. Then Netflix disrupted everything.

Comcast and ATT wanted to move to the part of the market that got the fat, juicy profits. That hasn't worked out. They moved into the market, paid a premium to do it, and the profits went out of it. They also weren't good at it. The market shifted too--I can't even tell you what the prime time Thursday lineup is on NBC. I can tell you shows that Netflix or Disney will have three months from now. Disney was good at it, and they're moving to the streaming model.

Cable providers are going after cellphones and devices and general internet now. Comcast does have Peacock and NBC Sports, but they're struggling to figure out what to do.

They don't know what content people are going to want to watch 10 years from now, or where they'll want it, but they're pretty sure they'll want internet in their homes.

 

[Vespidae]

They don't know what content people are going to want to watch 10 years from now, or where they'll want it, but they're pretty sure they'll want internet in their homes.

True. But a) I have Spectrum and you can't just buy internet service. You have to buy a cable package first and then you can add internet/streaming. b) There is not enough bandwidth available to handle very large events. If 100 million people watched the Super Bowl all on streaming, the system would just shut down. Mine does it already when different programs are on in different rooms.

I'm sure they will address (b) in time. But you can bet cable companies are not going to go down without a fight.

 

[bobongo]

Dissolving the conference might be one option. But the unintended consequence is that GT will have NO local/regional rivals. That's not going to be good for fan interest and I expect we will take a huge hit in attendance and/or any future conference GOR. The more this trends, the more I expect Tech will end up like Tulane in a smaller, less prestigious conference.

We're safely tucked away for now in a conference that has won 3 nattys in the past decade, with time to improve our standing before the big bang, if it happens. That seems preferable to me than taking a leap right now into the unknown. I know fortune favors the bold, but famine awaits the foolish. The question is, which of these aphorisms applies to us? I certainly don't know for sure, but I favor the safe harbor for the time being. And I'm thankful to have it. Things could be a lot worse. We could be in the Pac 10 or the Big 12. We should be grateful to at least be in the ACC. For now. But who knows? If 8 gang up and decide to quit, we'll be cast adrift. If that happens, I hope we wash ashore on a friendly island.

 

[MidtownJacket]

Yeah seems like a lot of revisionist history for some of us is going on here. When the deal was announced, the intent was to secure the Conference together with legal lashing that protected against poaching our top programs. Mission accomplished.

The revenue gap between us and the B1G/EssECee is untenable but would be there with or without the GoR - some could argue that if we lost our top tier to one or both of them the gap would widen further.

I’m a homer of the first order when it comes to my team, but even I can’t argue we are being hurt by the ACC. We have to get back to winning and do so in a hurry on the football side / maintain&improve on the MBB side and hope we can navigate the next few years in a way more befitting The Institute’s historical legacy. Until then, we are being saved by the GOR keeping the Clemsons of the conference tied to us.

 

[SOWEGA Jacket]

Keep in mind that Oregon, with all their Nike money, who has been in the playoffs RECENTLY, got told "nah, we're full" by the B1G.

This is where too many people don’t think past the present. Sure, they were told that right now. But that has no bearing on the future. What if I told you that USC and UCLA were told not now by the BIG 2 years ago?

A month ago if someone posted that the BIG would be taking USC/UCLA in the near future you would have come in here and called them crazy. I absolutely believe that Oregon will be in the BIG soon enough. I also believe GT will be in the BIG soon enough. Now, in college football ”soon enough” could mean next week to 5 years. But if you look at the game the BIG and SEC are playing it’s fairly simple to see where we are headed. The BIG will add some more western schools to create more local games ala Oregon and Stanford and GT gives them the foot in the door in the south with easy travel into/out of Atlanta.

 

[Techster]

I think this is correct. The problem lies with the lack of a clear end result for the ACC school, or schools, that challenge the ACC GOR. The SEC probably already has all the revenue from Florida and SC media markets that is attainable. As a NC resident I can say that few people here care enough about a game between Auburn and LSU to move the needle even a little. Virginia is likely very much the same.

No one is leaving without the B1G or SEC tapping on their shoulder first. NO ONE leaves a good/decent situation to get into a worse situation...unless you're Bobby Dodd and GT...ahem.

That said, if there are 8 teams in the ACC that have been told by either the B1G or SEC that they have a place waiting for them, then I think there will be a LOT of behind the scenes vote tallying going on to dissolve the ACC so cherrypicked schools can move on without penalty of the GOR.

 

[bobongo]

No one is leaving without the B1G or SEC tapping on their shoulder first. NO ONE leaves a good/decent situation to get into a worse situation...unless you're Bobby Dodd and GT...ahem.

That said, if there are 8 teams in the ACC that have been told by either the B1G or SEC that they have a place waiting for them, then I think there will be a LOT of behind the scenes vote tallying going on to dissolve the ACC so cherrypicked schools can move on without penalty of the GOR.

No question if the SEC wants four and the B1G wants four, the ACC will come to its end. Hope we're one of the 8.

 

[Techster]

This is where too many people don’t think past the present. Sure, they were told that right now. But that has no bearing on the future. What if I told you that USC and UCLA were told not now by the BIG 2 years ago?

A month ago if someone posted that the BIG would be taking USC/UCLA in the near future you would have come in here and called them crazy. I absolutely believe that Oregon will be in the BIG soon enough. I also believe GT will be in the BIG soon enough. Now, in college football ”soon enough” could mean next week to 5 years. But if you look at the game the BIG and SEC are playing it’s fairly simple to see where we are headed. The BIG will add some more western schools to create more local games ala Oregon and Stanford and GT gives them the foot in the door in the south with easy travel into/out of Atlanta.

I think the gameplan by the SEC and B1G has been masterful. I've also said that the B1G and SEC are not done...the time isn't right yet to bring on other schools.

IMO, the plan for the SEC and B1G has been to cut the head off each conference (get the flagship schools), then cherry pick the remnants. The remaining schools now know that staying in their current conference isn't tenable if they want to compete with the Super 2. Once their media and GOR rights expire, there will be more tectonic shifts in the landscape. This move also gives them cover against any tortious interference lawsuits from other conferences and schools that will obviously be economically hurt by the big brands leaving the conference. By taking the head off the beast, the SEC and B1G are now forcing other prized schools to move, or slowly perish on the vine, when their respective media deals are done.

Which brings us to the ACC. ACC schools made the GOR deal hoping to keep the more desirable schools from leaving, but what's going on is it's keeping EVERYONE tethered to a media deal widely regarded as one that gets worse and worse by the year. I think a school like Wake Forest/NC State/BC/Syracuse/Pitt (and some extent GT) are OK with it because the ACC is the best it's going to get for them. For schools like UNC/UVA/FSU/Miami/Clemson/GT (who was already tapped on the shoulder by the B1G a decade ago) who have or had other options previously, the GOR deal is starting to become an anchor to their ambitions.

 

[Techster]

 

[CEB]

I don’t even know who or what to reply to at this point, I will just throw this out....

Rampant speculation to follow....
It seems to me that a LOT of the bump the BIG is hoping to get (keep in mind, they have not yet gotten it, but given their position we all expect they will) is coming from a fundamental shift in how the media is valuing these media deals. Everyone is suspecting that new trends / models / projections point to greatly increased revenue in live sports. Obviously the biggest teams will be the biggest draws and the highest revenue but the underlying point is that all of these live sports media deals may currently be very under valued. BIG is making noise because they are in the midst of a renegotiation. They are simply the first to the table in this new environment. I am sure the SEC is watching very eagerly because if BIG projections are anywhere close to what is being thrown around, you can bet the SEC is going to start looking for ways back to the negotiating table too.
Which brings us to the ACC... in theory, our deal is also currently undervalued. In 12-13 years, presumably, it will be grotesquely undervalued. I don’t know the provisions which would allow us to get back to the negotiating table but I suspect they would involve a fundamental change in membership (however the agreement defines that). Therefore, if we could add teams, we could get to the negotiating table. However, if there is unrest among our members, the process of adding teams gets complicated.... existing members bargaining their “yes” vote for a release from GOR or a guaranteed payout? Total speculation, but the long and short of it is;
- there is value already in the ACC that we are not realizing.
- our ability to realize that value potentially destabilizes the conference
- we’re 14 years away from a natural expiration of the agreement; a HUGE sum of money would remain unrealized if we do nothing.
- if we leap into action and jeopardize any current members, there’s no guarantee that new members offset the loss
However.... if these value swings are really as massive as people are projecting, standing pat may be a worse option than losing a couple of members. Then again, the loss of major members could have a long term effect of further widening the gulf between the ACC and BIGSECY.
I’m starting to feel like Phillips here... Can’t we all just get along?!?

 

[iceeater1969]

No question if the SEC wants four and the B1G wants four, the ACC will come to its end. Hope we're one of the 8.

How does ESPN void the weak sister loooong term ACC contract?

They have to give a little to Bg1.while making their CASH COW SEC stronger.

The colleges are the weak negotiators.
.
Bottom feeders with some markets like gt may be told = u are in if u do a MASSIVE FUND RAISING FOR OPERATING EXPENSES.
.

 

[CEB]

Bottom feeders with some markets like gt may be told = u are in if u do a MASSIVE FUND RAISING FOR OPERATING EXPENSES.

Honestly, I think we already know this regardless of whether or not someone has told us. I hope we have the ability to do it.

If we put our faith in the conference and we do nothing, we know our fate. Our best case is bottom dweller in whatever the ACC becomes.

I’m hoping we are making the investments and building the infrastructure that will either take us to a bigger and better situation or make us one of the top contenders in a strengthened ACC.

 

[bobongo]

How does ESPN void the weak sister loooong term ACC contract?

I'm guessing the contract would be voided by default because the ACC would no longer exist.
You can't have a Division I conference with fewer than 7 schools, by NCAA rules.

 

[orientalnc]

True. But a) I have Spectrum and you can't just buy internet service. You have to buy a cable package first and then you can add internet/streaming. b) There is not enough bandwidth available to handle very large events. If 100 million people watched the Super Bowl all on streaming, the system would just shut down. Mine does it already when different programs are on in different rooms.

I'm sure they will address (b) in time. But you can bet cable companies are not going to go down without a fight.

I have internet without cable from Spectrum.

 

[forensicbuzz]

It sounds great but Do you honestly think anyone in charge at the ACC could make a deal of this magnitude happen? Or anykind of a good deal?

yes

 

[forensicbuzz]

Anyone who ever says anything along the lines of “it’s for the kids” etc. is either corrupt to the core or dumber than a box of rocks. I refuse to believe Phillips is dumb.

He's neither, but does believe it should be about student-athletes/ That being said, he understands the big business of college football.

 

[slugboy]

While it’s interesting beer talk (or coffee talk) to discuss 8 teams leaving the ACC, the driver is marquee matchups




Clemson-Miami fits that bill. Clemson-Texas fits that bill.

Does FSU-Auburn? Five years ago, yes. Today, I’d say “no”

Are there 8 teams in the ACC that provide marquee matchups? No

Clemson, yes
Miami, less so, but plausible
UNC, FSU, VT? Not lately, but UNC is the closest

 

[bobongo]

Are there 8 teams in the ACC that provide marquee matchups? No

There are not 8 teams in the ACC that are wanted by the B1G and the SEC.
But if they want, say, 4 of them, they'll have to take four more in order to dissolve the ACC and beat the GOR.
I think it's either 8 or nothing. Probably nothing.

 

[RonJohn]

While it’s interesting beer talk (or coffee talk) to discuss 8 teams leaving the ACC, the driver is marquee matchups




Clemson-Miami fits that bill. Clemson-Texas fits that bill.

Does FSU-Auburn? Five years ago, yes. Today, I’d say “no”

Are there 8 teams in the ACC that provide marquee matchups? No

Clemson, yes
Miami, less so, but plausible
UNC, FSU, VT? Not lately, but UNC is the closest

That list of marquee matchups can change yearly and easily change every five years. Are USC and UCLA really "marquee" matchups now? They are closer to your examples of FSU and Auburn. They have a market and they have brand history.

Clemson has won 10 plus games since 2011, but were only a good/decent team through the 90s and 2000s. Texas won 10 plus games through the 2000s, but has been mainly a 5-8 win team since then. "Marquee" matchups can change even during the season. It is very likely that some of the games that people think will be in the top ten games of the 2022 season will end up being irrelevant.

I don't think there is a way out of the GOR, even if 10 ACC teams decide to leave. (The GOR language that is available says that every current member has to vote to end it. The remaining four could invite at least four more in to keep above 7.) I think that the discussion about marquee matchups and wanting to see this team vs that team is all simply "fan" talk. You can't make long term decisions based on short term data. Even with Alabama, they could turn into the current FSU when Saban is no longer coaching.

 

[CEB]

There are not 8 teams in the ACC that are wanted by the B1G and the SEC.
But if they want, say, 4 of them, they'll have to take four more in order to dissolve the ACC and beat the GOR.
I think it's either 8 or nothing. Probably nothing.

GOR will go away in 2036 or when the ACC (all members) agrees to end it. At that point some number of teams will depart. A whole lot of things can influence when / if the ACC ends GOR but the number teams deciding to leave is not pertinent unless that number is 15.