Conference Realignment

[TechPhi97]

The PE proposal I read said the PE investors would take a declining percentage of the growth in revenue over a 20 year period It started at something like 25%.

Normally, PE wants to have a significant role in key management decisions. Would they want to fire the coach if the team went 4-8 and revenue actually declined? Or, would it be the AD that gets fired?

They would rule the conference, not the schools. They could change distribution systems and do things like rewarding schools with distributions based on performance. Schools would get less over time, except those that consistently excel. I have no idea if this is what they’re thinking, just brainstorming stuff. But the thing all PE firms take is decision rights. I don’t think the Presidents of the schools will go for that.

 

[RonJohn]

We would still televise their games - they just wouldn’t get any money for it.

My post was in response to someone asking what would happen if FSU blocked ESPN from having access to broadcast the games.

 

[cpf2001]

Aren’t they doing that now by guaranteeing a spot and specific money to be allocated to the ACC? Better to keep them “in the game” for scheduling than absorbing and giving a conference share.

There are a good 6-10 teams in the ACC that could put together a playoff run or knock off a top 5 SEC team without anyone being too shocked. Surprised in any given year; sure, but even GT against UGA isn’t App State vs Michigan, despite Collins’ best efforts.

That’s not true for the “Buffalo, Charlotte, Wake” programs. And the ones who will be on the outside looking in when the big 2 conferences reach their final sizes will be profiles like that (or will fall to that level).

 

[Thwg777]

Given Free Shoes performance in the Orange Bowl, why don’t they just go back to being an all women’s college again? That would stick it to the ACC!

 

[SimpleGT]

It doesn’t have to be just the ACC. Buffalo, Charlotte, Wake … all are small in the world of CFB.

The SEC, to name a conference, does not want more SEC games. They don’t want to beat themselves, so they need OOC opponents. It would be far cheaper to align with a group of teams and simply pay them rather than give them a conference share. It’s the same as manufacturing… why do it in-house if you don’t have to?

This will take a decade to play out, but I think distributions would be preferable so as not to dilute conference shares.

I hear the Washington Generals are available as sacrificial lambs

 

[Vespidae]

There are a good 6-10 teams in the ACC that could put together a playoff run or knock off a top 5 SEC team without anyone being too shocked. Surprised in any given year; sure, but even GT against UGA isn’t App State vs Michigan, despite Collins’ best efforts.

That’s not true for the “Buffalo, Charlotte, Wake” programs. And the ones who will be on the outside looking in when the big 2 conferences reach their final sizes will be profiles like that (or will fall to that level).

Hence, keep the programs you mentioned viable, yes?

 

[cpf2001]

Hence, keep the programs you mentioned viable, yes?

How, when they’re starting already to fight for their life to get out of that situation? The ACC is on a trajectory to only get less viable, so games against programs in it that don’t get invites to the big leagues only get less relevant to TV and fan interest.

 

[Flajacket]

Do you understand what the ROI is for large PE funding of college athletics? For example, it was reported that FSU was seeking $500 million in PE funds in order to buy their way out of the ACC. PE investors require large returns on their investments and usually want large returns, plus a near term exit. How would FSU be able to pay a 20% return ($100 million per year), offer a way to exit at a highly appreciated amount, and still make more revenue than they get from the ACC? (or even any revenue at all?) Financially it doesn't make any sense to me.

Kinda sounds like loan shark numbers.

 

[Vespidae]

How, when they’re starting already to fight for their life to get out of that situation? The ACC is on a trajectory to only get less viable, so games against programs in it that don’t get invites to the big leagues only get less relevant to TV and fan interest.

Um, no. The ACC is not bankrupt. It’s not in decline. Revenues are increasing. They are simply less than the P2 and growing more slowly.

Not every D1 team can be in the P2. Nor should they. The reality is there are big market teams with lots of resources and small market teams without. And there’s nothing new about that.

 

[forensicbuzz]

Um, no. The ACC is not bankrupt. It’s not in decline. Revenues are increasing. They are simply less than the P2 and growing more slowly.

Not every D1 team can be in the P2. Nor should they. The reality is there are big market teams with lots of resources and small market teams without. And there’s nothing new about that.

There are big market teams without resources and small market teams with big resources? How big a market is New Orleans / Baton Rouge?

These are serious questions, not intended to start an argument.

 

[cpf2001]

Um, no. The ACC is not bankrupt. It’s not in decline. Revenues are increasing. They are simply less than the P2 and growing more slowly.

Not every D1 team can be in the P2. Nor should they. The reality is there are big market teams with lots of resources and small market teams without. And there’s nothing new about that.

The ACC also hasn’t lost its highest-viewership teams. Yet.

All of this is predicated on the idea that the big 2 leagues aren’t done growing.

The folks who get left behind will be in a doom spiral. And there will be no viewers or money in an SEC team playing the faded corpse of Syracuse instead of another conference game, once expanded playoffs mean one or two losses don’t disqualify you. Exhibition games against lower competition just don’t draw like that in the US.

Why waste a TV spot in a 12 week regular season on UGA demolishing someone in a game nobody cares about? There’s more money in playing a low-to-mid-tier Big 10 team, even if you aren’t trying to make it a truly marquee matchup.

 

[WreckinGT]

The ACC also hasn’t lost its highest-viewership teams. Yet.

All of this is predicated on the idea that the big 2 leagues aren’t done growing.

The folks who get left behind will be in a doom spiral. And there will be no viewers or money in an SEC team playing the faded corpse of Syracuse instead of another conference game, once expanded playoffs mean one or two losses don’t disqualify you. Exhibition games against lower competition just don’t draw like that in the US.

Why waste a TV spot in a 12 week regular season on UGA demolishing someone in a game nobody cares about? There’s more money in playing a low-to-mid-tier Big 10 team, even if you aren’t trying to make it a truly marquee matchup.

If the SEC goes to a 9 game schedule at some point then it will likely be 9 conference games, 1 FCS, 1 G7 game, 1 P2 game for most teams. They won't stop playing the ACC or the B12 for a while but it will be a second tier game and it won't be surprising if they move the games to earlier in the season.

 

[Vespidae]

All of this is predicated on the idea that the big 2 leagues aren’t done growing.

Listen to Greg Sankey, SEC Commissioner. They are NOT trying to “save” college football. They are trying to do what’s best for the SEC. And Tony Pettiti, Big Ten Commissioner, is doing likewise for the Big Ten.

Does CFB need 128 football teams. No. Neither did the NFL. It’s called “creative destruction” … industries devolve, reallocate capital, new alliances form.

Teams will still play football. Yes, some teams will become drop down in profile. I don’t think either P2 is going to lose any sleep over UAB, Southern Miss, Wake Forest or … any other program that isn’t accretive.

The ACCN is profitable today. The best thing for any program not in the P2 is pare down debt and right size for its fanbase and demand. Its the ones who are upside down that have a reckoning coming.

 

[orientalnc]

Listen to Greg Sankey, SEC Commissioner. They are NOT trying to “save” college football. They are trying to do what’s best for the SEC. And Tony Pettiti, Big Ten Commissioner, is doing likewise for the Big Ten.

Does CFB need 128 football teams. No. Neither did the NFL. It’s called “creative destruction” … industries devolve, reallocate capital, new alliances form.

Teams will still play football. Yes, some teams will become drop down in profile. I don’t think either P2 is going to lose any sleep over UAB, Southern Miss, Wake Forest or … any other program that isn’t accretive.

The ACCN is profitable today. The best thing for any program not in the P2 is pare down debt and right size for its fanbase and demand. Its the ones who are upside down that have a reckoning coming.

I chat with an FSU alum regularly and he is convinced ESPN will opt out of the ACC contract next year. He believes the ACCN is losing money.

 

[Vespidae]

I chat with an FSU alum regularly and he is convinced ESPN will opt out of the ACC contract next year. He believes the ACCN is losing money.

ESPN told the ACC not to do it, so there’s that. I would expect them to immediately option to Fox. Or other.

 

[stinger78]

Did Jesse “Secspeed” Palmer tell him that?

 

[orientalnc]

ESPN told the ACC not to do it, so there’s that. I would expect them to immediately option to Fox. Or other.

A couple of things my UNC connected neighbor shared:

The ACCN contract is separate from the main media contract. Also from the extension contracts.
Since the ACCN is not Nielsen rated, how are ads rates set? How are carriage rates set for the conference networks? Bottom line, how does one determine that the ACCN is losing money? Or, is profitable.

It seems to me that the ACCN is a pretty cheap way for ESPN to cover all the non-rev sports and the lower interest rev sport games. It's a part of the cable lineup in every ACC market and I doubt closing it down will affect the subscriber rates either way. If closing it forces more views onto their streaming platform, what is the cost impact?

Maybe ESPN knows the answers to all those questions, but I don't see how a fan can make an educated guess.

Also, if the option is for the entire ACC-ESPN media deal, how will ESPN replace the content they would lose?

 

[Techster]

Also, if the option is for the entire ACC-ESPN media deal, how will ESPN replace the content they would lose?

They would reshuffle the deck with other non-ACC content. ESPN is partnered with 2 other P4 leagues spread across all 4 time zones. Does America really Duke-NC State on ESPN Plus at noon when UGA is playing Arkansas on ABC or the main ESPN channel? Does anyone care that Wake Forest and Syracuse can only be watched on ACCN at 330pm when UCF and Oklahoma State are playing on ABC or ESPN 2?

This what I've been trying to say about ESPN consolidating and the "cream of the crop" ACC teams finding homes in the Big 12/SEC or B1G. There's more than enough content once consolidation begins because there's more than enough teams out there to fill it. Of all the arguments against the ESPN not renewing, "not enough content" is probably the way down the list of concerns for ESPN.

 

[Northeast Stinger]

Rather than look at one game, look at the number of Nielsen appearances and the average viewership. That‘s how value is determined.

It is historically low. I hate to break it you, but Tech does not drive ratings. And they have not appeared on a lot of Nielsen networks. Low appearances and low ratings per appearance. Not great.

The way media rights work, Tech’s numbers dilute the total reported conference numbers. That’s simply a fact. I know you don’t like it, so take it up with ESPN/Fox/NBC etc.

A benefit to Tech is that they are not on Nielsen rated networks very often and that’s good, because those numbers are excluded from the calculation. So Tech vs Duke on the ACCN really doesn’t matter. Tech v Georgia on ABC does.

Ask yourself each week, “What is the best matchup, that will appeal to the greatest number of Nielsen viewers?”

I’m not judging one way or another, but simply trying to explain things In a way that might be useful. One thing I find with this forum is a tendency to be an echo chamber and I encourage you to think for yourself. Not everything presented here is factually correct.

A final note. Yes, I teach college. I find that a number of posters here have personally insulted me as a hack for teaching and thats fine. I think it says more about them than me. But I am semi retired. Prior to teaching, I ran a half billion dollar company with operations in 180 countries. I’m not bragging, but I think I have the contacts (including the former chairman of Nielsen) and experience to bring a perspective you might value. If you don’t, just read it and discard it and do your own thing.

One of the questions I have is a little hard to encapsulate succinctly so bear with me.

Tech was once the hottest ticket in town and had a national following. Yes, I’m going way back. We don’t have to go over all the reasons for why this is no longer the case. Media has changed, entertainment has changed, sports have changed, news has changed, the country has changed, and Tech is no longer considered a national power, and these are all starting points for different conversations.

My question is, has there ever been a team of Tech’s national reputation and draw, that has gone through the decades long decline we have, who has gone back to being a nationally recognized power and has recovered the same drawing power and media share they once had?

I can’t think of any team that has done that but I don’t know which factor that is a feature of, other than failure to win consistently, but that is an interesting thought experiment to me if you have an opinion.

 

[Vespidae]

A couple of things my UNC connected neighbor shared:

The ACCN contract is separate from the main media contract. Also from the extension contracts.
Since the ACCN is not Nielsen rated, how are ads rates set? How are carriage rates set for the conference networks? Bottom line, how does one determine that the ACCN is losing money? Or, is profitable.

It seems to me that the ACCN is a pretty cheap way for ESPN to cover all the non-rev sports and the lower interest rev sport games. It's a part of the cable lineup in every ACC market and I doubt closing it down will affect the subscriber rates either way. If closing it forces more views onto their streaming platform, what is the cost impact?

Maybe ESPN knows the answers to all those questions, but I don't see how a fan can make an educated guess.

Also, if the option is for the entire ACC-ESPN media deal, how will ESPN replace the content they would lose?

There are several valuations floating out there re the ACCN. They tend to say the same thing ... the ACCN is profitable and because it is a jv, splits profits 50/50 with ESPN. It is estimated to dump about off about $9M to each team. This number appears to be confirmed by GTAA's own financial statements as it is noted separate from the ACC media rights distribution.

As you said, there are media rights and there is money made directly by the network. Two separate issues. It isn't clear to me if FSU were to leave, if they return their equity value in the ACCN. Not sure.

Not being Nielsen simply means a lower quality viewer, so ad rates are typically less. It is the same for the SEC Network.