Expansion Talk 2021

[alagold]

Snakes eat rats. Go snakes.

I have a wonderful rat snake (or two) that are around my house/yard.I love to watch them ---and what they eat--RATS.

 

[Northeast Stinger]

I have a wonderful rat snake (or two) that are around my house/yard.I love to watch them ---and what they eat--RATS.

I think red rat snakes are one of the most beautiful snakes of all.

 

[85Escape]

...red rat snakes are one of the most beautiful snakes...

Those words don't work together.

 

[orientalnc]

I am sure there's a snake thread somewhere, but this is not it.

 

[Oldgoldandwhite]

At what point do the conferences get so large they don’t play anyone else?

 

[slugboy]

"While you’ll continue to hear that the ACC is fine because of the grant of rights lock up, each year that passes means the exit fees get lower and lower. If other conferences are offering more and more revenue while the exit fees decrease each year, eventually there’s a breaking point."

Big Ten: $54.3 million
SEC: $45.5 million
Big 12: $37 to $40.5 million
Pac-12: $33.6 million
ACC: $30.9 to $37 million

I think the author is spot on. If you assume the ACC payout is on the high end at $37M and the exit fee is $52M (assuming my Googling is correct), I hope GT is on the phone with the Big Ten trying to undo a decade old mistake. It would take 3 years to pay for the exit fee with the increased distribution, 4 if you'd like to amortize it and factor in higher travel expenses. Internet people talk about the GOR like it's some Uber expensive thing, but the opportunity cost of NOT paying the exit fee seems to be far larger.

That $52 million was the exit fee for Maryland years ago. Maryland did not pay the full amount.
The last version I found was that the exit fee is “three years of conference distributions”. For 2021, that’s about $100 million.
Until the last two years, the exit fee doesn’t decline unless the payout does.
However, if the gap grows between payouts, that $100 million becomes more reasonable to pay off. The SEC and B1G pay about 1/3rd more to each school than the ACC. The SEC paid out $45 mil per school last year, and the last payment I saw for the ACC was $33 mil (but that wasn’t 2021). It’s a huge anchor, though.

@ugacdawg is correct about the Grant of Rights. If Clemson (or anyone else) leaves, all their home broadcasts are owned by the ACC for 15 years. For example, if they moved, Clemson’s home game against Alabama would be on the ACC network (or through the contract) and the money for the game would go to the remaining ACC schools.
That’s a massive cut to the income a departing ACC team would bring to their new conference.

 

[gville_jacket]

At what point do the conferences get so large they don’t play anyone else?

Think that's kind of the point. The speculation is that these conferences are trying to become their own league with their own set of rules.

 

[slugboy]

Let’s look at the grant of rights with a little math. I’ll simplify by leaving off bowl games and neutral site games. The ACC Network pays $155 million a year, and that’s set, but it’s only a portion of the broadcast revenue.

Let’s say Clemson, FSU, and Miami all leave for the SEC (and the SEC takes them). The ACC owns the broadcast rights to half of their games, including through streaming. The ACC has at least as many games to broadcast in the new setup as they did before. In fact, the ACC has more games to broadcast—where they had the Clemson-GT game, now they’ll have GT vs Baylor (or whoever we substitute) and they’ll have Clemson-Tennessee (or whoever is at Death Valley). Yes, thanks to Grant of Rights, half the games played between two SEC teams belong to the ACC because one of them used to be in the ACC. This continues through 2036
For that reason, you’d assume that the pot of revenue stays the same or increases. That pays out $33-34 million/year now, but with 1/3rd fewer teams.
Georgia Tech’s distribution would be $33 million/0.8 = ~$42 million per year.
That’s through 2036, for doing nothing but standing pat.
Let’s also assume that FSU, Clemson, and UM get by with paying half of their exit fees. That’s $150 million / 12 = $12.5 million per team. Nice—not huge, but nice.
Because they left, FSU, UM, and Clemson get no ACC distributions, but the ACC still holds the rights. By leaving, the departing schools failed to uphold their end of the deal, but the ACC revenue is for ACC schools.
The SEC’s pool would be the same as it is with TX and OU, but FSU, UM, and Clemson add (mostly) nothing to the pool (those dollars basically go to the ACC through 2036). Yes, the Clemson-Florida game at Florida is a boost for the SEC, but I’ll neglect that for the math here.
The SEC would go from 16 schools to 19 schools, but the revenue would stay the same. Let’s say it’s the first $80 mil/year neglecting the three new schools.
The SEC per-school payout would be $80mil*16/19 = $67 million per year per school.
That’s still a huge bump for Clemson, UM, and FSU, but Mississippi State is giving up $13 million per year to add FSU to the conference. The bigger the SEC rights, the more valuable it is for UM to jump, but the more it costs the existing SEC schools to add them **on a recurring, yearly basis, through 2036**.

This also neglects the value of the broadcast of FSU vs UT (either Tennessee or Texas) to the ACC. The ACC Network contract is fixed, but the ABC or ESPN rights will be worth more from those games. The ACC revenue might even increase.

 

[orientalnc]

Let’s look at the grant of rights with a little math. I’ll simplify by leaving off bowl games and neutral site games. The ACC Network pays $155 million a year, and that’s set, but it’s only a portion of the broadcast revenue.

Let’s say Clemson, FSU, and Miami all leave for the SEC (and the SEC takes them). The ACC owns the broadcast rights to half of their games, including through streaming. The ACC has at least as many games to broadcast in the new setup as they did before. In fact, the ACC has more games to broadcast—where they had the Clemson-GT game, now they’ll have GT vs Baylor (or whoever we substitute) and they’ll have Clemson-Tennessee (or whoever is at Death Valley). Yes, thanks to Grant of Rights, half the games played between two SEC teams belong to the ACC because one of them used to be in the ACC. This continues through 2036
For that reason, you’d assume that the pot of revenue stays the same or increases. That pays out $33-34 million/year now, but with 1/3rd fewer teams.
Georgia Tech’s distribution would be $33 million/0.8 = ~$42 million per year.
That’s through 2036, for doing nothing but standing pat.
Let’s also assume that FSU, Clemson, and UM get by with paying half of their exit fees. That’s $150 million / 12 = $12.5 million per team. Nice—not huge, but nice.
Because they left, FSU, UM, and Clemson get no ACC distributions, but the ACC still holds the rights. By leaving, the departing schools failed to uphold their end of the deal, but the ACC revenue is for ACC schools.
The SEC’s pool would be the same as it is with TX and OU, but FSU, UM, and Clemson add (mostly) nothing to the pool (those dollars basically go to the ACC through 2036). Yes, the Clemson-Florida game at Florida is a boost for the SEC, but I’ll neglect that for the math here.
The SEC would go from 16 schools to 19 schools, but the revenue would stay the same. Let’s say it’s the first $80 mil/year neglecting the three new schools.
The SEC per-school payout would be $80mil*16/19 = $67 million per year per school.
That’s still a huge bump for Clemson, UM, and FSU, but Mississippi State is giving up $13 million per year to add FSU to the conference. The bigger the SEC rights, the more valuable it is for UM to jump, but the more it costs the existing SEC schools to add them **on a recurring, yearly basis, through 2036**.

This also neglects the value of the broadcast of FSU vs UT (either Tennessee or Texas) to the ACC. The ACC Network contract is fixed, but the ABC or ESPN rights will be worth more from those games. The ACC revenue might even increase.

I see your point and agree with it. I just wonder how likely it is that anyone leaves their media rights behind and leaves. That is a very risky bet. I could see the ACC claiming that Clemson joining the SEC enhanced the value of the SEC media contract and that difference is included in the Clemson media rights owned by the ACC.

 

[slugboy]

I see your point and agree with it. I just wonder how likely it is that anyone leaves their media rights behind and leaves. That is a very risky bet. I could see the ACC claiming that Clemson joining the SEC enhanced the value of the SEC media contract and that difference is included in the Clemson media rights owned by the ACC.

The strange thing is that the ACC owning the media rights doesn’t directly hurt the team, it hurts the conference that “poaches” the team. It makes them much less valuable to add.
It’s like a scarlet letter, or even the dreaded cone of shame

 

[Northeast Stinger]

There are “pundits” out there who say if the SEC and Clemson want to get married they will make it happen one way or another.

Hard for me to assess how big a threat this is or what it would unleash across conferences. In my mind I have to feel like we are a year or two away from anything happening. We just came off a Covid year that scrambled a lot of the usual financial algorithms and we could be in the same situation or worse this year if the current infection rates are any indication. If I were advising Clemson I would say let’s wait until we don’t have so many unknown variables.

 

[bobongo]

At what point do the conferences get so large they don’t play anyone else?

With 14 teams crammed into 12 games, the ACC is too big already to play each other even with no OOC games.

 

[BurdellJacket]

There are “pundits” out there who say if the SEC and Clemson want to get married they will make it happen one way or another.

Hard for me to assess how big a threat this is or what it would unleash across conferences. In my mind I have to feel like we are a year or two away from anything happening. We just came off a Covid year that scrambled a lot of the usual financial algorithms and we could be in the same situation or worse this year if the current infection rates are any indication. If I were advising Clemson I would say let’s wait until we don’t have so many unknown variables.

I know it has a lot to do with the money and the television contracts and there are a lot of you folks that know a whole lot more about that than I do, but in the ACC, Clemson is a real big fish in a pretty small pond. In the SEC, Clemson would be a medium size fish in a great big pond with a lot of big fish. In the ACC, Clemson is guaranteed to get into the Championship playoffs on a regular basis. In the SEC, not so much. It looks to me like they are a lot better off where they are.

 

[Northeast Stinger]

I know it has a lot to do with the money and the television contracts and there are a lot of you folks that know a whole lot more about that than I do, but in the ACC, Clemson is a real big fish in a pretty small pond. In the SEC, Clemson would be a medium size fish in a great big pond with a lot of big fish. In the ACC, Clemson is guaranteed to get into the Championship playoffs on a regular basis. In the SEC, not so much. It looks to me like they are a lot better off where they are.

To be clear, it is not money for the sake of money. It’s a continuing loss of revenue over time that makes it impossible to compete for recruits against other conferences. Sure, Clemson could still be the equivalent of Navy lording it over the conference equivalents of Citadel,
Alcorn State, Memphis, Tennessee State, Texas El Paso and Slippery Rock. But Clemson did not build a national brand just so they could win a weakened ACC.

 

[Coloradojacket]

To be clear, it is not money for the sake of money. It’s a continuing loss of revenue over time that makes it impossible to compete for recruits against other conferences. Sure, Clemson could still be the equivalent of Navy lording it over the conference equivalents of Citadel,
Alcorn State, Memphis, Tennessee State, Texas El Paso and Slippery Rock. But Clemson did not build a national brand just so they could win a weakened ACC.

Clemson's rise is a bit deceiving as it happened with the demise of FSU. In 2014 FSU was the power of the ACC with us right behind them. Just as UGA's rise is because of the drop of Florida, Tennessee and Auburn. And I define rise by wins and losses.

 

[UgaBlows]

To be clear, it is not money for the sake of money. It’s a continuing loss of revenue over time that makes it impossible to compete for recruits against other conferences. Sure, Clemson could still be the equivalent of Navy lording it over the conference equivalents of Citadel,
Alcorn State, Memphis, Tennessee State, Texas El Paso and Slippery Rock. But Clemson did not build a national brand just so they could win a weakened ACC.

If nobody leaves the ACC then it’s not weakened, and If Clemson wins out they are in the playoffs period. Clemson is going to keep getting grade A recruits no matter what conf they are in, and money is prob not ever going to be an issue for them because they have a level of alumni donations to their program that we can only dream of.

 

[Northeast Stinger]

If nobody leaves the ACC then it’s not weakened, and If Clemson wins out they are in the playoffs period. Clemson is going to keep getting grade A recruits no matter what conf they are in, and money is prob not ever going to be an issue for them because they have a level of alumni donations to their program that we can only dream of.

Then color me relieved.

 

[BurdellJacket]

To be clear, it is not money for the sake of money. It’s a continuing loss of revenue over time that makes it impossible to compete for recruits against other conferences. Sure, Clemson could still be the equivalent of Navy lording it over the conference equivalents of Citadel,
Alcorn State, Memphis, Tennessee State, Texas El Paso and Slippery Rock. But Clemson did not build a national brand just so they could win a weakened ACC.

Well you might just be right, but if ehe ESPN/SEC is to take in all the other factories by that rationale, then screw what was college football and I will have much more spare time and weekends for fishing, fly tying and time at the firing range.

 

[Oldgoldandwhite]

Think that's kind of the point. The speculation is that these conferences are trying to become their own league with their own set of rules.

I could live with them beating each other up.

 

[forensicbuzz]

I know it has a lot to do with the money and the television contracts and there are a lot of you folks that know a whole lot more about that than I do, but in the ACC, Clemson is a real big fish in a pretty small pond. In the SEC, Clemson would be a medium size fish in a great big pond with a lot of big fish. In the ACC, Clemson is guaranteed to get into the Championship playoffs on a regular basis. In the SEC, not so much. It looks to me like they are a lot better off where they are.

Keep repeating the fallacy associated with the SEC. Just as hard for Clemson to get through the ACC schedule as Alabama to get through the SEC schedule. SEC is just hyped more.