Plausible ACCN Revenue

[GTFLETCH]

LINK
http://accfootballrx.blogspot.com/2016/06/plausible-accn-revenue.html

Look, I get it - the ACC has been talking about a cable channel for a long time, but so far, nothing has happened. The league has been mismanaged and made some boneheaded mistakes when it comes to athletic revenue. That has caused a lot of fans to be discouraged; some have become downright pessimistic. I get it.

However, that doesn't change the POTENTIAL of the ACC. This league has great teams in great locations. The football product is improving rapidly, and the other sports are already excellent. When people say the reason there isn't an ACC network channel yet is because it won't make any money... well, I have to speak up!

I'm not saying this is how it will go down, just one of many possibilities - this post is intended as an example to show you how easy it would be for both ESPN and the ACC to make a pile of cash AND satisfy a whole lot of customers...

Premise: there will be an ACC channel, launched by ESPN, and it will not be a cable-only channel, but will include digital/streaming options for cable cutters. In my example, I'm proposing 4 levels of subscriptions:
- 1 month price (essentially ppv): $15.00
- 6 month price (one sport season): $10.00/month
- 12 month subscription (web app): $8/month
- cable subscribers: $0.25/month (average of in-state and out-of-state)

Plausible revenue streams, based on concurrent customer numbers:
- 1 month subs: $15 X 100,000 viewers X 12 months = $18 million/year
- 6 month subs: $10 X 200,000 viewers X 12 months = $24 million/year
- 12 month subs: $8 X 400,000 viewers X 12 months = $38.4 million/year
- cable subs: $0.25 (avg) X 28 million X 12 months= $84 million/year
TOTAL of all 4 streams: $164.4 million/year
split 50/50 with ESPN: $82.2 million/year
divided by 15.2 shares = $5.4 million/year per team.

I tried to be conservative on all of these numbers, but they could easily be higher. I'm saying a total of ONLY 28.7 million people around the world would be subscribing to the ACC Network in one form or another. It could easily be twice that many, or more.

NOTES on the above:

• for 1 month (ppv) viewers, I'm not saying the same 100,000 people would renew every month; I'm suggesting that a total of 1.2 million people would buy one month each in the course of a year. That could be ALL Notre Dame fans paying to watch a single game, maybe.
• The 6 month and 12 month ala carte prices are to capture cord cutters. A 6-month sub. is to allow them to buy JUST football or JUST basketball season.

So based on this presumably conservative estimate...
...ESPN stands to make another $82.2 million/year in new revenue
...Each ACC teams stands to receive an extra $5.4 million/year

Now I ask you - is that a failure? I don't think so.

 

[RonJohn]

The problem is that the whole system is a sham, which someday in the near future will fall down. It is estimated that ESPN(ESPN channel only, not includeing 2/u/SEC/etc) costs over $6 per subscriber to the cable/sat companies. It is estimated that SECN costs $1.40 per subscriber in the SouthEast and $0.25 elsewhere. Disney requires that all* cable/sat packages include ESPN and SEC.(The required basic packages don't include ESPN, but mostly just the locals) I would guess that less than half of all cable/sat subscribers watch ESPN. That means that those customers are subsidizing ESPN for those who do. A smaller percentage of subscribers in the SE watch the SECN, so much more than half are subsidizing the channel for the few who watch it. Outside of the SE, I would guess that less than 10% watch the SECN, so more than 90% are subsidizing a channel for the small minority.

ESPN has made a lot of money. The ACC could potentially make a lot of money with this business model. However, the business model is not sustainable. It is almost like a pyramid scheme. ESPN overpays for content. ESPN then charges customers and non-customers alike behind confidentiality agreements. Cable/Sat customers don't understand why/how their cable/sat bills keep going up and get upset about it. IIRC ESPN lost 7 million subscribers in 2014 and 2015. Also IIRC reports say that more than 60% of ESPN's revenue comes from subscribers. If ESPN cannot reduce the amount they pay for content or figure out different ways of getting revenue, they are not going to be able to keep the business open. They won't close up very soon, but 5 years or 10 years in the future things will get very interesting for them.

 

[GTFLETCH]

Good Read about the ACC current TV Contract with ESPN and what went wrong....

Point 1-
The ACC's 2010 contract also spelled out that it would give "the network [ESPN] exclusive rights to conference football and men's basketball games". Yep, ALL of them: Tier 1, Tier 2 and Tier 3.

Point 2-
Tier 2 games are being sub-licensed to Raycom from ESPN for $50 million/year (money which goes to ESPN, not to the ACC). That price is apparently far enough below market value that they can afford to sublicense some of them again to Fox regional sports networks. Obviously, if 2 middle men can make a profit, the ACC did not get the best price!

Link
http://accfootballrx.blogspot.com/2016/06/what-went-wrong-acc-tv-contract.html

 

[GTFLETCH]

REPOST from another Board!!

The ACC was foolish to bundle Tiers 1, 2 and 3 together. Imagine what could've been or can be in a decade:

Tier 1 with NBC - one game per week, valued at $7 million each X 13 = $91 million/year

Tier 2 with ABC/ESPN - limit them to a max of 4 games per week; est. $4M X 4 X 13 = $208 M/yr.

Tier 3 on a true ACC Network (partner with ESPN or re-brand the NBCSPN). With proper scheduling of cupcake games (ie. spread throughout the season), the ACC could have as many as 3 or 4 live games EVERY week. Est. 28 million subs X 12 months X $0.80 each (avg) = $268.8 million/year.

GRAND TOTAL: $567.8 million/year ==> $37.85 million/year per school (TV only).

Oh and lots talk Basketball $$$... Why isn't the ACC there right now? Awful contract in 2010... http://accfootballrx.blogspot.com/2016/06/what-went-wrong-acc-tv-contract.html

 

[AE 87]

Well, I'm glad that every game (except SECNetwork game) is available on ESPN3 typically within a couple of hours of the end of the game. So, I'm not complaining about the last deal.