ACC extension shows ESPN's shrewd control over competition and expansion
Last week I pummeled ESPN on how they've utterly failed to capitalize on the college recruiting subscription business. While we can be known as an "Anti ESPN" blog we generally give them props when they're deserved. With that in mind, I find myself somewhat floored by the Bobby Fischer-esque chess game they're playing as the ACC will now submissively sign an extension with ESPN that will run through 2026.
At first glance, it looks like the ACC is coming out a winner and in many ways they are. They added Pitt and Syracuse, which triggered the ability to renegotiate with ESPN. The rumored extension will close the gap on television revenue per school comparative to schools from other BCS conferences. From SBJ:
"Under the new terms that are being negotiated, each of the ACC’s 14 schools can expect at least $14 million to $15 million a year, sources said, depending on how negotiations between the conference and ESPN conclude.
That would help the ACC close a fairly significant annual revenue gap with other major conferences. The Pac-12 and Big Ten each are distributing close to $21 million per school a year. The SEC’s deal provides $17 million per school, and the Big 12’s schoolseach average $15 million."
Currently ACC schools get about $13 million a year but as CBS pointed out, there is also an increase in travel budget as the league expands. More importantly, barring further expansion or something unforeseen, the ACC is about tapped out in terms of television monetization and are locked into their current deal until 2026, fourteen years from now. To put that in perspective, 14 years ago Roger Maris still held the single season Home Run record and Bill Clinton was giving us a very finite explanation of what constituted as sex.
What makes it worse for the ACC is that generally speaking the short term and long term outlook for sports media rights and in particular college sports rights are very bullish with Fox and NBC ready to pounce on anything ESPN doesn't retain. Unlike the Pac 12 and the Big Ten, who have or will soon have their own networks, the ACC won't have another avenue to raise their television revenue. The Big Ten and Pac 12 have shrewdly allowed themselves the opportunity to control their own destiny as their networks can ramp up carriage fees, distribution, and advertising revenue over time.
Rewinding back here is the play by play of ESPN's chess game...
Congratulations are in order for Woody Paige. Today he won for the 400th time on Around the Horn. Yes, I think this does mean that some extremely unfortunate intern probably was assigned with the unenviable task of tallying the wins of the various talking heads that have populated the show since its debut back in 2002. Woody's 400th win was celebrated with copious amounts of silly string, his daughter and a pie in the face. Here's the raucous celebration video Around the Horn put together for the occasion.
