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May 14, 2012

Expansiopocolypse Madness Hits the ACC

Filed under: ACC,Conference,Money — Chas @ 12:11 pm

I’m now of the opinion that conference realignment in college sports is much the same as summer TV programming. It’s generally not as good as the regular season, but at least it’s something to watch.

Apparently I made the mistake of listening to my wife and taking Sunday as a computer/twitter/internet-free day. Not checking for updates. Not looking to see if anything new happened. So I missed the Chairman of the Florida State Board of Trustees (Sorry, I have to do this) going off the reservation. Ranting about the ACC’s new deal, going with the conspiracy theory of North Carolina/basketball favoritism, expressing how interested Florida State is (or should be) in the Big 12. And generally, acting like he came from the message boards rather than as a steward for the entire school.

The biggest problem was that he was horribly clueless about so much of the reality.

[Andy] Haggard played up the long held idea that the league office is in the back pocket of the basketball programs of Duke and North Carolina, while floating the concept that there is some pile of cash possible if the Seminoles could only package some of their lower-profile football games, maybe even like Texas does with the Longhorn Network.

“It’s mind-boggling and shocking,” Haggard told Warchant.com. “How can the ACC give up third-tier rights for football but keep them for basketball? … It continues the perception that the ACC favors the North Carolina schools.”

The truth is the money delivered by selling off the first- and second-tier rights was shocking enough. Also true: neither of his assertions may be accurate. The ACC later said Haggard was incorrect and third-tier basketball rights are not maintained by schools. And no one has any idea what FSU could get from some of its weaker football games.

Sources say the ACC has not distributed the contract with ESPN to member schools. It rarely, if ever, does. Many in the league are wondering how much Haggard himself came up with the third-tier conspiracy, what he thinks is in the deal or why he believes it even matters so much.

It seems like a ploy to drum up fan support for a bold switch. Nothing rallies boosters like the idea of Coach K bullying someone into action, even if it isn’t true.

What’s also sad, is that this piece by Wetzel has its own whopper of an inaccuracy.

The piece decries the fact that this new contract is back-loaded. In other words, the money will not be $17 million/year. That will be the average over the lifetime of the contract. The fact is, most of the media deals are back-loaded.

“EVERY conference deal with networks is always this way,” a source directly involved in the ACC-ESPN negotiations emailed Sunday. “It is always backloaded. Every deal.”

So while the ACC-ESPN agreement starts at about $14 million per school, the source said, it concludes at about $24 million per school.

Meanwhile, Haggard’s rantings led the FSU President to go into damage control.

FSU President Eric Barron finally decided it was time to weigh in on the matter. Without fully chastising his trustee board chair and calling him everything but a renegade, rouge voice in Tallahassee, Barron deferred to the ACC in a 78-word statement.

He started by saying the school regretted any “misinformation” about the ACC’s contract deal with ESPN. He added the university respected the chairman of the board’s opinions, and acknowledged that a school should make sure to take steps toward building a positive future for itself.

But, perhaps more importantly, for now, he parted with Haggard on one key issue:

“Florida State,” Barron said, “is not seeking an alternative to the ACC nor are we considering alternatives. Our current commitments remain strong.”

That and a couple bucks gets you a cup of coffee.

The other problem is that no one seems to fully understand the whole matter of media rights. Especially what are the 3d Tier rights (and I include myself as being confused by this at various points).

Simply put, third-tier rights are games not desired or contracted for broadcast by a conference’s first and second-tier media rights holder which then become property of the individual schools which may broadcast or sell them as they see fit.  As an example, Texas bundled its third-tier rights, partnered with ESPN, and formed the Longhorn Network about which I’ll discuss in further detail.

What each conference provides to its member institutions as “third-tier rights” varies greatly from conference to conference and here is where much of the confusion rests.

In the ACC, “third-tier rights” consist of select (not all) women’s basketball, baseball and Olympic sports events (volleyball, soccer, track & field, softball, etc).   ESPN (the ACC’s first and second-tier rights holder) is allowed to broadcast every ACC sporting event it chooses from the ACC football championship game on down to Florida State’s women’s soccer game vs. Stetson – if it wanted to.  All games ESPN does not broadcast — the vast majority of women’s basketball, baseball and Olympic sports events — revert back to the individual schools to do with what they choose.  Clemson, as an example, sells some of its third-tier baseball games to the regional sports network CSS.

In the Big 12, “third tier rights” consist of all those select women’s basketball, baseball and Olympic sports games as well as one select football game per season (the least desirable one) and a few select men’s basketball games (also, the least desirable ones).  ESPN owns the Big 12 first-tier rights while Fox has its second-tier and the individual schools, the third.

The Big 10 only has an outside first-tier media rights holder, ESPN.  The Big 10 Network is the Big 10’s second and third-tier rights holder while the league also farms out select men’s basketball games and its football championship game to CBS and Fox respectively.

Adding to the confusion is that many, but not all, people consider coaches’ shows, radio broadcast rights, and internet streaming rights to be “third-tier rights.”  All ACC and Big 12 schools have full individual ownership over those rights, however Pac-12 schools granted those rights back to their conference. (According to the Orlando Sentinel and Tallahassee Democrat, FSU presently makes roughly $6.5 million per year from this inventory and there’s no reason to believe that would change in the Big 12.)

The last paragraph is important. FSU already gets money from a bunch of those sources — the only additional 3d tier rights they would pick up from a move to the Big 12 would be 1 really bad football game and 3-4 of the worst basketball games. They might be able to generate an extra million or maybe two from selling those games, but it wouldn’t be easy.

Everyone points to the Longhorn Network as the gold standard of huge profits from 3d Tier media rights. It’s why FSU fans are lusting after the idea of going Big 12. The $15 million/year Texas gets, and that somehow other schools can not only have their own channel but get that kind of money. That conveniently ignores how much of the Longhorn Network is unique to the school, its backer and the timing. Texas is dominate in Texas.

It was already the biggest athletic program in terms of money generated out there. It absolutely dominates the state. ESPN gave them a deal that no one else can get — probably not even Notre Dame right now. It was caused, in no small part because of when it happened. ESPN didn’t want the Texas to go to the Pac-10 at the time. ESPN wanted to keep the Big 12 intact. It made it worth Texas’ while to keep the Big 12 together.

Florida State is not Texas. They do not dominate the Florida markets. They have more competition at the collegiate level. No one legitimately believes FSU could start their own national channel.

It’s obvious, though, this issue is not going away quickly. It may fade into the background for a while, but the discontent from the FSU fanbase is palpable. Everyone is rightfully pointing out that the ACC’s lower payout than other conferences has a lot to do with how poorly the “football schools” in the ACC have done for the last decade. Especially Florida State and Miami. The fact that the ACC did even worse than the Big East in BCS games has an impact. The ACC is 2-13 in the BCS games. Even the ACC Commissioner had to acknowledge it while trying to spin positive.

Swofford estimated that football drives 70-80 percent of rights fees and acknowledged that more national success in that sport would have meant additional revenue.

“We seem to be right on the verge of taking that next step,” Swofford said, not for the first time. “Our main goal … is to have our best teams winning on a national stage.”

About the only program in the ACC that has truly done most of the work was Virginia Tech. And they were only added because of political pressure. Imagine the state of the ACC football if Syracuse had been the team to go in 2003.

I figured over the next year, there would be time to learn a little more about the politics, attitudes and perspectives from of the ACC and schools. Looks like I’m getting a crash-course in FSU a little early.

UPDATE: The FSU President issues a statement that one might be inclined to say bitch-slaps the whole FSU to the Big argument in a calm, reasoned manner.





Just when I thought we were getting out of the Big East w/ all the expansion rumors and moving to the calm, stable waters of the ACC. BOOM! Now I have to think the same pathetic thoughts, like who is better Louisville or Rutgers.

Comment by Bones 05.14.12 @ 12:29 pm

Yikes. I’m taking a nap until August.

Thanks for the most clear and simple explanation yet.

Comment by Reed 05.14.12 @ 12:35 pm

It seems to fail to get mentioned but more people watched ACC football then Big 12 football in 2011.

Of course that makes the ACC look even worse, but for all the talk of the great Big 12 power house of football… more people watch the ACC.

Comment by JoeP 05.14.12 @ 12:45 pm

More people watch the ACC because fans stay home and catch the game on TV as opposed to showing up at the stadium. Pitt will fit right in then.

Comment by TX Panther 05.14.12 @ 12:48 pm

Chas, when the local sports network like Roots broadcast Pitt BB game … is than an example of 3rd tier rights?

Comment by wbb 05.14.12 @ 12:49 pm

This conference chaos is only happening because there is no central form of control with one agreed upon form of governance. We all know the NCAA is a paper tiger. So, the madness will continue up, and until, change becomes less painful than the status quo. Sure, there are perceived and real ecomomic windfalls for a select few but the majority of schools are just along for the ride, albeit a bumpy one. Right now, it is everybody fend for themselves. This, of course, is not sustainable. But neither is anything else in the world today, particularly when one speaks in the context of economics. Sooner or later, we will come to the realization that these one off conference affliations which will entail the San Diego State team traveling to Hartford, Ct for a Tuesday night made for TV special is nothing short of insanity. Congress will intervene eventually and mandate a return to the roots of conference affliation which were primarily driven by geography. Until then, we will continue to witness more stupidity like a Seminole/Mudhen softball doubleheader on ESPN3. The very idea that any conference, even the ACC, provides stability is, in and of itself, delusional. The state of California has a $16 Billion budget deficit part of which goes to fund state universities like San Diego State. Does anybody really believe that politicians will not eventually be the ultimate arbitraters in all of this? Meanwhile, start making plans to get a flight out of Pittsburgh to Clemson, SC in Febuary.

Comment by wally 05.14.12 @ 1:04 pm

Most of those Root games are via “Big East Network” which is the ESPN owned syndication of Big East basketball games — the 2d tier rights.

There have been one or two really bad games in the non-con that were 3d tier games Pitt owned. The tricky thing for a school like Pitt and 3d tier games — finding someone to not only buy the rights but also have the equipment and production to do the game.

Comment by Chas 05.14.12 @ 1:06 pm

From what I’m reading, FSU has high costs (like travel) associated with it’s non-revenue sports – those costs will only increase (and WAY UP at that) if they jump to the BigXII. WVU will have to deal with that reality as well.

It seems a lot of FSU’s non-revenue teams make the national championship tournaments as well, jacking up their costs even more. A victim of their own success? The BigXII would have to offer HUGE money to make up for that shortfall.

Comment by Patrick 05.14.12 @ 1:09 pm

TV viewing is in millions. ACC could have sell outs and it would not come close to the TV #s.

So saying more people are at the games doesn’t fly. Maybe for high school football, but not college.

Comment by JoeP 05.14.12 @ 1:34 pm

I’m just glad we are in the ACC. Good place to be…

Comment by Gordo 05.14.12 @ 1:42 pm

This was definitely helpful in wrapping my head around all the aspects of this iteration of Expansiopocolypse.

Comment by Chris 05.14.12 @ 1:53 pm

Chas – thank you for making a point that I was trying to get across to some friends over the weekend. Namely, that raising the issue of 3rd tier rights is either a red herring or just ignorance. Most universities simply do not have the resources to do much with these rights. They are better off getting some exposure through an outlet such as ESPN rather than holding the rights and doing nothing with them.

IMHO, the real questions with regard to the ACC deal are is the money enough, and why 15 years? The latter question, in particular, troubles me.

Also, the fact that the ACC has more TV viewers shouldn’t be too much of a surprise – more schools in larger television markets. The Big 12 has a couple of big markets, and more importantly, a couple of schools that have audiences that transcend traditional TV markets, but most of the schools are in the middle of nowhere and don’t have a national (or even regional) audience.

Comment by Pantherman13 05.14.12 @ 2:03 pm

Regardless how things shake out for the major conferences, Pitt belongs in the ACC and we Pitt fans should be glad the ACC invited us to join their conference.

We on this blog think football and basketball but there are many other sports that Pitt students compete in. Geographically, Pitt is sitting nicely for the Olympic sports where travel is concerned.

I know it’s always about the $$ but Pitt administrator’s must look out for ALL Pitt athletes. Pitt will not be taking a back seat joining the ACC. Pitt’s only other conference option would be for them to get an invitation to join the B1G Conference. Personally, I’d rather see Pitt compete in the southeast than the mid-west. But that’s just my opinion. HTP!

Comment by MariettaMike 05.14.12 @ 2:24 pm

FSU Prez says the faculty is adamently opposed to joining an inferior academic conference. Lays out some very strong reasons why a jump to the Big 12 may not be in the university’s best interests. Basically says he doesn’t want to be Texas’s bitch.

Comment by TX Panther 05.14.12 @ 3:22 pm

The only conference I can see FSU bolting the ACC for is the SEC…and that doesn’t seem likely. I think the ACC will be as stable a home for Pitt for the next few years as is possible in college sports. Until Notre Dame decideds to go all in with one conference, I suspect things will quiet down for awhile, except for the rumors and speculation. I would, however, like to see the ACC move it’s headquarters to somewhere, say Washington, DC to show geographic balance. DC would also be a great town to host the ACC Basketball tournament.

Comment by CJK 05.14.12 @ 3:35 pm

I added a new post, that includes the entirety of the statement from FSU’s President.

link to pittblather.com

Comment by Chas 05.14.12 @ 4:04 pm

Clearly most all colleges around the country, save a very few. are experiencing athletic dept. budget problems. Here’s a quick solution. Repeal Title 9.

Like my good friend Frankcan says: women should be barefoot and in the kitchen. Making us guys samwiches. :-)

Comment by Emel 05.14.12 @ 4:07 pm

EMel you are the man you are right 99 percent of the time on every thing you know what piss me of
abought this stuff is i thought we left all this behind in the big east.
but here we are teams thinking of leaveing leaders signing bad tv deals people saying BB has to mutch to say abought things just like in the big east football schools agenest BB the same shit

Comment by Frankcan 05.14.12 @ 4:59 pm

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