In case you weren’t already aware of this, there won’t be an ACC Network for at least 3 or 4 years. There are some issues to overcome. There is a whole infrastructure to set up. Even the SEC Network that has been announced was more than two years in the works.
For the ACC, there are some added layers that complicate thing. Such as their deal with Raycom.
The Sports Business Daily did a fine — if somewhat pessimistic piece — detailing the hurdles to a ACC Network.
The main roadblock is rights. When it signed its ACC deal in 2010, ESPN and Charlotte-based Raycom Sports cut a deal that grants Raycom the ACC’s digital and corporate sponsorship rights, plus a heavy dose of live football and basketball games. Through a sublicensing agreement, Raycom owns the rights to 31 live football games and 60 live men’s basketball games.
Even if the conference is able to buy back those rights from Raycom, a second roadblock remains. Raycom sublicensed 17 of those football games and 25 of those basketball games to Fox, which carries the games on its regional sports networks throughout the ACC footprint. Live local sports programming is important to Fox’s RSNs, and they are not likely to give up those games cheaply.
The games that stay with Raycom make up the ACC’s long-running syndicated package that is distributed to more than 50 million households on over-the-air networks, and reaches 25 of the top 50 U.S. TV markets.
Those deals extend through 2027.
It’s unlikely that ESPN will try to launch a channel without those rights. ESPN brought all of those rights — TV, digital, sponsorship — together as it formed the SEC Network, which launches in August 2014.
That’s because a syndicated model that the ACC follows (and the SEC had been operating) really doesn’t work when you want your own channel.
You need those other rights because you need all the inventory you can get. There’s no way the separate channel can launch without football and basketball games.
The Raycom issue is a hurdle. Raycom (along with the Fox RSNs) have a dire need for that content in light of losing all access to SEC content. ACC content suddenly became a centerpiece to their sports channels. That said, it is hardly insurmountable for an ACC Network. Just more expensive.
It seems unlikely that Raycom would sell back to ESPN on the cheap, and the ACC knows this. That’s why the ACC plans to make the deal “enticing” for Raycom and will probably have to come out of pocket to secure a successful sell, according to a source with direct knowledge of the ACC’s plan. There’s also a chance that Raycom/Fox could keep some of the content. This will be part of the negotiation.
Though ESPN bought all the ACC’s rights and sublicensed them, the ACC still can help facilitate the Raycom sell as an ESPN partner.
These roadblocks appear more daunting than what faced the SEC and Pac-12, which bought back third-tier multimedia rights before launching their channels. The ACC has more programming tied into other ventures, but it seems dedicated to pulling off this channel.
Raycom is in a difficult spot. Losing those rights would really hurt their stations. At the same time, they know that eventually those rights are going away. The issue is how do they get the best situation for the long-term?
This is where it is in Raycom’s best interest to work with ESPN and the ACC to find a compromise. Raycom’s game production values have been, um, questionable at time. Yet, they do have an infrastructure in place where most of the ACC is located that would be helpful in launching the ACC Network. Heck, Raycom owns a station in Louisville. Not to mention Cleveland, so they are not too far from Pittsburgh and Syracuse (roughly 150 and 335 miles respectively). Making them a production supplier/partner would provide them with a revenue stream while maintaining a relationship.
ESPN does see the opportunity with the ACC. Not even simply for football, but with basketball sharing the load.
Q: Football drives the ratings and in many ways realignment. If a conference is that good in basketball, how much of an impact can that have in dollars from networks?
“I think what the ACC has created could in many ways redefine what’s possible in college basketball in terms of fan interest. When you have the likes of Syracuse, Pittsburgh, Notre Dame and Louisville joining Tobacco Road along with their other basketball brands, there are real possibilities there. We’re going to move them into our franchise Big Monday slot with the Big 12 so they’ll have early games on Monday nights.
“I think there will be so many meaningful games between those ACC teams that it will almost be a somewhat daily conversation for basketball fans. We all know football in many ways drives the enterprise. But college basketball, we continue to invest in it. It’s a critical part of our program mix from November to the end of March. It’s an innings eater. There’s a lot of it on, but at the same time we could use more of it that really moves the meter in a meaningful way with college football-like numbers.”
Q: What kinds of ratings could the new ACC draw and what are good numbers for college basketball?
“I think we could see 1.5 and 2.0 ratings regularly out of the ACC, which would be pretty spectacular. We average about a 1.1 for all of the (men’s basketball) games we put on ESPN for the season. That number has been fairly stable over the last decade. Last year, the Big Ten averaged around a 1.5 and broke about a decade-long run of the ACC being the highest-ranked conference. The ACC was around a 1.3 and the SEC was about a 1.1.” (ESPN’s highest-rated college football game during the 2012 regular season was a 3.7 for South Carolina-LSU.)
That’s a bit optimistic, but it shows why ESPN would support going ahead with an ACC Network. The old conventional wisdom was that they wouldn’t want to have ACC games on the ACC Network competing with their own programming. And since they owned all the TV rights to the ACC, they would block it. Now it is an opportunity to grow the interest in ACC basketball to serve them better.
As for the ACC Network being at least 3 or 4 years away, this is where you hope ESPN and the ACC are being smart. They already have to do some things backward — like trying to reacquire the rights to a bunch of games from Raycom. This is a chance to get a head start in lining up carriers for the ACC Network in advance.
Rather than the usual battles that happen after a channel launch is announced as imminent. Lay the groundwork now. Work with DirecTV, Time Warner, Comcast, etc. to at least start the negotiations. Given how glacial the pace is in negotiating a carriage rate and placement on the tiers.
It would be the most Ninja Swofford thing if the ACC announced its launch in a few years concurrently with major distribution on cable and satellite already in place.