With the news of the impending move of Texas A & M to the SEC, conference realignment now becomes a lightning rod issue and the ACC must be proactive. There are serious considerations that must be accounted for when contemplating joining or creating a super conference, but at the heart of all of these decisions is money. It requires money to fund athletic departments and the best athletics department budgets are autonomous as well as self-sufficient, not reliant on allocations from the University's operating budget. In order to remain athletically competitive, it is important to maximize the value of the conference so that the member schools can afford to offer the market price for the top tier coaches and staffs as well as maintain athletic facilities at a competitive standard. Additionally, schools like North Carolina utilize their basketball and football programs to fund their large athletic departments which feature 28 varsity sports. Without proper action, it will be difficult to maintain that number of teams, which offer unique opportunities for young people to pursue higher education and greater fulfillment.
A look at the conference television contract revenue is concerning. According to the blog, The Business of College Sports, the television contracts payout as such:
Conference Total Per Year AverageWith Texas A & M leaving the Big 12 to move to the SEC, the Big 12 is done. That leaves the ACC with the second lowest revenue producing TV contract among the soon to be big five power conferences.
Big 12 $150 million
Pac 12 $250 million
ACC $155 million
SEC $205 million
Big Ten $212 million
Big East $42.33 million
The SEC has an annual advantage of $50 million annually on the ACC, which represents the next rung up on the TV revenue ladder. To put it in perspective, that is $4.167 million more per institution annually for the member schools of the SEC over the member schools of the ACC. I have seen calls for the ACC to look to add various schools from the Big East and I believe that would be a huge mistake as evidenced by the value of the Big East's TV contract value. The Big East's current TV contract is approximately a quarter of the value of the SEC, Big Ten, or Pac 12. The market has spoken and the Big East's TV market share has very little value. This is because the Big East's primary foot print is areas dominated by professional sports. Therefore, a Big East school has very little value to the ACC. The ACC must add value to remain a power conference, not merely add the requisite number of schools required to get to the magic sixteen power conference number.
Further, a look at football bowl revenue also shows the precarious financial situation of the ACC.
Projected Bowl Revenue for 2011-12:As a result of projected bowl revenue, the SEC has an additional annual economic advantage of $6,748,000. This is without the additional revenue received by the conference with a second BCS bowl game. Since the SEC is traditionally in two BCS games, an increase projected revenue is appropriate to reflect that probability. Therefore, there is an additional $17 million advantage, which increases the total to $23,748,000. Since there is profit sharing at the conference level for those revenues, the SEC has a $73,748,000 advantage over the ACC.
SEC
Bowl Pay Out
BCS $17,000,000
Capital One 4,600,000
Cotton 3,625,000
Outback 3,500,000
Chick-fil-a 2,930,000
Gator 2,700,000
Music City 1,830,000
Liberty 1,700,000
Total - $37,585,000
ACC
Bowl Pay Out
BCS $17,000,000
Chick-fil-a 3,970,000
Champs Sports 2,325,000
Sun 2,000,000
Belk 1,700,000
Music City 1,830,000
Independence 1,150,000
Military 862,500
Total - $30,837,000
Based on the current 12 team league, the total revenue share is a $6,145,667 advantage per team.
This disparity in revenue has put the ACC at a significant disadvantage and will only be exacerbated through expansion without aggressive action by the league office. The expansion of conferences into power conference will result in TV deals being renegotiated based on the new value of the coverage area. The ACC must not be left behind.
With Texas A & M's move to the SEC inevitable, there is speculation that the SEC is looking to add a couple of ACC teams to improve the TV coverage area of the conference. The two most discussed areas are NC and VA-DC. North Carolina has a population of 9.38 million and VA-DC a population of 8.43 million are attractive markets and it is not unreasonable to expect the SEC to aggressively pursue institutions that can give it access. With that understanding, the ACC should let NCSU and VT go to the SEC if pursued.
To replace VT and NCSU, the ACC needs be aggressive. Currently, Notre Dame is an independent in football with a lucrative TV deal with NBC and Texas has a deal with ESPN for its own TV network. Both of these endeavors are very profitable for each respective institution. Therefore, it is going to require a compelling situation to attract either of the two giants.
By approaching Texas and Notre Dame together to join the ACC with Oklahoma and Oklahoma State as well as Kansas, and Kansas State (if NCSU and VT leave the ACC) would be an opportunity that is impossible to ignore because of the combined market value.
By bringing in Texas, Notre Dame, Oklahoma and Kansas, the ACC would become the premier conference for both athletics as well as academics and could command top dollar for any media/broadcasting agreements. While I am not in a position to make an educated guess as to the value of a TV contract, the combined market power of the new conference would exceed 107 million viewers or approximately a third of the United States population. Additionally, it is difficult to quantify the national effect of having so many iconic programs in one conference like UNC, Texas, and Notre Dame. Further, UNC, dook, Texas, and Notre Dame will have a significant draw in the Northeast market, particularly NYC, where each school has a strong alumni base that is passionate about its alma mater's athletics. The TV market share of that combined coverage area would be difficult to ignore because of the amount of money it would command.Population
State (in millions)
Maryland 5.70
Virginia/DC 8.43
North Carolina 9.38
South Carolina 4.56
Georgia 9.83
Florida 18.54
Indiana 6.43
Illinois 12.91
Texas 24.78
Oklahoma 3.69
Kansas 2.82
Total 107.04
The power of the combined marketshare/value is the reason I believe that Texas and Notre Dame would be interested in exploring expansion within the ACC foot print. The combined market share would dominate the collegiate landscape without compromising the academic beliefs of the involved schools while securing their athletic financial future. The coverage area is focused on geographical areas that are passionate about college sports, mitigating the effects of competition from professional sports.
The culture of the schools is also a nice fit for conference alignment and would boast some of the best rivalries in sports. This would be a dynamic conference that features the flagship schools for the states of Virginia, North Carolina, Texas, Oklahoma, and Kansas (possibly). Further, it would have some of the premier private schools in the country with Notre Dame, dook, Miami, Boston College, Georgia Tech, and Wake Forest. The athletic prowess of the two largest revenue generating sports would be unquestionable and the academic standards that the ACC prides itself on would be uncompromised, if not bolstered.
Please begin the dialogue and protect the conference and it's member schools. The loss of the wrong institution would be devastating to the long term health of every ACC member school's athletic department. For example, the loss of Florida State would be catastrophic. Florida State provides the ACC with football credibility and it would be a huge loss if it were to leave the ACC. Additionally, Florida State brings the Florida TV market, which is 18.54 million strong. Miami does not have the market share that Florida State does. Therefore, Florida State is an incredibly important member of the ACC. If the dominoes begin to fall within the ACC, it will be devastating for the remaining schools without a proper plan of action.
Sincerely,
Buttered Biscuits
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