ACC, PAC-12, and BIG alliance / conference realignment

[HRE Otto IV]

Stinks that Army might go to the AAC. That makes it hard to get them on the schedule. Might also impact our current series.

 

[CousCuse]

You said a lot of words but in there you admit it CAN be done. Whether or not it is worth the money and whether or not the ACC will allow it to happen is another story.

You are wrong about Texas/Oklahoma. They paid an exit fee of $50M each. That includes the $80M exit and any compensation for their one year of TV. Saying it was just for TV rights is false. They should have paid over $100M each and negotiated for less than half. So why would one think that an ACC team would owe $50M per year of the TV contract?

So if SU is given the below offer you want them to turn it down? Why?

Teams A and B announce they are going to SEC in 2026. 2025 SU gets $5M (our end of exit fee withholdings). 2026 SU gets $5M (last half of exit fees), 2027-2035 SU gets $3.75M more per year (TV payout).

Are we not better off?

FSU and Clemson would deliver many ratings bonanza games like the FSU/LSU game if they were playing an SEC schedule. In the ACC there aren't any outside of them playing one another. So, they would be much more valuable to ESPN in the SEC.

 

[kcsu]

You accused me of creating a new argument in the post I responded to. No matter, I didn’t.

Regarding the schools who want to leave, it is immaterial who leaves, the principles remain the same.

You state I am assuming hostility. Who wants any teams to leave, beyond the two or three that may presently have a landing spot? None of the remaining schools want anyone to leave. That creates hostility. And they remain in power, not the schools with wandering eyes. There has been zero comments or statements from ACC schools regarding a consensus to part ways, let alone to d so amicably. You are assuming facts not in evidence. Can it happen, yes, I already alluded to a future where things can be resolved, but at this juncture, there remains no incentive to accommodate FSU and/or anyone leaving. Everyone knows FSU and Clemson lack the financials to leave anytime soon. Everyone knows UNC lacks the will to write the check. Both points have been previously stated.

You are intermingling points regarding the exit fees and TV rights/payouts. The exit fee is just that, the cost of getting out. You point out the Big12’s 99 year agreement, but there is no exchange of promises, just we will stay together for 99 years and if someone wants out this is the exit fee. The ACC knew they needed an increased fee to garner further rights negotiations, Maryland jumped before the increase, they understood this point and knew they were more likely committed to the exit fee than not. The major difference is that the ACC established the current exit fee for the purpose of attracting a partner for the network, the ACCN. The Big12 had no such purpose, plus 99 years is questionably long.

Regarding the TV rights, you undervalue the TV rights at $25MM. The value is what ESPN pays annually, even the guarantee is much higher than you posit, thus the numbers don’t work out correctly. The need to buy back rights at $50MM was a ballpark figure averaged over the next 12 years. Compared to UT and OU, they needed to pay to get out the one year early, otherwise they could not go anywhere. The Big12 exit fee was more of a one-sided promise and lacked substance of a contract; juxtapose the ACC purpose of opening negotiations for a network (this is oversimplified), this makes the ACC’s exit fee much stronger than the Big12’s. Regarding the buyback, the Big12’s TV rights at the time of negotiations were around $200MM annually, or $20MM, probably a little higher because contracts escalate over time, but not too much. Even their new deal is only valued around $30MM/team (granted, if UT and OU were involved it would be much higher). With a questionable exit fee and low valued rights, OU and UT still paid $50MM each, per announced $100MM exit deal. Or a factor of 2.1X Rights and a token amount for the exit fee. Recall that initially, the Big12 was going to make both wait out the GOR, they only negotiated a deal when it was to their advantage. Regardless, it took a lot of time to bargain away one year. What is lacking in your calculations is a desire by the remaining ACC teams to actually agree to anything.

Further, you assume ESPN wants to pay a couple teams more in the SEC, that makes no sense because 1) ESPN has to pay more! 2) it destroys the ACC and the ACCN. ESPN and the ACC have vested interest in continuing to make money. ESPN has no interest in destroying a major property. 3) If the door is opened to teams leaving, the door is opened to Fox grabbing schools, too. 4) schools with wandering eyes either lack the resources to make the move (yes, FSU’ offer of $300 MM was an insult to everyone and they didn’t even have that available). 5) Plus many more reasons we don’t know about But ACC members and ESPN do.

i have consistently held that a deal my arise down the road but a deal now is a fool’s errand. The current ACC teams are on the rise, overall. FSU and Clemson drive ratings the most. The ACC remains seriously undervalued. ESPN has look-ins to adjust the ACC’s payouts. The ACC covers the most densely populated and projected to grow territory. The GOR is solid. If it was easy to break the agreement, it would have been done before now. At this juncture, the ACC has no incentive to work with FSU or any other school wishing to jump.

What remains is to ponder why you want FSU and others to jump? As an Orange fan, there is no benefit to the ACC at this time, why make a bad deal now?

Please stop making sense. Your post is spot on. The only way a team is leaving the ACC is by paying an enormous amount of money. Period.

 

[Sherman20]

I have not changed my argument. I have consistently stated that the exit fee is significant and most schools cannot or will not pay it outright, let alone buy back their rights. I have consistently opined that the ACC buyback is too long for a simple calculation, as you argue $250MM, or roughly 5 years when they have another 12 years following this season, or roughly $500-$600MM. When you use the OU and UT multiplier of 2.1, you end up at $1.050-$1.26BB.

Your estimate does not even cover the rights the ACC will gain by not agreeing to the offer. Negotiations don't work that way unless you have no leverage. In this scenario, FSU and Clemson have no leverage as they are under contract (as is every ACC school).

As to the carriage fees, they will not increase significantly as people cut the cord, sure some streaming will be available, but that is too difficult at this time to assume it will be cover the cord cutting losses. Yes, the ACC may get a nice bump with CA and TX, but that is not revenue FSU and Clemson get to use to negotiate down their buy back.

To your final comments, there is no way ESPN can simply move the FSU and Clemson rights to the SEC, that is bargaining in bad faith. Unless the ACC is heavily compensated, there is no incentive for the remaining ACC teams to agree to a buy back by FSU and Clemson. All the ACC has to do is file a case in court and keep it there so long as it is not frivolous, the ACC wins by default.

I am not sure why you want to let FSU and Clemson out on the cheap. If they are leaving in 2036, then they are leaving in 2036. What incentive is there to let them out early and on the cheap? There is no benefit. Keep them locked down and continue to build up the remaining teams. The option to buy back their rights is always on the table, but as UT and OU proved, the price is steep. From FSU and Clemson's perspective, the money is not as bad as the FSU AD cried about. The have an easy path to the playoffs.

If ESPN fails the ACC and does not make a sweet offer in 2036 then all ACC teams need to see what is out there and in their best interest. I personally believe that ESPN will not allow Fox more "territory". If ESPN kills off the ACC, then ESPN will be no better than Jefferson Pilot for the SEC, a regional carrier. If that happens, ESPN can write off college sports as a whole because Fox, NBC, CBS, and the streamers know the boon that is CFB and Hoops. They are not likely to give up control again for a long time.

Please note, too many mouths on the web are only looking at this from a conference perspective. See Paul Finebaum. Are highly biased. Finebaum, the Dude, Frank the Tank, et al. All of them ignore the networks and the streamers who need content - and have the bucks!, ignore hoops as a revenue source, even though they freely admit that hoops is at least 25% of the contract but offers much more upside on revenue, and cannot keep their biases from ruling their "opinions". I wish we had access to the full matrix the decision makers get to see.

This is such a great post. I’m saving it. HRE Otto doesn’t seem to have any idea what he’s talking about.

 

[Sherman20]

Agree you haven't changed your argument. My point is what I posted has little to do with your argument. You are tangenting.

Why are you assuming Clemson? It wasn't too long ago that I would argue that GA Tech was a better FB program (Ross/O'Leary/Gailey/Johnson > Hatfield/West/Bowden). Clemson's success the last 10 years or so has been great, but that doesn't ensure future success. IMO if the scenario I laid out happens it would be FSU and UNC.

But back to my point the exit would be very expensive and nearly impossible for a school to do on its own. That is where ESPN could assist and "buy back" the TV rights. You are totally ignoring this angle. Whether or not ESPN can afford it (which I suspect they cannot) is a fair argument.

You are also assuming hostility. If the ACC wanted to play hardball, no one can leave. But why choose that route? If over the next 10 years the ACC can make MORE money for everyone, why turn that down out of spite? If (a big IF) all parties can come to an agreement, why not? You keep making it so a mutually beneficial exit is NOT possible. That is naive.

I believe the Tier 1/2 rights from ESPN is $25M a year. Why would there be a need to buy back rights for $50M? The B12 let Texas out early because it made them more money. This move would be the same. Also wasn't what Texas paid the exit fee AND one year of TV rights? The B12 had a 99 year commitment and to get out you needed to pay 2 years of revenue ($80M). So in reality they only paid $50M to leave a year early AND get out of the 99 year. They got off cheap.

ESPN would be $weetening the pot as incentive. If they wanted to, they could play hardball too. If two ACC teams leave for the SEC then they can still get 1/2 TV shares for their road games (same as they would make in the ACC). Their home games would be owned by the ACC who sold them to ESPN. So ESPN can chose to put FSU vs Miss State as the ACC Tier 1/2 game in a given week and relegate the actual ACC games. That would kill exposure for the ACC teams. So not only does the ACC not have more money, they have less TV slots.

Again if there is no mutual agreement this cannot happen. If there is a mutual agreement, there is no reason for a lawsuit is there?

“The 99 year commitment” is irrelevant. Lol. That isn’t a contract. Why do you keep mentioning that? Texas and OU are only able to leave ONE YEAR early on the GOR, even though they announced they were leaving several years ago. The Big 12 wasn’t gonna let them go so easily. The GOR is the ironclad agreement tying the conference schools together. Texas and OU could only afford to get out one year early, and Texas is the richest school of all. FSU and other ACC schools with wandering eyes can’t afford to get out of the GOR early, as Htown explains.

 

[kcsu]

FSU and Clemson would deliver many ratings bonanza games like the FSU/LSU game if they were playing an SEC schedule. In the ACC there aren't any outside of them playing one another. So, they would be much more valuable to ESPN in the SEC.

not

 

[HRE Otto IV]

“The 99 year commitment” is irrelevant. Lol. That isn’t a contract. Why do you keep mentioning that? Texas and OU are only able to leave ONE YEAR early on the GOR, even though they announced they were leaving several years ago. The Big 12 wasn’t gonna let them go so easily. The GOR is the ironclad agreement tying the conference schools together. Texas and OU could only afford to get out one year early, and Texas is the richest school of all. FSU and other ACC schools with wandering eyes can’t afford to get out of the GOR early, as Htown explains.

1. The B12 schools all agreed to the 99 year. You can look this up.

2. The B12 bylaws state any team leaving owes 2x revenue ($80M). You can easily look this up.

3. No one has reported that the $50M exit fee is all TV/GOR. You can also look this up. The 2x TV is internet folklore. Why are people spreading fake news?

4. The B12 had them on the hook for $80M each and a buyback for TV/GOR and settled for $50M.

5. The hold up in leaving early was FOX and not the B12. This can also be easily looked up.

6. The B12 sold the TV rights. They did not own them. ESPN and FOX did. As long as the TV contract didn’t decrease, the B12 could not claim damages or need compensation. This is also the case for the ACC Tier 1/2. The Tier 3 (ACCN) would require compensation though.

7. ESPN did not require compensation. This would be the case if an ACC team left for the SEC too.

8. FOX wanted compensation. Reportedly they took $10M per team for the half share that they owned. Which means a full share is $20M not $50M.

9. The settlement was was leaving the B12. Not just for leaving early. Not just for one year of TV rights. You can easily look this up. Saying otherwise is completely false.

 

[suorange08]

“The 99 year commitment” is irrelevant. Lol. That isn’t a contract. Why do you keep mentioning that? Texas and OU are only able to leave ONE YEAR early on the GOR, even though they announced they were leaving several years ago. The Big 12 wasn’t gonna let them go so easily. The GOR is the ironclad agreement tying the conference schools together. Texas and OU could only afford to get out one year early, and Texas is the richest school of all. FSU and other ACC schools with wandering eyes can’t afford to get out of the GOR early, as Htown explains.

You should read this as it explains the issues OU and Texas were having with getting out:

https://www.si.com/college/2023/02/03/big-12-sec-texas-longhorns-oklahoma-sooners-split-explainer

 

[suorange08]

I have not changed my argument. I have consistently stated that the exit fee is significant and most schools cannot or will not pay it outright, let alone buy back their rights. I have consistently opined that the ACC buyback is too long for a simple calculation, as you argue $250MM, or roughly 5 years when they have another 12 years following this season, or roughly $500-$600MM. When you use the OU and UT multiplier of 2.1, you end up at $1.050-$1.26BB.

There is no 2.1 multiplier for OU and Texas. Technically, they had to pay an $80MM exit fee per school as well as one year of media rights. They negotiated it down to $50MM total per school, covering the exit fee and media rights (including reversing the Texas home and home with Michigan to be at Michigan next year instead of at Texas- due to Fox wanting that). The Big12 did not have to negotiate the dollars down, especially to that level.

I do agree that the ACC schools looking to leave will have a huge amount that they would have to pay, though it would be an exit fee plus the media rights for the remainder of the contract. I don't think it would be near $1B though. More like half of that.

 

[qdawgg]

I can’t believe he replied. There was no reason to believe he’d write a follow up. I also can’t believe it’s just repeating the same things that have already been proven wrong, 20 pages ago and 10 pages ago, and the last page.

 

[HRE Otto IV]

I can’t believe he replied. There was no reason to believe he’d write a follow up. I also can’t believe it’s just repeating the same things that have already been proven wrong, 20 pages ago and 10 pages ago, and the last page.

Give me one article. Should be easy as pie to prove me wrong. But you cannot. So sad you lose again.

 

[CousCuse]

not

Marquee matchups draw non-fan of the teams playing viewers from all over the college football world.

 

[MikeSU02]

It's Wednesday, September 7th and it's still entirely legal and feasible for Clemson or FSU to leave the ACC.

Did they?

Can we just set this up as a repeating post?

BTW, while you're answering the above, please note that ESPN/Disney are in a real fight with Charter/Spectrum.

There is no 7th-dimension chess with this. It's all on the table.

 

[HtownOrange]

There is no 2.1 multiplier for OU and Texas. Technically, they had to pay an $80MM exit fee per school as well as one year of media rights. They negotiated it down to $50MM total per school, covering the exit fee and media rights (including reversing the Texas home and home with Michigan to be at Michigan next year instead of at Texas- due to Fox wanting that). The Big12 did not have to negotiate the dollars down, especially to that level.

I do agree that the ACC schools looking to leave will have a huge amount that they would have to pay, though it would be an exit fee plus the media rights for the remainder of the contract. I don't think it would be near $1B though. More like half of that.

As explained previously, OU and UT believes there 99 year commitment was not a valid contract. HRE agrees to this point and so does the article you linked in the previous post. As such, the exit was null and void. The cost of getting out was valued at more that two years ' TV revenue, thus the multiplier.

Note: the payout from TV rights does NOT include other monies paid out. Bowl money is earned each year and is not added. Hoops hoops tourney credits are not added as the conference receives those monies whether a team stays or goes unless the team is independent.

It does not matter how the money is "broken out". Since the teams argued the exit fee was bogus, the only substantive factor was TV revenue, which was roughly a little over $20MM/year at that time. If you prefer to argue the exit fee was valid, then shift money over to that column. Either way, you still get to double plus the TV revenue.

Don't be confused by cherry picking a writer's cherry picked comments. If OU and UT were willing to fight over the $80MM exit fee, they would have. OU and UT were willing to forego two years' TV money to get out one year early. Otherwise they could have waited one more year and forced the B12 to sue for the exit fee. Contractually, OU and UT were in the stronger position on the exit fee. What could NOT be ignored was the GOR.

If it is as easy as you and HRE believe please explain why it was not done? Further, explain why HRE and you want FSU out easily and on the cheap.

I have offered a valid explanation that is in line with prior facts. I have held all along that a deal is possible but other factors must fall in line before a deal can occur. I have posted ACC and ESPN perspective to oppose any bargain basement agreement put forth by FSU and others on this site.

Facts:
FSU floated a $300MM offer to leave. FSU believes the GOR is more solid that HRE and you believe
FSU lacks the money to pay the $300MM, let alone any larger amount
Clemson wants more money
UNC wants more money
It is probably safe to assume all remaining ACC schools want more money
The ACC deal was negotiated when ACC teams were down
ACC teams are improving
There remain look-ins for ESPN to evaluate the deel
The GOR is solid (which is the opposite of what HRE has argued all along)
The ACCN makes money for both the ACC and ESPN
ESPN has no incentive to destroy the ACCN
ESPN would have to increase its payouts to cover the FSU and any other team that moves to the SEC, a bad business move
If a team moves from the ACC, the door is opened for Fox and any others to pick apart the ACC.
The moment a team can break the GOR, all GOR are rendered useless
Neither ESPN nor Fox want GORs to be rendered useless
The ACC will be in a stronger position for bargaining with stronger teams going forward.
The ACC has a huge audience base, it is now the undisputed largest audience base.
ESPN is more likely to ensure the ACC has a decent deal (Hint: they ensured the ACC deal was better than the B1G 12's deal at the time it was made, many lauded it as a very good deal), why destroy a profit center, lose territory to a competitor and alienate a large portion of the population?
The ACC will make more money by waiting and improving it's product, consolidating it's fanbases and new markets in the mean time.

Please explain why you, HRE and others want FSU/Clemson/UNC to get out on the cheap. No one has proffered a valid basis for doing so. Many on here have asked and yet no one provides a valid response.

 

[HRE Otto IV]

As explained previously, OU and UT believes there 99 year commitment was not a valid contract. HRE agrees to this point and so does the article you linked in the previous post. As such, the exit was null and void. The cost of getting out was valued at more that two years ' TV revenue, thus the multiplier.

Note: the payout from TV rights does NOT include other monies paid out. Bowl money is earned each year and is not added. Hoops hoops tourney credits are not added as the conference receives those monies whether a team stays or goes unless the team is independent.

It does not matter how the money is "broken out". Since the teams argued the exit fee was bogus, the only substantive factor was TV revenue, which was roughly a little over $20MM/year at that time. If you prefer to argue the exit fee was valid, then shift money over to that column. Either way, you still get to double plus the TV revenue.

Don't be confused by cherry picking a writer's cherry picked comments. If OU and UT were willing to fight over the $80MM exit fee, they would have. OU and UT were willing to forego two years' TV money to get out one year early. Otherwise they could have waited one more year and forced the B12 to sue for the exit fee. Contractually, OU and UT were in the stronger position on the exit fee. What could NOT be ignored was the GOR.

If it is as easy as you and HRE believe please explain why it was not done? Further, explain why HRE and you want FSU out easily and on the cheap.

I have offered a valid explanation that is in line with prior facts. I have held all along that a deal is possible but other factors must fall in line before a deal can occur. I have posted ACC and ESPN perspective to oppose any bargain basement agreement put forth by FSU and others on this site.

Facts:
FSU floated a $300MM offer to leave. FSU believes the GOR is more solid that HRE and you believe
FSU lacks the money to pay the $300MM, let alone any larger amount
Clemson wants more money
UNC wants more money
It is probably safe to assume all remaining ACC schools want more money
The ACC deal was negotiated when ACC teams were down
ACC teams are improving
There remain look-ins for ESPN to evaluate the deel
The GOR is solid (which is the opposite of what HRE has argued all along)
The ACCN makes money for both the ACC and ESPN
ESPN has no incentive to destroy the ACCN
ESPN would have to increase its payouts to cover the FSU and any other team that moves to the SEC, a bad business move
If a team moves from the ACC, the door is opened for Fox and any others to pick apart the ACC.
The moment a team can break the GOR, all GOR are rendered useless
Neither ESPN nor Fox want GORs to be rendered useless
The ACC will be in a stronger position for bargaining with stronger teams going forward.
The ACC has a huge audience base, it is now the undisputed largest audience base.
ESPN is more likely to ensure the ACC has a decent deal (Hint: they ensured the ACC deal was better than the B1G 12's deal at the time it was made, many lauded it as a very good deal), why destroy a profit center, lose territory to a competitor and alienate a large portion of the population?
The ACC will make more money by waiting and improving it's product, consolidating it's fanbases and new markets in the mean time.

Please explain why you, HRE and others want FSU/Clemson/UNC to get out on the cheap. No one has proffered a valid basis for doing so. Many on here have asked and yet no one provides a valid response.

You are putting words into others mouths. Neither I nor the other poster argued a single item you just wrote about. I NEVER argued the GOR was not valid. We will leave it at that.

 

[texascpa]

It's Wednesday, September 7th and it's still entirely legal and feasible for Clemson or FSU to leave the ACC.

Did they?

Can we just set this up as a repeating post?

BTW, while you're answering the above, please note that ESPN/Disney are in a real fight with Charter/Spectrum.

There is no 7th-dimension chess with this. It's all on the table.

BTW, it's Thursday, September 7th.

 

[Cusefan69]

BTW, it's Thursday, September 7th.

 

[qdawgg]

Give me one article. Should be easy as pie to prove me wrong. But you cannot. So sad you lose again.

I never mentioned you. How do you know I wasn’t referring to Htown with my post. Only if you are really just trolling would you assume my post was about you specifically. Thank you for owning up to it by replying.

 

[JRHEETER]

The ACC fully believes that FSU and Clemson ARE going to leave the ACC

When? They’re not entirely sure of that yet, but it more than likely will happen.

The importance of adding SMU, Cal and Stanford was so that WHEN FSU and Clemson leave they are above the 15 team threshold in the GOR which means ESPN can NOT renegotiate the media package and give them less $$$$.

It’s not a matter of IF it’s a matter of WHEN regarding Clemson and FSU.

Will it be this next season or the season after that? Very unlikely.

 

[MikeSU02]

BTW, it's Thursday, September 7th.

I have to eat that. It's been a long week. I'm an idiot.

 

[MikeSU02]

If this article has been posted, apologies. But holy cow did SMU go hard. Long read, but very good.

Inside SMU's pursuit of the Power Five — 'It's a couple hundred million dollars. I'm not losing sleep over it.'

SMU is headed for greener pastures in the ACC. How it all happened is a Texas-sized story filled with billionaires and big decisions.

sports.yahoo.com

 

[MikeSU02]

If this article has been posted, apologies. But holy cow did SMU go hard. Long read, but very good.

Inside SMU's pursuit of the Power Five — 'It's a couple hundred million dollars. I'm not losing sleep over it.'

SMU is headed for greener pastures in the ACC. How it all happened is a Texas-sized story filled with billionaires and big decisions.

sports.yahoo.com

Not to quote my own post too often, but it jumps off with:

'It's a couple hundred million dollars. I'm not losing sleep over it.'​

And goes UP from there.

 

[Stevenson]

If this article has been posted, apologies. But holy cow did SMU go hard. Long read, but very good.

Inside SMU's pursuit of the Power Five — 'It's a couple hundred million dollars. I'm not losing sleep over it.'

SMU is headed for greener pastures in the ACC. How it all happened is a Texas-sized story filled with billionaires and big decisions.

sports.yahoo.com

Sounds to me like a few people at NC State got a bag of cash…

 

[MG44]

I would say Mr Miller didn't dick around...that's a freakin' "influencer"

 

[MikeSU02]

Sounds to me like a few people at NC State got a bag of cash…

When they get to the part where they’re in the room and the total worth of the room is $15 billion, lolllllll.

SMU, man.