Good Legal View of the ACC-ESPN Contract

[arbitragegls]

This is one legal view of the ACC - ESPN contract that indicates it may be tough for the ACC to get more money out of ESPN. However, depending on ESPN's desire to help the ACC which has more content on ESPN than any other conference whether it be pro ball of any kind or another college conference, may infact help with Swofford's desire to revisit the present deal in some way(as mentioned in previous post under different heading).

The bottom line from this legal view is that the ACC did not get a bad deal. In fact, if we now look at the BE looking at perhaps a 50% less contract than a year ago; and CBS indicating that are not in a mood to give the SEC much more money, The ACC contract may be looking better every day particularly with its 5 and 10 year look in. And do not forget that Swofford and the ACC had numerous media consultants that helped with the negotiation and valuation. So it was not just a Swofford decision. A legal view can be found here:
http://atleagle.blogspot.com/2012/05/tv-rights-q-with-sports-lawyer-timothy.html

 

[Toga]

In sum, FSU and Miami tanking has cost SU a boatload of money. And FSU is complaining?

 

[sufan]

This is one legal view of the ACC - ESPN contract that indicates it may be tough for the ACC to get more money out of ESPN. However, depending on ESPN's desire to help the ACC which has more content on ESPN than any other conference whether it be pro ball of any kind or another college conference, may infact help with Swofford's desire to revisit the present deal in some way(as mentioned in previous post under different heading).

The bottom line from this legal view is that the ACC did not get a bad deal. In fact, if we now look at the BE looking at perhaps a 50% less contract than a year ago; and CBS indicating that are not in a mood to give the SEC much more money, The ACC contract may be looking better every day particularly with its 5 and 10 year look in. And do not forget that Swofford and the ACC had numerous media consultants that helped with the negotiation and valuation. So it was not just a Swofford decision. A legal view can be found here:
http://atleagle.blogspot.com/2012/05/tv-rights-q-with-sports-lawyer-timothy.html[/quote]


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"The only fact out of the Big 12 is that the average of the deal comes out to $20 million per year. This does not start until 2015. These are graduated deals. For the ACC, the whole length of the deal is $17 million plus, but a different formulation puts the ACC at $19 million. So, you could really be talking about another million per year if a school went to the Big XII. ESPN has no interest in creating a have-not conference when they have created a have in the ACC. The ACC is probably the most balanced from markets, geography, sports, and academics. My read is that TV values are maybe 30% of athletic budgets at this point. It is big, but not everything.

Excellent interview:

1) So the Big 12 $20m deal begins in 2015. Not sure anyone has picked up on this point.

2) Does anyone know what "a different formulation puts the ACC at $19 million" refers to?

 

[cusenole9]

In sum, FSU and Miami tanking has cost SU a boatload of money. And FSU is complaining?

Yep, but I don't think it's crazy for a school to be frustrated with the fact that they went on run of mediocrity without even having a losing season or missing a bowl game, and lead the conference in television ratings, and the value of the conference crumbles around them. Why stay in a place where everyone expects you to be a dynasty and carry the conference? People should look up FSU's TV ratings before they blame them for the ESPN deal.

 

[Faegan]

Yep, but I don't think it's crazy for a school to be frustrated with the fact that they went on run of mediocrity without even having a losing season or missing a bowl game, and lead the conference in television ratings, and the value of the conference crumbles around them. Why stay in a place where everyone expects you to be a dynasty and carry the conference? People should look up FSU's TV ratings before they blame them for the ESPN deal.

I assume you follow what's going on with the noles given your board name. Do the nole fans think about the reality that Nebraska, Colorado, A&M, and Missouri all couldn't get out of the Big XII fast enough? And that Texas was the reason? They simply got tired of having to kiss the King's ring regularly.

 

[Toga]

2) Does anyone know what "a different formulation puts the ACC at $19 million" refers to? - Good question. Didn't TGD allude to something like this (which never was followed up on by any media type)?

 

[cusenole9]

I assume you follow what's going on with the noles given your board name. Do the nole fans think about the reality that Nebraska, Colorado, A&M, and Missouri all couldn't get out of the Big XII fast enough? And that Texas was the reason? They simply got tired of having to kiss the King's ring regularly.

Yeah they think about it. It's a concern to me and a minor concern to a fan base that isn't thinking rationally right now (we've been unhappy with the ACC for a while now.) The fact that Texas agreed to equal revenue on tier one and two and everyone signed a long grant of rights is what quells those concerns. But still, I agree you have to ask, what happens in 13 years or so when that grant of rights is up? Do they threaten to leave?

 

[Faegan]

Yeah they think about it. It's a concern to me and a minor concern to a fan base that isn't thinking rationally right now (we've been unhappy with the ACC for a while now.) The fact that Texas agreed to equal revenue on tier one and two and everyone signed a long grant of rights is what quells those concerns. But still, I agree you have to ask, what happens in 13 years or so when that grant of rights is up? Do they threaten to leave?

I think that underestimates Texas's resources and leverage. Texas doesn't have to wait 13 years to do anything.

 

[arbitragegls]

A try at defining the $19 million or more...the contract that hopefully will be "looked into" prior to year five does include some tier 3 rights. However, the ACC schools still have 3 tier rights to other items such as coaches shows, some other games not in bball and football. It is estimated that 'Cuse makes as much as $2 million to $4 million on these shows (this it keeps for itself and not shared).
The comparisons with TV contracts do not take into consideration of this and are not necessarily apples to apples wherein the continued conversation.
Perhaps what is amazing is that less than 5 years ago the ACC per team TV dollars were around
$8million--a very significant raise in a short period of time.

I am beginning to think that the brain waves of teams like FSU/Clemson etc are really fried...expectations of so much more dollars coming in that they are losing perspective. Although football and basketball teams may be profitable playing in Iowa and Kansas, how do you send a women's lax team or swim team or other olympic sports to these "far away places" with fewer alumni going to watch...it will be lonely out there!

 

[Orangello]

I think that underestimates Texas's resources and leverage. Texas doesn't have to wait 13 years to do anything.

This^^^^^^^^^^

Everyone is assuming there's a Bevo Conference 13 years on.

 

[cusenole9]

This^^^^^^^^^^

Everyone is assuming there's a Bevo Conference 13 years on.

Very true. Now there are plenty of FSU fans that are not in favor of leaving unless the plan is to add 4 or 6 more teams. This would add stability to the conference and dilute the power of Texas. Which may mean they aren't in favor of it.

And for Arbitragegls, There's really no telling the difference in numbers financially. Bowl deals, playoff picture etc. must be taken into account. You may be right, but it is going to take a lot of research and inside information to actually understand the financial landscape here.

 

[javadoc]

Very true. Now there are plenty of FSU fans that are not in favor of leaving unless the plan is to add 4 or 6 more teams. This would add stability to the conference and dilute the power of Texas.

Sort of like adding BC, VT, Miami, FSU, Syracuse, and Pitt to the ACC, diluting the power of the NC tetrad.

 

[Faegan]

Anyone ever see the Seinfeld where Elaine yells at Jerry for telling her new boyfriend that he heard Elaine and he were "hot and heavy?" She yells at him, "I'm trying to get a little squirrel to come over to me here. I don't wanna make any big, sudden movements. I'll frighten him away." That's Texas right now. Attracting squirrels with nuts, hoping nothing frightens them off.

 

[sufan]

A try at defining the $19 million or more...the contract that hopefully will be "looked into" prior to year five does include some tier 3 rights. However, the ACC schools still have 3 tier rights to other items such as coaches shows, some other games not in bball and football. It is estimated that 'Cuse makes as much as $2 million to $4 million on these shows (this it keeps for itself and not shared).
The comparisons with TV contracts do not take into consideration of this and are not necessarily apples to apples wherein the continued conversation.
Perhaps what is amazing is that less than 5 years ago the ACC per team TV dollars were around
$8million--a very significant raise in a short period of time.

I am beginning to think that the brain waves of teams like FSU/Clemson etc are really fried...expectations of so much more dollars coming in that they are losing perspective. Although football and basketball teams may be profitable playing in Iowa and Kansas, how do you send a women's lax team or swim team or other olympic sports to these "far away places" with fewer alumni going to watch...it will be lonely out there!

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Re: "19 million or more":

Could it refer to tier 3 TV rights that ESPN does not choose to broadcast, and that schools can then sell?

Or perhaps to TV rights relating to re-broadcast of game?

Or as you say, TV rights to games other than football and men's BB?