CLEMSON — The ACC expansion movement might include a new business venture.
In an effort to create new revenue and take advantage of new markets in the Northeast (Pittsburgh and Syracuse) and Midwest (Notre Dame and Louisville), the ACC is studying the viability of creating its own television network.
Clemson athletic director Dan Radakovich said the ACC is in “exploratory” stages of talks about a network.
“I think it’s (the ACC’s) due diligence to explore all opportunities that might be there,” Radakovich said. “What I think is going on is discussions amongst a group of ADs and the commissioner’s office to see where best we can go into the future, (maximize) some opportunities available as it relates to the ever-changing landscape of college athletics, and certainly working with our partners at ESPN to see what might be available.
“So, it’s really very exploratory.”
One of the biggest draws to creating a network are subscription fees.
The Big Ten Network is a key reason why the conference dwarfs all other conferences in television dollars, and a major factor in Maryland’s decision to leave the ACC.
By some estimates, the Big Ten’s annual payout to each member school could increase to $35 million per year by 2017, which would more than double the average annual value of the ACC’s television dollars distributed to each school ($17 million).
For each household that receives the Big Ten Network on cable, the Big Ten receives just under a dollar per month. Subscription fees explain why the Big Ten targeted Maryland and Rutgers in expansion, lured by the 15 million households in the Baltimore-Washington D.C., New York City-New Jersey and Philadelphia markets.
If the Big Ten Network was added to cable packages in all of those markets, which is unlikely, Sports Illustrated estimates it would be worth $200 million per year to the conference in subscription fees.
The revenue generated from subscription fees might explain why the ACC added schools like Pittsburgh and Syracuse.
But would a network be viable for the ACC?
The NFL and Major League Baseball each has a national market. The Big Ten has larger alumni and fan bases than the ACC. Some analysts suspect even the Big Ten will struggle to get its network picked up by cable providers in the mid-Atlantic. The University of Texas and ESPN have struggled to get the Longhorn Network accepted by cable providers in Texas.
Moreover, to start a network the Sports Business Journal reports the ACC would need 30 to 35 football games per year. And that’s where another problem arises as ESPN signed a 15-year, $3.6 billion deal last year to own all of the ACC’s football and men’s basketball rights.
ESPN’s contracts with the Big Ten and Big 12 do not include ownership of all football and men’s basketball games.
The Sports Business Journal reported ESPN is “lukewarm” on the idea of an ACC Network.
One conference official told The Post and Courier an ACC network would likely have to be a partnership with ESPN. The official said it is unclear how ESPN and the ACC would agree to split revenues from the network.
Radakovich indicated the ACC had not yet determined whether such a network is viable.
“I think it comes back to the market place,” Radakovich said. “I don’t know how successful all of those various networks can be and for each one success is defined differently.
“Certainly we want to make sure exposure is at its highest, but at the same time resources being able to flow back to the individual campuses is always one of the main tasks that a conference office has in front of it.”