In 2014, the Southeastern Conference generated $347 million in television money. According to forbes.com, $300 million of that came from ESPN between rights fees and the conference’s share of profits from the SEC Network.
In its first year, the SEC Network kicked off around $112 million for the SEC.
According to reports late last week, the Big 10 Conference and Fox Sports are close to a new media rights deal that could rival or surpass the SEC’s. Fox already owns 51 percent of the Big Ten Network. Early projections say the new deal could make more than $40 million for Big Ten schools.
So what does this mean for the Atlantic Coast Conference, whose member institutions could make just half of what their Big 10 brothers are making next year?
Clemson athletic director Dan Radakovich told The Clemson Insider earlier this week the ACC is paying close attention to what is happening with the other Power 5 Conferences and there is a sense of urgency by the conference going forward in terms of where it is in its discussions with ESPN and a possible plan to start an ACC Network.
The ACC Network, according to Radakovich, is the first thing ACC Commissioner John Swofford thinks about when he goes into his Greensboro, N.C. office every day. Talk of a conference network will be one of the hot button items on the agenda when the league’s athletic directors get together in Amelia Island, Fla., for their annual spring meetings in a couple of weeks.
Does the ACC worry about falling behind the Big Ten or the SEC in rights fees because it has not started its own network, yet?
Radakovich: “We do. There is no question. That is why the urgency of moving forward with this network is top of (our) mind each and every day.
“The ACC has had its best two years in competitive national rankings than it has had in a lot of years. Football, basketball … There are some really good things going on in this league. The real question is, without some additional revenue, can we sustain it. That’s where the urgency is.
“Do we have to be where the Big Ten is? I don’t know if we will ever get there. If that is an aspiration, then it could be an aspiration that we chase forever. Do we need to get to where the SEC is? They have been ahead of us right now. How do we get in the game? That is what we need to be able to do as a league is get in the game and that is what this network will allow us to do.
“When you start to wonder how many dollars and those types of things are coming in, you don’t know. That’s tough to account for right there because we don’t know. You don’t know and I don’t know. When those dollars come into Ohio State, how much of those dollars go to the university? How much of those dollars are taken by the university to run the general university and not specifically the athletic department? How much of that happens at Illinois, or Iowa, or Penn State? Maybe it’s none or maybe it’s a lot. The same thing within the SEC, how many of those dollars, when the President sees those new monies coming in, do they take a piece of that to help operate the rest of the university? Maybe they do, maybe they don’t.
“It’s clear they’re bringing in more revenue than we are and we have to be able to help mitigate that at some point and time, and the network is a way to do that.”
Does ESPN have a deadline when it comes to creating an ACC Network?
“I hope at (the spring meetings) we get a really good update from the league as to where we are. I know there is a lot of work going on within the league office and our consultant is actually handling the negotiations. I know with Commissioner Swofford that is the first thing he thinks about every time he walks into the office.
“What we have to understand is if we get a network, this is not only revenue coming to the Atlantic Coast Conference, but is also a revenue producer for (ESPN). So as they look to expand their opportunities of revenue, this is a pretty good way to do it. We have a lot impetus on both sides to be able to get this done.
“I think the one reason why it has been kind of pushed back a little bit, and I think you guys have heard this before is the distribution channels and the ability for ESPN to get on the Comcast, the Time Warner and the DirecTV. Those are really done during their contract negotiation periods or renewals with those cable providers and those start to happen in 2018, ‘19 and ‘20.
With the changing landscape in television and the different ways people watch television now, how have those things slowed down the process of getting an ACC Network?
Radakovich: “Our partner is ESPN. They own our rights through 2026-’27 in our current agreement. They are a really good partner to have because, while they had a serious of layoffs within their company, you have to look back at the history of ESPN and see their mediocre growth for a long period of time and just like any other business they have to say ‘Have we gotten too big in certain areas? Let’s trim ourselves back. We are a publicly traded company and a subsidy area of Disney.’ They have to do things differently than what an athletic department might have to do or a university would have to do.
“I will put my bet on the really smart people on ESPN to understand how to monetize live sports television because it is not a weekly serial sitcom or something else that it is easily DVR and watched at another point in time or movie. Live sports are really a unique situation as it relates to television. They are at the forefront of owning rights and being able to create those types of monetization of those rights.
“How are we going to gather it in five years? I have no idea. But will it be paid for? Probably, in some way shape or form.
“It goes a little beyond the cord cutting. You can cut the cord, but you better have some type of line that brings the information to you. Even in your own house with WiFi, you have to able to have something to bring that in. Then the idea of paying for that particular bundle of service, it moves away from your cable operator and into another way to consume that information.
“We are putting our dollars on the ESPN horse in this race, knowing they have motivation to go out and monetize this right they have already purchased.”