Neff discusses an ACC revenue gap that's only growing wider

Neff discusses an ACC revenue gap that's only growing wider

Baseball

Neff discusses an ACC revenue gap that's only growing wider

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The ACC has long lagged behind some of its Power Five counterparts when it comes to revenue distribution for its member schools. And that gap is quickly growing wider, making it a key talking point during the ACC’s annual spring meetings last week.

“The concern that it’s growing wider, absolutely it’s a big discussion within the league,” Clemson athletic director Graham Neff told The Clemson Insider.

Thanks in large part to the launch of the ACC Network, the conference reportedly generated $497 million in gross revenue for the 2019-20 financial year, a record for the league that saw average payouts of more than $30 million to each of its full-time members (Notre Dame, a member in all sports but football, gets a different cut). Yet it’s a drop in the bucket compared to what the SEC and Big Ten are raking in.

The Big Ten reportedly generated nearly $800 million in revenue in the same year, or roughly $40 million more than the SEC as the top money maker among the Power Five conferences, which also include the Big 12 and Pac-12. The SEC took over that distinction during the 2020-21 financial year with a reported revenue of more than $833 million, or approximately $55 million per each of its 14 members.

Conferences have multiple revenue streams, including bowl payouts and the NCAA Tournament. But none is more substantial than media rights contracts as television networks and streaming services bid for broadcasting privileges. Problem for the ACC is, neither is currently competing to air its games.

That’s because the ACC is locked into a Grant of Rights agreement with ESPN until 2036, a deal that was set to expire much sooner (2027) before being extended nine years when the conference launched the ACC Network in August 2019. And short of Notre Dame joining as a full-time football member, the league’s options for renegotiating are few and far between.

The ACC initially entered the agreement in 2013 in an effort to stabilize itself after Maryland, one of the league’s founding members, left for the Big Ten. If Clemson or any of the ACC’s other current members successfully tried to leave the conference, then they would have to give up their cut of the league’s revenue distribution.

Meanwhile, the money in the SEC and Big Ten is getting bigger. The SEC recently inked a 10-year deal with ESPN reportedly worth $300 million to make the network the exclusive rights holder for the league’s football and basketball games beginning in 2024. The Big Ten is negotiating a new mega TV rights contract that will begin in 2023 and could be worth more than $1 billion, or roughly $71 million per member institution, according to Sports Business Journal.

At Clemson, Neff said the athletic department has been able to somewhat bridge the ACC’s revenue gap “through IPTAY (the department’s fundraising arm) and through people” making donations that help the school fund scholarships and facilities. Neff said it may force league members to further prioritize the allocation of their cut to the sport that’s primarily responsible for creating revenue in hopes that it brings in more money that can be used to financially supplement other areas.

“We talk about brand and how do we invest and how do we prioritize investments and what that looks like on our campuses,” said Neff, who worked as Clemson’s deputy athletic director before being promoted following Dan Radakovich’s departure in December. “I think it goes along strategically with (ACC) Commissioner (Jim) Phillips’ vision of football and elevating football’s brand. That’s where certainly a lot of is driven and certainly a lot of eyeballs within the league and within certainly the football coaches’ room.

“I’m sure in AD meetings, they look to Clemson for that type of example where investment fuels, in theory, success with the right decisions and people, which helps raise boats for a lot of the other departmental investments.”

But with the ACC well behind in the revenue arms race, it continues to leave the conference and its members in a precarious position.

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