(01-09-2023 01:17 AM)Skyhawk Wrote: Whether we like it or not, there is going to come a point where media companies are just not going to pay the same amount to every school just because they happen to be in a conference with schools that the media company values.
And I think conferences are going to try to fight that as long as possible.
Plus, media companies would like to avoid having to make that choice, because of the optics involved.
Couple this with - while I think espn would like to see FSU, and possibly other schools in the SEC for matchups, that's going to cost them money if the SEC goes from 16 schools to 18 or more schools.
So what about this:
What if espn had a meeting with the ACC and the SEC, and Vanderbilt.
The offer:
If Vanderbilt were willing to be traded for an ACC school (let's say FSU), espn would do the following:
Offer to pay Vanderbilt the difference between the SEC distributions and the ACC distributions until the end of the current SEC contract (2030).
And offer FSU an invite to the SEC, but at the ACC rate (35M - see below) until the end of the current SEC contract (2030).
Essentially FSU gets a raise, but reduced revenue at first in order to facilitate the deal.
And offer to increase the ACC deal so that the payout per school to $35M - up from just under 32M - if they add 2 schools. And a guaranteed increase to (at least) 40M in 2030 (when the SEC deal ends) - until 2036 (when the ACC deal ends). Vanderbilt would be included in the 40M, of course.
(With a guarantee, that espn would not reduce the ACC deal if the SEC at some point poached 2 more schools and the ACC needed to backfil 2 more - depending on the schools, of course).
And to help, the SEC guarantees that Vanderbilt will still play all their currently scheduled games with Tennessee, and to make sure that that is extended until 2036.
That's the carrot - now for the stick:
If Vanderbilt doesn't agree to this, the next deal for the SEC from espn would be a two-tiered deal, and Vanderbilt obviously would not be in the top tier, and with the bottom tier not likely to even make the 40M now being offered.
Yes, the SEC could try to stand behind Vanderbilt and hope that bidding from other media partners in 2030 might bail them out from espn's strategy. But considering all the changes on the horizon, and the steady downward spiral of ota and cable, I wouldn't hold my breath. Plus that potentially screws the rest of the potential "bottom tier" SEC conferences.
Does this benefit espn? Adding 2 new schools to their duopoly and getting FSU matchups in the SEC, and Vanderbilt basketball in the ACC? Yes, I would imagine so.
The cost to espn - since the swap cost is a wash - is just the incentive to the ACC, which may have happened anyway, if they decided to expand.
And the new schools themselves add a cost, of course.
So really, for espn, these are just costs they likely would have had to pay anyway, and they instead get an additional long-term benefit.
espn could wait to make a scaled-down version of this offer in 2030, but I think current circumstances (changes - cfp, nil, etc) accelerate the need.
So the question for you all is:
Do you think Vanderbilt would take this deal?
There is one way to avoid GOR entanglements. A trade is not one of them. The most fool proof is a complete merger. To do that everyone needs to get something, including the network.
You may see this playout in the Big 10's negotiations with more PAC schools. Washington and Oregon could likely move pro rata. Maybe even Stanford. Cal would have to make more than they make now, but they may not need a full share. If not Cal perhaps Colorado, or even Arizona or Utah. The point is if the transferring school makes more they don't lose. If they keep access they don't lose.
Now in the case of the SEC and the ACC both are fully owned rights wise by ESPN. A full merger in which Florida State, North Carolina, Virginia Tech, and Clemson received full SEC shares and perhaps Miami and Louisville received more than 5-million-dollar bump which everyone else would get is all that is needed to complete such a deal.
What would the SEC get? A solid control over the Southeast with no chance through the end of the old ACC GOR which would be assumed by both parties in the merger for anyone to breach the Southeast or really the Southwest.
What does the ACC get? The get to stay together while those with the most to lose by remaining don't lose anything, and everyone else gets a modest bump.
What does ESPN get? A GOR holding both until 2036. A merger of the ACCN / SECN / LHN which saves overhead and maximizes subscriptions in all states within the combined footprint at maximum ad rates (which are shared 50/50 in the existing network contracts. They get to schedule more profitable games for Miami, Louisville, Virginia Tech, N.C. State, Georgia Tech, Clemson and F.S.U.
How about Notre Dame? They keep their partial deal but can now spread that schedule around the entire inventory which offers them much more flexibility.
That's 30 plus ND. Let's round that out to 32 and pick up two more Big 12 schools in the process. They don't have to come in at full price either, but at a decent raise. Kansas, Texas Tech, perhaps Colorado?
So Skyhawk in that scenario Vanderbilt could either remain whole or at ESPN's insistence receive the average ACC share. I should think perhaps 3 tiers of payment could be set up. Since Vanderbilt has not yet received the new SEC share they could simply be locked into the old one with %'s for an escalator.
This pathway is GOR friendly, ESPN friendly, would likely cost ESPN between 240 million and 300 million, but how much would they save from the combined overhead? How much would they make over and above because of absolute control of ad rates in the predominance of the states? How much do they make in subscriptions for the combined product? How many more T1 games do they have for inventory?
They could still acquire Pacific Coast Time zone schools via additions to the New Big 12.
The SECN would now be available in New York, Pennsylvania, Massachusetts, Virginia, and North Carolina, and perhaps Kansas or Colorado. Now that's an interesting play especially if the old LHN also carries the New Big 12 games to which ESPN has access.
North Carolina keeps Duke, Wake, and N.C. State. Syracuse, Pitt and B.C. are accounted for and the football first schools get better schedules and all make at least a little bit more than they make now, and those who spend the most to be competitive make a lot more. And ESPN gets what they have wanted without much adjustment in the long run. By 2036 all of the schools will know whether they want to continue to pursue athletics at the highest level or step down or get out. Then adjustments to the whole upper tier will occur and new contracts signed, perhaps with the collective bargaining for the whole enchilada.