(05-14-2015 11:56 AM)Dasville Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year

I don't think that is true.

What part?

Here's an ESPN article that comes very close to supporting my statement:
"The grant of rights coincides with the ACC's TV deal with ESPN through the 2026-27 season. That deal was worth $17 million per school per year, but sources told ESPN last year it is expected to increase to at least $20 million per school per year with the addition of Notre Dame."
http://espn.go.com/college-football/stor...presidents

I also remember reading a bunch of other articles saying $18 and something + either network or either "at least $2 million" or "over $2 million"

I would hunt them down, but I think that they're redundant given the article that I liked above.

(05-14-2015 11:42 AM)nzmorange Wrote:  

(05-14-2015 11:22 AM)orangefan Wrote:  

(05-14-2015 11:03 AM)MplsBison Wrote:  The BTN doesn't add value for the B1G?

I don't think that's what he's saying. The ACC has all of it game rights tied up with ESPN, some of which are sublicensed to Raycom and the Fox RSNs. To provide programming for an ACCN, these games might need to be bought back. Alternatively, ESPN could contribute its ESPNU and ESPN3 inventory. In either case, how does the ACC get paid more for games that ESPN/Raycom/Fox already own?

In the case of the SECN, the SEC did three things. First, the did not renegotiate additional rights fees for the addition of TAMU and Mizzou right away. Those were negotiated as part of the creation of the SECN. Second, the SEC extended its deal with ESPN until 2034. Finally, the SEC bought back some tier 3 rights that had been sold by the individual schools (1 fb game per season per school) and offered them to ESPN for the SECN. These all allowed the SEC to give ESPN "more value," which justified the additional payments to the SEC.

The ACC has already been paid by ESPN for the additions of SU, Pitt and ND and for its extension to 2027. Thus, the ACC's opportunity to add value is far more limited than the SEC's was. The ACC could buy back the Raycom or Fox rights and reoffer them to ESPN, probably more expensive than SEC's repurchase of certain tier 3 games. The ACC could also further extend its rights deal with ESPN past 2027.

When the BTN was formed, the B1G withheld enough games to provide programming for the BTN (as the P12 did when they formed their network). I think that this the timing and the value to which the prior post is referring.

You're somewhat close in that people forget the opportunity costs associated with networks. But, the timing to which I was primarily referring was the fact that there was an asymmetry of information when the BTN was formed. ESPN was the only serious player in the space (because of structural reasons stemming from the '80's and 90's) and other players weren't in a position to move quickly (the market was inefficient because the possibility of pricing wars didn't exist). Furthermore, conferences lacked an adequate understanding of their content's true value. ESPN was paying hundreds of thousands per school when the would have been paying millions in efficient markets. The B1G called ESPN's bluff and launched the BTN, which coincided with an unexpected growth in fan interest. The combined effect of increasing the conference's beta and bargaining position created massive profits. However, those profits were a matter of timing, not structural changes.

The ACC is in a different position. The intrinsic value of ACC media content is pretty well known and the sports media markets are MUCH more efficient today than they were ~10 years ago. Adding a network would not necessarily lead to a materially-increased payout after the costs of buying back content is factored into the calculation and after the payout is risk adjusted.

Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year. That's roughly what the Pac 12 makes. Sure, the Pac's contract ends slightly earlier, and these contracts are back-loaded, but the Pac's exposure is MUCH worse. At the end of the day, I think that the ACC and the Pac have very similar media deals for similar products. As such, I think that there is substantial evidence to support my theory that the conference network delivery method is not inherently better than the older method. Don't get me wrong. I think that conference networks are better. I just don't see a possible ACCN as a game changer.

But if it's not a loser, then why wouldn't they do it in order to "keep up with the Joneses"?

(05-14-2015 12:00 PM)MplsBison Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  

(05-14-2015 11:22 AM)orangefan Wrote:  

(05-14-2015 11:03 AM)MplsBison Wrote:  The BTN doesn't add value for the B1G?

I don't think that's what he's saying. The ACC has all of it game rights tied up with ESPN, some of which are sublicensed to Raycom and the Fox RSNs. To provide programming for an ACCN, these games might need to be bought back. Alternatively, ESPN could contribute its ESPNU and ESPN3 inventory. In either case, how does the ACC get paid more for games that ESPN/Raycom/Fox already own?

In the case of the SECN, the SEC did three things. First, the did not renegotiate additional rights fees for the addition of TAMU and Mizzou right away. Those were negotiated as part of the creation of the SECN. Second, the SEC extended its deal with ESPN until 2034. Finally, the SEC bought back some tier 3 rights that had been sold by the individual schools (1 fb game per season per school) and offered them to ESPN for the SECN. These all allowed the SEC to give ESPN "more value," which justified the additional payments to the SEC.

The ACC has already been paid by ESPN for the additions of SU, Pitt and ND and for its extension to 2027. Thus, the ACC's opportunity to add value is far more limited than the SEC's was. The ACC could buy back the Raycom or Fox rights and reoffer them to ESPN, probably more expensive than SEC's repurchase of certain tier 3 games. The ACC could also further extend its rights deal with ESPN past 2027.

When the BTN was formed, the B1G withheld enough games to provide programming for the BTN (as the P12 did when they formed their network). I think that this the timing and the value to which the prior post is referring.

You're somewhat close in that people forget the opportunity costs associated with networks. But, the timing to which I was primarily referring was the fact that there was an asymmetry of information when the BTN was formed. ESPN was the only serious player in the space (because of structural reasons stemming from the '80's and 90's) and other players weren't in a position to move quickly (the market was inefficient because the possibility of pricing wars didn't exist). Furthermore, conferences lacked an adequate understanding of their content's true value. ESPN was paying hundreds of thousands per school when the would have been paying millions in efficient markets. The B1G called ESPN's bluff and launched the BTN, which coincided with an unexpected growth in fan interest. The combined effect of increasing the conference's beta and bargaining position created massive profits. However, those profits were a matter of timing, not structural changes.

The ACC is in a different position. The intrinsic value of ACC media content is pretty well known and the sports media markets are MUCH more efficient today than they were ~10 years ago. Adding a network would not necessarily lead to a materially-increased payout after the costs of buying back content is factored into the calculation and after the payout is risk adjusted.

Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year. That's roughly what the Pac 12 makes. Sure, the Pac's contract ends slightly earlier, and these contracts are back-loaded, but the Pac's exposure is MUCH worse. At the end of the day, I think that the ACC and the Pac have very similar media deals for similar products. As such, I think that there is substantial evidence to support my theory that the conference network delivery method is not inherently better than the older method. Don't get me wrong. I think that conference networks are better. I just don't see a possible ACCN as a game changer.

But if it's not a loser, then why wouldn't they do it in order to "keep up with the Joneses"?

I never said that the ACC shouldn't. I just think that the benefits are ridiculously overstated.

(05-14-2015 11:58 AM)MplsBison Wrote:  When did they sign the deal that gave away all their games to ESPN? That seems like a dumb thing to do if you're hoping to offer enough content to start a specific channel just for your games.

Was it back during the time when the ACC's survival was questioned? In other words, was it a desperation move at the time to try locking everyone into the conference?

The ACC-ESPN deal was announced in 2010, covering games through the 2022-23 season. That deal was for an average of $13 million/school/year. It came on the heals of the SEC's deals with ESPN and CBS that averaged $15 million/year/school, so it seemed like a good deal at the time.

Subsequently, the B12 and P12 negotiated deals in the $20 million/year/school range, which put pressure on both the ACC and SEC to come up with ways to increase the value of their deals despite being locked into long term contracts.

To add more value, both the SEC and ACC expanded and agreed to extend their contracts with ESPN. The ACC also agreed to add some Friday night football games. The SEC used the opportunity to negotiate the creation of the SEC Network. As noted, they were in a better position to do so than the ACC because fewer games had been sublicensed to other networks and the length of the sublicenses were much shorter.

Nice article summarizing the ACC's business moves over the last 12 years. Says the current tv deal pays an average of $300 million/year

http://www.sportsbusinessdaily.com/Journ...eline.aspx

(05-14-2015 11:59 AM)nzmorange Wrote:  

(05-14-2015 11:56 AM)Dasville Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year

I don't think that is true.

What part?

Here's an ESPN article that comes very close to supporting my statement:
"The grant of rights coincides with the ACC's TV deal with ESPN through the 2026-27 season. That deal was worth $17 million per school per year, but sources told ESPN last year it is expected to increase to at least $20 million per school per year with the addition of Notre Dame."
http://espn.go.com/college-football/stor...presidents

I also remember reading a bunch of other articles saying $18 and something + either network or either "at least $2 million" or "over $2 million"

I would hunt them down, but I think that they're redundant given the article that I liked above.

Yes, the Sports Business Journal said it averaged $260 million a year, which comes to about $18 million a year after you factor in Notre Dame. And its been said the ACC would get $2 million a year if they didn't get a network. I have my doubts about the latter as I don't understand why ESPN would pay again for something they already own the rights to, but several articles have stated that.

(05-14-2015 12:30 PM)orangefan Wrote:  Nice article summarizing the ACC's business moves over the last 12 years. Says the current tv deal pays an average of $300 million/year

http://www.sportsbusinessdaily.com/Journ...eline.aspx

Interesting find. First time I've seen that $4.2 billion figure. Previously SBJ was quoting ADs saying it was $260 million a year, which would be $3.64 billion over 14 years.

(05-14-2015 12:42 PM)bullet Wrote:  

(05-14-2015 11:59 AM)nzmorange Wrote:  

(05-14-2015 11:56 AM)Dasville Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year

I don't think that is true.

What part?

Here's an ESPN article that comes very close to supporting my statement:
"The grant of rights coincides with the ACC's TV deal with ESPN through the 2026-27 season. That deal was worth $17 million per school per year, but sources told ESPN last year it is expected to increase to at least $20 million per school per year with the addition of Notre Dame."
http://espn.go.com/college-football/stor...presidents

I also remember reading a bunch of other articles saying $18 and something + either network or either "at least $2 million" or "over $2 million"

I would hunt them down, but I think that they're redundant given the article that I liked above.

Yes, the Sports Business Journal said it averaged $260 million a year, which comes to about $18 million a year after you factor in Notre Dame. And its been said the ACC would get $2 million a year if they didn't get a network. I have my doubts about the latter as I don't understand why ESPN would pay again for something they already own the rights to, but several articles have stated that.

I do recall that from articles at the time. My guess is that the deal is to try to create more value from a new network than from using the games on existing platforms and to split the benefit between the conference and ESPN.

(05-14-2015 12:42 PM)bullet Wrote:  

(05-14-2015 11:59 AM)nzmorange Wrote:  

(05-14-2015 11:56 AM)Dasville Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year

I don't think that is true.

What part?

Here's an ESPN article that comes very close to supporting my statement:
"The grant of rights coincides with the ACC's TV deal with ESPN through the 2026-27 season. That deal was worth $17 million per school per year, but sources told ESPN last year it is expected to increase to at least $20 million per school per year with the addition of Notre Dame."
http://espn.go.com/college-football/stor...presidents

I also remember reading a bunch of other articles saying $18 and something + either network or either "at least $2 million" or "over $2 million"

I would hunt them down, but I think that they're redundant given the article that I liked above.

Yes, the Sports Business Journal said it averaged $260 million a year, which comes to about $18 million a year after you factor in Notre Dame. And its been said the ACC would get $2 million a year if they didn't get a network. Ihave my doubts about the latter as I don't understand why ESPN would pay again for something they already own the rights to, but several articles have stated that.

ESPN only follows contracts. Why would they pay the ACC an additional $2 million if it wasn't in the contract? That seems random. ESPN is not in the business of giving "propers". Chuck Neinas is fantastic at his job but it is about the here and now. He gave the Big 12 an option......not a solution.

(05-14-2015 12:51 PM)orangefan Wrote:  

(05-14-2015 12:42 PM)bullet Wrote:  

(05-14-2015 11:59 AM)nzmorange Wrote:  

(05-14-2015 11:56 AM)Dasville Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year

I don't think that is true.

What part?

Here's an ESPN article that comes very close to supporting my statement:
"The grant of rights coincides with the ACC's TV deal with ESPN through the 2026-27 season. That deal was worth $17 million per school per year, but sources told ESPN last year it is expected to increase to at least $20 million per school per year with the addition of Notre Dame."
http://espn.go.com/college-football/stor...presidents

I also remember reading a bunch of other articles saying $18 and something + either network or either "at least $2 million" or "over $2 million"

I would hunt them down, but I think that they're redundant given the article that I liked above.

Yes, the Sports Business Journal said it averaged $260 million a year, which comes to about $18 million a year after you factor in Notre Dame. And its been said the ACC would get $2 million a year if they didn't get a network. I have my doubts about the latter as I don't understand why ESPN would pay again for something they already own the rights to, but several articles have stated that.

I do recall that from articles at the time. My guess is that the deal is to try to create more value from a new network than from using the games on existing platforms and to split the benefit between the conference and ESPN.

IMO, ESPN's idea is that ESPN wants to reserve the option of possibly using that content to enhance the value of their internet-only services like WatchESPN, rather than starting another conference network. To make sure they have that option, they told the ACC they'll pay for the content whether they use it on a conference network or on something else.

(05-14-2015 01:06 PM)Dasville Wrote:  

(05-14-2015 12:42 PM)bullet Wrote:  

(05-14-2015 11:59 AM)nzmorange Wrote:  

(05-14-2015 11:56 AM)Dasville Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year

I don't think that is true.

What part?

Here's an ESPN article that comes very close to supporting my statement:
"The grant of rights coincides with the ACC's TV deal with ESPN through the 2026-27 season. That deal was worth $17 million per school per year, but sources told ESPN last year it is expected to increase to at least $20 million per school per year with the addition of Notre Dame."
http://espn.go.com/college-football/stor...presidents

I also remember reading a bunch of other articles saying $18 and something + either network or either "at least $2 million" or "over $2 million"

I would hunt them down, but I think that they're redundant given the article that I liked above.

Yes, the Sports Business Journal said it averaged $260 million a year, which comes to about $18 million a year after you factor in Notre Dame. And its been said the ACC would get $2 million a year if they didn't get a network. I have my doubts about the latter as I don't understand why ESPN would pay again for something they already own the rights to, but several articles have stated that.

ESPN only follows contracts. Why would they pay the ACC an additional $2 million if it wasn't in the contract? That seems random. ESPN is not in the business of giving "propers". Chuck Neinas is fantastic at his job but it is about the here and now. He gave the Big 12 an option......not a solution.

Bullet: The contract was being renegotiated upward because of a material change in conference membership and an arbitration clause that the league had a right to invoke. There's no reason why the payment structure couldn't change during the renegotiation. In other words, but for that clause, the ACC may have been able to secure a guaranteed $21-22 million, but the conference opted for a guaranteed ~$20-21 million, with a chance for more (the values I just gave are purely for explanatory purposes).

Das: ESPN wouldn't pay $2 million for the heck of it, but my understanding is that it is in the contract. I've read multiple articles that mention it and I don't see why it's not something that could be included as a contractual term.

Anyone interested: Here's an excerpt from HokieMark's site:
"2) It sounds like the ACC decision-makers want to make sure ACC Network profits paid to the ACC would be more than the $2 million per year bump for not doing one. This is just due diligence."
http://accfootballrx.blogspot.com/2015/0...22615.html

Reach out to him and he might tell you the source that he used.

(05-14-2015 12:07 PM)nzmorange Wrote:  

(05-14-2015 12:00 PM)MplsBison Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  

(05-14-2015 11:22 AM)orangefan Wrote:  

(05-14-2015 11:03 AM)MplsBison Wrote:  The BTN doesn't add value for the B1G?

I don't think that's what he's saying. The ACC has all of it game rights tied up with ESPN, some of which are sublicensed to Raycom and the Fox RSNs. To provide programming for an ACCN, these games might need to be bought back. Alternatively, ESPN could contribute its ESPNU and ESPN3 inventory. In either case, how does the ACC get paid more for games that ESPN/Raycom/Fox already own?

In the case of the SECN, the SEC did three things. First, the did not renegotiate additional rights fees for the addition of TAMU and Mizzou right away. Those were negotiated as part of the creation of the SECN. Second, the SEC extended its deal with ESPN until 2034. Finally, the SEC bought back some tier 3 rights that had been sold by the individual schools (1 fb game per season per school) and offered them to ESPN for the SECN. These all allowed the SEC to give ESPN "more value," which justified the additional payments to the SEC.

The ACC has already been paid by ESPN for the additions of SU, Pitt and ND and for its extension to 2027. Thus, the ACC's opportunity to add value is far more limited than the SEC's was. The ACC could buy back the Raycom or Fox rights and reoffer them to ESPN, probably more expensive than SEC's repurchase of certain tier 3 games. The ACC could also further extend its rights deal with ESPN past 2027.

When the BTN was formed, the B1G withheld enough games to provide programming for the BTN (as the P12 did when they formed their network). I think that this the timing and the value to which the prior post is referring.

You're somewhat close in that people forget the opportunity costs associated with networks. But, the timing to which I was primarily referring was the fact that there was an asymmetry of information when the BTN was formed. ESPN was the only serious player in the space (because of structural reasons stemming from the '80's and 90's) and other players weren't in a position to move quickly (the market was inefficient because the possibility of pricing wars didn't exist). Furthermore, conferences lacked an adequate understanding of their content's true value. ESPN was paying hundreds of thousands per school when the would have been paying millions in efficient markets. The B1G called ESPN's bluff and launched the BTN, which coincided with an unexpected growth in fan interest. The combined effect of increasing the conference's beta and bargaining position created massive profits. However, those profits were a matter of timing, not structural changes.

The ACC is in a different position. The intrinsic value of ACC media content is pretty well known and the sports media markets are MUCH more efficient today than they were ~10 years ago. Adding a network would not necessarily lead to a materially-increased payout after the costs of buying back content is factored into the calculation and after the payout is risk adjusted.

Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year. That's roughly what the Pac 12 makes. Sure, the Pac's contract ends slightly earlier, and these contracts are back-loaded, but the Pac's exposure is MUCH worse. At the end of the day, I think that the ACC and the Pac have very similar media deals for similar products. As such, I think that there is substantial evidence to support my theory that the conference network delivery method is not inherently better than the older method. Don't get me wrong. I think that conference networks are better. I just don't see a possible ACCN as a game changer.

But if it's not a loser, then why wouldn't they do it in order to "keep up with the Joneses"?

I never said that the ACC shouldn't. I just think that the benefits are ridiculously overstated.

So ... basically you're saying you think they should do it, but you're going to complain about it the entire way?

I guess that's like someone saying "well, I think we have to buy that Lamborghini in order to keep up with everyone else, but the benefits of it are overstated."

(05-14-2015 12:24 PM)orangefan Wrote:  

(05-14-2015 11:58 AM)MplsBison Wrote:  When did they sign the deal that gave away all their games to ESPN? That seems like a dumb thing to do if you're hoping to offer enough content to start a specific channel just for your games.

Was it back during the time when the ACC's survival was questioned? In other words, was it a desperation move at the time to try locking everyone into the conference?

The ACC-ESPN deal was announced in 2010, covering games through the 2022-23 season. That deal was for an average of $13 million/school/year. It came on the heals of the SEC's deals with ESPN and CBS that averaged $15 million/year/school, so it seemed like a good deal at the time.

Subsequently, the B12 and P12 negotiated deals in the $20 million/year/school range, which put pressure on both the ACC and SEC to come up with ways to increase the value of their deals despite being locked into long term contracts.

To add more value, both the SEC and ACC expanded and agreed to extend their contracts with ESPN. The ACC also agreed to add some Friday night football games. The SEC used the opportunity to negotiate the creation of the SEC Network. As noted, they were in a better position to do so than the ACC because fewer games had been sublicensed to other networks and the length of the sublicenses were much shorter.

Interesting, thanks!

I don't understand how ESPN gave the ACC and SEC 13-15million/school/year, then turned around and gave 20 to the XII and PAC.

(05-14-2015 01:33 PM)MplsBison Wrote:  

(05-14-2015 12:24 PM)orangefan Wrote:  

(05-14-2015 11:58 AM)MplsBison Wrote:  When did they sign the deal that gave away all their games to ESPN? That seems like a dumb thing to do if you're hoping to offer enough content to start a specific channel just for your games.

Was it back during the time when the ACC's survival was questioned? In other words, was it a desperation move at the time to try locking everyone into the conference?

The ACC-ESPN deal was announced in 2010, covering games through the 2022-23 season. That deal was for an average of $13 million/school/year. It came on the heals of the SEC's deals with ESPN and CBS that averaged $15 million/year/school, so it seemed like a good deal at the time.

Subsequently, the B12 and P12 negotiated deals in the $20 million/year/school range, which put pressure on both the ACC and SEC to come up with ways to increase the value of their deals despite being locked into long term contracts.

To add more value, both the SEC and ACC expanded and agreed to extend their contracts with ESPN. The ACC also agreed to add some Friday night football games. The SEC used the opportunity to negotiate the creation of the SEC Network. As noted, they were in a better position to do so than the ACC because fewer games had been sublicensed to other networks and the length of the sublicenses were much shorter.

Interesting, thanks!

I don't understand how ESPN gave the ACC and SEC 13-15million/school/year, then turned around and gave 20 to the XII and PAC.

From 2010 to 2011 the market changed pretty rapidly. Other networks were willing to pay around that amount so ESPN couldn't get their rights for less.

(05-14-2015 01:35 PM)quo vadis Wrote:  

(05-14-2015 01:33 PM)MplsBison Wrote:  

(05-14-2015 12:24 PM)orangefan Wrote:  

(05-14-2015 11:58 AM)MplsBison Wrote:  When did they sign the deal that gave away all their games to ESPN? That seems like a dumb thing to do if you're hoping to offer enough content to start a specific channel just for your games.

Was it back during the time when the ACC's survival was questioned? In other words, was it a desperation move at the time to try locking everyone into the conference?

The ACC-ESPN deal was announced in 2010, covering games through the 2022-23 season. That deal was for an average of $13 million/school/year. It came on the heals of the SEC's deals with ESPN and CBS that averaged $15 million/year/school, so it seemed like a good deal at the time.

Subsequently, the B12 and P12 negotiated deals in the $20 million/year/school range, which put pressure on both the ACC and SEC to come up with ways to increase the value of their deals despite being locked into long term contracts.

To add more value, both the SEC and ACC expanded and agreed to extend their contracts with ESPN. The ACC also agreed to add some Friday night football games. The SEC used the opportunity to negotiate the creation of the SEC Network. As noted, they were in a better position to do so than the ACC because fewer games had been sublicensed to other networks and the length of the sublicenses were much shorter.

Interesting, thanks!

I don't understand how ESPN gave the ACC and SEC 13-15million/school/year, then turned around and gave 20 to the XII and PAC.

The market changed. Other networks were willing to pay around that amount so ESPN couldn't get their rights for less.

That sucks for the ACC and SEC.

If I were them I would tear up the friggin' "outdated" contracts unless they gave me the same rate.

There's no reason why any of the P4 should get a better rate from the same network than any other.

Maybe one day they'll be smart enough to negotiate the contracts as a block, rather than by individual conferences.

(05-14-2015 01:30 PM)MplsBison Wrote:  

(05-14-2015 12:07 PM)nzmorange Wrote:  

(05-14-2015 12:00 PM)MplsBison Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  

(05-14-2015 11:22 AM)orangefan Wrote:  I don't think that's what he's saying. The ACC has all of it game rights tied up with ESPN, some of which are sublicensed to Raycom and the Fox RSNs. To provide programming for an ACCN, these games might need to be bought back. Alternatively, ESPN could contribute its ESPNU and ESPN3 inventory. In either case, how does the ACC get paid more for games that ESPN/Raycom/Fox already own?

In the case of the SECN, the SEC did three things. First, the did not renegotiate additional rights fees for the addition of TAMU and Mizzou right away. Those were negotiated as part of the creation of the SECN. Second, the SEC extended its deal with ESPN until 2034. Finally, the SEC bought back some tier 3 rights that had been sold by the individual schools (1 fb game per season per school) and offered them to ESPN for the SECN. These all allowed the SEC to give ESPN "more value," which justified the additional payments to the SEC.

The ACC has already been paid by ESPN for the additions of SU, Pitt and ND and for its extension to 2027. Thus, the ACC's opportunity to add value is far more limited than the SEC's was. The ACC could buy back the Raycom or Fox rights and reoffer them to ESPN, probably more expensive than SEC's repurchase of certain tier 3 games. The ACC could also further extend its rights deal with ESPN past 2027.

When the BTN was formed, the B1G withheld enough games to provide programming for the BTN (as the P12 did when they formed their network). I think that this the timing and the value to which the prior post is referring.

You're somewhat close in that people forget the opportunity costs associated with networks. But, the timing to which I was primarily referring was the fact that there was an asymmetry of information when the BTN was formed. ESPN was the only serious player in the space (because of structural reasons stemming from the '80's and 90's) and other players weren't in a position to move quickly (the market was inefficient because the possibility of pricing wars didn't exist). Furthermore, conferences lacked an adequate understanding of their content's true value. ESPN was paying hundreds of thousands per school when the would have been paying millions in efficient markets. The B1G called ESPN's bluff and launched the BTN, which coincided with an unexpected growth in fan interest. The combined effect of increasing the conference's beta and bargaining position created massive profits. However, those profits were a matter of timing, not structural changes.

The ACC is in a different position. The intrinsic value of ACC media content is pretty well known and the sports media markets are MUCH more efficient today than they were ~10 years ago. Adding a network would not necessarily lead to a materially-increased payout after the costs of buying back content is factored into the calculation and after the payout is risk adjusted.

Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year. That's roughly what the Pac 12 makes. Sure, the Pac's contract ends slightly earlier, and these contracts are back-loaded, but the Pac's exposure is MUCH worse. At the end of the day, I think that the ACC and the Pac have very similar media deals for similar products. As such, I think that there is substantial evidence to support my theory that the conference network delivery method is not inherently better than the older method. Don't get me wrong. I think that conference networks are better. I just don't see a possible ACCN as a game changer.

But if it's not a loser, then why wouldn't they do it in order to "keep up with the Joneses"?

I never said that the ACC shouldn't. I just think that the benefits are ridiculously overstated.

So ... basically you're saying you think they should do it, but you're going to complain about it the entire way?

I guess that's like someone saying "well, I think we have to buy that Lamborghini in order to keep up with everyone else, but the benefits of it are overstated."

Reading very clearly isn't your strong point.

(05-14-2015 01:39 PM)MplsBison Wrote:  

(05-14-2015 01:35 PM)quo vadis Wrote:  

(05-14-2015 01:33 PM)MplsBison Wrote:  

(05-14-2015 12:24 PM)orangefan Wrote:  

(05-14-2015 11:58 AM)MplsBison Wrote:  When did they sign the deal that gave away all their games to ESPN? That seems like a dumb thing to do if you're hoping to offer enough content to start a specific channel just for your games.

Was it back during the time when the ACC's survival was questioned? In other words, was it a desperation move at the time to try locking everyone into the conference?

The ACC-ESPN deal was announced in 2010, covering games through the 2022-23 season. That deal was for an average of $13 million/school/year. It came on the heals of the SEC's deals with ESPN and CBS that averaged $15 million/year/school, so it seemed like a good deal at the time.

Subsequently, the B12 and P12 negotiated deals in the $20 million/year/school range, which put pressure on both the ACC and SEC to come up with ways to increase the value of their deals despite being locked into long term contracts.

To add more value, both the SEC and ACC expanded and agreed to extend their contracts with ESPN. The ACC also agreed to add some Friday night football games. The SEC used the opportunity to negotiate the creation of the SEC Network. As noted, they were in a better position to do so than the ACC because fewer games had been sublicensed to other networks and the length of the sublicenses were much shorter.

Interesting, thanks!

I don't understand how ESPN gave the ACC and SEC 13-15million/school/year, then turned around and gave 20 to the XII and PAC.

The market changed. Other networks were willing to pay around that amount so ESPN couldn't get their rights for less.

That sucks for the ACC and SEC.

If I were them I would tear up the friggin' "outdated" contracts unless they gave me the same rate.

There's no reason why any of the P4 should get a better rate from the same network than any other.

The smartest move any conference commissioner has made in the past 20 years was Delany's decision to form the BTN. His only mistake was to have FOX as a 50% equity partner instead of going it alone.

Still, the BTN, and the new deal the B1G will sign next year, will mean the B1G will make far, far more media money than will the ACC for the next decade, and even quite a bit more than will the SEC.

(05-14-2015 01:59 PM)quo vadis Wrote:  

(05-14-2015 01:39 PM)MplsBison Wrote:  

(05-14-2015 01:35 PM)quo vadis Wrote:  

(05-14-2015 01:33 PM)MplsBison Wrote:  

(05-14-2015 12:24 PM)orangefan Wrote:  The ACC-ESPN deal was announced in 2010, covering games through the 2022-23 season. That deal was for an average of $13 million/school/year. It came on the heals of the SEC's deals with ESPN and CBS that averaged $15 million/year/school, so it seemed like a good deal at the time.

Subsequently, the B12 and P12 negotiated deals in the $20 million/year/school range, which put pressure on both the ACC and SEC to come up with ways to increase the value of their deals despite being locked into long term contracts.

To add more value, both the SEC and ACC expanded and agreed to extend their contracts with ESPN. The ACC also agreed to add some Friday night football games. The SEC used the opportunity to negotiate the creation of the SEC Network. As noted, they were in a better position to do so than the ACC because fewer games had been sublicensed to other networks and the length of the sublicenses were much shorter.

Interesting, thanks!

I don't understand how ESPN gave the ACC and SEC 13-15million/school/year, then turned around and gave 20 to the XII and PAC.

The market changed. Other networks were willing to pay around that amount so ESPN couldn't get their rights for less.

That sucks for the ACC and SEC.

If I were them I would tear up the friggin' "outdated" contracts unless they gave me the same rate.

There's no reason why any of the P4 should get a better rate from the same network than any other.

The smartest move any conference commissioner has made in the past 20 years was Delany's decision to form the BTN. His only mistake was to have FOX as a 50% equity partner instead of going it alone.

Still, the BTN, and the new deal the B1G will sign next year, will mean the B1G will make far, far more media money than will the ACC for the next decade, and even quite a bit more than will the SEC.

And if I was the ACC or SEC commissioner, I would call b.s. on that. The ACC and SEC content isn't worth that significantly less than the B1G content. And that's coming from a B1G fan!

(05-14-2015 01:48 PM)nzmorange Wrote:  

(05-14-2015 01:30 PM)MplsBison Wrote:  

(05-14-2015 12:07 PM)nzmorange Wrote:  

(05-14-2015 12:00 PM)MplsBison Wrote:  

(05-14-2015 11:42 AM)nzmorange Wrote:  You're somewhat close in that people forget the opportunity costs associated with networks. But, the timing to which I was primarily referring was the fact that there was an asymmetry of information when the BTN was formed. ESPN was the only serious player in the space (because of structural reasons stemming from the '80's and 90's) and other players weren't in a position to move quickly (the market was inefficient because the possibility of pricing wars didn't exist). Furthermore, conferences lacked an adequate understanding of their content's true value. ESPN was paying hundreds of thousands per school when the would have been paying millions in efficient markets. The B1G called ESPN's bluff and launched the BTN, which coincided with an unexpected growth in fan interest. The combined effect of increasing the conference's beta and bargaining position created massive profits. However, those profits were a matter of timing, not structural changes.

The ACC is in a different position. The intrinsic value of ACC media content is pretty well known and the sports media markets are MUCH more efficient today than they were ~10 years ago. Adding a network would not necessarily lead to a materially-increased payout after the costs of buying back content is factored into the calculation and after the payout is risk adjusted.

Right now the ACC is getting paid $18 and change, plus an increase of "over $2 million" if the conference doesn't get a network. That averages out to ~$20.5 million/school/year. That's roughly what the Pac 12 makes. Sure, the Pac's contract ends slightly earlier, and these contracts are back-loaded, but the Pac's exposure is MUCH worse. At the end of the day, I think that the ACC and the Pac have very similar media deals for similar products. As such, I think that there is substantial evidence to support my theory that the conference network delivery method is not inherently better than the older method. Don't get me wrong. I think that conference networks are better. I just don't see a possible ACCN as a game changer.

But if it's not a loser, then why wouldn't they do it in order to "keep up with the Joneses"?

I never said that the ACC shouldn't. I just think that the benefits are ridiculously overstated.

So ... basically you're saying you think they should do it, but you're going to complain about it the entire way?

I guess that's like someone saying "well, I think we have to buy that Lamborghini in order to keep up with everyone else, but the benefits of it are overstated."

Reading very clearly isn't your strong point.

You resorting to a personal attack rather than a counter-argument confirms I was correct.

(05-14-2015 02:05 PM)MplsBison Wrote:  

(05-14-2015 01:59 PM)quo vadis Wrote:  

(05-14-2015 01:39 PM)MplsBison Wrote:  

(05-14-2015 01:35 PM)quo vadis Wrote:  

(05-14-2015 01:33 PM)MplsBison Wrote:  Interesting, thanks!

I don't understand how ESPN gave the ACC and SEC 13-15million/school/year, then turned around and gave 20 to the XII and PAC.

The market changed. Other networks were willing to pay around that amount so ESPN couldn't get their rights for less.

That sucks for the ACC and SEC.

If I were them I would tear up the friggin' "outdated" contracts unless they gave me the same rate.

There's no reason why any of the P4 should get a better rate from the same network than any other.

The smartest move any conference commissioner has made in the past 20 years was Delany's decision to form the BTN. His only mistake was to have FOX as a 50% equity partner instead of going it alone.

Still, the BTN, and the new deal the B1G will sign next year, will mean the B1G will make far, far more media money than will the ACC for the next decade, and even quite a bit more than will the SEC.

And if I was the ACC or SEC commissioner, I would call b.s. on that. The ACC and SEC content isn't worth that significantly less than the B1G content. And that's coming from a B1G fan!

Calling BS on it won't change the terms of the various contracts. Smart moves, and dumb ones, have financial consequences.