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RE: Thamel: Stanford and Cal potentially going to ACC
(08-10-2023 12:27 AM)bryanw1995 Wrote: (08-09-2023 09:22 PM)AllTideUp Wrote: (08-09-2023 08:09 AM)johnbragg Wrote: (08-08-2023 10:55 PM)AllTideUp Wrote: (08-08-2023 05:43 AM)johnbragg Wrote: These are (mostly) national companies with national contracts. DirecTV, Dish, Comcast, Cox etc. The Disney-Comcast, Disney-Cox etc contracts say that the ACC Network gets (I guess) $1.50 a month for any state with an ACC team.
Cable companies aren't going to drop ESPN, sports are the only thing holding the bundle together. But the carriage contracts are for around 3 or 5 years -- it was a big deal when Comcast and Disney did a ten year deal back when Comcast bought NBC.
When the carriage contracts come up, then the cable companies can revisit that point.
It depends.
The people in the Bay Area don't watch their own schools, much less are they going to watch a conference on the other side of the country.
That doesn't matter. The contract is the contract.
Quote:Everyone in the TV industry knows that so I doubt Skipper's provision would be met with joy.
That doesn't matter. The contract is the contract.
Quote:I also doubt it's as simple as ESPN signed a deal that forced cable networks to do absolutely anything ESPN wanted which is what this would amount to. All they have to do is add middling Power schools in any state and they automatically get full coverage?
That's what the contract says. It was a risk the cable companies were taking -- and it might be tied to a provision that if schools leave the ACC, those states get dropped, it might be tied to all kinds of things.
As far as I can tell, the carriage contracts are for 3 to 5 years. the Comcast contract was signed in 2021. So this isn't a *long term* ironclad commitment. (Which means it's maybe also not a long term solution....)
The conferences are not at all inclined to add mediocre schools willy-nilly. You'll notice that the ACC didn't add Houston and Cincinnati when they could have easily done so, bringing Texas and Ohio into the ACCn footprint. Or Houston and TCU when the Big 12 lost Texas and Oklahoma.
It's not a slam-dunk that the ACC adds Cal and Stanford, which are very ACC-style schools in a lot of ways. Takes 12 votes out of 15, which means it takes 4 schools to block a move. Much less SMU.
But it could happen. Maybe the ACC GOR skeptics are right and I'm wrong about the GOR, and they're adding teams in the expectation of losing teams. Or maybe they're taking a long view and looking at 2036, just in case their schools' SEC / Big Ten dreams get dashed and they're left behind.
Quote:Especially in the era when cable companies are struggling to sell subscriptions? I don't see it.
That's what's in the contract. Biut contracts do expire. The Comcast - ACC network deal (part of an overall Comcast-Disney deal) was signed in 2021. If it was a 5 year deal then it runs through the end of 2026.
Quote:Not to mention, someone somewhere on the West Coast still owes Comcast a lot of money. Being that Comcast is the biggest cable provider in the country and I'm sure the folks at ESPN/ACC would love to keep working with them long term, I highly doubt it would be a simple transaction.
That money has nothjing to do with ESPN and nothing to do with the ACC Network though. The PAC 12 owes that money, or the Pac 12 Networks owe that money, or the 12 schools owe that money. Maybe the Pac 12 pays off Comcast out of this years' revenues. Maybe it's legally "Pac 12 Networks" that owes Comcast that money, and the schools do a dine-and-dash, letting Comcast take over the Pac 12 Networks and get whatever value they can out of the studios and trucks and equipment.
But it's not an ESPN problem or an ACC problem, or a Mountain West problem if they take WSU and OSU. (If the MWC and PAC merge, then maybe it's an MWC problem. but I don't think NCAA rules let you merge like that.)
The contract is the contract is the contract...yeah, yeah, yeah.
I don't think you get what I'm saying. I fully understand what John Skipper said and I don't doubt for a second his commentary on the contract, but that doesn't mean cable companies had this sort of deck-stacking in mind when that provision was agreed to. There is a certain principle to negotiation and that is it should be in good faith. If one of the parties feels it necessary to take advantage of a loophole then you start down a road you might not like.
Cable companies not renewing the ACC Network in the next round of negotiations is only one possible outcome. It doesn't mean it's the only thing these companies could do in the short term. If ESPN/ACC wants to play by the letter of the law with the contract then they can expect the cable companies to do the same. Now the question is what else is in that contract that might not favor the ACC if the cable providers decide to stick to the rules? Until relatively recently, we didn't know anything about this provision for the ACC Network deal. What else don't we know?
To your point, if this was as simple as adding a huge state market for an in-state addition then the ACC was foolish to pass up Houston or TCU or anyone else in Texas. And I don't care about arguments pertaining to institutional fit either...Louisville was by no means an institutional fit. So why wouldn't the ACC add schools in big markets if there's an automatic windfall? There's obviously other layers to this and some of it has to do with the situation...the ACC has some unhappy members currently.
There could be several reasons for taking this approach and it might have to do with adding now in anticipation of departures, as you mentioned.
Either way, I've never heard of a company struggling with market share just taking something like this in stride. The key thing here is that when the cable companies signed a provision like this, they surely believed and probably discussed the sort of additions that would make it work for everyone...I doubt Stanford, Cal, and SMU were mentioned in the discussion. If ESPN/ACC plans on going outside the spirit of the negotiation then they invite the cable companies to do the same.
At the end of the day, you're still dealing with people when you deal with a business. Contracts exist in the first place to hold "people" rather than entities to their word. Why? Because "people" make the decisions for entities.
And yes, the money owed to Comcast will play a part in this drama if the ACC decides to build a surplus using the very schools that took the money in the first place.
What the heck are you on about? They signed the provision, they knew something like this was a possibility, yet you think they’ll, what, get really, really mad about it? ESPN has these companies over a barrel, live sports are worth a LOT, and ESPN is the King there. Paying an extra $1.25 for SMU or Stanford was a risk they had to take. They’ll address it when the next negations open up and work something out then.
ESPN doesn't have anyone over a barrel...whether the provision is rock solid or not. It's entirely possible they'll be sold in the not too distant future.
Everyone(not just ESPN) in media is struggling these days to maintain their profits whether that's networks or distributors. In this climate, the last thing a cable company wants to do is fork over extra cash in exchange for absolutely nothing and speed up the process of cable cutting. Whether the companies knew the risks or not doesn't really address the issue. The issue is we're talking about jacking up the bill on every customer in the state of CA for a product they won't consume. Especially in a market like that, which has higher penetration of internet access, the consumers have more options to abandon their current provider.
It may just be $1.25 per subscriber or something like that, but if it didn't add up then the ACC wouldn't consider it.
Yes, sports are huge, but that doesn't solve the problem. It took ESPN a while, in the first place, to get full carriage on the ACC Network. Conference networks in general, including the SEC and Big Ten, will struggle more and more as time passes.
Yes, it may be as simple as the cable companies have to revisit this at the next negotiation. But you can believe when ESPN comes back to the table that they'll want rate increases across the board. They typically want that and lately, they need it. After all, their base continues to shrink and until they find a good method of going DTC, there are no new markets for them to tap to make up the losses. That being the case...don't you think maybe an organization should be a little more deliberate in their thought process? A very short term gain in exchange for what?
A simple rule of business is that you probably shouldn't bite the hand that feeds you. So no, pissing off your business partners is not in your own long term interests. Honestly, I don't know what's so hard to understand about that.
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Thamel: Stanford and Cal potentially going to ACC
