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- No, I don't think the ACC going to fall apart tomorrow
No, I don't think the ACC going to fall apart tomorrow
And the Big Ten isn't going to 18+ teams next week either.
Good morning, and thanks for spending part of your day with Extra Points.
I’ve got three big Newsletter Business type announces. Let me hit two now, and one at the end of today’s email.
First, Let me share an update about migration glitches. Two weeks ago, once we made the switch to Beehiiv from Ghost, we discovered that many users had been mistakenly double-billed as part of a migration glitch. Last week, we learned that fixing that bug mistakenly removed premium access for some of our paid subscribers.
We (and that includes myself, my D1.ticker colleagues, and our partners at Beehiiv and Stripe) have been working to diagnose and fix this problem as soon as possible. We are hopeful that everything will be fixed in the next 48 hours, tops. Thank you so much for your patience and grace as we try to fix these tech hiccups.
On that note, we’ve also heard from many of you that post-migration, the emails have been going to the Spam or Promotions folder of your inbox. Email deliverability is a finicky beast that varies a bit from ESP to ESP, but we believe the best way to make sure you get the newsletter is to add [email protected] to your email contacts. You can also waitlist the mail.beehiiv domain. If that sentence sounds like Greek to you, contact your tech administrator.
It’s been frustrating feeling like my tech stack was preventing me from writing what I want, when I want to write it. The news cycle doesn’t slow down just because some newsletters are being sent to the great Promotions Tab in the sky. But we’re just about on the other side of everything now, which means we can spend a little time looking at some potentially big conference realignment storylines from the last few days.
What’s going on in the ACC?
If you were online at all on Friday, you probably heard about the Florida State Board of Trustees meeting, where Florida State AD Michael Alford made it very clear that the school is deeply concerned about the broadcast revenue gap between the ACC and the Big Ten/SEC.
The existence of this gap is not breaking news. Both the Big Ten and the SEC will get a chance at another broadcast contract before the ACC, whose rights don’t expire until 2036, and both leagues already stand to earn tens of millions more, per school, in broadcast money. By the end of the decade, the broadcast revenue gap between a Purdue or a Missouri and a Florida State is projected to be more than $30 million a year. And as the Tampa Bay Times quoted Alford here:
“At the end of the day, if something’s not done, we cannot be $30 million behind every year compared to our peers,” Alford said.
Does that mean FLORIDA STATE TO THE SEC IS CONFIRMED?!?
Well, no, not exactly. Remember, one can’t just exactly leave the ACC without paying a stiff financial penalty. Any departing school would need to pay an exit fee. The size of that fee was specifically discussed during the meeting. Via our friends at the Times:
One trustee asked if a buyout to leave the ACC was “even feasible.”
“That is an excellent question,” answered Carolyn Egan, FSU’s vice president for legal affairs and general counsel.
Egan said the ACC’s exit fee is three times its annual operating budget. That equals about $120 million.
If FSU could make up $30 million per year, a trustee asked, does that mean the Seminoles would break even in about four years?
“Hypothetically,” Alford said.
First, we need to be clear about something. $120 million is a lot of money. Florida State’s athletic department spent about $150 last year on everything. Even with highly motivated donors, this is not a school that could easily just write a $120 million check all at once.
But if you could finance that exit fee, perhaps by taking a loan from the university (or shoot, maybe a local bank), and pay it off in installments? Alford is probably right…the amount isn’t so high that it would be impossible, and since FSU’s broadcast revenues would rise in a new league, they could “break even” in a few years.
But $120 million just covers the exit fees. As best as we can tell around here, that doesn’t cover the grant of rights that Florida State gave to the ACC. Here’s friend of the newsletter David Hale of ESPN breaking down the numbers:
A little context here… Alford’s concerns over survival are not unfounded but these numbers don’t add up. A quick 🧵
— 💫🅰️♈️🆔 (@ADavidHaleJoint)
7:34 PM • Feb 24, 2023
Hale’s back-of-the-napkin math shows that if that GOR is legally enforcible, Florida State is looking at a fee closer to $350 million than $120 million. That’s a massive number, one that is almost certainly too large for a school like FSU to finance right this second. It’s too large for a single broadcaster to finance either (if they’d even be legally allowed to, which I don’t believe is a given).
Florida State isn’t the only school sounding the alarm, in public, about revenue distribution. Here’s Clemson AD Graham Neff, quoted by The Post and Courier:
Is it time revenue distribution within conferences, or at least the ACC, is done differently? Yeah, I’ve been very active in those conversations within the league and continue to expect to take a leadership role in our desire for that to be a changed circumstance. Urgently.”
My best read on the situation is that the ACC is not in danger of falling apart tomorrow. It is too expensive and too disruptive to legally challenge the GOR agreement immediately, and ESPN, Fox and other broadcasters aren’t exactly itching at the prospect to throw even more rights fee money around right now (just ask the Pac-12).
But my educated guess is that some level of unequal revenue sharing is coming. My assumption is that allowing schools to “eat what they kill” to some extent, earning more money due to success on the field and court rather than just by pure broadcast eyeballs, would be less distruptive than hardcoding bonus payouts to the Florida States and Clemsons of the world, but that is just a guess. I’m sure even that would be opposed by the Boston Colleges of the conference.
This has all the makings of becoming a major problem in 2027, especially if schools are directly paying athletes by then. But I don’t have reason to believe that this revenue disparity existentially threatens the league today.
Speaking of leagues that I don’t think are likely to immediately make a move,
Is the Big Ten gonna grab Washington and Oregon or what
I’ve seen an uptick in reader DMs and radio station questions about the Big Ten’s future expansion plans. The longer the Pac-12 takes in signing a new media rights deal, the more I suspect national writers will pen blogs like this one, suggesting that the Big Ten adding Washington and Oregon is something close to inevitable.
If I could tell the future, my newsletter would be a hell of a lot more expensive than eight bucks a month. I’m not going to sit here and say that the Big Ten will never add Oregon or Washington (or some other combination of other schools), because I don’t know the future. But here is what I do know right now.
The Big Ten does not have a commissioner. Sure, Kevin Warren doesn’t technically start his new gig with the Chicago Bears until April 17, but nobody is going to try and execute an industry-changing initiative with six weeks on the clock, especially given a) how busy March is for the industry and b) that such a massive change would impact the candidate pool to replace Warren. Or at least, they’re not going to do if if they don’t absolutely have to.
Kristina M. Johnson, the president at Ohio State, is stepping down at the end of this term. Michigan State also currently has an interim president. So does Oregon. Stanford’s president is potentially in deep doo-doo. Presidents at other critically important schools in the league, like Michigan, have been there less than a year. University presidents, and not athletic directors, are the ones who actually sign off on realignment decisions, and with so many seats either empty or newly filled, massive action is unlikely in the short term.
The math is still the math. The Big Ten had the opportunity to get TV numbers on Oregon and Washington in 2022, even going so far as to take a meeting with representatives from those schools…and elected to take no action. At that time, I was told that there was far from a consensus on whether relatively modest TV increases were worth the political and logistical headaches of expanding beyond 16 teams. I have yet to personally hear anything, or read any sourced reporting, to indicate this has changed.
The idea that adding additional west coast schools as travel partners is a requirement for the Big Ten feels like it needs additional reporting. Washington is about as close to LA as Rutgers is to Minnesota. UW and OU are early 2+ hour direct flights from either LA school, and north of 800 miles away. They’re not close by any stretch of the imagination. The only advantage is that those flights do not require any time zone changes. That’s not for nothing, as those flights are even more disruptive to athletes, but let’s not pretend sprinkling in trips to Seattle and Eugene dramatically alleviates athlete burdens.
Now, at some point over the next several years, could that thinking change? Sure. And sure, maybe the Pac-12 totally falls apart by not signing any sort of broadcast deal, and Big Ten presidents have to make a decision sooner than they originally anticipated. But I don’t have reason to think that is likely right now. Even the Pac-12 thing, to be honest.
The lBig Ten will have its hands full trying to build a new football scheduling model, fully onboarding USC and UCLA, and hiring a new commissioner (and with that, almost certainly new senior conference staffers). Unless the Pac-12 is reduced to a smoldering crater before Tax Day, I believe it’s pretty unlikely the Big Ten makes a big membership move in the immediate future.
But if the Big Ten and ACC aren’t likely to be directly involved in realignment decisions, does that mean nobody else will make any moves?
No. In fact, I think we could be seeing some moves relatively soon. But that’s for another newsletter….
Quick other Newsletter Note:
Later in March, I’m going to fly out to Brazil and spend some time with family I haven’t seen in a while. While I will try to write a few times from São Paulo, this would be a great time for me to publish freelance stories. I pay $300+, plus revenue sharing, for freelance pitches. If you have a unique story you’d like to pitch to Extra Points, shoot me an email at [email protected].
I prefer, but do not require, freelance stories to include some level of original reporting. If they don’t, they should represent a unique voice and perspective that cannot be found elsewhere. Published newsletters will typically be in the 1,000-1,500 word range. Happy to talk through your pitch idea!
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