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Following the lead of other major conferences, member schools and league officials are weighing the merits of an all-ACC sports network.
“I think the beauty of it is it would be ACC all day, 24/7,” said John Swofford, ACC commissioner.
Associated Press | File May
ESPN President John Skipper (left) and SEC Commissioner Mike Slive announce the launching of the SEC Network. It is expected to begin airing in August 2014.
Thursday, August 1, 2013
ACC commissioner John Swofford has a vision of what a TV channel devoted to the league would look like.
It would have a reasonable number of football and men's basketball games, the lifeblood of any endeavor like this. Live and replay programming. Historical shows. Coaches shows. Awards shows. And, best of all, it would be constant.
"I think the beauty of it is it would be ACC all day, 24/7," Swofford said in Greensboro, N.C., at the ACC Kickoff last week.
But that's getting ahead of ourselves. Swofford, who rarely tips his hand before acting, and the league's membership have to first decide if an ACC channel is the next logical step for the conference.
"The need is for us to really thoroughly evaluate it to see if that's the best route for us to take in terms of the future, both from a potential revenue standpoint and from an exposure standpoint," said Swofford, who emphasized such undertakings take years.
"Channels, right now, are sort of the sexy thing to pursue."
A glance around the country suggests so. The Big Ten Network, once ridiculed, is now a moneymaking machine, spitting out yearly checks to each school of about $7 million, a growing bonus on top of the league's regular TV contract.
The Pac-12 started a national network and several regional networks last year. And in August of 2014, the SEC will launch its own network, partnered with ESPN. Of the five power conferences, only the Big 12 has so far declined to pursue one, while the ACC is mulling it.
While a number of media consultants agree that an ACC channel could be a potential boon for the conference long term, they also warn that the initial hurdles to forming a channel and gaining distribution are more burdensome than some realize and likely will take years.
"It's one of those things at the beginning where everybody says, 'Wow, it's a network and it's great and it's exciting,' " said Lee Berke, the president and CEO of LHB Sports, Entertainment & Media, which helps sports properties create and implement their own networks.
"But then, as with football, the blocking and tackling necessary takes time. And it could be a several-year process until it reaches the success that everybody is hopeful of."
What are the benefits?
Money. And potentially lots of it.
This isn't the first time the ACC has considered starting its own channel. The league had discussions in 2007 but chose not pursue one, a decision the SEC also reached at the time.
But the Big Ten began its own network then, one that struggled initially but is now the bedrock of its financial stability. After early distribution woes and startup costs, the Big Ten distributes about $7 million per year to each school because of its network, with projections for greater growth in the future.
In the ever-competitive world of college athletics, that's a significant sum. The Big Ten paid out close to $25 million total to each of its members last year, a figure expected to rise as the network becomes more profitable and the league renegotiates its primary TV rights in 2016.
The ACC's deal with ESPN, which goes through the 2026-27 season, will be worth roughly $20 million per year to each school. Without a network, a significant gap still exists with other leagues that will only get wider.
But the benefits go beyond money. It's a 24/7 showcase for the league, which would control its brand and could get into more households.
"Every major sports property is out there and developing its network across a range of different platforms and screens," said Neal Pilson, the former president of CBS Sports and current president of the media consulting firm Pilson Communications.
"NFL, Major League Baseball, NHL, NBA, there's a Golf Channel, there's a Tennis Channel. It makes perfect sense that you'd want to do this, not just for the way things are right now, but for the way things are in the future.
"And you're looking for content across all these screens and you're an ACC fan or a Big Ten fan, you know exactly where to go. Those are great resources to have as the technology changes that you can offer up your content any way people want to consume it."
Why do it now?
For starters, stability. The recently signed grant of rights deal, in which the league's members relinquished control of their media rights to the conference for the duration of the TV contract, will prevent any more schools from joining Maryland and jumping ship.
Instability sank the often-overlooked cautionary tale, the Mountain West, which launched the first college conference network in 2006, preceding the Big Ten, but faltered under its revolving membership.
"A network can't survive when you don't know who your membership is going to be and what your markets are," said Kristi Dosh, a sports business reporter for ESPN who devoted a chapter to league networks in her upcoming book "Saturday Millionaires."
"If you've got that grant of rights, you don't have to worry that the rug's going to be pulled out from under you one day and you're going to have to shut the network down because you just don't have the markets to sustain it anymore."
With the league's membership secure, it can proudly trumpet its favorable demographics. The ACC claims the highest population (107 million people) and the most TV households (38 million) within its footprint of any conference.
U.S. census trends show the Southeast to be among the biggest growth regions over the next 20 years, and big markets such as New York, Washington, Miami and Atlanta are all within the league's borders.
The appetite for ACC content seems high. Although league networks are football driven - and the ACC's on-field product has come under fire in recent years - the basketball product, with the addition of Syracuse, Pittsburgh, Notre Dame and, eventually, Louisville, figures to be better than ever. It would also create an easier-to-find platform for the league's nonrevenue sports.
The conference can also be heartened by the success of the ACC Digital Network, which has more than 6,500 subscribers and has generated 5.7 million views on YouTube since its formation a year ago, more than any other conference.
"I think that's a good barometer, and it sort of proves that there's a good market out there for the ACC Network," Dosh said.
What's in the way?
Lost in the dollar figures and dreams of 24-hour programming is the fact that starting a network is, to be blunt, hard.
"It's one thing to start a network in 2007 and another to start one in 2014 and 2015," said Chris Bevilacqua, a college sports TV consultant who helped create the MountainWest Sports Network and recently helped design the Pac-12's media rights deal.
"There's just been a lot of stuff that has happened during that time frame, not the least of which is, by my calculation, some plus or minus $70 billion of long-term sports rights deals have now been consummated in the last two or three years. So you're talking about a significant financial commitment that has to be swallowed by the ecosystem somehow."
The ACC is an "all-in" partner with ESPN with its TV rights, Swofford said, but even then the network has sublicensing deals with Raycom Sports and Fox to carry some football and basketball games on regional networks through 2027.
If an ACC-branded channel were to be created, rights to those games would need to be reacquired.
"It's not unlike the SEC had to undo their regional rights," Swofford said. "It's not uncommon for anybody starting a channel to have some of those kinds of issues that you have to work your way through."
Live sports programming is the driving force behind conference networks. The SEC Network, for instance, plans to show 45 football games per fall, broadcasting a triple-header each Saturday in addition to games shown on CBS and ESPN's roster of
In the ACC's current TV deal, ESPN gets to show the league's premier matchups on its different channels. It would have to be worth it to ESPN to allow some of those games to be on an ACC-branded channel.
"You start to siphon those key games to a large extent off to an ACC channel, then you cannibalize the value of your package and ultimately reduce the overall revenues that you'll receive," Berke said.
"The idea of a conference channel is supposed to be additive. If you're going to make it additive, then what you have to do is essentially put for the most part some first-tier games, but quite often second- and third-tier matchups, on in order to make the network whole."
Beyond the media rights issues are the usual hurdles for fledgling networks - gaining distribution and getting acceptable subscriber fees.
To date, the Big Ten Network is the only league-branded channel that has been profitable, although the early years were fraught with distribution problems.
A league can't simply create a network and be done with it. It has to get cable providers to carry it. That means negotiating with such cable giants as Comcast and Time Warner, but also satellite providers such as DirecTV and Dish Network.
"Even with a partner as strong as ESPN, it takes a while to get distribution," Berke said. "The University of Texas Longhorn Network is partnered with ESPN, and they still have yet to have full distribution in central Texas."
Getting an acceptable carriage fee is part of the negotiation. Pilson estimated that college TV networks like the Big Ten earn anywhere from 75 cents to $1.10 per subscription in states that are in their footprint and far less (5 to 10 cents) in states outside that footprint.
Multiply that by the millions of homes and you can see why a network has the potential to be so lucrative. Finding a price the cable companies will pass on to their customers is tricky, however.
"If you get 100 percent distribution and 5 cents per channel, it's not going to work," Pilson said.
Sure, the ACC can claim so many big markets and TV households within its footprint. But can the league deliver those markets? New York has a lot of people, but do they care about the ACC enough for cable providers to pass the cost of another channel on to its customers?
"The blueprint exists and there is a history here of loyalty and audience interest in college sports, college athletics," Pilson said. "If you live in North Carolina or Virginia, you're going to probably want the ACC channel. Same is true in Georgia, Florida or South Carolina.
"It gets a little more difficult when you go up to Boston and you go out to Syracuse, where there is not a strong history of ACC athletics."
Will it happen?
If it does, it won't be soon. Swofford made several references to the SEC's network, which doesn't launch until August of 2014, having been three years in the works. The ACC is just now entering the discussion of the possibility of a channel.
"It's a business analysis is what it is," Swofford said.
Dollar signs might be dancing in many peoples' heads, but that kind of profitability isn't instant.
"The trick is managing expectations," Pilson said. "If you tell everybody that they'll get a million bucks back or $10 million back from the channel in 12 months, you're probably not managing expectations very well. It's going to be a long, tough build, but I have a degree of confidence that it will work."
Swofford, comfortable with the league's new position but not content, seems interested.
"I'm intrigued by it," he said. "I think that the answer is much more likely to be yes this time around than it was last time.
"The world has changed and we've changed, and our footprint has changed. And those things matter. What was the right answer five years ago, 10 years ago, might not be the right answer now."
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