If University of Maryland president Wallace Loh ever bolted up from a deep sleep at 3 a.m., wondering if he made the right decision nearly four years ago to have the Terrapins bolt the Atlantic Coast Conference for the Big Ten, he must now feel completely vindicated.
The conference and ESPN announced last month the formation of the ACC Network, which will debut by August 2019.
The Big Ten Network launched in 2007.
And if you've ever seen the Big Ten Network, and the coverage of non-revenue sports like field hockey, wrestling, softball and baseball, you know what ACC fans have been missing out on and what they'll be getting in, well, three years.
"The macro view is there's still a lot of betting on the come here," said Chris Bevilacqua, co-founder of New York-based Bevilacqua Helfant Ventures, which focuses on media and other commercial rights advisory services, business development and investment opportunities in the sports and entertainment industries. "Doing a traditional network is still a risky business, even if you're ESPN. What you heard is the plans to launch a network [three] years from now. There are still a lot of things that are going to happen, and a lot is out of the hands of the ACC and ESPN.
"While there is a commitment to do a cable network by 2019, what that will look like is still too early to tell. ... It may work out that way. But it may not work out that way.
"... All the ingredients are in place. You've got a powerful brand called ESPN that knows how to put a network together. But you've got forces that are beyond the control of ESPN and the ACC ... changing consumer behavior, shrinking subscriber bases, ‘skinny bundles,' new delivery systems, overall business model changes."
In June, the Big Ten completed an agreement with ESPN, which, coupled with a deal with Fox that was announced in April and a basketball-only deal with CBS, will earn the conference an average of $440 million annually throughout the next six years. All told, the Big Ten will earn $2.64 billion from the deals.
The $440 million per year is nearly triple what the Big Ten is earning with its current agreements with ESPN and CBS.
No financial terms of the new ESPN-ACC deal were announced, but the 12-year rights deal they reached in 2010 was reported to be worth $1.86 billion, or $155 million per year. ESPN has held TV rights for ACC games since 1979.
According to an analysis of the TV contracts of the Power 5 conferences (Big Ten, ACC, Southeastern Conference, Pac-12 and Big 12) done by the San Jose Mercury News, starting in 2017, each Big Ten school will average about $41 million a year throughout the life of its TV contract. Each SEC school will average $34 million, each Big 12 school $23 million, each Pac-12 school $22.5 million and each ACC school $22 million.
The deal also keeps Notre Dame in the ACC for every sport except football, in which the Irish will remain an independent. But if Notre Dame ever decides to give up that status, the deal requires the Irish join the ACC.
The ACC-ESPN deal runs through 2036, which is similar to the SEC-ESPN deal, which runs through 2034. Bevilacqua said the length of the deals did not surprise him.
"ESPN, for better or worse, their company is built on owning valuable sports rights for the long term," he said. "ESPN is obviously bullish on the value of sports rights. It's not surprising to me that they went for 20 years because that's what ESPN wanted. It might be surprising if you're a seller -- 20 years is a long time."
If the value of TV contracts keeps growing exponentially (like they have been), then the Big Ten will be in a position to sign an even bigger deal when this one expires in 2023. And at that point, the ACC-ESPN deal will only be in its fourth year.
"The Big Ten designed it that way," Bevilacqua said. "They figured they'd get another bite out of the apple. They figured the marketplace would be more settled when its current deal is over, and that it's likely there will be an expanded set of buyers. In addition to ESPN and Fox, you might have Amazon, Netflix and Hulu fighting over rights, too."
Issue 224: August 2016