More insight on the ACC's financial challenges. An article from June 2018.
David Teel Contact Reporter Daily Press
Michigan athletic director Warde Manuel told the university’s Board of Regents last week that his department’s share of Big Ten revenue was $51.1 million in 2017-18, with $52.1 million projected in 2018-19.
Per its most recent federal tax filing, the
ACC’s average distribution to schools in 2016-17 was $26.6 million, little more than half the Big Ten’s haul. Two points about the striking contrast:
First, neither the ACC nor its member schools have revealed the league’s 2017-18 shares. Moreover, no one has projected 2018-19 numbers.
Second, sports isn’t Monopoly. A more modest pile of cash — none of the Power Five conferences is impoverished — hasn’t prevented ACC teams from thriving nationally in football, men’s basketball and the Olympic sports.
Manuel’s presentation to Michigan’s board, plus the Southeastern Conference’s average distribution of $40.9 million in 2016-17, reaffirms the ACC’s need for its impending cable channel to generate considerable revenue.
A partnership with
ESPN, the ACC Network is scheduled to launch in August 2019, its earnings potential the subject of rampant speculation and, among athletic directors, anticipation.
The ADs wonder because they’re investing millions in on-campus network production facilities. They worry because sustaining a business long-term with a fraction of competitors’ resources borders on impossible.
The revenue gap has never been larger and likely will grow until the ACC Network debuts. The overarching question is: How much can the channel bridge the gulf?
Disney’s October carriage agreement with Altice, a cable provider that serves New York, New Jersey and Connecticut, was an encouraging start. Disney is ESPN’s parent company, and the Altice deal includes not only ESPN but also the ACC and SEC networks.
Negotiations with cable providers elsewhere, and how many subscribers those providers retain in our cord-cutting world, will help determine the ACC Network’s success. Forecasting those contracts and subscription rates is folly, but there is one history lesson worth examining.
Many consider the SEC Network, born in 2014, the most successful launch in cable television annals. In its final fiscal year without the network, the conference reported $210.4 million in television and radio revenue. One year later, the SEC earned $311.8 million from TV-radio, a 48.2-percent increase.
The league’s most recent tax filing, for 2016-17, showed $409.1 million, a 94.4-percent bump over the network’s three years.
During that same time, ACC television money has risen 19.7 percent, from $197.2 million to $236 million.
Translation: In 2013-14, ACC television money lagged behind the SEC by a modest $13.2 million. Three years later, the difference was a staggering $173.1 million.
Since the SEC also has a lucrative contract with CBS, its increases can’t be solely attributed to the SEC Network. But there’s no questioning the network’s impact.
Comparable numbers for the Big Ten and its network are unavailable because, unlike the ACC and SEC, the conference does not reveal television revenue on its tax return. Rather, the Big Ten’s return categorizes more than 90 percent of its income as “sports revenue.”
Matching the SEC’s meteoric rise will be difficult, if only because ACC fans, smaller in number than at larger SEC schools, aren’t likely to create similar demand. That said, the ACC’s footprint stretches from Boston to Miami, and west to Pittsburgh, Louisville and
Notre Dame.
SEC TV-radio revenue rose $101.4 million in the first year of its cable network, which calculates to $7.2 million for each of the conference’s 14 schools. The same increase divided among the ACC’s 15 schools would be $6.8 million.
Yes, partial ACC member Notre Dame will receive a full network share, as the Fighting Irish should. Their men’s basketball and Olympic programs, plus their five annual football games against ACC colleagues, are that valuable.
Some may recall that in February 2017
Florida State athletic director Stan Wilcox told the school’s Board of Trustees that the ACC Network could net each school $8 million-$10 million in Year 1, and $10 million-$15 million per year thereafter.
“These are all projections,” Wilcox told the board, according to
247sports.com. “It all depends on how well the network does. They are saying this network should have the same kind of return that the SEC Network has had in (its) first couple of years.”
Optimistic doesn’t begin to describe, and no one associated with the ACC Network project has echoed Wilcox, publicly or privately.
Firm answers? They won’t emerge until the conference’s 2019-20 tax return is released in the spring of 2021 — three years from now.
Until then, some tangible and encouraging comparisons for the ACC from the last five seasons.
NCAA men’s basketball tournament record: ACC 65-35, SEC 40-24, Big Ten 47-31.
Men’s basketball national championships: ACC 2, SEC 0, Big Ten 0.
Football bowl record: SEC 34-23, Big Ten 23-23, ACC 26-28.
Record in
Bowl Championship Series, College Football Playoff and New Year’s Six games: ACC 7-5, Big Ten 8-6, SEC 8-9.
Football national championships: SEC 2, ACC 2, Big Ten 1.
Top 25 teams in this year’s penultimate Directors’ Cup all-sports standings: SEC 7, ACC 6, Big Ten 5.
An excellent place to be competitively versus the Power Five’s leading money-makers. The ACC’s challenge remains financial.
Complete Article:
https://www.dailypress.com/sports/dp-spt-acc-network-revenue-0628-story.html
