Posted by John Vrooman on Saturday, August 24, 2019 in NCAA Football, Sports Econ Blog.

Interview with FOX Business. PDF.

FOX: We’re working on a story today about ESPN’s launch of the ACC Network and what it could mean for the balance of power in college sports, in terms of revenue and other benefits. Would love to get your thoughts on the network’s financial prospects and if it could boost the ACC’s efforts to challenge the SEC and Big Ten.

Optimistic forecasts of $10 million – $15 million per school for the new ACC Network are probably somewhat exaggerated but after an initial shakedown period, ESPN’s fully owned ACC Network should surpass the P12’s fully owned P12N with about $5 million to $8 million bump in revenues per school after 2019.

The ACC Network is unique in two important respects. First, the ACC deal with ESPN is set to expire in 2036—a full decade after what will probably be another Power 5 conference realignment derby surrounding the coincidental expiration of major media rights deals in 2023-25.

The benefit of the long-term ACC-ESPN deal is the relative certainty and stability of ACC risk-free contractual cash flow from media. The risky aspect of the long-term deal with ESPN is ironically the network’s economic viability as it simultaneously fights for and against the rapidly changing digital media revolution by systematically overbidding for increasingly scarce live sports programming across the board.

Second, the ACC has the inside track through 2036 on Notre Dame football, when the Fighting Irish finally decide to join a conference. Notre Dame currently receives about $15 million annually for its unique 2016-25 NBC deal and a $5.8 million share of the ACC media pie.

ESPN’s current CFP deal also ends in 2025. By the simultaneous expiration of the current ND-NBC and ESPN-CFP deals in 2025, Irish football will probably begin to fully merge home and away games into the relatively stable ACC Network revenue stream.

V