SMU can add immediate $ to ACC media deal

[slawton011963]

Like many on here I'm accustomed to disappointment! No way would/should we now pivot to getting our hopes up on the ACC. We are headed towards a world of (stealing some old terminology) Division 1 made up of the most attractive from the former P5 conferences and a Division 2 made up of those who don't make the cut. As opposed to expansion, a better bet is that the networks and conference commissioners are trying to figure out how to rid themselves of schools like Wake Forest, BC, Northwestern, Iowa St...etc. (sorry for offending anyone) so that there are fewer schools to split the revenue with. This latest round has addressed the WSU, OSU and Cal demotions.....I would imagine Stanford may end up in the top tier, but who knows.

What is happening to us in all of this is simply business as usual. If we can get shafted, we will, and each and EVERY time we get our hopes up it ends in disappointment. But what is happening in college football is absolutely tragic.

[Topper]

Like many on here I'm accustomed to disappointment! No way would/should we now pivot to getting our hopes up on the ACC. We are headed towards a world of (stealing some old terminology) Division 1 made up of the most attractive from the former P5 conferences and a Division 2 made up of those who don't make the cut. As opposed to expansion, a better bet is that the networks and conference commissioners are trying to figure out how to rid themselves of schools like Wake Forest, BC, Northwestern, Iowa St...etc. (sorry for offending anyone) so that there are fewer schools to split the revenue with. This latest round has addressed the WSU, OSU and Cal demotions.....I would imagine Stanford may end up in the top tier, but who knows.

What is happening to us in all of this is simply business as usual. If we can get shafted, we will, and each and EVERY time we get our hopes up it ends in disappointment. But what is happening in college football is absolutely tragic.

We are living in a football landscape that is completely run for the benefit of the broadcasters. Right now we have two super conferences that eventually will acquire Florida State, Clemson, UNC and possibly UVA. They will find a way to shed Northwestern and Vanderbilt. Apple will eventually get involved by taking a position within ESPN which needs their money. Then Apple will not need its own conference deal. The ACC, Big 12, AAC Mountain West, Sunbelt and whoever else you want to name will suffer even greater budget disparity with the Super 2. The Super 2 will also have a deal so that they snare all but one or two playoff spots. If we can find a way to align with the ACC we should. There will be several historic programs in that league with which we can favorably compete.

[redpony]

Amazing- one more conference has the possibility of expanding and based on prior comments our admin has not done anything to market us or sell our capabilities to them. So typical of this SMU admin.

[Topper]

I read in a Tampa newspaper article that FSU is saying that it will lose $390 M over the life of the media contract compared to its membership in the BIG or SEC. The penalty for breaking the current deal is $120 M. Canzano says that Fla St is talking to JPMorganChase re its finances. The Seminoles are either trying to get a restructure of their current arrangement or are seriously considering bolting. Clemson wouldn't be far behind. Their other option is to wait until they can find 7 other teams with lucrative offers to leave. Then they could simply dissolve the ACC although I don't think anyone in the general public knows what rights their current media partners would have in such a situation.

This is nonsense on the part of FSU and Clemson again lets use real world numbers that are known. It has been reported now that Oregon and UW are coming into the Big 10 and getting $30 million the first year and OnE MiLlIoN more per year for the life of the current deal until a new deal is signed at which point they will get full shares. So as stated above the ACC just handed out $39 million or so on average to their current members. That means that even at the end of the current Big 10 deal Oregon and UW will be making less money than average ACC members just made never mind the ACC deal will go up at least $1 million per year unless ACCn subscriber rates fall through the floor rapidly.

So it is a stupid claim right off that FSU and Clemson could be $390 million behind the Big 10. It is also impossible to know what will happen with the new Big 10 deal as well and even if it is massive it will only be a few years after that when the ACC deal finally ends.

Next there is the exit fees. Maryland paid $36+ million of $50 million to leave many moons ago and that was with an argument that they had voted against the brand new jump from $25 million to $50 million in exit fees for the ACC. So I think is is pretty safe to say that FSU and Clemson will be paying about $40 million to possibly the full $50 million to leave.

So we are suppose to assume that somehow the Big 10 is thinking of adding FSU and Clemson at full shares, but just on a last minute whim they also added Oregon and UW at less than half shares after they just added USC and UCLA at full shares and knowing that USC was very happy to separate from Oregon in particular for recruiting purposes. That seems like a lot of knee jerk reactions for a conference that has a long history of playing things extremely close to the vest and taking a very long time to make expansion decisions. You still have Rutgers and Maryland that are not getting full shares and in the case of Rutgers getting even less because of up front loans. That all sounds like a poorly thought out disaster.

Now we have not even talked about the GOR. It is pretty widely reported that Texas and OU had to pay Fox $10 million each to cover the content that Fox will not have from them leaving the Big 12 one year prior to the end of the GOR. Fox only owns half the Big 12 content and while it is said to be the "tier 2" content really it is about equal ownership with ESPN. ESPN owns 100% of the ACC content and there is 9 years left on the ACC contract and GOR. So there is a pretty clear business precedent set that no matter what the conference says about breaking the GOR with the conference, because the GOR is with the conference not with the media partners, you are going to pay the media partner(s) something for the content they miss out on.

And I do not think that the ACC members are just going to negotiate away 9 years left on their GOR. But even if FSU and Clemson can get out of the GOR with the conference there is still the model set that Fox collected $10 million per team from two members of a conference they owned half of the content of. So if you say that ESPN only gets $15 million per year for the content they own 100% of you are looking at $135 million. You add the $40 million exit fee on to that and you are at $175 million out of pocket to leave the ACC and that is with a lowered exit fee, a reduced rate to ESPN for content, and ZERO to the ACC members for breaking the GOR 9 years early and no court cost.

I think that $175 is on the really low side of the actual cost when it is all said and done IF they can actually eventually break the GOR. And all of that to join a Big 10 that just offered Oregon and UW $30 million to start and a S1 million per year bump until the new, unknown, contract. So we are somehow looking at a claim that a school is going to be $390 behind while ignoring what two new members were just offered, ignoring exit fees, ignoring that no one ha a clue what media contracts will be in the future, and ignoring any legal fight and cost over the GOR.

Those claims seem like the claims of a university official that is a complete idiot and has no clue what they are talking about and that is about to get their university into a very poor position and probably cost them a hell of a lot of money,

As for any claim about "well what about the SEC" that has already been discussed. That is a horrible legal position for ESPN to put themselves in that could result in ESPN owing tens and tens if not hundreds and hundreds of millions to the ACC in damages while still paying the remaining members of the ACC to the end of their contract and also having to pay a ton more to FSU and Clemson for content they already 100% own.

There is seemingly zero reason that ESPN would be so stupid as to want to pay more money for something they already own while exposing themselves to massive litigation from several angles and probably to state and congressional investigations as well. FSU and Clemson are simply not worth all of that or close to all of that financial and legal danger especially when ESPN already owns 100% of their content for another 9 years and when the very simple math based on reality above shoes that potentially losing FSU and Clemson to the Big 10 seem far fetched and a completely idiotic move on the part of FSU and Clemson and not really a great move on the part of the Big 10 for that matter.

I'm not saying that you are wrong but you admit that your comments are based on "what is known." The point is that we don't know what the Florida State regents know as we don't know the details of their conference agreement or the conference's media agreement. They have hired Wall Street guys to help them work out the numbers so at this point all is speculation on our part.

[Dukie]

Amazing- one more conference has the possibility of expanding and based on prior comments our admin has not done anything to market us or sell our capabilities to them. So typical of this SMU admin.

I know that that comment confirms your existing biases (and I often share your biases in this area, FWIW), but I’m not aware of the evidence that that commenter knows anything at all.

[jkflamebo]

Amazing- one more conference has the possibility of expanding and based on prior comments our admin has not done anything to market us or sell our capabilities to them. So typical of this SMU admin.

Our admin has ZERO influence on these expansion decisions. If you haven't noticed the media overlords run the show now. If you don't beat top teams year in and year out, nor consistently have a lot of eyeballs watching the games in person or on tv...you are on the outside looking in.

As much as I would have liked the PAC, the ACC has always been a better fit. I believe FSU will be able to raise $ via wall street/private equity to get out the ACC. If the ACC wants to survive they should get ahead of it and add Stan/Cal and possibly SMU/Memphis/USF to offset losing FSU/Clemson/UNC/UVA.

Really wish I never saw the photo of PAC's GK in Moody...really got my hopes up. The epitome of incompetence, arrogance, horrific assumptions, and delusional thinking all along.

[redpony]

Dukie- my comments were based on a response here on PF regarding any contact we have had trying to connect with influential sources in the ACC. Just to clarify.

[Dukie]

Dukie- my comments were based on a response here on PF regarding any contact we have had trying to connect with influential sources in the ACC. Just to clarify.

Yes, I agree. That response here on ponyfans was asserted strongly. I just have zero basis for deciding that it is actually true.

[ROCKNEPONY]

Worse case this could be our new conference:

If 8 leave the ACC and vote to break contract they will likely be:
1. Clemson   [SEC]
2. Florida State  [SEC]
3. Miami - 
I think the SEC would take DUKE
4. Virginia Tech  [BIG10]
5. NC State  [BIG12]
6. North Carolina  [SEC]
7. Virginia  [BIG10]
8. Louisville  [BIG12]

NEW ACC - 18
1.   Miami or Duke
2.   Syracuse
3.   Pitt
4.   BC
5.   Wake Forrest
6.   GA-Tech
7.   Notre Dame
ADD
1.   SMU
2.   Tulane
3.   Rice
4.   Memphis
5.   UCONN
6.   USF
7.   Navy football
with a BIG East basketball team
8.   Army football
with a BIG East basketball team
9.   Air Force football
with a BIG East basketball team
10.  Cal football
with a BIG East basketball team
11.  Stanford football
with a BIG East basketball team

I'm not sure what the media deal would be but it would be good football and great basketball.

[EastStang]

Looks a lont like the Magnolia League that Stslllion always slammed with Stanford and Csl added for west coast flavor.

[Charleston Pony]

Looks a lont like the Magnolia League that Stslllion always slammed with Stanford and Csl added for west coast flavor.

I was told a former SMU Trustee, A.W. Tarkington was the one who actually proposed what came to be called the "Magnolia Conference" because before the Pony Express was built, he saw what television's impact was going to be and did not believe small private schools would be able to compete with their larger public school conference mates that had much larger alumni bases and fan followings. I think the suggestion was that SMU, TCU, Baylor & Rice depart the SWC and team with other smaller private schools like Tulane, Wake, Duke, etc...if the concept could be sold. As I understand it, he was pretty much laughed out of the room and Ron Meyer was hired soon afterwards to see if SMU could compete with Texas, A$M, OU and the like who were all paying players in those days

It's possible a "coast to coast" conference could be formed at some point in the future featuring the "best of the rest" but I suspect it would have to be the largest conference (even expanding on the old WAC 16?) with divisions set up to minimize long distance travel. SMU's being in Dallas would be a nice central location for hosting championships, but I'm just not sure the economics will ever justify it because it would not likely generate more revenue for it's members than most will gain from their current affiliations.

[crazy horse]

I keep seeing West Virginia mentioned as an ACC possibility. Why would they leave the Big 12 - and could they? What is their appeal academically, athletically or even market size? The only thing in their favor is proximity to a few ACC schools.

They always seemed like a very odd addition to the Big 12, but even stranger as a possible ACC add.

[dr rc]

I read in a Tampa newspaper article that FSU is saying that it will lose $390 M over the life of the media contract compared to its membership in the BIG or SEC.

Always gotta love the ridiculous "They are making more money over there which means I'm losing money over here" [deleted] people fart out when they are mad somebody got a better deal than them.

[Charleston Pony]

I keep seeing West Virginia mentioned as an ACC possibility. Why would they leave the Big 12 - and could they? What is their appeal academically, athletically or even market size? The only thing in their favor is proximity to a few ACC schools.

They always seemed like a very odd addition to the Big 12, but even stranger as a possible ACC add.

West Virginia has more T-shirt fans than most. Academics has always been the objection but these days it's all about media interest so large fan bases are a plus.

[crazy horse]

I guess that makes sense. Yet, there are only 1.8 million in all of West Virginia. Maybe another 250k have moved to other states? So 2M+ fans globally?

That's a lot of assumptions, but when I asked Google they said 1.84M - so I guess I was close. It has no answer for SMU.