Unconquered

This is starting to get very fascinating......

I would pitch in money to send TWO PLANES with those message streamers reading "Florida State is your daddy" to fly over Greensboro and the Research Triangle.

I, for one am not ACC bashing. The reason the ACC has no gravitas for football is bacause of us and UM.

If we were both powers our contract would be worth much more than 17 million per year. However, no where near 30 million.

As tot he SEC, they can't match 30 million per year or probably at least 35 million per year. Probably more like 20-23 million per year. Adding us may get them more money to put it int he 23 million range. However, why go to the SEC if the big 12 numbers are accurate? I guess precevied stability would be one answer. Ease of travel would be another answer. I can't think of a third reason.

After all, if its not about money then why leave the ACC?

I would also like us to keep UM. My FSU sources are limited since the adm change so I do not know how much that matters to FSU.

Seminole Network FTW!!

UT's 15 mill on the LHN is guaranteed contractually by ESPN. The viewership and network numbers are ESPN's problem and not UT's at this time.

I found this on the West Virgina Board and it is a long read, but worth it.

Since it seems that there are tons of internet / message board rumors going on about realignment, I figured that I would start a thread where we could all post everything together instead of having a lot of threads about the same topic.There are huge threads on FSU/Clemson/Texas sites across all the competitors (Rivals/Scout/247), to go along with everyone and their brother that has a blog with those associated schools.

I hope everyone joins in bringing info to this, as this should keep us busy during the offseason. It feels really good to be on the other side of the fence this year, as compared to last year. Since I'm starting this I guess I should be the first one to put some info into it. I got this from a Baylor fan on one of the other sites, there is a ton of info (if all true) but I think we all know that everything needs to be taken with a grain of salt. Anyways enjoy/discuss:

There are a lot of moving pieces to conference realignment, and even the most knowledgeable posters don’t know all of them. I’ve been lucky enough to have had a number of clients that are directly or indirectly involved with conference realignment on the side of Texas, Oklahoma, ESPN, and others, share a little insight. I’m by no means an expert, but I have a pretty strong understanding of some of the dynamics that you won’t see in print.

First, at this point, everything is a guessing game as to whether the ACC is or isn’t raidable. It’s going to come down to their final TV payout.

Tier 3 Programming & Payouts

Where the ACC is severely limited is that their ESPN contract is for Tier 1, 2, and 3 programming, which leaves no sports programming for teams like FSU, Clemson, and VA Tech to sell to regional and national carriers. Shared Tier 3 payouts isn’t a bad thing if you’re getting a strong payout on Tier 1 & 2. But, when you’re a team like FSU or Clemson, which has a strong following, your “value” is being used to subsidize teams with lesser value. So, your take home is much lower than if you controlled your own Tier 3 rights.

Unfortunately when it comes to Tier 3 payouts, most don’t understand exactly what Tier 3 refers to, how the contracts differ from school to school (and conference to conference), or the various levels even w/in Tier 3 contracts. The numbers most like to throw around aren’t even Tier 3 payouts. Tier 3 refers to ONLY those sporting events which the conference’s network partners have opted not to televise in any capacity. Yet, most of the numbers tossed about included everything BUT actual Tier 3. Most of the ISP, IMG, Learfield Sports, etc contract numbers tossed around are nothing more than payouts for coaches shows, radio broadcasts, stadium advertising rights, website operation rights, and various other marketing & advertising related enterprises.

First things first, think of ISP, IMG (ISP’s parent corp), and Learfield, etc as pimps. They don’t actually provide a service. Rather, they connect universities to various services, and act as the go-between in exchange for a fee (generally a percentage of the take home). Let's use ISP and Florida as an example. ISP negotiated and handled the 10 year/$82M Sun Sports contract for Florida. They also negotiated all of Florida’s radio contracts. They sell the advertising in their stadium, produce their game day programs, establish endorsements for the coaches, manage the Gator’s website, and advertising for it, etc. So, Florida gets $8.2M/yr from a hybrid-Tier 3 package from Sun Sports + another $2M+/- from ISP for advertising and management related services, for a total annual payout in the $10M range. But, not all of that is Tier 3, only a small piece.

One of the other issues is most don’t understand that the true Tier 3 figures teams have gotten in the past are going the way of the dinosaur. Texas reset the bar on true Tier 3 payouts (not to be confused w/ contracts that include “other” services). Most quote Texas as receiving $15M/yr for Tier 3. And, that’s true. But, what made Texas’ deal such a landmark is that is ON TOP of their IMG contract, which pays an additional $9.4M/yr for radio, stadium advertising, game day programs, website rights, etc. Texas is actually getting $24.4M/yr for their all-in package, not $15M. Now, compare that to Florida’s $10M and Florida State’s $6.6M. The reason this is important to note is b/c the numbers discussed for Florida (which are most often mentioned in these discussions) are from 4 years ago. It’s a whole new world from a financial perspective, and when their contract expires in a couple of years, they’ll resign for $15M - $20M for their all-in package (my opinion).

FSU currently gets $6.6M/yr from their ISP package, which includes coaches shows, stadium advertising, radio, etc. The issue with the ACC’s ESPN deal isn’t that it costs a team like FSU the measly $3M-ish difference between what they get and what Florida gets from true Tier 3 production currently, but that it costs FSU a much larger sum that is now available on the market. The SEC doesn’t allow standalone networks like the LHN. That’s what makes the Big XII such a strong entity from the standpoint of true Tier 3 earnings. Oklahoma, for instance, is about to sign the 2nd largest true Tier 3 deal here shortly. A school like FSU should have no problem getting an additional $5M - $8M in today’s market on top of their radio, coaches shows, advertising, etc package they’re getting from ISP (potentially more)…….especially if they can put out a really strong season before signing. And, in the right conference, that amount could increase even more.

Also, the SEC’s TV deal allows for “up to” 1 football game a year for Tier 3 broadcast, but it doesn’t guarantee it. Last year, CBS televised 15 SEC games, and the ESPN network televised the other 75 games. So, no SEC football games made it to Tier 3 distribution. Thus, the Florida deal is not only undervalued from a time/inflation standpoint, but also from an inventory standpoint. There is a big difference between network contracts that leave NO football inventory and the Big XII’s which guarantees at least 1 per team, and allows you to purchase your OOC home games for Tier 3 distribution (the same as how Versus purchases Big XII games from ESPN/FSN for Tier 3 broadcast). Plus, the Big XII’s contracts allow for more basketball games for Tier 3 as well. Texas, for instance, had 12 Tier 3 basketball games last year. The Big XII’s current contracts are only for 59 of the 75 Big XII home football games, which leaves more inventory for sale by every team.

Tier 3 is a much bigger monster than everyone realizes, b/c everyone’s going off of the meager contracts that were signed 2, 3, 4, 5 years ago. And, in the past, ISP, IMG, Learfield, etc largely reached out to regional players for broadcast arrangements. Now, there is an established market (and vision) for larger scale Tier 3 deals………deals that will make the old PPV ways of the past look downright laughable.

Big XII’s Tier 1 & 2 Payouts

It’s been leaked that the Big XII is at the cusp of signing an extension with ABC/ESPN that will pay the conference just shy of $20M/yr for Tier 1 & 2 programming, beginning in 2016. However, that number was leaked with the purpose of driving the price higher, the same as what the Big XII did to drive their FSN contract 50% higher when it was signed in April 2011. With Fox now working to share a split contract with ABC, the number is expected to push closer to $21M for Tier 1 & 2, possibly a smidgeon higher.

Beyond the Big XII’s payout for Tier 1 & 2, I can tell you they were wise enough to build into the preliminary ABC contract an escalator that will increase their payout a fixed amount if at least 2 teams are added to produce a championship game. The exact “per team” increase is dependent upon the total teams added, but will be in the $1.5 - $2.5M range.

In addition, there are out clauses in both contracts that will open them up for renegotiation at market value should the Big XII expand further. Much of what’s said about the Big XII’s contracts as far as certain teams being on the “list”, etc are message board fiction. But, there is, from what I’ve been told, an understanding as to potential ranges with certain teams added to the Big XII. So, while it isn’t in print, it is understood.

ACC’s Payout

Much has been made about the article that estimated the ACC’s payout would be in the $15M/yr range once it’s reworked. I think most at ESPN are expecting that number to be higher, but not nearly high enough to stave off any expansion threats from neighboring conferences. Many have asked why ESPN wouldn’t simply pay them enough to prevent poaching. The answer is, it’ll likely cost them more to prevent it than otherwise. Think about it. In order for the ACC’s 2 y/o ESPN contract to go from $13M/yr to the $25M/yr they’d need to prevent being raided, ESPN would have to increase their annual payout $168,000,000. On the flip side, if the best teams are picked off the ACC and added to the SEC or Big XII, it will not cost them $168M in escalations. And, they still get a huge inventory to broadcast, while cutting out a lot of the weaker teams that don’t draw on TV: ala BC, Syracuse, Wake, Duke (football), Maryland, etc.

Also, ESPN’s contract w/ the ACC is for a fixed amount of inventory. For their contract to increase at a high rate, ESPN has to buy more inventory than they’re getting. And, as it stands, the ACC’s available inventory to sell is only increasing 16.7%. Plus, if football drives the boat (and it does), then to presume that 2 lackluster football teams + 2 years of inflation could drive up a contract $100M+ (which is what would be needed to hit $20M/team), then you would have to kiss the thought of Notre Dame joining a conference goodbye. Because…….if you can get a $100M bump from 2 middling teams & 2 years of inflation, then what is Notre Dame football worth on the open market? And yes, I realize ESPN is getting football, basketball, and baseball, as well as Olympic sports from the ACC, while NBC is getting just football from Notre Dame. But, I think it’s safe to say football at the very least, accounts for 50% of the ACC’s contract (if not 75%). So, even if football is only half of the $100M bump, you’re essentially saying Pitt football is worth $25M/yr. So, what’s Notre Dame football worth then?

That’s why in many respects, the numbers through around for pay increases are absurd, b/c people are saying Pitt & Syracuse are each worth $50M/yr each out of one side of their mouth, but NBC may not want to pay Notre Dame $15M out of the other. SMH.

An Add’l Big XII Angle

Another wrinkle the Big XII has that isn’t set in stone, but has been discussed is the possibility of opting for an 8-team conference slate in a 12-team or 14-team conference. Why would this be beneficial in their pursuit of any high-value ACC teams? B/c when the ACC switched from an 8-game to a 9-game conference schedule, it cost each school 1 home game every other year. At FSU or Clemson, based on attendance, a home game is worth around $8M in terms of gate receipts, concessions, etc. Switching from a 9-game slate to an 8-game slate would afford each school an additional $8M+/- every other year in additional revenue ON TOP of the additional revenue they’d pick up in TV payout.

Plus, it would mean that those teams wouldn’t have to cancel their higher caliber OOC games, like Clemson had to do with Georgia, and is at risk of having to do with Oklahoma State & Ole Miss in coming seasons.

Now, in fairness, the ACC's schedule hasn't definitively cost each team 1 home game every other year. But, in order to continue having the 7-8 home games a year most teams prefer, it means high quality OOC games like Clemson/Georgia have to be axed in favor of scheduling a "buy" game against a cup cake. Just looking at the numbers, it would appear there is about a $3M swing in revenue in switching from a traditional home & home series against a quality OOC opponent to paying a lesser team to come to your house to get whipped.

Adding it All Up

Obviously, we’re talking hypotheticals here, but there is a very real possibility that by switching to the Big XII, a team like FSU, VA Tech, or Clemson would be able to make:

$20M - $25M/yr on Tier 1 & 2
$3M - $10M/yr on true Tier 3 (not including radio, etc)
$1.5M - $2.5M on a CCG
$3M - $8M every other year from an additional home game

When the dust settles on the Big XII’s contracts, most of the teams will be making $25M - $35M annually on true Tier 1 ? 3 payouts. And, that doesn’t include escalations from a CCG or the bump in payout that would result from procuring 2 or 3 high-level teams through expansion.

For the ACC to keep up, they’re going to have to double their current contract, b/c otherwise, it will be very easy to offer FSU, VA Tech, or Clemson a $10M+ increase in annual TV take home.

I’ve heard many say that’s not that big a deal. But in reality, it’s actually a bigger deal than most realize. FSU & Clemson specifically, compete annually against Florida, Georgia, Alabama, Auburn, Tennessee, and South Carolina for recruits. Each of those teams (aside from USC) has a significant edge in attendance at games. Why is that important? Because TV money aside, if you assume every fan in attendance is worth $100 to the athletic department’s coffers, the difference in per home game take home between an FSU and an Alabama, is about $2.4M. Add that up over the course of a season and you’re talking about an $18M shortfall in revenue vs a regional competitor. Now, add an additional $10M - $15M in TV revenue shortfall, and you can see that it won’t be hard to fall behind significantly.

Sadly, IMO, college athletics is looking more and more like professional baseball, where money drives success. But, if that doesn’t change, a program like FSU, Clemson, and VA Tech cannot operate and compete at an annual $30M revenue shortfall to their competitors. At some point, something has to give, b/c coaching salaries are going to push beyond many teams’ ability to compete and pay……as sad as that may be. So, while geography or travel may not make sense, their hand may be forced if (and that’s a big if) the ACC contract does not come back at a competitive rate. And IMO, that will have to be around $25M.

And, before anyone says travel will eat up a lot of the extra $.....the Big XII has an option to offer an adjusted payout based on annual travel miles. So, there are opportunities to make FSU, Clemson and others wholes in that respect."