ACC Network looking more like a sinking ship than the rising tide

[Rufus]

ACC Network looking more like a sinking ship than the rising tide

Interesting article talking about how cash-strapped Virginia Tech is.

"The soon-to-launch ACC Network is already over budget, and the return on the investment might not improve the outlook much."

 

[Sky ball]

To bad they didn't lock up viewership in NE and NY by adding UConn and Rutgers. Instead they get Louisville and a football less South Send. Hey, they still have the massive Wake Forrest viewership to sell.

 

[CTGoonie]

Swofford thinks they already have the CT market. His quote after saying they would have the ACC headquarters in Bristol instead of Charlotte “Some had the sense that Charlotte was a natural, but, really, both locations are within our footprint.”

 

[Sky ball]

Swofford thinks they already have the CT market. His quote after saying they would have the ACC headquarters in Bristol instead of Charlotte “Some had the sense that Charlotte was a natural, but, really, both locations are within our footprint.”

They don't even have the Boston market never mind CT and New England.

I wonder if the ACC would have the North Carolina market if they only had Wake Forrest?

 

[Exit 4]

As the years have clicked on by its even more apparent you need to have two schools in New England to cover the two largest buckets. BC for the private school / catholic crowd and Uconn for the Everyman crowd.

BC alone isn’t working. And Syracuse will never mop up the cracks inbetween.

 

[buddy]

They are still raking in $28 million/year without UConn. I think expansion of the ACC is unlikely for the foreseeable future.

 

[Exit 4]

As the years have clicked on by its even more apparent you need to have two schools in New England to cover the two largest buckets. BC for the private school / catholic crowd and Uconn for the Everyman crowd.

BC alone isn’t working. And Syracuse will never mop up the cracks inbetween.

It won't ever happen, but right sizing the ACC would mean adding UConn to re-energize their NY/NE/NYC market and to add Temple to help fill the mid atlantic void left by the loss of Maryland. To make it all fit, you'd have to jettison Wake Forest which is a net media loser for the AAC footprint and bring ND in full time.

Again, none of this is happening, but it represents to me what the right fix is to elevate the ACC if the ACC wants to strengthen itself as a regional conference both in the short and long term. If its just straight money grab with no value placed on the long term benefits of regional rivals, then add two schools in Texas with one of them being UT.

 

[browndog319]

If the ACC wanted to plug it’s Mid-Atlantic hole, I would add Villanova, not Temple. Better fan base. Sure, football is an issue but if you could get Nova to move up and play at the Linc, that would be a much better draw.

And they have Notre Dame for basketball only so maybe it’s not a big deal.

 

[mike012]

They are still raking in $28 million/year without UConn. I think expansion of the ACC is unlikely for the foreseeable future.

Big 12 says we like your plan too!! what could go wrong....

 

[Jae-VT]

ACC Network looking more like a sinking ship than the rising tide

Interesting article talking about how cash-strapped Virginia Tech is.

"The soon-to-launch ACC Network is already over budget, and the return on the investment might not improve the outlook much."

If I may, a different view on the ACC Network:

https://www.bizjournals.com/newyork...aways-from-the-surprise-altice-espn-deal.html

From the article:
■Who won?
ESPN is the clear winner, at least based on initial reports. It averted a standoff and added SEC Network and ACC Network on a cable system that covers the New York area market. ESPN secured a rate increase for its channels and got Altice to increase its minimum household penetration threshold, sources said. But sources cautioned me from declaring ESPN as the unquestioned winner based on one open question: We still do not know specifics about where that minimum penetration threshold is and how much flexibility Altice has to launch and market lower-cost tiers that do not include ESPN. ESPN deals typically mandate that it must be on a cable operator’s most widely distributed tier. As “cord shavers” continue to migrate to skinny bundles, those most widely distributed tiers become smaller. The key to the Altice deal is finding out how ESPN addressed that situation. “The rate increase is just window dressing in comparison,” one veteran media executive said.

■What was the biggest surprise?
I am blown away by the fact that ESPN was able to get carriage for both ACC Network and SEC Network on cable systems that span Connecticut, Pennsylvania, New Jersey and New York — areas that never will be confused for Tobacco Road or Tuscaloosa. ACC brass, in particular, have to be overjoyed, as this one deal makes its planned 2019 launch as close to a sure thing as you can get.

IMHO:
Who knows what will happen in 2019 and beyond. Perhaps the OP article will be correct and the ACCN will fall flat and be a failure, or perhaps, it will allow the ACC to keep pace with the other conferences. Regardless with the outcome, I do hope to see UConn regain its rightful place in one of the power conferences. Good day to you all.

 

[buddy]

Big 12 says we like your plan too!! what could go wrong....

It is not my plan. Big 12 is doing quite well right now. No need for them to expand either. You can read thousands of posts on CR here. The carousel stopped turning when Louisville's AD Jurich grabbed the brass ring while Warde was in the Bahamas. I think it would take a miracle for UConn to get to a P5 now. Louisville turned out to be the scummiest school ever, yet they are beloved by the ACC and ESPN still. That says it all to me.

 

[bobbyinaz]

If I may, a different view on the ACC Network:

https://www.bizjournals.com/newyork...aways-from-the-surprise-altice-espn-deal.html

From the article:
■Who won?
ESPN is the clear winner, at least based on initial reports. It averted a standoff and added SEC Network and ACC Network on a cable system that covers the New York area market. ESPN secured a rate increase for its channels and got Altice to increase its minimum household penetration threshold, sources said. But sources cautioned me from declaring ESPN as the unquestioned winner based on one open question: We still do not know specifics about where that minimum penetration threshold is and how much flexibility Altice has to launch and market lower-cost tiers that do not include ESPN. ESPN deals typically mandate that it must be on a cable operator’s most widely distributed tier. As “cord shavers” continue to migrate to skinny bundles, those most widely distributed tiers become smaller. The key to the Altice deal is finding out how ESPN addressed that situation. “The rate increase is just window dressing in comparison,” one veteran media executive said.

■What was the biggest surprise?
I am blown away by the fact that ESPN was able to get carriage for both ACC Network and SEC Network on cable systems that span Connecticut, Pennsylvania, New Jersey and New York — areas that never will be confused for Tobacco Road or Tuscaloosa. ACC brass, in particular, have to be overjoyed, as this one deal makes its planned 2019 launch as close to a sure thing as you can get.

IMHO:
Who knows what will happen in 2019 and beyond. Perhaps the OP article will be correct and the ACCN will fall flat and be a failure, or perhaps, it will allow the ACC to keep pace with the other conferences. Regardless with the outcome, I do hope to see UConn regain its rightful place in one of the power conferences. Good day to you all.

There are different definitions of "success" when it comes to the ACC Network.

Does having an ACC Network mean success to ESPN? Sure it does because it gives them incremental carriage fee increases but there is no dollar value in that article assigned to either of the ACC or SEC Networks. This likely means that all of the ESPN networks shown on the cable provider are bundled into 1 fee. How much of that "fee" does ESPN earmark towards the ACC Network? That's the big question

The next question is does the ACC Network kicks out significant income to the ACC schools? Without any significant increase in revenues all it does is continues to keep those schools locked in for an extended period of time while their neighbors in the SEC & B1G earn nearly double the revenue.

I remain skeptical that the ACC schools will see any marginal increase in revenues from an ACC Network. There is no reason for ESPN to give them anything since they already own it all. More likely, they throw a few crumbs to them.

Wait until schools like Florida, South Carolina, Maryland and Rutgers (all schools that sit within the current ACC footprint) are making $50+MM per year That's when it will get interesting to see if any of the ACC schools start looking for greener pastures

 

[Exit 4]

I don't see how the B1G doesn't have cable tv / media rights slowly melting down over the next decade. While they have a more loyal fanbase, I don't see how the same cable attrition doesn't have the same negative consequences. Maybe B1G revenues don't reverse, but they might not grow.

 

[buddy]

There are different definitions of "success" when it comes to the ACC Network.

Does having an ACC Network mean success to ESPN? Sure it does because it gives them incremental carriage fee increases but there is no dollar value in that article assigned to either of the ACC or SEC Networks. This likely means that all of the ESPN networks shown on the cable provider are bundled into 1 fee. How much of that "fee" does ESPN earmark towards the ACC Network? That's the big question

The next question is does the ACC Network kicks out significant income to the ACC schools? Without any significant increase in revenues all it does is continues to keep those schools locked in for an extended period of time while their neighbors in the SEC & B1G earn nearly double the revenue.

I remain skeptical that the ACC schools will see any marginal increase in revenues from an ACC Network. There is no reason for ESPN to give them anything since they already own it all. More likely, they throw a few crumbs to them.

Wait until schools like Florida, South Carolina, Maryland and Rutgers (all schools that sit within the current ACC footprint) are making $50+MM per year That's when it will get interesting to see if any of the ACC schools start looking for greener pastures

The ACC schools are locked in until 2036 by the GOR. No one is going anywhere. I wouldn't count on UConn to the ACC unless someone was thrown out. I really don't see ND ever joining them in football, which is the only way they might even consider UConn. The situation would be laughable if UConn was in a different P5 Conference, but really it is tragic. To think Rutgers making 50+ million/yr. It is just unbelievable.

 

[bobbyinaz]

I don't see how the B1G doesn't have cable tv / media rights slowly melting down over the next decade. While they have a more loyal fanbase, I don't see how the same cable attrition doesn't have the same negative consequences. Maybe B1G revenues don't reverse, but they might not grow.

The B1G has 2 major advantages that will likely prevent this from happening.

They own 49% of their network so they actually share the revenues instead of collecting a fee. This also gives them the ability to control the content instead of being told what games to air.

The other is that they have millions of alumni. I think 6 of the top 10 ranked schools by alums reside in the B1G. When the time comes to start monetizing programming to their fan bases they have more "targets" to sell to

 

[Exit 4]

The B1G has 2 major advantages that will likely prevent this from happening.

They own 49% of their network so they actually share the revenues instead of collecting a fee. This also gives them the ability to control the content instead of being told what games to air.

The other is that they have millions of alumni. I think 6 of the top 10 ranked schools by alums reside in the B1G. When the time comes to start monetizing programming to their fan bases they have more "targets" to sell to

I don’t see how these facts allow them to escape cord cutting. Sure, they will be less impacted because of alumni loyalty, but they will still be losing out of millions of cord cutters.

 

[bobbyinaz]

I don’t see how these facts allow them to escape cord cutting. Sure, they will be less impacted because of alumni loyalty, but they will still be losing out of millions of cord cutters.

Everybody will be affected by cord cutters

The difference is they control the content so they get the revenues from whatever new distribution model comes into play.

Just because people won't be using cable to watch games doesn't mean that the content will be free

 

[Exit 4]

Everybody will be affected by cord cutters

The difference is they control the content so they get the revenues from whatever new distribution model comes into play.

Just because people won't be using cable to watch games doesn't mean that the content will be free

I think they will lose almost as many retirees and millennials to cord cutting as the other conferences. And it will be revenue that is not replaced by new direct purchase models.

 

[bobbyinaz]

I think they will lose almost as many retirees and millennials to cord cutting as the other conferences. And it will be revenue that is not replaced by new direct purchase models.

If you're saying that all conferences will lose revenues then I would agree, but you are specifically targeting the B1G which doesn't make sense. They are positioned better than any other conference because of their ownership in the network that nobody else has.

Let's say that sometime in the future whether it's 5, 10 or 20 years from now the cost to watch Ohio St/Michigan or Alabama/Auburn is $10. It may be on cable, satellite, online or some new technology that hasn't been invented yet.

ESPN owns the rights to Bama/Auburn. Again, I'm not saying it will be on cable but they own the rights to broadcast the game on whatever platform it is at that time. How much of that $10 are they going to share with the SEC? It's not going to be anywhere near $4.90. It will be significantly less.

Under the same model the B1G owns the rights (along with FOX) to their game. The B1G gets $4.90 if that $10.

Again, I believe all broadcast revenues will decrease across the board but to say the B1G will specifically be affected more than others isn't accurate

 

[Exit 4]

If you're saying that all conferences will lose revenues then I would agree.

Yes, all conferences.

 

[billybud]

An article written by a postman who lives in Missouri.

VT is going over budget on the network facility....

 

[kibblesnbits]

If you're saying that all conferences will lose revenues then I would agree, but you are specifically targeting the B1G which doesn't make sense. They are positioned better than any other conference because of their ownership in the network that nobody else has.

Let's say that sometime in the future whether it's 5, 10 or 20 years from now the cost to watch Ohio St/Michigan or Alabama/Auburn is $10. It may be on cable, satellite, online or some new technology that hasn't been invented yet.

ESPN owns the rights to Bama/Auburn. Again, I'm not saying it will be on cable but they own the rights to broadcast the game on whatever platform it is at that time. How much of that $10 are they going to share with the SEC? It's not going to be anywhere near $4.90. It will be significantly less.

Under the same model the B1G owns the rights (along with FOX) to their game. The B1G gets $4.90 if that $10.

Again, I believe all broadcast revenues will decrease across the board but to say the B1G will specifically be affected more than others isn't accurate

Your analysis is completely wrong. If the Big 10 owns 49% of the network they get 49% of the profits, not the revenue. That could be more or less than received under a royalty model depending on the profit margin versus royalty rates. It's impossible to say from the facts presented and could, in fact, vary from year to year depending on how attractive the game is and the costs involved (until you recover fully burdened fixed costs there is no profit and once you recover them it's virtually all profit, the variable cost per subscriber being fairly low, so you are betting on the over in the ownership model).

 

[bobbyinaz]

Your analysis is completely wrong. If the Big 10 owns 49% of the network they get 49% of the profits, not the revenue. That could be more or less than received under a royalty model depending on the profit margin versus royalty rates. It's impossible to say from the facts presented and could, in fact, vary from year to year depending on how attractive the game is and the costs involved (until you recover fully burdened fixed costs there is no profit and once you recover them it's virtually all profit, the variable cost per subscriber being fairly low, so you are betting on the over in the ownership model).

Why would they get 49% of the profits? They are partners with FOX as a joint venture in the Network and own 49% of the network. That's why Nebraska, Maryland and Rutgers got reduced shares of revenue when they joined. The revenue wasn't reduced just because, they are in essence buying their share of the network.

They share 49% of the revenues & the expenses. So in my scenario they would get $4.90 in revenue and then any expenses related to that would be shared 51/49 between FOX and the B1G.

 

[SouthronCross]

It won't ever happen, but right sizing the ACC would mean adding UConn to re-energize their NY/NE/NYC market and to add Temple to help fill the mid atlantic void left by the loss of Maryland. To make it all fit, you'd have to jettison Wake Forest which is a net media loser for the AAC footprint and bring ND in full time.

Again, none of this is happening, but it represents to me what the right fix is to elevate the ACC if the ACC wants to strengthen itself as a regional conference both in the short and long term. If its just straight money grab with no value placed on the long term benefits of regional rivals, then add two schools in Texas with one of them being UT.

There were whispers of a ND-type deal for Texas in the past, but, I never placed much stock in them. As for Wake Forest, none of the original ACC members are ever going to vote to get rid of them. Almost any scenario you all can envision that would bring UConn into the league, I'm ok with.

That said, if you could get Villanova to make the jump to FBS football, I'd take them over Temple. But, I'm not sure that they want to spend that kind of money on football, just to get into a P5 conference.

 

[btstimpy]

From the article:
■Who won?
ESPN is the clear winner, at least based on initial reports. It averted a standoff and added SEC Network and ACC Network on a cable system that covers the New York area market. ESPN secured a rate increase for its channels and got Altice to increase its minimum household penetration threshold, sources said. But sources cautioned me from declaring ESPN as the unquestioned winner based on one open question: We still do not know specifics about where that minimum penetration threshold is and how much flexibility Altice has to launch and market lower-cost tiers that do not include ESPN. ESPN deals typically mandate that it must be on a cable operator’s most widely distributed tier. As “cord shavers” continue to migrate to skinny bundles, those most widely distributed tiers become smaller. The key to the Altice deal is finding out how ESPN addressed that situation. “The rate increase is just window dressing in comparison,” one veteran media executive said.

■What was the biggest surprise?
I am blown away by the fact that ESPN was able to get carriage for both ACC Network and SEC Network on cable systems that span Connecticut, Pennsylvania, New Jersey and New York — areas that never will be confused for Tobacco Road or Tuscaloosa. ACC brass, in particular, have to be overjoyed, as this one deal makes its planned 2019 launch as close to a sure thing as you can get.

The author is blown away because it wasn't ESPN that got the carriage for the ACC Network and SEC Network. It was The Walt Disney Company that got the carriage. Cable providers for the most part won't risk losing all families with kids by losing the Disney Channel and ABC. They'll give carriage to the ACC Network and SEC Network to keep families with kids using their service. What subscriber rates they pay is negotiable, but Disney will get the channels distributed.

Now the author for the article of the Original Poster might want to do a follow up with comment on this new development. Comcast drops Big Ten Network from some out-of-market areas