OT: Florida State to sue ACC over GOR

[NowInStorrs]

Does something like YouTubeTV or Fubo count as cable or streaming? Because it's basically cable but over the internet. I know plenty of people who have a service like that but very few who have an actual cable box.

 

[nelsonmuntz]

ESPN offers a ton of streaming and still most people have both cable and streaming. It’s not that expensive to have both. ESPN needs content for both as well.

It doesn't mean that ESPN can afford to pay for any of it once the cable bundle comes apart.

 

[nelsonmuntz]

Does something like YouTubeTV or Fubo count as cable or streaming? Because it's basically cable but over the internet. I know plenty of people who have a service like that but very few who have an actual cable box.

Streaming.

ESPN's problem is not simply streaming vs. cable. ESPN's problem is that it has a massive legacy revenue advantage because it makes so much money off every cable subscriber, whether they watch ESPN or not. That advantage is going away as cable shrinks and ultimately gets unbundled.

This legacy revenue advantage enabled ESPN to do a lot of things (like play God with conference alignments) that will not be possible in a streaming world. I have seen estimates that ESPN needs over $40/month per subscription to be revenue neutral of streaming vs. cable. Good luck with that.

Think of the BTN as a smaller, more vulnerable ESPN.

 

[Rufus]

I don’t see ESPN letting any of their product/teams go to Fox & NBC via the B1G.

The likely outcome if FSU can create enough doubt in the strength of the GOR is a new, unequal revenue sharing model in the ACC.

The ACC is so far behind in revenue that no amount of unequal revenue sharing will have the top 4 brands making what SEC and B1G teams make.

 

[CTFAN4LIFE]

Streaming.

ESPN's problem is not simply streaming vs. cable. ESPN's problem is that it has a massive legacy revenue advantage because it makes so much money off every cable subscriber, whether they watch ESPN or not. That advantage is going away as cable shrinks and ultimately gets unbundled.

This legacy revenue advantage enabled ESPN to do a lot of things (like play God with conference alignments) that will not be possible in a streaming world. I have seen estimates that ESPN needs over $40/month per subscription to be revenue neutral of streaming vs. cable. Good luck with that.

Think of the BTN as a smaller, more vulnerable ESPN.

I don't see the BTN being as vulnerable as ESPN because it is more nimble and doesn't have near the capital needs/overhead costs as ESPN does and Big Ten teams' fans are fans for life (and have a track record of watching not only their schools games but also the games of the other conference schools). Advertisers love the Big Ten viewer demographics so it is an escalator in terms of value to national advertisers. Pretty damn good place to be in and they're smartly adding huge and/or growing markets and brand schools.

 

[NE Football]

The ACC is so far behind in revenue that no amount of unequal revenue sharing will have the top 4 brands making what SEC and B1G teams make.

It’s actually not that much money for 10 schools to take less of the coming increase in revenues to pay the top 4 schools an equal amount as they would get in the B1G and the SEC.

Your analysis is based on three very big ifs, one being that FSU is actually successful in their lawsuit, two that they can get 75% vote to get into the SEC or the B1G and three that Both conferences could get a lot more money from the networks to expand.

 

[NE Football]

How much more direct declaration from FSU saying they're leaving the ACC is needed before you believe it?

FSU might leave if and only if they are successful in their lawsuit. That could take several years to decide that lawsuit.

 

[NE Football]

BC does not drive ratings. BC gets good ratings when they play a school that drives ratings and they are on ABC or ESPN. Last year, four of BC's football games were on the ACCN, 1 was on CBSSN, and 1 was on The CW. If they were a ratings driving team, you would have seen them more on ABC or ESPN as the networks understand what schools drive ratings. Their highest rated game was against FSU on ABC, both of which are ratings enhancers.

This is why FSU wants out of the ACC. If schools like BC, Wake, Duke drove higher football TV ratings, the media contract would be much better for the ACC.

When the ACC signed their contract it was the highest TV payout of any conference. With FSU back in the top 10 with Clemson and perhaps Miami, there is no reason that the ACC won’t get another huge contract from ESPN in ten years. It all depends on if FSU can break the GOR.

 

[CTFAN4LIFE]

FSU might leave if and only if they are successful in their lawsuit. That could take several years to decide that lawsuit.

They are not going to court - neither party wants that so they'll settle and FSU will go on its merry way. Then the other top ACC brands will determine if they can do something similar or not. The B1G has a war chest of money that they sit on and have provided low interest loans for the purposes of new schools to get out of a conference/step up to the B1G time (e.g. Rutgers and Maryland). I'd expect that is part of FSU's exit plan capitalization.

 

[CTFAN4LIFE]

When the ACC signed their contract it was the highest TV payout of any conference. With FSU back in the top 10 with Clemson and perhaps Miami, there is no reason that the ACC won’t get another huge contract from ESPN in ten years. It all depends on if FSU can break the GOR.

The ACC (as we know it) won't exist in 10 years; probably not even in 3 years.

 

[Ha Who]

When the ACC signed their contract it was the highest TV payout of any conference. With FSU back in the top 10 with Clemson and perhaps Miami, there is no reason that the ACC won’t get another huge contract from ESPN in ten years. It all depends on if FSU can break the GOR.

Can I have your kool aid?

 

[UConnJim]

nACC
1. BC
2. Syracuse
3. Pitt
4. Duke
5. VaTech
6. NC State
7. Wake Forest
8. Georgia Tech
9. SMU
10. Cal
11. Stanford
12. Louisville

So, Big 12 your move?

That's not happening as the ACC media deal with ESPN requires 15 schools in the ACC. That was part of the reason SMU/Cal/Stanford were added in case there were defections from the ACC.

 

[Kolumbo]

nACC
1. BC
2. Syracuse
3. Pitt
4. Duke
5. VaTech
6. NC State
7. Wake Forest
8. Georgia Tech
9. SMU
10. Cal
11. Stanford
12. Louisville

So, Big 12 your move?

Of course it would never come to this because CR brings about pure craziness, but if 15 is the minimum, and I assume the ACC would be at 13 with ND, how about UConn and USF. A basetball blue blood because let's face it, the ACC would no longer be a power football conference, and it needs to be in Florida.

 

[UConnJim]

You don’t understand, without a team in Boston the viewership and the AD revenue go down. Boston is too big of a market not to have a team in. Why do you think Rutgers got into the B1G over us?

Boston College does not bring the Boston market and college football ratings are not good in Boston. Boston has a huge Big 10 alumni base with 1% to 5% of graduates from Illinois, Iowa, Indiana. Maryland, Michigan, Northwestern, Penn St., Purdue, Rutgers, and Wisconsin living in the Boston area so the networks don't need BC to bring the Boston market.

Rutgers is in the Big 10 because NY metro has the largest Big 10 alumni base, the largest media market for cable boxes, and they are in relatively fertile recruiting grounds. Plus, they fit the institutional profile of the Big 10.

 

[nelsonmuntz]

I don't see the BTN being as vulnerable as ESPN because it is more nimble and doesn't have near the capital needs/overhead costs as ESPN does and Big Ten teams' fans are fans for life (and have a track record of watching not only their schools games but also the games of the other conference schools). Advertisers love the Big Ten viewer demographics so it is an escalator in terms of value to national advertisers. Pretty damn good place to be in and they're smartly adding huge and/or growing markets and brand schools.

That is not really the point. The BTN is getting paid carriage fees in its core markets, but that is most certainly coming to an end soon as cable providers are under massive margin pressure.

The bundling is the ENTIRE game for both ESPN and the BTN/Fox. A streaming, subscription model is a completely different animal from a revenue and marketing perspective.

 

[CTFAN4LIFE]

That is not really the point. The BTN is getting paid carriage fees in its core markets, but that is most certainly coming to an end soon as cable providers are under massive margin pressure.

The bundling is the ENTIRE game for both ESPN and the BTN/Fox. A streaming, subscription model is a completely different animal from a revenue and marketing perspective.

I was replying to your point, which was YOUR point: "Think of the BTN as a smaller, more vulnerable ESPN".

Anyway, yes, the BTN is getting carriage fees and the conference is printing money with it because it's fanbase watches games as well as any conference. The B1G is basically creating an NFL media model and a big reason it is successfully doing so is because they dominate their markets at a minimum and have national brands at their top-end (Michigan, Ohio State, Penn State, etc). B1G alums are everywhere in the US (they are geographically and economically mobile) and media companies/advertisers value that immensely. They have positioned themselves perfectly to face the migration from cable to streaming. No worries there.

 

[CL82]

Can I have your kool aid?

You may want to think twice about that. It seems to be of the Guyana variety.

 

[Chin Diesel]

They are not going to court - neither party wants that so they'll settle and FSU will go on its merry way. Then the other top ACC brands will determine if they can do something similar or not. The B1G has a war chest of money that they sit on and have provided low interest loans for the purposes of new schools to get out of a conference/step up to the B1G time (e.g. Rutgers and Maryland). I'd expect that is part of FSU's exit plan capitalization.

At a minimum, if this goes anywhere, even before it gets inside a courtroom, the GoR and the TV contracts have to come out of the office in Charlotte and in to the light, no?

 

[CL82]

At a minimum, if this goes anywhere, even before it gets inside a courtroom, the GoR and the TV contracts have to come out of the office in Charlotte and in to the light, no?

FSU has to get them, minimally. Once they do have them, one would think that they will be FOIA'd shortly thereafter.

 

[billybud]

How can a FOIA entity sign a media deal that is a trade secret?

There must be a train wreck for the ACC given how they are treating the contract. How did every lawyer and school administrator involved let this bullspit of the secret contract last this long?

The schools do not sign the ESPN contract. The ACC does. And the ACC is a private corporation that does not come under FOIA. The schools assign the rights to the ACC and the ACC works with ESPN. There looks like discrepancies between what members were told and the actual contract.

 

[Chin Diesel]

The schools do not sign the ESPN contract. The ACC does. And the ACC is a private corporation that does not come under FOIA. The schools assign the rights to the ACC and the ACC works with ESPN. There looks like discrepancies between what members were told and the actual contract.

Right but that contract between ACC and ESPN which binds FSU to that contract via the GoR has to become public if this goes forward.

And once it's out of the box, watch out.

 

[UConnJim]

Streaming.

ESPN's problem is not simply streaming vs. cable. ESPN's problem is that it has a massive legacy revenue advantage because it makes so much money off every cable subscriber, whether they watch ESPN or not. That advantage is going away as cable shrinks and ultimately gets unbundled.

This legacy revenue advantage enabled ESPN to do a lot of things (like play God with conference alignments) that will not be possible in a streaming world. I have seen estimates that ESPN needs over $40/month per subscription to be revenue neutral of streaming vs. cable. Good luck with that.

Think of the BTN as a smaller, more vulnerable ESPN.

ESPN has been offsetting some of the cable bundle fee declines with ESPN+ as some people have both ESPN and ESPN+. ESPN gets ~$10 per month from the bundle so to remain revenue neutral, they might need $50/month/subscriber or almost $600/year/subscriber if they go strictly straight to the consumer. I don't think direct to consumer will happen quickly as there will be some kind of bundle that many people will subscribe to, although it might be through a service like YouTube TV.

I think BTN is less vulnerable to the cable bundle collapsing as they get ~$1.50 per sub in market and ~$0.05 to $0.10 per sub out of market. I think many sports fans would be willing to pay say $2.99/month for BTN and the change might actually increase their revenues. And, BTN is not on the basic tier for cable in many bundles unlike ESPN.

 

[nelsonmuntz]

ESPN has been offsetting some of the cable bundle fee declines with ESPN+ as some people have both ESPN and ESPN+. ESPN gets ~$10 per month from the bundle so to remain revenue neutral, they might need $50/month/subscriber or almost $600/year/subscriber if they go strictly straight to the consumer. I don't think direct to consumer will happen quickly as there will be some kind of bundle that many people will subscribe to, although it might be through a service like YouTube TV.

I think BTN is less vulnerable to the cable bundle collapsing as they get ~$1.50 per sub in market and ~$0.05 to $0.10 per sub out of market. I think many sports fans would be willing to pay say $2.99/month for BTN and the change might actually increase their revenues. And, BTN is not on the basic tier for cable in many bundles unlike ESPN.

ESPN has been bleeding revenue and profit for a while. If all was well with ESPN, why hasn't ANYONE stepped up to buy the Worldwide Leader since Iger publicly signaled that it was for sale 6 months ago?

ESPN's per month subscription fee is heavily bundled with Hulu and DisneyPlus, so ESPN isn't really getting $10/sub.

 

[NE Football]

They are not going to court - neither party wants that so they'll settle and FSU will go on its merry way. Then the other top ACC brands will determine if they can do something similar or not. The B1G has a war chest of money that they sit on and have provided low interest loans for the purposes of new schools to get out of a conference/step up to the B1G time (e.g. Rutgers and Maryland). I'd expect that is part of FSU's exit plan capitalization.

The ACC is not going to let FSU walk away and open the door for others to follow the same route. They might as well rip up the GOR. FSU doesn’t have to win the lawsuit, they just have to create enough doubt about the ACC chances at winning to get a new, unequal revenue sharing model. Ironically, that new model might attract ND and Big 12 teams to join the ACC.

 

[CL82]

The ACC is not going to let FSU walk away and open the door for others to follow the same route. They might as well rip up the GOR. FSU doesn’t have to win the lawsuit, they just have to create enough doubt about the ACC chances at winning to get a new, unequal revenue sharing model. Ironically, that new model might attract ND and Big 12 teams to join the ACC.

I don't see how the math works for that theory. FSU is aiming toward a 70 million per year plus distribution. Essentially they want a double share. Do you see the other schools being willing to give that up?

for the moment though, let's assume that the math works , they also feel as if they were snubbed in the college football playoff selection due to conference affiliation. How does money fix that?