Smell BS anyone? I do.
Time is running out and even the creation of one means nothing without SIGNIFICANT revenue.
Swofford calls report on ESPN delaying an ACC channel 'premature'
"Wednesday marked the first time in several years that a John Swofford news conference did not include a question about a potential ACC cable channel. The league’s commissioner since 1997, Swofford has long championed the project internally while offering little insight publicly.
Talking with Swofford after his Q&A at the ACC’s basketball media day in Charlotte, N.C., I mentioned the absence of channel queries and asked if he had anything new to offer. He said no.
The conference’s primary media partner, ESPN would be a joint stakeholder in an ACC channel, just as it is in the SEC Network.
ESPN “had come back and said that in some of the other instances where (conference) networks have started, they lost considerable amounts of money in the first couple of years,” Sugiura quoted Peterson as telling the board. “What they’d like to do is delay the start for a couple years and do the necessary preparation.”
After reading Sugiura’s story I reached out to the ACC, which provided a statement from Swofford:
“Anything said surrounding our ongoing television discussions is premature and speculative,” he said. “If, or when, we reach a point where our television agreements have been altered, we will make an announcement at the appropriate time.”
Some observations:
# Peterson’s comments sound like the parties have decided to pursue a channel. That in of itself is good news for the ACC, whose schools need a revenue infusion – full details here-- to remain remotely close to SEC and Big Ten rivals financially.
The SEC projected it would distribute $31.2 million to each of its schools in 2014-15. The Big Ten expects its per-school share to mushroom to $44.5 million by 2017-18. The ACC’s has not publicly shared its future projections.
For 2013-14, the ACC's average distribution was $19.3 million, the Big Ten's $26.4 million, the SEC's $20.9 million, the Pacific 12's $21 million and the Big 12's $19.8 million.
# Citing the SEC Network as an example, Swofford has often said an ACC channel would require years of preparation. Officials at ACC schools were hoping the channel would launch for the 2017 football season, and how any delay would affect that target is unknown.
# Also unknown is how much ESPN might increase the rights fees it pays the ACC in the interim before a channel. Swofford alluded to such a possibility during an interview in July at the ACC’s football kickoff in Pinehurst, N.C.
“If we’re going to do this,” Swofford told me then, “we need to do it in the right way from the beginning that gives us the opportunity to have long-term success, and that’s what we’re trying to do and time it in a way so the distribution can be good, if not great, coming out, if we go this route. The other alternative is larger rights fees (from ESPN).”
They will need to be significantly larger.
# The ACC’s most recent tax return, for fiscal 2013-14, showed that television monies accounted for $197.2 million, 65.2 percent, of the conference’s $302.3 million in revenue. That $197.2 million represents a 149-percent bump from three years earlier.
ESPN and the ACC are contracted through 2026-27, and the deal was amended after Notre Dame joined the conference for sports other in football in 2013, and the league’s presidents signed a grant of media rights to stabilize membership.
# These are curious times for cable television as more consumers opt to purchase channels a la carte rather than in bundles and/or view programming online. ESPN earlier this month announced layoffs of approximately 300 employees, about four percent of its workforce.
Back in July, when reports surfaced of ESPN losing 7.2 million subscribers over the last four years and looking to slash costs, Swofford told me he did not believe those developments endangered a potential ACC channel.
“ESPN is our partner, and obviously you’re interested in anything going on with them,” he said. “What they would do with us, in theory, it’s a growth opportunity for them. It’s a revenue-generating opportunity, the channels that they do.
“They’re business people. When they go in that direction, they go in that direction because they think that they can make money. It’s an investment. I don’t think companies like that look at investments falling into the belt-tightening, cost-cutting area. It’s really sort of two different things. …
“I’m very pleased. We’re where I expected us to be when we started jumping into this a year ago. Right on target.”
# During his news conference Wednesday, Swofford was asked about future television revenues and conferences’ dependence on them.
“I’ve been hearing forever that rights fees and television dollars are going to level out or go backwards,” he said, “and I’ve been doing this for almost 40 years now. It’s never happened. It doesn’t mean it won’t happen, but there’s not much history to suggest that it will happen. …
“The market fluctuates just like anything else. Sometimes you’re out for bid at a really good time, and sometimes your contract is up at a time that you wish it wasn’t. That happens to every conference somewhere along the way, and I don’t know that the increases will necessarily continue to be what they have been at times in the past, and I’m sure we’ll have times where it levels some and times where it jumps considerably.
“In today’s world, you have to pay attention and learn about the new technology and what it means, and we’ve got good partners to do that with that know a lot more about it than we do.”
# Peterson’s comments to his board may startle some school administrators – the inner circle on the channel project is limited -- and the sooner Swofford can ease those concerns with definitive information, the better."
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