The ACC's Next Television Contract

I think it's safe to admit that if my blog were judged based on how often I make new entries, it would be a complete failure. I should probably stop acknowledging the fact that I'm slack. Still, to anyone that may still regularly check for updates, I apologize. I suppose I've made other things such as work and TV higher priorities. Anyway, the beginning of football season also got in the way. Just like the last few years, I was really excited for the beginning of college football season. Clemson had a new coaching staff, more experience at the line, and CJ Spiller was returning. I had high hopes. Unfortunately, we haven't performed quite as expected. It wouldn't be so bad if the ACC still garnered respect as a football conference. Alas, we're mediocre in a mediocre conference.

Over the last few years, the SEC has gradually established itself as the dominant conference in college football. They sealed the deal with a $3 billion television contract that took effect this year. The value of the ACC's television contract? $258 million. ACC schools on average earn about $3M a year from television rights, and SEC schools will now make approximately FIVE TIMES that. Beyond the obvious questions of whether such disparity is even healthy for college football, it's clear that the ACC (and other conferences) needs to at least somewhat close that gap or SEC schools will be so flush with cash no conference will have any hope to ever catch up. John Swofford (the head ACC honcho) has made it apparent that the conference is at least a little worried about the television contract situation, and is beginning to look at options. It'll be interesting to see what happens, but I developed a theory today on what I think could happen.

Comcast, the nation's largest cable provider, is worried that their business model is dying. They believe that to guarantee their survival they need to acquire content. Their current strategy is pursuing the entertainment giant NBC Universal. Their shareholders don't seem to agree (their stock dropped upon announcing their new strategy) and Time Warner doesn't either (they recently separated their cable division from their content division). Still, management is adamant so the naysayers don't really seem to matter right now. Acquiring NBC Universal would give Comcast a plethora of channels and content and give them significant leverage they previously lacked. They've hinted that one of their first priorities would be to create a challenger to ESPN.

While Comcast's new sports network will start out with whatever rights Comcast and NBC currently have, they'll need more if they want to become a serious challenger to ESPN. In the realm of college football, the SEC is pretty much off limits as they are deep in bed with ESPN and CBS. IF comcast succeeded at purchasing NBC Universal, the birth of their sports network would probably occur fairly close to the time the ACC's current contract expires in 2011. The logical move for Comcast would be to acquire the rights to a conference with a large foothold within its subscriber base since it may take a few years to convince other cable networks to broadcast its new sports behemoth. Comcast has a heavy presence on the east coast in areas such as Atlanta, Florida, South Carolina, Virginia, and Boston, all ACC markets. The ACC would most likely be happy to oblige to save the expense of starting its own network (something they seem hesitant to do anyway). Comcast would be betting on an ACC resurgence and the ACC would be betting on Comcast leveling the sports broadcasting playing field.

Will the ACC narrow the gap with the SEC in its new contract? Probably, but by how much? The SEC signed its contract just a few months before the economy took a nose dive (and they hired away one of ESPN's best negotiators in hopes of getting a better deal, which seems to have worked). Also, even if the ACC improves by 2011 it won't be as appealing as the SEC. Maybe the ACC could double its contract value to $500M or $600M but it won't get anywhere near the SEC's $3B. Sure, my prediction doesn't leave a lot of room for error (such as Comcast shareholders voting down a NBC acquisition) but it's definitely possible. If it happens, you read it here first.