ACConESPN

Good news for ACC fans this fine Monday morning! ESPN outbid Fox for ACC television rights.


From the Triangle Business Journal:

ESPN won the TV rights to ACC football and basketball in a bidding competition with Fox Sports that was surprisingly close, industry sources say, and as a result made the conference several million more dollars.

The back-and-forth bidding, which reached its final stages last week at the league’s spring meetings in Amelia Island, Fla., drove up ESPN’s rights fee from initial projections of about $120 million a year to $155 million, sources said, providing the ACC with more than double the revenue it was receiving from its previous football and basketball contracts.

ESPN’s increase was in response to an unexpectedly strong pursuit by Fox Sports and sources familiar with the negotiations say the bidding was neck-and-neck last week.

The ACC broke from its spring meetings without announcing a new deal, and the conference said a formal contract had not been finalized. But industry sources pegged a pending deal with ESPN at $1.86 billion over 12 years .

That annual figure of $155 million dwarfs the average of $67 million the league was getting from its previous media deals, which expire at the end of the 2010-11 season, but falls well short of the $205 million a year that the SEC gets from its new 15-year deals with CBS and ESPN.

Raycom Sports, a 30-year partner with the conference, is expected to continue running the syndicated package of football and basketball by sublicensing those games from ESPN.

It is unclear what digital rights are included, but the deal is thought to be an all-encompassing arrangement between the ACC and ESPN that includes online and broadband.

With the new package, ESPN will continue to choose from the ACC’s full selection of football games for its Thursday night programming, as well as its Saturday afternoon and night games on ABC. The basketball package keeps the highly rated North Carolina-Duke game on ESPN, and the network typically broadcasts ACC action on Tuesday, Wednesday and Thursday nights during the week, in addition to Saturdays. It remains to be seen if FSN will continue its Sunday night basketball programming by purchasing those games from ESPN in the new contract.

To win the rights, ESPN had to stave off Fox, which sent its big guns to Amelia Island to make its final bid. Fox was represented by Chase Carey, the chief operating officer for parent company News Corp.; Fox Sports President Ed Goren; and Fox Sports Networks President Randy Freer. Their bid included over-the-air and cable components, with a game of the week on Fox Sports and other games throughout the week on FX and FSN.

ESPN had executive vice presidents John Skipper and John Wildhack, and Burke Magnus, senior vice president of college sports, at the meetings for its final pitch.

Ken Haines, the longtime president of Charlotte-based Raycom Sports and a familiar figure around the ACC meetings, made his final presentation as well.

ACC Commissioner John Swofford and the ACC’s media consultant, IMG’s Barry Frank, led the talks on the conference side.

That Fox made such a competitive bid could be considered a heartening development for the Pac-10 and Big 12 conferences, which are next in line to negotiate new media contracts. Both have rights expiring in 2012.

Turner Sports, which recently acquired with CBS the NCAA’s rights to broadcast the men’s basketball tournament through 2024, could be a factor in future rights negotiations as it seeks regular-season college programming to go with its NCAA package.

Those networks might provide some much-needed competition in the college space for these conference deals, which have been dominated by ESPN.

The ACC’s new contract, which will take the league through the 2022-23 season, will be structured differently than its previous contracts. In the past, the ACC sold its football rights to ESPN, while Raycom bought the basketball rights. Other broadcasters who wanted ACC basketball, such as CBS, ESPN and FSN, acquired their games from Raycom.

The new deal puts the football and basketball rights in ESPN’s basket, from which Raycom, FSN and others will purchase their games.

Each ACC school will receive $12.9 million annually. Compare that to ~$17 mil for SEC schools and $22+ mil for Big Ten schools, pending increased revenue via the Big Ten Network.

This deal puts the ACC solidly in the #3 spot amongst the "big six" conferences when it comes to TV revenue. The Big 12 is #4, and averages ~$8.5 mil per school, but their system isn't true revenue sharing -- only half of the Big 12's TV money is divided evenly. The other half goes into an appearance pool. The schools that earn the most money are the ones who appear for football TV games and basketball nonconference games. Credits also are issued for NCAA tournament appearances.

#5 is the Pac-10. It's schools average ~$8 mil. But the Pac-10 TV deal is expiring and will be re-negotiated. The expectation is that the Pac-10 will climb to just above $12 mil per school; right around the ACC's level.

#6 is the Big East at ~$5 mil per school.


What does this mean? I think two things: 1) The ACC has just protected itself from being raided by conference expansion. 2) The Big 12 and Big East are extremely susceptible to raiding. Their flawed revenue sharing system and relatively low TV deals make them easy prey.