The ACC’s Grant of Rights (GOR) appears to be the only thing holding the conference together right now, as the SEC and Big Ten reportedly look to poach its most valuable members.
On Thursday, a source told SwimSwam that Virginia, North Carolina, Florida State, and Clemson had begun negotiating to join the SEC as ESPN attempts to void its television deal with the ACC. The GOR has been the primary sticking point for most sports observers in believing the move — a scenario that sort of leaves them stuck at “the ACC must remain as it is.”
Back in 2016, ACC leaders agreed to extend its media rights deal through 2036 to provide increased television revenue and launch the ACC Network. Under the arrangement, the ACC gets all revenue from home events on campuses of its member schools.
Now with payouts from the SEC and Big Ten expected to soon exceed $100 million annually, some ACC schools are scrambling for a way to legally circumvent the contract to avoid being left behind in conference realignment. The exit fee reportedly stands at $120 million, according to ESPN’s Andrea Adelson, and battling it out in court is considered by many to be financially risky given the rigid contractual language.
However, the GOR did not happen in a vacuum among just the ACC schools. The description of the original GOR agreement from 2013 notes that the contract is a condition of ESPN’s TV deal with the ACC. Schools looking to abandon the ACC could argue that the GOR is invalid if the TV deal no longer exists.
That could explain why ESPN might be trying to get out of a TV deal with the ACC that seems favorable on the surface. The Ringer’s Kevin Clark called it “one of the most network-favorable deals on the planet,” paying out about $36 million to its members last year compared to the $54 million that SEC schools earned or the $46 million given to each Big Ten member. It won’t be long before SEC and Big Ten schools are bringing home more than $100 million annually. Nevertheless, the profit margins from SEC expansion just might outweigh the cost of leaving behind the ACC Network. Plus ESPN has to think about protecting its most valuable assets from potential poaching by FOX and the Big Ten.
It’s difficult to estimate the value of a TV deal with any ACC leftovers if the conference fractures, especially since the Big Ten and Big 12 would be waiting to pounce. Perhaps ESPN has more information about other moves in progress. Or maybe with limited resources and airtime, ESPN is aiming to put all of its eggs into the SEC’s basket and then negotiate with other conferences once the dust settles.
ESPN could be attempting to end its TV deal with the ACC, or maybe it just wants more bargaining leverage to negotiate the release of its preferred targets. Either way, ESPN and FOX are playing 3D chess while everyone else is stuck playing checkers.
It’s sad that TV networks and greed are destroying college conferences.
This is a bad article. It does not understand nor correctly state the dynamics of the GoR deal.
Why would ESPN attempt to get out of a favorable long term deal with the ACC only to turn around and pay more money for the media rights to those same schools?
It also misrepresents Kevin Clark’s tweet to Branden. Mr Clark basically said “no way in hell” for the reasons stated above.
Stop digging SS.
And what does this statement on profit margins even mean? ESPN is making a killing on the ACC deal. It’s a highly leveraged asset that they obtained at a bargain basement price.
Because those schools will bring more money with better match ups
Interesting
I’m surprised I haven’t seen anyone raise potential antitrust concerns regarding these “realignments.”
What exactly are those concerns? What are you seeing that nobody else does.
I’m seeing a large number of top collegiate athletic programs consolidating into two powerful collectives, which are no longer loosely geographically based, or of a size that promotes something close to all-play-all competition. They are instead being formed purely to maximize negotiating leverage, and increase profit, at the expense of those programs that are excluded.