(04-15-2013 12:18 PM)4x4hokies Wrote:  We always hear from the WVU mathematics about the untold billions given up by the ACC because they sold their Tier-three souls.

From the sportsbusinessdaily article:
"The conference channel cleared its biggest obstacle in recent weeks when it reacquired the third-tier TV rights from IMG College, Learfield Sports and CBS Collegiate Sports Properties, the three rights holders that work with the conference’s 14 schools. Those third-tier TV rights represent one football game, eight men’s basketball games, baseball, women’s basketball and all other nonrevenue sports that are not picked up by ESPN or a syndicated partner."

"The value of the third-party rights the conference bought back is significant and comes after nine months of off-and-on negotiations. The rights holders agreed to give up TV rights valued at roughly $15 million a year. In return, those rights holders will lessen the guarantees to their schools by the same amount — a little more than $1 million a year for each school — for the next several years, industry sources said."
http://www.sportsbusinessdaily.com/Speci...4/SEC.aspx

One of the conferences that everyone claims to be more valuable than the ACC in every way just purchased all the same rights that the B12 retains for a little over a million per school. Somehow these third tier rights are going to pave the streets of Tallahassee in gold though.

I can think of at least 3 possible reasons why ESPN would want to involve the ACC in a network which results in more money to the ACC:

1) they think it might make more money but is too risky to do it alone and so want the ACC to buy stock in it somehow
2) they are stretched too thin and need help pulling it off
3) they don't want to lose ACC teams and see this as a way to keep them in the ESPN group.

(04-15-2013 01:43 PM)Hokie Mark Wrote:  I can think of at least 3 possible reasons why ESPN would want to involve the ACC in a network which results in more money to the ACC:

1) they think it might make more money but is too risky to do it alone and so want the ACC to buy stock in it somehow
2) they are stretched too thin and need help pulling it off
3) they don't want to lose ACC teams and see this as a way to keep them in the ESPN group.

I'll buy #3 and maybe #2, but not #1. #1 may be true, but the risks should offset the rewards, so although the ACC might get a higher "payout," that higher payout is offset by future liabilities and the conference is back to where it started. #2 may be true, but there are other ways to get resources. However, arguably the ACC knows its product the best, so the ACC could be the best investor.

EDIT:
But they don't need a network for #3 to happen. However, it might be good cover for PR reasons because ESPN can cave without looking like they caved. Not only does that keep ESPN from looking weak, it keeps the ACC from looking desperate. Still, ESPN and the ACC are in the act of renegotiating the other tiers. Why not add the extra money there?

I have come to the conclusion that forming a network in conjunction with ESPN is ESPN's way of ensuring that they will have a lasting relationship with the conference until they decide otherwise. That makes it more worth their time to invest in the conference than it would be if ESPN knew that they would have to compete with Fox in 12 years. If they form a network with the ACC, they know that, at the very least, they will keep some of their investment in the conference, no matter what. I think that's where the lion's share of the increased financial value is. The rest comes from your 2nd point.

However, I am not sure how much that is worth. I guess we will have to wait and see.

(04-15-2013 12:04 PM)Hokie Mark Wrote:  Looking back at last season, I'm thinking these games might have found their way onto SECN

The above list on my post are all of the games that would have ended up there. I pulled them from MAttsarz website,. These are the games that did not make it to ESPN, ESPN2, or ESPNU.

(04-15-2013 01:43 PM)Hokie Mark Wrote:  I can think of at least 3 possible reasons why ESPN would want to involve the ACC in a network which results in more money to the ACC:

1) they think it might make more money but is too risky to do it alone and so want the ACC to buy stock in it somehow
2) they are stretched too thin and need help pulling it off
3) they don't want to lose ACC teams and see this as a way to keep them in the ESPN group.

ESPN makes $210 million per year off ESPNU before it ever sells a commercial, showing programming that has mostly already been paid for via deals meant to put games on ESPN and ESPN2. That network is not in jeopardy of losing them money.

announcement tomorrow postponed due to Boston..

(04-15-2013 11:38 AM)Hokie Mark Wrote:  ECONOMIC JUSTIFICATION FOR ACC CHANNEL:
think of it this way... ESPNU is a "grab bag" of mostly tier 2 and 3 type games from a variety of conferences... so let's use the grab bag analogy. Which way of distributing toys do you think would fetch a higher price?

1) a random toy in a brown paper bag - no idea what you are buying until you pay for it
2) a set of consistent toys, like a set of match-box cars.

If you chose #2, you would be correct. Customers will pay more to get what they WANT as opposed to a random thing in the general category of what they want.

To get people to pay extra for the SEC Network, ESPN probably moves games from ESPNU and ESPN3 over to SECN. They do not continue giving out SEC games when they are trying to sell them at a higher price.

Likewise, ACC games would suddenly be on the ACC Network instead of spread across a bunch of ESPN channels.

Meanwhile - emphasis on "mean", perhaps - if there are games on ESPNU which are not SEC or ACC, ESPN simply moves those games to ESPN3 to back-fill the lost SEC and ACC games.

Ok. So you just said ESPN would move ESPN3 and ESPNU content to the ACCN. Yet, that has nothing to do with how the ACC would actually generate revenue on this project considering ESPN owns the content whether it's on ESPN3, ESPNU or some fictitious ACCN.

I'd be surprised if it doesn't happen now.

(04-15-2013 05:05 PM)adcorbett Wrote:  

(04-15-2013 12:04 PM)Hokie Mark Wrote:  Looking back at last season, I'm thinking these games might have found their way onto SECN

The above list on my post are all of the games that would have ended up there. I pulled them from MAttsarz website,. These are the games that did not make it to ESPN, ESPN2, or ESPNU.

I included ESPNU games

(04-15-2013 01:43 PM)Hokie Mark Wrote:  I can think of at least 3 possible reasons why ESPN would want to involve the ACC in a network which results in more money to the ACC:

1) they think it might make more money but is too risky to do it alone and so want the ACC to buy stock in it somehow
2) they are stretched too thin and need help pulling it off
3) they don't want to lose ACC teams and see this as a way to keep them in the ESPN group.

4) ESPN won't have enough quality games to keep ESPNU on it's current level of cable subscribership and rather than trash the whole network, it's cost effective to re-brand it as ESPNACC.

(04-15-2013 05:11 PM)adcorbett Wrote:  

(04-15-2013 01:43 PM)Hokie Mark Wrote:  I can think of at least 3 possible reasons why ESPN would want to involve the ACC in a network which results in more money to the ACC:

1) they think it might make more money but is too risky to do it alone and so want the ACC to buy stock in it somehow
2) they are stretched too thin and need help pulling it off
3) they don't want to lose ACC teams and see this as a way to keep them in the ESPN group.

ESPN makes $210 million per year off ESPNU before it ever sells a commercial, showing programming that has mostly already been paid for via deals meant to put games on ESPN and ESPN2. That network is not in jeopardy of losing them money.

Then they must think they can make more money off an ACC network because ESPNU is going away to become ESPNACC.

(04-16-2013 12:08 AM)ChrisLords Wrote:  

(04-15-2013 01:43 PM)Hokie Mark Wrote:  I can think of at least 3 possible reasons why ESPN would want to involve the ACC in a network which results in more money to the ACC:

1) they think it might make more money but is too risky to do it alone and so want the ACC to buy stock in it somehow
2) they are stretched too thin and need help pulling it off
3) they don't want to lose ACC teams and see this as a way to keep them in the ESPN group.

4) ESPN won't have enough quality games to keep ESPNU on it's current level of cable subscribership and rather than trash the whole network, it's cost effective to re-brand it as ESPNACC.

+1. Good point.

(04-16-2013 12:10 AM)ChrisLords Wrote:  

(04-15-2013 05:11 PM)adcorbett Wrote:  

(04-15-2013 01:43 PM)Hokie Mark Wrote:  I can think of at least 3 possible reasons why ESPN would want to involve the ACC in a network which results in more money to the ACC:

1) they think it might make more money but is too risky to do it alone and so want the ACC to buy stock in it somehow
2) they are stretched too thin and need help pulling it off
3) they don't want to lose ACC teams and see this as a way to keep them in the ESPN group.

ESPN makes $210 million per year off ESPNU before it ever sells a commercial, showing programming that has mostly already been paid for via deals meant to put games on ESPN and ESPN2. That network is not in jeopardy of losing them money.

Then they must think they can make more money off an ACC network because ESPNU is going away to become ESPNACC.

When did that happen or are you just assuming it'll happen?

(04-16-2013 05:11 AM)wildthing202 Wrote:  

(04-16-2013 12:10 AM)ChrisLords Wrote:  

(04-15-2013 05:11 PM)adcorbett Wrote:  

(04-15-2013 01:43 PM)Hokie Mark Wrote:  I can think of at least 3 possible reasons why ESPN would want to involve the ACC in a network which results in more money to the ACC:

1) they think it might make more money but is too risky to do it alone and so want the ACC to buy stock in it somehow
2) they are stretched too thin and need help pulling it off
3) they don't want to lose ACC teams and see this as a way to keep them in the ESPN group.

ESPN makes $210 million per year off ESPNU before it ever sells a commercial, showing programming that has mostly already been paid for via deals meant to put games on ESPN and ESPN2. That network is not in jeopardy of losing them money.

Then they must think they can make more money off an ACC network because ESPNU is going away to become ESPNACC.

When did that happen or are you just assuming it'll happen?

He is assuming.

(04-15-2013 11:03 AM)adcorbett Wrote:  ESPN starting an ACC network with 49% ownership, which represents a new revenue source could be profitable. ESPN converting ESPNU to an ACC Network, despite the fact that they have plenty of content, would be them giving up revenue they earn, to give to the ACC. I see no benefit in it for them.

That's too simplistic. Look at the implications of that situation. If the ACC is gaining and ESPN is losing, then the ACC would have to transfer enough of their gain to ESPN to match ESPN's loss (at a minimum) for ESPN to participate. The ACC can only do that and make a profit if new value is being created. If no new value is created then, assuming no value is lost through transaction friction or otherwise, the network is a wash for all parties. Everyone is assuming that the ACC is going to make a HUGE profit, so my question is "from where is the new value coming?"

After that question is answered, my second question is "if that is a more profitable arrangement, why doesn't ESPN do it right now and keep all of the profits?" The implications of that question are that the ACC would be giving ESPN something that they don't have, or providing ESPN with a service that ESPN needs and that the ACC is better suited to provide.

Assuming that academic considerations are not a factor, the only two things that have been suggested that are reasonable answers to the above questions are:

1) ESPN needs investors and the ACC is the best available investor because they know their product better than anyone else, so they are in a position to give money at a lower cost than anyone else.

2) ESPN needs the security of knowing that the content will generate income for them in 12+ years to invest a greater amount in the conference, and the ACC is essentially making that committment.

Both of those factors would likely increase the payout and academic considerations might also increase the value of the payout, but I still think that it is going to come up short of many people's expectations.

I think that the BTN has been wildly successful because 1) the timing was amazing and 2) the B1G is airing valuable content. B1G schools have a ton of fans and their olympic sports are well funded and competitive. Also, the BTN does air some football, some basketball, and classic games. It would likely fetch a very high price if it was sold individually. Everyone overlooks that fact.

OT- It's also worth noting that the B1G is going all in to maximize TV money at the expense of other revenue streams. That fact often gets overlooked, too. The B1G has announced a 10 game conference schedule, the B1G has a luxury tax on gate admissions, and the B1G doesn't play against FCS teams. All of that costs money for the schools involved, and it is in the name of increasing the TV value of the conference and the TV distribution. Unless the ACC is willing to do that, it is unlikely that the conference will have a network that is as important to it as the BTN is to the B1G.

I agree that the ACC Network won't make the killing that some other networks are projected to make. The good news is that it doesn't have to. If the network can make $60M per year TOTAL for the ACC - that's $4M per year per team - then I would call it a great success. That would be enough to keep up with the SEC and the Pac-12 and pass the Big XII. It would also keep the ACC within a stone's throw of the Big Ten (which historically has been out in front for generations, so I don't see how that's a problem on the field).

(04-16-2013 05:56 AM)Hokie Mark Wrote:  I agree that the ACC Network won't make the killing that some other networks are projected to make. The good news is that it doesn't have to. If the network can make $60M per year TOTAL for the ACC - that's $4M per year per team - then I would call it a great success. That would be enough to keep up with the SEC and the Pac-12 and pass the Big XII. It would also keep the ACC within a stone's throw of the Big Ten (which historically has been out in front for generations, so I don't see how that's a problem on the field).

That depends on how you define "make" and what the network airs. As it stands right now, retained content is worth about $6-8 million/school. So, if you define "make" as in "generates a profit," then $4 million might be a loss, depending on how much existing content is surrenderred to the conference.* If you define "make" as in "generates a profit in excess of current levels," then I agree, $4 million would be HUGE. Anything that makes us better off is worth doing.

* I feel like I am not incredibly clear here, but I think that you know what I mean, despite my lack of literary prowess.

(04-16-2013 09:17 AM)nzmorange Wrote:  

(04-16-2013 05:56 AM)Hokie Mark Wrote:  I agree that the ACC Network won't make the killing that some other networks are projected to make. The good news is that it doesn't have to. If the network can make $60M per year TOTAL for the ACC - that's $4M per year per team - then I would call it a great success. That would be enough to keep up with the SEC and the Pac-12 and pass the Big XII. It would also keep the ACC within a stone's throw of the Big Ten (which historically has been out in front for generations, so I don't see how that's a problem on the field).

That depends on how you define "make" and what the network airs. As it stands right now, retained content is worth about $6-8 million/school. So, if you define "make" as in "generates a profit," then $4 million might be a loss, depending on how much existing content is surrenderred to the conference.* If you define "make" as in "generates a profit in excess of current levels," then I agree, $4 million would be HUGE. Anything that makes us better off is worth doing.

* I feel like I am not incredibly clear here, but I think that you know what I mean, despite my lack of literary prowess.

Yes, I meant $4M per school above the current level. By contrast, BTN generates $7M per school, and (if my math is correct and if my assumptions were at least pretty close) the SECN will generate about $6M per school.

I think we need to check which states ACC schools are in vs SEC schools. If we are depending on Cable subs in state that have SEC teams, the ACC has this beat by far.

(04-16-2013 10:30 AM)Hokie Mark Wrote:  

(04-16-2013 09:17 AM)nzmorange Wrote:  

(04-16-2013 05:56 AM)Hokie Mark Wrote:  I agree that the ACC Network won't make the killing that some other networks are projected to make. The good news is that it doesn't have to. If the network can make $60M per year TOTAL for the ACC - that's $4M per year per team - then I would call it a great success. That would be enough to keep up with the SEC and the Pac-12 and pass the Big XII. It would also keep the ACC within a stone's throw of the Big Ten (which historically has been out in front for generations, so I don't see how that's a problem on the field).

That depends on how you define "make" and what the network airs. As it stands right now, retained content is worth about $6-8 million/school. So, if you define "make" as in "generates a profit," then $4 million might be a loss, depending on how much existing content is surrenderred to the conference.* If you define "make" as in "generates a profit in excess of current levels," then I agree, $4 million would be HUGE. Anything that makes us better off is worth doing.

* I feel like I am not incredibly clear here, but I think that you know what I mean, despite my lack of literary prowess.

Yes, I meant $4M per school above the current level. By contrast, BTN generates $7M per school, and (if my math is correct and if my assumptions were at least pretty close) the SECN will generate about $6M per school.

Well, we would have to make $4 million plus the cost of the content, which I would imagine would be at least about a million/school, so the payout would have to be $5-6 million/school, depending on what we air. I'm not sure that we are going to hit that.

I can see us beating current payouts by $1-2 million (after costs) and I can see us getting a bump from UL/ND less UMD of about $1-1.5 million. That puts us somewhere between $19 million and about $20.5 million.