The ACC has a football problem.

There are a couple of eye-opening quotes from Clemson’s AD in this Q&A piece worth noting.  First, if you want to understand why the ACC seems to be teetering on some sort of precipice these days, here’s why:

… The conference and the membership well understand what is happening. For example, in this latest contract with ESPN, 80% of it is generated by football. As good as basketball has been in the ACC, it is very evident just through this contract that football has to be very, very relevant.

Raiding the Big East for Pitt and Syracuse may look great from a basketball perspective, but it doesn’t do a damned thing for football.  Too bad that’s where the money is.  And the ACC has had a hard time understanding that lately, which is kind of surprising, given that the moves that brought FSU, Miami and Virginia Tech into the conference were all driven by football.

But here’s the sobering part of the conversation:

… For example this new contract has two look-in windows- one at five years and one at 10 years. The purpose of that – in talking with ESPN people and our people in the same room – is to look at the end of five years where are we- competitively, what’s our performance, and does it merit a significant increase in the rights fee. There’s no question that on ESPN, the rights to television money is larger than any other conference. They’ve got other- the SEC has CBS and other conferences have other carriers, but there is tremendous exposure for the ACC football games as well as basketball games and other Olympic sports. As far as exposure, it’s a very good contract. Dollar wise as far as what ESPN is paying, it’s at the top, but overall because of the lack of CBS, you don’t have the same kind of dollars that other conferences have. But, having said that, ESPN has made it very clear that the purpose of writing in those look-ins is to see where we are in five years. You don’t wait until the end of the 15 years to say, ‘hey, how are we doing?’ That’s the purpose of the five-year and the ten-year look-in to challenge our conference and all of us associated with the conference know that football is extremely important and we have to perform and do everything we can to perform. [Emphasis added.]

The WWL insisted on writing look-in provisions into the new TV deal.  That’s not exactly a vote of confidence in your long-term prospects, ACC.

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32 Comments

Filed under ACC Football, It's Just Bidness

32 responses to “The ACC has a football problem.

  1. Always Someone Else's Fault

    Look In: “to look at the end of five years where are we- competitively, what’s our performance, and does it merit a significant increase in the rights fee.”

    My understanding is that the look-ins represent an opportunity to increase the rights fees – but they do not represent an opportunity for ESPN to cancel the contract or reduce fees. Within that understanding, the current contract is a guaranteed baseline. If Clemson and FSU explode onto the national scene and become Must-See TV on Saturday nights, then the contract goes up. If they remain chronic underachievers, the contract remains status quo.

    I’m sure other provisions give ESPN an “out” if the conference membership changes substantively – but those are separate from the “look-ins.”

    Honestly, I get a completely different reading from his comments. It was interesting to hear him close with thoughts on Georgia as a standing part of their schedule.

    • Why would ESPN insist on a contract provision that works against its financial interests? And why would Phillips see those provisions as a challenge to the conference?

      • JG Shellnutt

        Agreed; ESPN would not insist on something that could only benefit the ACC without having some ability for their own interests. These look-ins must have provisions for either of both sides to benefit or lose based on market value at the time.
        Seems like ESPN knew that the ACC would become weaker and weaker and planned accordingly.

      • Ardbeg

        Sometimes I “force” you to take a contract provision that appears bad for me as leverage to force you to take a lower price, because I’ll save money now and I don’t think it’ll end up hurting me later as much as you do. ESPN may have insisted on the provisions as a way of avoiding an argument over the ACC’s long-term projections of viewership/success (versus their internal estimates, which were either lower or were similar but saw greater uncertainty). The ACC wants a long-term contract, and also wants to be paid for their long-term expectations. ESPN refuses to pay top dollar, instead responds with a lowball (or medium) contract that gives the ACC the potential for a windfall if they actually reach parity with the SEC or B1G in football. Everyone claims victory. Except the Clemson AD, who appears to understand ESPN negotiated well and views the lookins not as opportunities for upside but as a missed opportunity to lock in more revenue now. (I haven’t seen the contract, so I’m not saying this is what it is, just what it could be.)

        • Mayor of Dawgtown

          I think this is it.^

        • 81Dog

          that makes a lot of sense, but I wonder what the stick is for the ACC if they think they’re entitled to a bump up at the look-in window? Maybe ESPN wrote in “if the ratings are X, you get an increase of Y.” Sorta like ad rates, really. You buy the ads at a certain price, based on a guarantee of ratings at a certain level. If the ratings are lower, the buyer gets a rebate or reduced prices on the next batch of ads. Maybe ESPN expects ratings of a certain level, and if the ACC consistently delivers higher ratings, they’re guaranteed more money for the next 5 year period. That protects ESPN from buying a ratings loser for too much money, and it protects the ACC in the event their mediocre little league suddenly becomes a ratings bombshell.

        • Mayor of Dawgtown

          BTW you make good scotch.

      • Always Someone Else's Fault

        Because they are standard operating procedure for the WWL, if their earlier statement on the ACC contract is to be believed.

        You don’t want clients chafing under contracts they feel are unfair for 15 years. The look-ins are built in tension defusers, which make them smart business. If ESPN comes back in 5 years and says, “Well, you’re woefully under-compensated, but tough, you made the deal, hire a better commissioner next time,” they’re only hurting themselves in the long run.

        I see the ADs comments as a rebuttal to Haggard: “Look, if we want more money, go earn it at the box office by posting some Ws.” That’s the challenge. And coming from the Clemson AD, that suggests to me that FSU on their own if they move to the B12.

        • Because they are standard operating procedure for the WWL…

          If so, then why isn’t there one in the SEC contract?

          If I’m not mistaken, ESPN’s statement about what was similar in the ACC contracts had to do with Tier 3 distribution rights.

          • Always Someone Else's Fault

            I’ve heard Slive refer to look-in provisions within the SEC deal. No, I don’t have a ready link.

            • If the SEC contract had a look-in provision, you wouldn’t have a 14-school conference today.

              • 81Dog

                not necessarily. A look in based on the ratings generated by your current 12 team league doesnt preclude a renegotiation, bump up, or opt out (take your choice) if your league adds teams, especially teams in attractive media markets outside your current league footprint. They’re two different issues.

      • Always Someone Else's Fault

        Bottom line – as I understand them, look-ins are not “outs.” The contract has “outs,” but those are spelled out elsewhere. Look-ins benefit the conferences only. If ESPN wants to pay the ACC less after 5 years, then the contract either goes to court or the ACC voluntarily dissolves it and puts themselves back on the market.

        • Again – if that’s the case, why in the world would ESPN insist on having that in the contract?

          • Always Someone Else's Fault

            Because it sets in stone at the outset the terms for dispute resolution coming from, oh, schools like FSU.

            You’re reading, “ESPN has made it very clear…” to mean, “they rammed this provision down our throat.” Every comment following that runs in the opposite direction: “we can increase the value of this contract, because it anticipates the potential for the value of ACC football to increase over the coming years.”

            The SEC contract had look-in provisions.
            8/17/11:
            “It is unless the SEC invokes a “look-in” clause or an “opener” clause in the contract.

            I spoke with network officials and major conference officials about the boiler plate workings of college football contracts. Here’s the nutshell version:

            A “look-in” basically says both parties can talk about adjusting the deal, but there is no obligation to do so on the broadcast partner’s part — in this case, ESPN. “Look-ins” are the 98-pound weaklings of TV contract clauses.”

            http://sports.espn.go.com/espn/columns/story?columnist=wojciechowski_gene&page=wojciechowski-110816&sportCat=ncf

            There you have it. Conflict resolution built into the contract. Standard boilerplate.

            • Well, now, wait a minute.

              Woj isn’t saying he’s actually seen the language in the contract. He isn’t saying he’s heard directly from the SEC about the specific terms of the contract. Nor is he saying that he’s gotten direct word from his employer about those specific terms. He’s speculating. “Unless” is a pretty big qualifier in that quote you cite.

              I’m not questioning whether some of these contracts have clauses like that in them. I am questioning why ESPN would insist on putting one in a contract. And if this is routine with the ACC, then why did Phillips make such a big deal about the clause in the latest contract?

              • Always Someone Else's Fault

                Because Exhibit A in the FSU argument is that the contract locks them into a bad position for 15 years. The look-in clause undercuts that argument significantly.

                Look, his comments could cut both ways. I’m willing to admit that. But you’re essentially arguing that those clauses represent a vote of no-confidence by ESPN in the ACC, when…

                A) the Clemson AD clearly doesn’t describe them that way, and…
                B) more than just the Woj article suggest these things are media contract boilerplate

                You do an excellent job of “reading between the lines,” so to speak, but sometimes that can bite a reader in the rear. The entire Clemson AD piece to me reads as an attempt to calm the waters. If the look-in clauses were a net negative, and if the ACC/Clemson AD saw them in that light, then he never mentions them in the interview, especially in that context.

                • The look-in clause undercuts that argument significantly.

                  Honestly, I don’t get your abiding faith in the look-in clause. You admit it doesn’t force the network to do anything. And if circumstances change down the road in the ACC’s favor, if the network wants to maintain good relations with the conference as a matter of good business sense, it’ll rework things anyway.

                  Bottom line, I still haven’t heard a good explanation why the network insisted upon the clause as opposed to the conference.

                  I think this is one of those things we’ll have to agree to disagree on. ;)

                  • Always Someone Else's Fault

                    You’re calling it a vote of no-confidence. I’m saying that’s taking things too far, which isn’t at all the same thing as “abiding faith.” But I see your point. I just think you’re reading too much into the ADs statements.

                    • I don’t think I’d call it a vote of “no-confidence”. There is a contract, after all. But I do think ESPN perceives that the ACC’s future is somewhat shaky.

                  • Always Someone Else's Fault

                    Fair enough.

  2. The other Doug

    I believe the money escalates every couple years over the term of the contract, and this makes the look ins even more interesting. ESPN has promised to pay more later, but at the same time has the ability to “look in”.

  3. reddawn

    Coach K has to be worried sick. He had a shit fit when the ACC added VT, the U, and BC. For obvious reasons, there was no such shit fit when they added Cuse and Pitt but you can guarantee a bigger one is coming when his beloved Tobacco Road conference falls apart.

    • cube

      The funny thing is that he will have been part of what brought it down by fighting football’s influence for so long.

  4. Here’s what an extended playoff gets you. Depressed regular season revenues when people realize that it’s not important to watch until late in the regular season and into the postseason. No one watches regular season basketball (except for the two Duke-UNC games) nationally until the conference tournaments and March Madness. I think you get beyond 6 teams in a playoff, and people will begin to decide not to tune in during the regular season. The conference commissioners are getting ready to kill the goose that laid the golden egg.

  5. Mayor of Dawgtown

    The addition of Syracuse and Pitt may still work for football, too. Both of those teams are former national football powers. All it would take for Pitt, for example, to be right back up on top is one undefeated season. Two such seasons in a row and all that dynasty talk with pictures of Tony Dorsett being flashed on the screen would begin again. All I’m saying is don’t be so quick to write the epitaph of the ACC.

    • Todd

      Former National Powers? Dorsett in ’73 or so Marino in ’82 or ’83. The landscape has changed light years since they were remotely relevent. Clemson didn’t do their conference any good by getting 70 hung on them in a BCS game. The ACC tie in to the BCS has been a joke.

    • hassan

      “All it would take for Pitt, for example, to be right back up on top is one undefeated season. Two such seasons in a row and all that dynasty talk with pictures of Tony Dorsett being flashed on the screen would begin again.”

      Do you get a different satellite feed than I do? What in the past few years suggests that Pitt or Syracuse is on the verge of back to back undefeated seasons?

      • Mayor of Dawgtown

        Never said Pitt was “on the verge” of back to back undefeated seasons. I just said that if that happened they would be back on top. As recently as 3 or 4 years ago they were 10-3. If you look at their schedule if they had a halfway decent coach and fielded a respectable team even now they could win 8 or 9 games as bad as they have been recently. BTW, the Dawgs lifetime record against Pitt is 0-3-1.

    • Bulldog Joe

      Syracuse and Pitt already play like ACC teams. They are a perfect fit.

  6. hassan

    Clemson and FSU bolt. Ga Tech and Miami try hard to. The ACC is left with football that is far less entertaining than Conf USA. The ACC becomes permanent Thursday and Friday night fixtures drawing less viewers than public access high school broadcasts in the same time slot. ESPN lawyers up and tries to get their money back as this is not the product they bought.