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Tuesday, July 23, 2024
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The Key To ACC Expansion Was Once Its Greatest Weakness

  • The ACC’s long media contract has allowed for a unique deal with incoming members Stanford, SMU, and Cal.
  • It offers a decade-plus of security in the conference for all parties, with the promise of tangible revenue down the line.
Florida State Seminoles tight end Markeston Douglas (85) and his teammate celebrate a touchdown. The Florida State Seminoles defeated the Oklahoma Sooners 35-32 in the Cheez-It Bowl at Camping World Stadium on Thursday, Dec. 29, 2022.
Alicia Devine/Tallahassee Democrat

One year ago, the ACC’s media deal with ESPN, which runs through 2036, looked like it would put the conference behind the rest of the Power 5. It was the only one without an opportunity to negotiate a new contract by 2025.

But that length has become its greatest strength in the recent round of realignment, Octagon SVP William Mao, who worked with the ACC on its expansion deal, told Front Office Sports. 

The contract was a major reason the ACC was able to get enough votes to add Stanford, Cal, and SMU. It offers a decade-plus of security in the conference for all parties, with the promise of tangible revenue down the line.

“I view [the ACC-ESPN deal] as a positive,” Mao said. “What’s the other conference that also has a relatively longer deal in place? It’s the SEC — and yet no one’s ever smarting over the fact that the SEC has a longstanding relationship with ESPN. They’re often lauded for it.” (The SEC has a 10-year, $3 billion deal with ESPN/Disney beginning in 2024.)

Stanford and Cal have agreed to forgo 70% of the ACC’s media rights distribution for the first seven years in the league — while SMU will give up its entire distribution for a whopping nine years, a source confirmed to FOS. 

As a result, the league will receive about $70 million annually from ESPN to distribute to existing members — some of which will be based on athletic performance.

Scrounging for extra dollars was key to getting 12 of 15 members to agree to expand, as schools like Florida State have been public about their dissatisfaction with revenue distributions. They didn’t want to lose money on the deal — or break even, given increased travel costs.

“You couldn’t structure anything like that if you only had a five-, six-year deal,” Mao said. 

The deal, in addition to the remaining 13 years on the contract, also provides the ACC extra stability in the Super Conference era. 

The league was already in a good place with a strict grant-of-rights contract — a legal deterrent against potential defectors.

But the deal provides an insurance policy in case schools like FSU or Clemson do leave. It’s likely that the ACC’s media contract requires a minimum number of schools, multiple industry experts have told FOS. Adding SMU, Stanford, and Cal could guarantee the league doesn’t lose media rights fees even in a worst-case scenario where four schools bolt.

While ACC Commissioner Jim Phillips didn’t make this point outright, he did say stability was a top factor in the expansion discussion. “If anything happens with your league and a school wants to explore something else,” he began, but then trailed off. He ended the comment by reiterating his strength in the Grant of Rights.

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