Total revenue for the ACC dropped by over 7 percent in fiscal year 2016 as compared to FY2015, but conference officials remain optimistic because of the pending launch of a dedicated network.
It’s hard to imagine that the conference which houses the current reigning national champion in both football and men’s basketball could have made less money, but an ACC revenue decline for the past fiscal year is the reality.
Prior to FY2016, ACC revenue had grown on an annual basis for five consecutive years. David Teel of the Daily Press reports that the revenue reported by the conference for the past fiscal year was 373.4 million, a 7.4 percent decrease from FY2015’s $403.1 million.
Teel argues that the conference’s revenue in FY2015 was inflated by two factors. Maryland had to pay an exit fee of over $31 million for leaving the conference to join the Big Ten, and the Orange Bowl was a semifinal game for the College Football Playoff. That inflation is necessary to understanding the ACC’s current position near the bottom of the Power 5 conference revenue heap. Only the Big 12 reported a smaller revenue figure for FY2016.
It’s not just the fact that the ACC finished fourth out of the five Power 5 conferences that have ACC officials looking for solutions, but the disparity between their conference and the others that also is cause for concern. ACC revenue was over $150 million less than what the SEC took in and over $100 million less than the hauls that the Big Ten and Pac-12 raked. While the victories of Clemson and North Carolina in football and men’s basketball national championship games should help the numbers for FY2017 immensely, depending on winning titles in both sports isn’t a sustainable business plan. To stay competitive, the ACC has taken a page out of the Big Ten and SEC playbooks with a dedicated television network.
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According to Andrew Carter of the Charlotte News-Observer, ACC commissioner John Swofford has a solution. Swofford is banking on the 2019 launch of the ACC Network to not only prevent future year-to-year revenue declines but help to close the gap between the ACC and the Big Ten/SEC.
In theory, it’s a solid hope. A large part of what makes the Big Ten and SEC so lucrative is the power of their television networks. The content on the networks allows those conferences to collect millions of dollars in advertising revenue, as well as maintain significant leverage in negotiations for game rights with broadcasters like ESPN and Fox. If the broadcasters don’t pay what they are asking, the Big Ten and SEC can just put the games on their own networks. Having its own dedicated network will allow the ACC the same luxuries.
There’s no guarantee that the ACC Network will produce the same treasure trove that the Big Ten and SEC platforms have, however. Whether or not ESPN, which is navigating its own uncertain waters right now, will be as invested over the long haul is worth questioning. Fox is heavily invested with the Big Ten, and whether or not the network will be interested in acquiring more ACC content should ESPN pass in the future is speculative right now.
It’s imperative that the ACC stay competitive in the balance ledger for the ACC’s interest in staying competitive on the court/field. The conference hopes that the ACC Network will accomplish that objective.