ACC Network looking more like a sinking ship than the rising tide

The soon-to-launch ACC Network is already over budget, and the return on the investment might not improve the outlook much.

For collegiate conferences, the name of the money game in the current era is the revenue created by their own television networks. Salivating over the impressive advertising and rights returns posted by the Big Ten Network and SEC Network, the ACC Network is the rising tide that the ACC hopes will raise all of its ships.

So far, that’s not looking good.

According to Chris Coleman of Virginia Tech Sports War, the studio that ACC member Virginia Tech has pledged to build for the ACC Network is already over budget, by nearly double the original projected cost.

On top of the fact that the Hokies’ athletic department is already cash-strapped, having posted a net loss for the past two fiscal years, there is no guarantee that the revenue produced by the network will produce the returns necessary for the ACC to continue to compete with other conferences.

For fiscal year 2015, for example, the Big Ten Network produced a $22.6 million dividend for the conference. In its first season, without full distribution to the total number of potential viewers it now reaches, the SEC Network contributed $5.5 million to each school’s coffers.

The ACC Network faces more challenges than simply the cost of the studios. To meet a condition placed upon the conference by ESPN in order to be carried, the conference will have to prove to ESPN that it is operational by this August, a year ahead of the projected launch date of August 2019. If ESPN isn’t convinced, the reach of the network upon launch which is crucial to the success of the network will be impaired. Deals with ESPN and Fox are a big part of what has made the Big Ten and SEC networks so successful.

The ACC does have several strong national brands like Duke University and University of North Carolina men’s basketball along with Clemson and Florida State football to sell to carriers, and that’s a reason for optimism. If distribution issues can get worked out, then the cost of the studios and all the other infrastructure might be well worth the expenses.

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That’s all a matter of speculation at this point, however. The speculations about the cost of the studios ended up being far too optimistic, and if that becomes a trend, the rising tide of the ACC Network might end up being a sinking ship.