Big East Contract Negotiations and the ACC
Last week, someone on the Internet reported that the Big East is looking to get $14 to $17 million per team per year in television revenue. Granted, the Big East is in the catbird seat as the next conference up to market itself. But to think that the current collection of Big East schools could approach what the ACC is getting is shocking, especially after losing Pitt, Syracuse, West Virginia, and TCU. If the Big East could land that–and that is a huge IF–what would that mean for the ACC?
First, before we get carried away on what the Big East will get, we should heed the words of Frank the Tank, the Internet’s best blog for discussing conference issues (realignment and business):
Regardless, if there’s any semblance of reason out there, then the truth will likely be somewhere in the middle. NBC Sports Network effectively needs any type of halfway decent live sports content, so it has a larger incentive to pay a premium to the Big East. Comcast is NOT a charity, though, as evidenced by the aforementioned Animal Practice interlude to the Closing Ceremonies of the Olympics. This can’t be emphasized enough: Comcast is going to pay the least amount that they can possibly get away with in order to win the Big East rights. As a result, that floor is going to be determined by how much interest ESPN and, to a lesser extent, Fox have in the Big East. If the conference wants to obtain maximum value, then it particularly needs to have ESPN legitimately involved in the bidding process or else Comcast isn’t just going to hand over large rights fees for the hell of it and negotiate against themselves. In my humble opinion, ESPN isn’t going to want to let NBC Sports Network get the Big East for free, but the guys in Bristol aren’t going to go balls out to retain the Big East, either (and Comcast, who has gone toe-to-toe with ESPN in tough negotiations on many fronts, definitely knows that). That points to a potential Big East contract that’s in the middle of the high and low figures that have been reported out there – let’s say about $10 million per all-sports school per year and $4 million per non-football school per year.
Plus, the Confidential has always believed that ESPN is genuinely irate that the Big East rejected its offer last year. It remains to be seen whether ESPN will even allow itself to get into a bidding war with other networks over the Big East. While Georgetown, Villanova, St. Johns, DePaul and Marquette are situated in nice markets, the lack of a football team renders them somewhat indistinguishable from Atlantic 10 schools. So it falls on the schools like Louisville, UConn, Cincinnati, Memphis, Temple, and Rutgers to carry the all-sports side of things. That is not an awful collection of teams, but is it really going to top what the ACC and Big XII can offer in hoops, much less what all conferences can offer in football. Just not sold on the ratings being there to justify mega-millions.
But if the Big East does land a deal approaching the ACC’s deal, then it is obvious that the ACC is in trouble. By being locked-in at well below market value, and with conferences like the B1G and Big XII having the ability to negotiate soon, the disparity will be massive. Seriously, if the Big East is worth $15M per team, the other conferences have to be worth $30M per team. It will be hard for FSU and other schools to justify being compensated like a Big East team just because the ACC improvidently locked itself in.
And once the first school leaves the ACC, it is not difficult to envision scenarios where there is a greater pillaging of ACC schools by the Big Four conferences (except the Pac-12). There are no shortage of Internet posts analyzing just how the major conferences would carve up the ACC. Unfortunately for Syracuse and Pitt, they may have been on the wrong side of this move. The Big East having the good fortune to market itself at the perfect time might, ironically, be the ACC’s undoing.
Of course, if you are ESPN, you do not want the ACC imploding. So, again, expect ESPN to make a “take it or leave it” offer to the Big East that will give it a raise, but also keep the Big East from going on the market. And if the Big East refuses, ESPN will have to just walk away entirely and put its billion dollars elsewhere. Frankly, that’s a good move. ESPN does not need to overpay for content.
Maybe the NHL could use that billion dollars?
The Confidential 
“It will be hard for FSU and other schools to justify being compensated like a Big East team just because the ACC improvidently locked itself in.” The same ACC that sent Clemson to the OB last year to be sanduskied? The same ACC that picked up Big East bottom dwellers like Pitt and Sryalose? The ACC is at best equal to the Big East and needs to wake up to that fact.
Let’s not get carried away. The team that beat Clemson is now in the Big XII. The 2013 Big East will essentially be the 2002 Conference USA, plus Rutgers and Temple. And UConn, who did not exist in 1992.
I find it impossible to believe that any network will pay more than what ESPN offered last year. This is the first time (I think) that a network will be valuating a completely unproven commodity. The Big East is asking ESPN, NBC, Fox, and CBS to say “Don’t judge us by the conference we are right now, judge us by the conference that we’re going to be in 3-5 years”.
The networks will probably see the opportunity to get in on the ground floor of this new-look conference, but there are far too many variables for them to consider before they can be a contender among the other conferences:
1) Lack of history: Unlike the other conferences, this new Big East has no real football rivalries, no traditions, etc… On the basketball side, losing Syracuse impacts several old and recent rivalries (SU/G’town, SU/UConn, SU/L’Ville, etc…). Obviously the loss of both Pitt and WVU kills one of the most heated rivalries in the NCAA.
2) Lack of BCS tie-ins: Heading into a new era with football playoffs, and four BCS bowls for conference champions/runners-up, the five major conferences (SEC, B1G, BigXII, Pac12, ACC) have all locked-up bowl tie-ins with the major BCS bowls. Even the ACC has helped to cock-block the Big East by suggesting they would secure a tie-in with Notre Dame. Without a guarantee of having some sort of relevance in the post season, only the true football purists will tune-into a conference that has nothing to play for.
3) Conference Stability: Absent the Big East wet dream that Notre Dame will join the conference in football, the Big East is always going to be on the verge of getting raided. If anything, the Big East has become a fertile farm system for the rest of the conferences. Coaches can use the Big East as a training ground until they can “go to the show”, likewise whenever a school succeeds in the Big East all talk will be when that school is going to get selected by another conference. Louisville is likely the next to go (Big XII) and UConn has its bags packed and waiting by the door in the hopes that the ACC calls. Even with a network’s ability to renegotiate the contract in the event a team leaves, it is a lot of up-front risk.
4) Impact on other conferences: I agree, a big pay-day for the Big East will increase the values for all of the other conferences when time for renegotiations. Will NBC overpay for the Big East in the hopes to intentionally screw over ESPN, CBS, and Fox when they go to restructure contracts with the other conferences? That seems more like wishful thinking on the part of Big East fans and not rooted in reality.
ESPN has no incentive to offer more than it did last time and could easily argue that the value has decreased. The Big East will prudently wait to hear offers from all of their potential suitors, so ESPN would be wise to lower those expectations during the 60-day exclusive period and let it be known that they’re coming in low on the league. Even if they offered the same total as 2011, it will now be divvied among more teams, equaling less per team.
What is more likely to happen is that the ACC adds UConn and Louisville/Rutgers before this ever happens. The ACC has to take UConn rather than Rutgers if it really wants to damage the Big East. UConn has a huge basketball brand that makes them tons of third tier money. By taking UConn out of the Big East, you officially kill it as a basketball power and that is how you end the Big East as a major.
How pissed would West Virginia be if the ACC took Louisville?