Not all get a kick out of ACC TV deal
Many local subscribers shut out for now as league, ESPN play the long game
Soon, many Clemson University football fans with subscription- TV contracts will lack the means to watch Trevor Lawrence and the Tigers begin their title defense on Aug. 29 against Georgia Tech. And many University of Pittsburgh fans won’t be able to watch the Panthers’ Aug. 31 season opener against Virginia.
Those fans will be short- term casualties of the Atlantic Coast Conference’s long- term strategy.
On Thursday, the ACC and ESPN will launch the ACC Network, a 24- hour channel devoted to the conference’s 15 member schools. The network will televise 40 football games, 150 men’s and women’s basketball games, and more than 200 Olympic sporting events.
It is expected to launch with at least 34 million subscribers, and distribution deals are in place with, among others, DirecTV, Charter/ Spectrum and Verizon Fios, along with Hulu, Google Fiber, YouTube TV and PlayStation Vue. The network will also air content on a streaming platform, ACC Network Extra, bringing the total of events scheduled for broadcast to 1,350.
Among providers available locally, Comcast, Dish Network, Cox and Armstrong have not yet announced agreements. Dish and Cox declined to comment. A representative for Armstrong said the parties had been negotiating for more than a year regarding the ACC Network. Comcast did not respond to a request for comment.
Both ESPN and ACC executives were confident that a deal with Comcast would materialize in the future. The future is what they’re focused on, a focus bolstered by the recent history of conference networks and the leverage of ESPN’s omnibus agreements. Basically, you can get it if you really want it, and sooner or later everyone will get it anyway.
“One of the real pluses of being with ESPN and Disney is, they do have the strong leverage in the marketplace, and particularly when their leverage is at the strongest is when their omnibus deals
are up,” ACC commissioner John Swofford told the Pittsburgh Post- Gazette in a phone interview. “We took that into account in terms of when the ACC Network would launch, as well as the projections that we have forecast.”
Mr. Swofford has spent his life in the ACC. He played quarterback and defensive back for North Carolina, became the Tar Heels’ athletic director at 31 and took over the conference in 1997. The path to the ACC Network began nearly two decades ago as the conference expanded, stretching from Boston to Miami and as far west as Louisville.
“When we took a look at our league and what we would see in the future back in the early 2000s, we felt like, A) we had to get bigger from a footprint standpoint and the number of television sets in our footprint, and B) we had to improve ourselves football- wise collectively, and we needed to do that without in any way damaging the traditional aspect of our league in men’s basketball,” Mr. Swofford said
The creation of a network will expand the ACC’s revenue and help the conference close the gap with the rest of the Power Five. The Big Ten reported $ 759 million in revenue during the 2018 fiscal year, according to tax documents obtained by USA Today. The Southeast Conference reported $ 660 million in revenue in 2018, according to tax documents. The Pac- 12 reported $ 497 million in revenue and the Big 12 reported $ 374 million.
The ACC came in at $ 465 million for the previous fiscal year.
The Big Ten and SEC have conference networks backed by Fox and ESPN, respectively. The Pac- 12’ s member schools own the Pac- 12 Network, though the league has rights agreements with ESPN and Fox.
“We’ve learned a lot from what the Big Ten did and we’ve learned a lot from the SEC Network,” Pitt athletic director Heather Lyke said in June. “I think this network is going to be even better.”
Mr. Swofford noted that while the SEC Network took off almost immediately, the Big Ten Network hit its stride about three years in and the Pac- 12 Network has struggled without a partner.
“The [ financial] potential is extremely significant for our institutions,” he said. “That doesn’t necessarily happen overnight. It could, but the way we have projected this is based on, really, about a three- year build- out in terms of having full maturity from a revenue- producing standpoint. If it happens sooner than that, that’s great, and it could. But in terms of the decision- making that we have made with our schools, it is based on a build- out.”
To increase revenue, the ACC Network will need to increase the number of households it can reach, and that will require carriage rights agreements with as many providers as possible.
In addition to DirecTV and Verizon, ESPN reached agreements with Charter/ Spectrum, Altice and several smaller providers.
“I can tell you that we are very pleased with the distribution agreements that we have in place currently, and as you imagine, we continue to have lots of conversations, productive conversations, with other distributors for ACC Network coverage in the ACC footprint and beyond the footprint,” said Rosalyn Durant, ESPN’s senior vice president of college networks.
ACC coaches and athletic directors have spent the summer publicly urging fans to demand that their cable providers carry the ACC Network if it does not already, and fans have nationally available options — for a fee, of course — if their provider doesn’t carry the network and they don’t want to switch.
“There are four national distributors in place already, with DirecTV, Hulu live TV, Sony PlayStation Vue, and YouTube TV is the latest one, and we anticipate more options in the near future,” Ms. Durant said.
It doesn’t always happen at once. Dish, Time Warner Cable, Charter and Cox did not agree to carry the Big Ten Network until after it launched, with some joining almost a year later. Verizon didn’t agree to carry the SEC Network until after it launched. And the ACC has time on its side: Disney’s 10year contract with Comcast expires in 2022.
Cable companies that don’t get on board risk alienating, and losing, subscribers. Pac- 12 Network president Mark Shuken pointed to the lack of a carriage agreement with DirecTV during the network’s launch as possibly negatively affecting the bottom line.
“There was a single outlier in DirecTV, and that was disappointing,” Mr. Shuken told the Post- Gazette in a phone interview. “… So the only residual pain, frankly, was that folks that had DirecTV had to choose whether to leave DirecTV or not. As evidenced by the last couple of quarters of subscriber numbers, that may not have been the best decision, to abandon some of the core sports fans.”
AT& T, which owns DirecTV, announced a drop of 168,000 subscribers to streaming service DirecTV Now and 778,000 fewer traditional subscriptions during a second- quarter earnings call.
The sports fans who do get the network will get more than the games. Recently, ESPN unveiled the new ACC Network studios and on- air talent. Mark Richt, a former Georgia and Miami coach, talked about Georgia Tech’s new offense. Jordan Cornette, a former Notre Dame basketball player, raved about the studio’s 262 LED light fixtures. Robotic cameras emerged from tables.
In an interview during the studio preview, ESPN’s president and co- chair of Disney media networks, Jimmy Pitaro, said Mr. Swofford had told him that the network was a priority. Mr. Swofford will be in ESPN’s headquarters in Bristol, Conn., on Thursday to flip the switch.
“It’s the end of that journey in a sense, but it’s the beginning of another journey, because in college sports or any level of sports, obviously, you can’t be complacent,” Mr. Swofford said. “This is something we want to continue to build on.”