Thursday, May 15, 2014

Expansion is Dead: Part II

Why is it that talk about college football expansion refuses to die? There is far more evidence to support the theory that, at least for the foreseeable future, expansion is dead.

But is it?

Dead? Not exactly but it certainly is in deep hibernation.

Certainly the Big Ten covets the opportunity to extend their product south and the conference hasn’t exactly been secretive about their desire to further pillage the ACC.  The problem is that the only schools that meet their profile just are not interested.

Maybe that changes now that ACC commissioner John Swofford publically admitted that an ACC network is years away and may not happen at all but I’m not so sure it would matter to Big Ten targets UVA and UNC.

The consensus is  that the Big Ten’s payout will dwarf that offered by the ACC --perhaps by as much as $20 million per year. Is that enough of an incentive to lure away the new TV markets in Virginia and North Carolina that the Big Ten craves?

I don’t think so.

In order for change to take place there must be either great need or great opportunity and very little risk.  Look at all the moves in the conference realignment drama that played out over the past two years: Pitt, Syracuse, Rutgers, WVU and Louisville left the Big East out of great need. Maryland had perhaps the greatest need of all when they dumped the ACC for the Big Ten.  

Texas A&M, Missouri and Colorado left because of the great opportunity offered by membership in other conferences.

In every case the reward of switching conferences greatly exceeded the risk involved in the move.

And that’s why I believe the ACC is secure despite having the lowest payout of the major conferences.

I’m not convinced the risk-reward equation  supports a move by any ACC school.

First there is the grant of rights – the ACC’s grant of rights is modeled after the Big 12’s in that every member has agreed to cede both their television rights and the television revenue to the conference in the event of a theoretical move.

People like to argue about how secure a grant of rights makes a conference. There are many scenarios people contrive to get around the GoR but not a single attorney I’ve spoken to believes a GoR could be successfully challenged.  It’s just not worth the risk or the money and time it would take to even adjudicate the issue.

Add to that a powerful provision I’m told exists in both the Big 12 and ACC’s GoR – one that stipulates that each member  agrees that the loss of TV revenues for departing members isn't punitive.  

What that means is that if any school leaves the Big 12 or ACC for another conference they will not play on television remainder of the ACC/Big 12 TV contract and that they will receive absolutely no television money.

To me that ends the discussion right there. The risk is far to great to even consider a move.

Yet sources within the Big Ten continue to tell me that they believe the ACC GoR could be easily circumvented because the ACC schools did not receive due consideration for ceding their rights.

They believe that it maybe be illegal for state-funded institutions to grant rights without receiving proper payment.

I don’t argue the point with them.

But valid or not their argument is moot when the Big Ten can’t find an ACC school interested in even discussing the possibility.

As if the pesky grant of rights wasn’t enough there’s also the culture problem to overcome.

Most ACC schools identify with the southern culture whereas it’s safe to say to the Big Ten is a mid-west league despite the additions of Maryland and Rutgers.

It was easy for WVU to leave the Big East. The Big East didn’t fit WVU’s culture. The Big 12 is by far a better fit, at least culturally if not geographically,  for WVU.

UVA and UNC in the Big Ten? That’s a clash of cultures that usually spell doom for outlier – just ask Boston College how they’ve done as a member of the ACC.

The third factor against any ACC school leaving is the exit fee. Until the law suit with Maryland is decided the value equation of a move is a losing proposition.

How much of a revenue gap would be needed to overcome the GoR, the outlier factor and the specter of the exit fee?

How many ACC schools can risk a decade of no TV money or TV appearances?

There are scenarios where the Big Ten could entice certain ACC schools to leave.  Those schools each have unique revenue problems that somewhat offset the risk of adjudication – provided the exit fee is ruled punitive – but each of those schools falls short of the metrics the Big Ten requires.

Florida State, Georgia Tech and Pitt have revenue problems. FSU does not meet the Big Ten’s academic model and both GT and Pitt lack the large alumni base that the Big Ten depends on to inflate revenues. 

An official at NC State tells me they would jump at the chance to leave the ACC and UNC’s shadow, but like FSU the Wolfpack doesn’t meet the academic standards required by the Big Ten.

It’s my opinion that the Big Ten’s ACC expansion plans are over unless they reconsider schools that are not AAU members.

The Big Ten is trying.  The plan to move the basketball tournament to Washington D.C. was meant to be  a clear message to UVA but so far the Cavaliers are not listening.

Does Swofford’s sound bite about a potential ACC network change anything? Not unless the ACC’s exit fee is ruled punitive – if that happens then the risk-reward equation suddenly changes in the Big Ten’s favor.

There’s a few more scenarios concerning the SEC, the Big 12 and the Big Ten targeting the Big 12 that I’ll address next week. Some are more likely than others.

Some Notes:
  • BYU has to be reconsidering the ban on Sunday play that has kept them out of the Big 12 – right?
  • I’ve been one of the few voices openly saying that an ACC Network would never happen and I’ve been writing about it for over a year. Last week I came to believe one must be in the works because of the new found sense of allegiance UVA has for the ACC.

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