ACC, ESPN Announce Latest Mega-Deal With 12-Year Agreement
In the growing story of college-sports mega media deals, a new chapter was written this week. The Atlantic Coast Conference and ESPN have announced a 12-year multimedia-rights agreement, beginning in 2011-12, that not only gives ESPN full rights to all of the conference’s content, without a separate broadcast component, but doubles the television revenue that each member school will receive.
The deal covers the rights to every conference-controlled football and men’s basketball game as well as the lower-profile competitions in women’s basketball and Olympic sports over 12 years. That amounts to nearly 5,000 ACC events on ESPN’s television, digital, and mobile platforms, including syndication, over the life of the contract.
“It’s an extensive package that reaches new heights financially, provides unprecedented branding opportunities for us, and strongly positions our lead within the ever-changing world of technology,” says ACC Commissioner John Swofford.
The deal also marks the first time that ESPN has negotiated a complete deal with a college conference, in which the network acquires all the rights to all of that conference’s content. Every other such deal — such as the one the SEC and ESPN struck last year — has a broadcast component (in the case of the SEC, with CBS).
A Perfect Dozen
The growing trend in college-sports rights deals has been to increase the length of the contract, but how did the ACC settle on 12 years?
“Twelve years seemed to be a balancing point where we could maximize the dollars and not take ourselves so far out that the world would look completely different,” Swofford explains. “It could have been longer, but we felt that was the right point that balanced all of this out in terms of dollars. We wanted to give ourselves stability. We were concerned about going too far out with the changing technology that is out there.”
Keeping Raycom in the Mix
The agreement also includes a sublicense arrangement with Raycom Sports, which will continue to be the syndication home of ACC content for over-the-air and regional-cable-network distribution, both inside the ACC footprint and out.
“There will be very little change in what Raycom is doing in the ACC territory,” says Raycom Sports President/CEO Ken Haines. “It has given us the ability to also syndicate games outside of the ACC region, so we can go to other parts of the country and have those games. If anything, our brand is enhanced somewhat by this new arrangement.”
ESPN, however, has the right to co-exist with Raycom on those games, so that syndicated matchups can be shown on ESPN as well. That means that every syndicated game can, effectively, become a national game.
“We’re offering fans a choice,” says John Skipper, EVP of content for ESPN. “You can watch Raycom, or you can watch ESPN. This will be to the benefit of the ACC. We believe the ratings for those games will be at historic levels.”
The agreement also includes the ability to add additional sublicense agreements with other national outlets.
Raycom will also continue to manage digital assets, such as the official conference Website, although the conference retains both the archival and digital rights to its content.
“That gives us some new opportunities with technology that we haven’t had before,” Swofford says.
Filling Platform Space
In addition to renewing ESPN’s commitment to showing football and men’s and women’s basketball, the new agreement expands the network’s commitment to Olympic sports by showing more regular-season and championship games in a number of lower-profile sports, including baseball, softball, lacrosse, and men’s and women’s soccer. The ACC content will also be a part of ESPN’s 3D strategy on ESPN3D.
The increase in content provided by the extended ACC agreement will help ESPN grow some of its properties, including ESPN3.com and ESPNU.
“Remember how many platforms we have,” Skipper says. “We have the need for a lot of product. Over the last few years, we have tried to upgrade that product. College sports has generally been priced well, and we think it’s a great product for an appropriate price.”
Equitable revenue distribution has been a guiding principle of the ACC for decades, and this agreement continues that tradition.
“Distribution of revenue will continue to be divided equally among our member institutions,” Swofford says. “The financial aspects of this, as well as the opportunities with new media going forward, only increase the stability of our league. Our schools will be receiving more than double the television revenue that they had been receiving in the past. That’s very significant for any college athletic program in today’s world.”
Still, should anything go sour during the length of the deal or the ACC realign into a new conference, the agreement includes conference-composition clauses that allow ESPN and the ACC to renegotiate to handle any change.
The financial terms of the agreement have not been confirmed by ESPN or the ACC, but the figure has been reported at $1.86 billion, in the ballpark of the 15-year, approximately $2 billion deal ESPN signed with the SEC. Fortunately for college conferences, these types of big-dollar, multi-year agreements appear to be here to stay.
“I don’t foresee a trend where these rights go down, because there is more competition for those rights than ever,” Skipper says. “Conferences have done their own networks, and a number of regional players want to put on college sports. I would suspect that this will continue to be a competitive landscape. We will continue to acquire marquee product that we need, and we will pay market price for it.”