Within the past two years, college sports have been turned upside down with major programs changing conferences. In college sports, there are 5 Power Conferences that are the main players and bring in the most revenue: The SEC, Big Ten, Big 12, Pac 12, and ACC. The Big 12 and The Pac 12 each lost their two biggest players. USC and UCLA are leaving The Pac 12 to head to The Big Ten, and Texas and Oklahoma are leaving The Big 12 to join The SEC. As of now, The ACC has neither gained nor lost any of its member schools and has been the only unaffected conference so far, and it is not without good reason.
In the summer of 2021, Texas and Oklahoma sent shockwaves across the college sports world, changing the landscape of the future when they announced that they will be leaving The Big 12 for The SEC in 2025. Josh Roetzer’s article titled, “The Big 12 Loses its Biggest Names,” discusses what went into the process of Texas and Oklahoma deciding to change conferences and the legalities behind it. About a year after Texas and Oklahoma got the ball rolling, USC and UCLA followed suit and decided they will leave The Pac 12 and head for The Big Ten. The process of their departures is similar to the process Texas and Oklahoma were subject to.
Media Rights Deals Control Everything
As discussed by Connor Johnson in his recent article, a huge take away from these four major departures is that media rights deals are among the biggest factors in conference realignment. In 2012, The Big 12 entered a TV deal with Fox and ESPN spanning 13 years. In 2012, The Pac 12 entered their own media rights deal with Fox and ESPN, spanning 12 years. These media rights contracts are the reason for the timing of the realignment. Texas and Oklahoma will exit in 2025 when The Big 12’s contract expires, and USC and UCLA will exit in 2024 when The Pac 12’s media rights contract expires.
As with everything in college sports, the motivation behind all of these moves is money. The Big Ten and The SEC are the kings of college sports in terms of revenue, paying out over $57M and $54m per school on average, respectively in 2022. Texas, Oklahoma, USC, and UCLA simply wanted more money, and there was no reason for The Big 10 or The SEC and their member schools to turn them away, as they are sure to generate revenue for the respective conferences.
Where does The ACC Fit in?
The reason why The ACC has been stagnant, in short, is because of The ACC’s media rights deal with ESPN and the Grant of Rights Agreement. The ACC’s media rights deal is different than that of The Big 10 and The SEC. The timing of The ACC’s media rights deal is unfortunate for both the conference and the member schools, and they desperately need to restructure the current one or get a whole new one.
In 2012, The ACC and ESPN agreed to a media rights deal that would run through 2027, which included a Grant of Rights Agreement. Essentially, the Grant of Rights Agreement provides that the member schools are subject to the terms of the media rights deal with ESPN throughout the life of the contracts, and their covenant is “irrevocable” and “effective” regardless if the schools leave the conference. In 2016, The ACC extended a media deal with ESPN and the Grant of Rights Agreement for another 20 years, through 2036. In non-legal terms, simply put, this means that all 15 member schools are effectively stuck in The ACC until 2036.
In theory, the schools could leave, however The ACC is still entitled to the media revenue that they receive from home games and certain away games until 2036, when they are finally released from the Grant of Rights Agreement and ESPN media rights deal. In addition to sacrificing that revenue, there are also estimated to be $120M in exit fees per team.
The Grant of Rights Agreement can theoretically be challenged in court if a school can find a way out of it. Should one school be successful, The ACC floodgates will open and it could be the end of the conference as we know it.
This does not mean that certain ACC schools are not exploring all of their options. There have been plenty of rumors that ACC schools are trying to move, from Clemson and UNC, to even reports that Miami and Florida State are “expected” to join the SEC. However, now a few months after that report, it seems like it was nothing more than a rumor, or perhaps those schools anticipated being able to get out of the Grant of Rights Agreement, but ultimately failed to do so.
The ACC’s Lack of Movement Makes Sense
When you take all of that into consideration, it is not very surprising that The ACC and its member schools have been stagnant. Looking at it from the perspective of The ACC, it is a double-edged sword. On the positive side, The ACC should not be at immediate risk of losing any of its members. On the negative side, letting this media rights deal and Grant of Rights Agreement continue through 2036 is simply not a feasible option with the way things are playing out in college sports. By the time 2036 comes around, The Big 10 and The SEC could create their own league and leave the NCAA.
What happens remains to be seen, but it would be better if The ACC tries to get ahead of things and make their member schools happy and increase their revenues. There have been rumors of schools exploring changing conferences. The ACC recognizes these risks and claims to have a plan.
When asked about the state of the conference this summer, Jim Phillips, The ACC Commissioner, has said that he feels “really, really good about the trajectory” of it. Phillips acknowledges that The ACC is the bottom dweller (and it is only going to get worse) of the Power 5 conferences in terms of revenue, and he said that they are working on ways to fix this and feels good about the alignment of the members of the conference.
Louisville Athletic Director Josh Heird and UNC Chancellor Kevin Guskiewicz have essentially called on ESPN to come to the table and help renegotiate their media rights deal. ESPN is in a unique position here, where their business is not just broadcasting the games that they have rights to. ESPN covers every sport and every team, so they have an inherent interest in ACC teams being successful and relevant, better sports means more interest for ESPN. So, it may be in their best interest to try to help keep The ACC afloat.
What does the Future Look Like?
College football and their major players are not dragging their feet on this. If you do not act fast, you will get left behind; both individual schools and entire conferences are at risk. This August, to pair with their new power programs in USC and UCLA, The Big Ten announced a new 7-year deal with Fox, CBS, and NBC that is worth more than $7B, beginning in 2023. In the same light, to go along with their new darlings in Texas and Oklahoma, The SEC will begin a new media rights deal in 2024 with ESPN for $3B over 10 years. And most recently, on September 2nd, the College Football Playoff officially voted to expand to 12 teams, beginning in 2026, as discussed by Connor Johnson.
We know that the future of The Big 10 and The SEC are safe with their recent moves. Who, if anyone, joins them as the relevant conferences remains to be seen. The table for the expanded College Football Playoff is set, and we know the Big Ten and the SEC will be there. The question is what will The ACC do to make sure they have a seat at the table?