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Texas to the ACC: Is it so crazy?

When I first heard rumors of Texas to the ACC about a week ago I thought it was the most ridiculous thing I’d ever heard. No specific reason – it was just my gut reaction.

Then I got to thinking about it, and suddenly I can see it. Texas to the ACC makes more sense than any other scenario outside of the Big 12.

Let’s get inside the mind of Texas for a minute. It’s used to being the alpha dog in its conference. It has a brand new network it would like to keep that stands to make them financially stable for a very long time. Texas is an elite public university, one of the “public Ivy” schools.

Given all that, where does Texas best fit outside the Big 12? Crazy though it may sound, I think it’s the ACC.

Before we get into why the ACC is the surprise frontrunner, let’s take a look at the other conferences from the one with no chance to the one with the strongest case after the ACC.

The only way Texas will be joining the Big East is if it goes independent for football and needs a home for its other sports. I don’t see any point in wasting word count on why this is the case.

The Big Ten doesn’t seem to be a factor at this point. Even if they were, they would almost certainly require Texas to ditch the Longhorn Network because of the Big Ten Network, which has second tier rights in the conference (by comparison, the regional networks in the Pac-12 have third tier rights).

I’m sure the SEC would welcome Texas with open arms, but the academics in the SEC keep them from being a factor. Florida and Vanderbilt are the only academic heavyweights in the conference, and that’s not enough for Texas. Again, this is a conference unlikely to let Texas keep Longhorn Network. That’s the most important part.

The Pac-12 is out because Texas would have to give up the Longhorn Network and stomach splitting money equally with little brother Texas Tech and a school like Washington State. They’d also presumably be sharing a regional network with Texas Tech. They wouldn’t be getting into Southern California either, as it seems clear any addition of Texas, Texas Tech, Oklahoma and Oklahoma State would mean creation of an eastern division in the Pac-12 to also include Utah, Colorado, Arizona and Arizona State. Although they fit in academically, it’s not enough. It also means playing away games two time zones away.

Which brings us to the ACC. The ACC comes the closest to giving Texas everything it wants and needs. Texas can come in and immediately be competitive in football and basketball. It’s a respectable conference for all the other sports as well. Based on the US News and World Report rankings that came out yesterday, the ACC is the best conference academically. Texas would be in extremely good company in that respect. The ACC television deals already provide a per year average that is higher than the Big 12 will have under its new contract. Although Texas receives more than the average in the Big 12 currently because of the unequal revenue distribution model, that model has already been equalized to a degree with equal sharing of the new FOX money, and there’s talk of making all revenue sharing equal going forward.

The biggest selling point isn’t that Texas can make as much or more in conference distributions in the ACC, it’s that Texas would get to keep the Longhorn Network. I think that’s the deciding factor here. The ACC allows each member to dispose of their third tier rights (any content not picked up by the conference’s tv partner, ESPN) in whatever manner they choose, so there’s no reason to believe Texas wouldn’t be able to keep the Longhorn Network. Texas is guaranteed to make $10.98 million from the Longhorn Network this year, with increases of 3% each year after. In addition, once network revenues exceed $295 million, Texas will begin receiving a whopping 70% of what’s called “Network Adjusted Gross Revenue,” which is essentially net income of the Longhorn Network. Is there any doubt holding onto this network is Texas’ top priority? 

Even more importantly, the ACC could position the Longhorn Network to carry more football games. ESPN, Texas’ partner in the Longhorn Network, is the sole rights-holder in the ACC. That means no negotiation with FOX or any other network when it comes to television rights in the conference. From what I’ve been able to gather, the ACC contract with ESPN requires ESPN to carry all football and men’s basketball games, which on the face of it would make it seem that no football games would be available to the Longhorn Network. I have not been able to obtain a copy of the contract between ESPN and the ACC, but I wouldn’t be surprised to find language that might allow Longhorn Network to grab some games. Because ESPN has so many channels across its own brand and ABC, I imagine the language says something about games being carried on ESPN or any of its affiliates or subsidiaries. Longhorn Network would likely qualify if broad enough language was used.

Even if the terms of the contract don’t allow for ESPN to pass games to the Longhorn Network, I think there could be some negotiation to allow it. The ACC would be increasing in value as a conference by adding a huge national brand like Texas, so a renegotiation of the contract with ESPN might be in order. If a new contract is negotiated and current members of the ACC have their revenue share increased, perhaps they won’t mind a game or two ending up on Longhorn Network. Money talks. Not to mention that adding Texas increases the brand power of the ACC as a whole. As long as revenue is still be distributed equally amongst ACC members and the current members are adequately compensated for allowing the Longhorn Network to exist, I don’t think they’ll say no to the chance to add Texas.

You can argue with me all you want about fans not wanting to travel to ACC destinations or current ACC members being against the addition, but the financial incentives for all involved are the most important motivators in this round of conference realignment.

If you’re not sold, check out this piece by Chadd Scott of ACC/SEC/C-USA site ChuckOliver.net detailing why Texas to the ACC is a bad move.

27 thoughts on “Texas to the ACC: Is it so crazy?”

  1. Something not mentioned is that within the LHN contract, if Texas does not have a conference ESPN has first and refusal rights for tiers I and II. ESPN will have, if a league requires Texas make concessions on the LHN to join the league, exactly 0 motivation for this. They would essentially own Texas if Texas is not in a conference, and would buy Tier I and II rights and it already has III. Texas has little control in this process right now.

    If ACC is where Texas goes, it will be less to do with the fact that Texas wants the ACC, and all to do with the fact that it is the only conference that will take them with the LHN network as is. No changes required. If the ACC does not take Texas, I bet ESPN buys their tier I and II rights. Possibly for cheap if NBC/CBS/Fox do not bid too much.

  2. Just from a fan’s perspective, I would love to have Texas in the ACC. It would bring another big time football fan base into the fold, which would make the ACC a better value for tv contracts and bowl bids. (Our bowls suck) In addition to football, basketball and baseball would be deeper with good teams where it is already strong.
    Plus, from a Clemson perspective, anything that dilutes the Tobacco Road influence on the conference is a good thing.
    I would love to see the Longhorns in Death Valley, and a trip to Austin. But watch out for the reception Rick Barnes would get in Littlejohn.

  3. This makes a lot of sense and your point is well-taken. However, the geographics and the “big fish, small pond” euphemism comes into play for me. Were I a UT fan, this would be my least favorite scenario for a multitude of reasons – mostly because it just wouldn’t feel right or fair playing a bunch of high school teams and two or three decent squads every year.

    Oh yeah, and WTH was with the “Florida and Vandy are the only academically sound colleges in the SEC”? UGA was right on the heels of Florida (much the same as in everything else) and has an APR higher than anyone in the conference. I’d say UGA is right there with those three, but again, the SEC ain’t nowhere near the ACC in that category.

  4. I agree that the ACC makes sense financially for Texas, but that’s about it. A boost in academic rankings never mattered much to Texas in the Big 12. It’s all about the LHN and if a conference will let Texas keep it.

    Question is, will FSU care to hang around if Texas comes into the picture? That whole exploratory committee sure seems like a way to jump ship if necessary. Florida allowed an invite to FSU back in 1991, so I’m not sold on the whole “we own the state” argument regarding Clemson, GA Tech, and FSU.

    Vanderbilt is the only academic “heavyweight” in the SEC. Florida, Georgia, Alabama, etc are all pretty equal and being ranked over #50 in the US News pretty much means nothing.

    Gainesville can point to the AAU standing all it wants, but the AAU is just a political club that means a lot less than the marketing touts. Are Syracuse and Nebraska really any less because they didn’t meet the magical barriers of the AAU from 2010 to 2011? Doubtful.

    UGA 98

  5. Why is it so difficult for people to understand the metric used for evaluating the academic quality of a conference is the relative number of AAU member schools. Vandy and Florida are AAU schools. Georgia isn’t. End of story. U.S. News rankings mean NOTHING in this argument. As for Texas to the ACC, the football team will be independent and the Olympic sports would go to the ACC. No way on God’s earth would Texas put its football team into the ACC. TExas would control its Tier 1, 2 and 3 rights to football and its Tier 3 rights to Olympic sports (UT doesn’t have lacrosse, water polo or most other minor sports. Only 9 men’s teams and 7 women’s teams).

    1. Huh? Saying that the ACC would accept Texas Olympic sports without the football program is LUDICROUS and moronic. What delusions in your mind would make you type those words?

  6. As a UNC alum and fan I would be happy to see Texas join the ACC. I’m a hoops fan first but I know football brings in the bucks and the ACC needs a legitimate football power to keep the conference viable. I can think of few better than Texas: Great school, great town, great all around athletic program. Hope it happens.

    btw love your blog. Not to sound too cynical but it’s refreshing to see someone cut through the pomp and pageantry of college sports and talk knowledgeably about what really drives things: TV rights and money.

  7. Kristi, just a correction, the SEC allows schools to have full control of 3rd tier rights. As an example, Florida’s 10-year $100 million deal with the Sunshine Network for their 3rd tier rights. None of that is shared with the conference.

    Texas will not be going to the SEC regardless.

  8. Here’s the thing, though: Even as an equal partner of either the Big Ten or Pac, Texas would make as much or more money in those conferences than they would as a member of the ACC. Remember that the LHN folds in Texas’s media rights, so you’d have to subtract about $10M from that $15M annual average payout for the LHN. tOSU gets $10M annually for their media rights even though the BTN controls Ohio State’s third-tier rights.

    If Texas does choose the ACC, what that tells me is that Texas isn’t interested in the LHN because of the money; Texas is interested in the LHN solely because of the LHN and possibly because they have an aversion to being in a conference of equals and would rather lord it over inferior peons.

    Big Al: I don’t see the ACC lowering itself to the level of the BE and taking only Texas’s nonfootball sports (why would they?!?). If they do, however, it would be the death of the ACC as I see FSU and others bolting soon afterwards.

    1. Texas is most interested in protecting and promoting it’s brand via the LHN.

      Also, in the ACC’s case, the conference does not control 3rd tier rights like the B1G does. Texas would get to keep it’s LHN payouts because it does not carry 1st or 2nd tier content. Something else to consider is that when the LHN revenue reaches $295 million, Texas then gets 70% of all revenue from then on.

  9. As a BC fan, I love Texas in the ACC, though I am skeptical this is anything more htan a Pac-12 leverage play. Austin is a great and easy road trip. UT is a top notch public school with strong Olympic sports and a huge national draw.

    Boston, Raleigh, Charlotte, Charlottesville, Miami, and DC are all great, easy road trips for other schools’ fans, and Austin fits right in. Anything that will help get the ACC basketball tournament out of Greensboro is a good thing in my book too.

  10. @Richard –

    What most people don’t understand is that Austin, Texas is the largest city in the U.S. without a pro sports franchise. This gives UT a primary market of 1.3million people that they do not share with other teams when it comes to sports entertainment dollars. This natural advantage over other college (and pro) franchises accounts for a lot of the value of its media rights. FSU does not have the same primary market advantage. Therefore, the value of its media rights won’t support the school going independent. BYU can do it because it has a strong CJCLDS following (a market of approx 3.5mil). ND is ND. Southern Cal, a premier program in the media capital of the country, only generates $29mil/ year in total football revenue out of a marketplace of 10.6 million. Texas’ football program generates upwards of $90 million. Tallahassee’s primary media market is only 245,000. The difficulty of trying to support a program on a media market of 245,000 and an average sized fan base precludes FSU from going independent.

  11. Big Al:

    I’m not arguing that Texas can’t go independent. I’m quite sure that they can. What I doubt is the ACC taking all of UT’s non-football sports while letting Texas go independent in football. The BE may do that, but I seriously doubt the ACC would take in the Longhorns unless UT football is played in the ACC.

    If they do (or even if Texas is admitted on unequal terms), I see schools splitting off from the ACC in the near future.

  12. As a UNC alum, I would love to see Texas in the ACC. It is a good fit and mutually beneficial. Selfishly, I would love to road trip to Austin for a Tar Heel football game and host Texas in Kenan in 2012 to see Mack Brown roaming the sidelines again, even if it is in the wrong color.

    Kristi – love the blog. Thank you.

  13. It UT goes to the ACC for football, the the crunch you hear is Wake Forest, Boston College, UVA, North Carolina State, and Georgia Tech being thrown directly under the bus. Being in the same conference as UT has been made for Baylor, Kansas State Texas Tech, and Iowa State. Being in the same conference with UT would be very bad for the ACC schools that do not have hanger-on fans. In a couple of years, VT, Clemson, Florida State, and North Carolina will be looking to move to another conference and the rest of schools will be hung out to dry.

    Any school that gets into a deal with UT is asking to be screwed over.

  14. Gainesville can point to the AAU standing all it wants, but the AAU is just a political club that means a lot less than the marketing touts. Are Syracuse and Nebraska really any less because they didn’t meet the magical barriers of the AAU from 2010 to 2011? Doubtful.
    *********************************
    AAU is about research dollars and of late NIH dollars. Nebraska not having a medical school directly as part of the school and focussing on agriculture doesn’t bring in those latter dollars. There are many schools that get close to 65 % of every dollar in direct costs associated with research (save for equipment over $5,000). That goes for covering overhead (up keep of the building, utilities, and administrative costs including administrators). They are big time dollars. The grants also mean they can have professors on soft money contracts (i.e. most the faculty salaries are covered by the grant and not the school). These professors in turn train graduate students. The grants cover the tuition and stipend for such students (i.e. more money brought into the school) and these graduate students do some of teaching (i.e. cheap labor). Public schools typically have negotiated lower rates for overhead closer to 50 % but still an important revenue stream. Collaborative grants becoming more important. Collaborations between institutions are a result of people at the institutions meeting.

  15. Much may depend upon what schools accompany Texas in an ACC western pod (UT won’t enter the conference by itself, and any fellow newcomers will almost certainly be fellow Big 12 emigres). Kansas would be the favored choice of ACC schools because it’s a basketball brand with ties to conference members, particularly North Caroliina, which may mean Kansas State tags along. Either Texas Tech or Baylor would round out the pod — since I think Tech will head west with OU and Okie State, it likely means Baylor is ACC-bound, igniting an instant Baptist rivalry with Wake Forest.

    As a Maryland fan, I’ll be watching this warily. If UT’s inability to play with others strikes once again, leaving the ACC unstable and enabling Maryland to be picked up by the Big Ten, all this will be a win-win for College Park.

  16. If UT joins the ACC, some current members will eventually move on. They will be replaced by more attractive teams from men’s football and basketball. Academics WILL count in the equation.

    This makes sense for Texas. Who want to fly their football team from Austin to Pullman, WA? when they could be competing much closer to home. No games ending at midnight Austin time.

    I predict that if Texas joins the Acc, it will be the best football conference in the BCS and ACC teams will win NC’s regularly. The ACC institutions and Texas are the cream of the crop. Let the PAC 16 implode all by itself.

    HOOK’EM

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