Last Updated on June 5, 2014
Last week, the ACC and ESPN reached an agreement which extended the network’s television contract with the conference for 15 years. News of the agreement caused many to speculate that FSU would leave the ACC for the Big 12, under the assumption that the amount of money the school would earn under the ACC’s extended media contract was not sufficient and that FSU would be able to earn more under the Big 12’s yet-to-be-negotiated media contract.
However, in a memorandum released today, FSU president Eric Barron all but squashed any rumors of FSU leaving the ACC for the Big 12.
In the memorandum, Barron provided four reasons why alumni believe FSU should consider joining the Big 12: the Big 12 is more football-oriented than the ACC, the Big 12 would give FSU greater football competition, the ACC provides advantages to North Carolina schools, and FSU would earn more media revenue under the Big 12’s media contract.
In response, Barron nearly doubled the reasons why FSU should not join the Big 12, providing seven explanations. These explanations included his notations that the ACC is an equal share media revenue conference while the Big 12 is not, any additional money FSU would receive under a more lucrative Big 12 media rights deal would in turn be spent by FSU on further travel to play Big 12 schools, ticket revenue would decline as Big 12 fans would be less inclined to travel to FSU games, the sellout FSU-Miami rivalry would be lost, FSU would have to pay $20-$25 million to leave the ACC and the Big 12 is an “academically weaker” conference.
While many FSU fans may be disappointed in Barron’s response, his reaction is perhaps the most level-headed of any made during the past 18 months in which conference realignment has changed the collegiate athletics landscape. Barron’s response provided analysis of three of the key factors driving conference realignment: media contract revenues, travel and academics. However, it appears that for once, the lure of media contract revenues did not outweigh the costs posed by travel and academics resulting from conference realignment.
Over the past 18 months, fans of college athletics have watched as teams have realigned themselves with conferences in far away lands, under the auspices of joining the ranks of more prestigious academic institutions, better competition, and ultimately, earning higher revenues. However, in his memorandum, Barron indirectly called out many of these institutions on their bluff: How can you promote academics and earn more revenue, when you are requiring your student-athletes to travel further distances and expending more money to meet a growing travel budget?
In recent months, I have been given great access into top Division-I athletic department’s budgets. Across the board, the highest expense any athletic department incurs is for travel. Athletic departments that compete in localized geographic areas already shell out millions of dollars per year to pay for travel. Imagine how much the amount spent on travel will increase when schools join conferences with geographic reaches across the nation? Will it double? Triple? Will the possibility of earning $2 million more per year under a media rights agreement balance the additional travel costs incurred by the athletic department, while also negating the time lost to study by student-athletes required to travel further distances for competition? Only time will tell.
Today, many may be chastising Barron for his memorandum and apparent disinterest in moving FSU to the Big 12. However, ten years from now, it will be interesting to see what FSU has gained (and likewise, what it may have lost) by remaining in the ACC.
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May 15, 2012 at 5:07 pm
Firstly Alicia, the memorandum was released yesterday, Secondly Barron’s response is a typical negotiating and CYA strategy. He needs to appear on the side of academia in order to appease his faculty members. His BOT will overrule him and he remains in the good graces of them. Thirdly, He never said FSU wasn’t going anywhere, just listed reasons, pro and con. He made a couple of blatant mistakes in his memo. Firstly, he may have been referring to an old situation in talking about unequal rev sharing in the B12. Doesn’t exist any longer. And, he talked about conference travel on buses. FSU teams don’t travel ANYWHERE on Buses, except maybe Clemson and GT one of which goes with FSU when they leave. Try again with a little more reasoned response.
May 15, 2012 at 5:27 pm
Bill, what reasons do you have for why FSU should leave the ACC? I’m always interested in learning of opposing viewpoints. I feel 99 percent certain the Seminoles will remain in the ACC and confident with my analysis.
May 15, 2012 at 7:19 pm
I actually thought the memo was not very polished for someone in the upper crust of ACC academia, but maybe that’s just me being a Big 12 dullard. That said, I think you are correct, if the difference is only $2.9 million per team per year then there is no way that FSU and Clemson join the Big 12. But, how can you be 99% confident until you know the $$$? The only thing certain for now is the ACC deal, which pays $17.1 million annually for Tier 1-3 and the conference championships (which is also locked in longer than any other conference) and the $20 million ACC buy out number.
Here is what is in flux and requires study by FSU:
The Big 12 is rumored to have negotiated a deal that pays $20 million per team, but the deal is not finzalized yet. For the Fox Tier 2 deal, the initial announcement had the deal at only $60 million per year, a number announced by numerous outlets including the Sports Business Journal. However, when the deal was finalized a few months later it was for $90 million per year. The same possiblity exists for the Big 12’s Tier 1 deal, which could be $1-2 million more at the end of the day. Plus, the Big 12 Tier 1 deal that was floated and the Tier 2 deal already signed both run 3 years shorter than the ACC deal. Since all these deals are backloaded (the ACC won’t make $17 million per year per team until 2021 according to Wetzel), it is likely that the $20 million per team number could be greatly increased if the Big 12 is simply willing to extend those deals out as long as the ACC deal. If Wetzel is correct and you look at the numbers side by side on a year by year basis, I would put a major wager down that the gap will wind up much larger than $2.9 million annually.
If FSU and Clemson came on board, the Big 12 would have a conference championship game to sell. That is likely at least $2-3 million more per team in TV rights money alone. The Big 12 traditionally sold its tickets to the Championship game much better than the ACC does, which would create more cash for its members.
If FSU and Clemson came on board, you don’t think that Fox would be willing to shell out some additional cash for the Tier 2 rights to Seminole and Tiger games that they have zero rights to show currently to make the deal happen? Conservatively, I think their addition would be worth at least $1-2 million per team from Fox on Tier 2.
Conservatively, the FSU would make around $5 million per year on their Tier 3 rights. Clemson likely not as much, but Tier 3 is probably still a $2-3 million asset for them.
We don’t have a finazlied picture of the 4 team playoff payout and qualification structure. However, almost no matter which direction it goes, the Big 12 is likely to be a proportional winner and the ACC a proportional loser compared to the current BCS system. The Big 12 would have placed the second most teams in the 4 team playoff (only slightly behind the SEC) while the ACC would have placed the least teams of any BCS conference over the past 10 years under most models.
Lastly, the travel is going to increase for FSU simply by staying in the ACC with the additions of Syracuse and Pitt. On the other hand, the change to the Big 12, especially with 1-3 Eastern partners would not be as significant as Barron indicated. FSU is not as far from the Texas state line as many in the media seem to think.
At the end of the day, FSU could be looking at a $10 million per year decision (or more depending upon the playoff). Can FSU really afford to throw that kind of cash out the window when they are running at a deficit currently and UF, Georgia, Auburn, South Carolina and Alabama are going to be swimming in money when the new SEC deal and SEC network are announced?