College sports realignment: What are the next steps for the ACC?

The ACC isn’t going anywhere, which is good news, and also very much a problem for the member schools that probably feel more that they’re stuck with each other than glad to still be together.

The reason the ACC isn’t going anywhere: the grants of media rights keeping the members together through 2036, which is two eternities from now, are as inviolable as they are constrictive.

If you have doubts about that, consider the cases of Texas, Oklahoma and the Big 12, which would love to not continue being tethered to each other, the problem being, Oklahoma can’t afford to pay the roughly $80 million in exit fees to get out of its grant of media rights to the Big 12 before the conference’s TV contract expires in July 2025.

Texas and Oklahoma are leaving the Big 12 for the SEC, which would love to have them ASAP, and the Big 12 would love the two schools that don’t want to be around anymore to leave.

But the conference isn’t budging on the exit fees.

That $160 million in exit fees works out to $16 million per member.

The ACC exit fee is reportedly in excess of $120 million.

And on top of that, a school departing the ACC is penalized an amount equal to its annual TV revenue from the conference for the duration of the grant of rights, meaning, doing quick math, a school that would want to join another conference in 2024 would end up being down close to $600 million when all is said and done.

So, nobody’s leaving, despite what your favorite blogger may be trying to get you to believe to the contrary.

That’s one reality. The other: that the ACC is on the verge of falling hopelessly behind the new Power 2, the SEC and Big Ten, in the arms race.

The P2 already pays out $25 million more per school per year its members than the ACC pays to its members; by the end of the decade, the gap is projected to surpass $50 million per school per year.

The benefits of more money, spelled out: more money for coaches, more money for facilities, recruiting.

The ACC didn’t get anybody into the College Football Playoff last year. The conference got just five bids to the 2022 NCAA Tournament. (The Big Ten got nine; the SEC, six.)

In this arms race, the rich don’t just get richer; they’re also more likely to win more.

How can the ACC fight back?

Expansion

The easy solution here is convincing Notre Dame to join as a full football member, but that’s not happening anytime soon, if ever. Word this week is that the conference has talked to SMU (in the Dallas/Fort Worth media market, the nation’s fifth-largest). There’s really nowhere else to go in terms of landing a school in a big media market, unfortunately. All the good schools are otherwise accounted for at this point.

Somehow work more money out of ESPN

The talk of a deal with the Pac-12 to use the ACC Network to broadcast Pac-12 games could make money for both, but what it be enough to prevent the Big 12 from poaching what’s left of the Pac-12 South (Arizona, Arizona State, Colorado, Utah)? It’s not like ESPN is just going to up and give the ACC more money, even if the network might also end up getting stuck paying billions to the ACC for an increasingly inferior product.

A new revenue distribution model

The current model splits money basically evenly among the members. An idea gaining traction is to distribute money based on performance, to reward the schools that, in essence, are trying harder. The basic principle of modern economics could incentivize everybody to get better, which wouldn’t be the worst thing in the world.