Tuesday, November 20, 2012

Maryland is Leaving the ACC, but How's Their Math?

It's been a rough week if you're a fan of the Atlantic Coast Conference.

As everyone knows by now, the University of Maryland voted Monday morning to leave the ACC to join the B1G (that means Big Ten plus three).

The Terrapins are of course a charter member of the ACC—founded in 1953—but their athletic programs are hemorrhaging money to the tune of losing $26.8 million last year.

That apparently means that they had to jump at the chance for slightly more television revenue.

The B1G hands out approximately $24 million a year per school versus $17 million for the ACC.

Interestingly, taking a look at the Nielsen numbers from 2011 tells us that the B1G number is about right while the ACC badly botched their most recent negotiations.

For football, the SEC is clearly No. 1 with 4,447,000 viewers. No. 2 is the B1G with 3,276,000 and the ACC is in third with 2,650,000.

The B1G is first in hoops with the ACC close behind. The biggest difference between the two television deals is the B1G deal expires in 2017 while the ACC locked themselves in until 2027.

According to Sports Illustrated's Pete Thamel, the B1G projects to be able to distribute roughly $43 million per school when the conference negotiates its next deal, but that number strikes me as unlikely and based on a lot of assumptions.

The B1G is assuming that the new television markets brought in by adding Maryland and Rutgers—Washington, D.C. and New York City/New Jersey—will give them far more households with the B1G Network on their standard tier 1 sports package.

That would give them tremendous bargaining power when the time to talk turkey comes up again.

However, the way people watch television is changing rapidly and the industry will have to change too if it wants to keep its subscribers.

A recent study suggests that the average monthly cable bill could be $200 by 2020. That's absolutely insane.

Prices are already far above what the shoddy product we receive is worth which has been driving people online for entertainment.

It's not surprising when services like HuluPlus, Netflix, Vudu, Amazon Prime and others are all vastly superior to wildly inconsistent cable connections filled with dozens of channels that go unwatched.

Thus, the thinking is that in the future cable companies will offer broadband connections with more options for à la carte programming and less of the stuff you don't want in an attempt to keep people from going online. 

This is an intriguing issue in and of itself, but my point is simply these revenue projections by the B1G are likely overly optimistic. 

That's especially true when you consider that the league is simply diluting its product by adding two middling football programs and hoping that market share somehow overrides the product on the field. 

It's somewhat sad to see Maryland leave I guess, but they're a mediocre athletic department that brings very little to the table in the sport driving all this conference realignment nonsense, football. 

I'm hoping that ACC commissioner John Swofford holds the Terps to the $50 million exit fee (one they didn't agree to) and finally shows he has some cajones when it comes to negotiating. 

Stick it to the deserters I say, and take your time finding the new member to fill their shoes. Everyone's assuming a school like UConn or Cincinnati is the logical choice, but are both unappealing options. 

I say take that $50 million and pay a better candidate's exit fee from some other conference. 

Or, umm...Notre Dame, are you sure you don't want to play football with us for real? Pleeeeeeeease?  

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