Jotting Down Notes On ACC Expansion: Uninspiring Results With Stripped Traditions

Today is going to be all about celebratory and chest thumping press releases and projections of revenues (via anonymous sources to Pac-10 beat reporters who will dutifully cut and paste whatever they are served up). So I thought star the day by jotting down the notes on how the much hyped expansion worked out for ACC. There is never a perfect comparison because each BCS conference has its own quirks and idiosyncrasies. Yet I think looking at ACC makes sense because that conference expanded for the same reasons Pac-10 is taking a leap today. From a 2008 Washington Post article entitled, "ACC's Forward Progress Limited," here was the set up on why ACC made its leap into the expansion craziness in 2003:

The Atlantic Coast Conference's symptoms five years ago were easily diagnosed: diminished ego, voracious appetite and selective vision. The conference with the highest average revenue payouts, an acclaimed tradition of basketball success and a reputation as one of the most pristine collegiate scholastic associations in the country needed -- or, at least, felt it needed -- to grow.

Tired of the persistent malaise with its football clout among Bowl Championship Series conferences and intent on catching the eye of television network executives, the ACC set out to expand from nine to 12 schools in 2003 in hopes of satiating all of its competitive, financial and academic desires in one fell swoop.

Sounds familiar? Well the result at the 5 year mark was not all that impressive and it should make folks reflect before jumping for joy today. At this point, it doesn't matter. Utah is in. However, I do want to make sure we note down the points re. ACC expansion and create this blog trail, so that 5 years from now (if BN still exists), we can come back revisit this post to decide whether we were right to raise the red flags.

The Post article concluded the results were "mixed":

"I'm not sure there's been a terrifically positive benefit," said Paul Haagen, a law professor and former vice chair of the academic council executive committee at Duke University. "It has been less negative than some people feared and less positive than some people will claim." [...]

Florida State outlasted Virginia Tech, 27-22, at the inaugural ACC championship game in 2005 in front of 72,749 at the Gator Bowl in Jacksonville, Fla. The following year, Wake Forest beat Georgia Tech, 9-6, and attendance fell by nearly 10,000. "Wake Forest and Georgia Tech -- those aren't exactly marquee programs," said William S. Kern, professor of economics at Western Michigan. "The buzz outside of the region has not been as big as it might have been in the past."

Attendance dropped again in 2007. Virginia Tech knocked off Boston College, 30-16, before nearly 20,000 fewer fans than when it played in the inaugural contest.

As mentioned in the comment threads there was a slight uptick in the attendance numbers last year, but it wasn't all that impressive either. The numbers have been pathetic since its first year.  As far as the TV revenues are concerned despite, the big K the conference signed with ESPN and the championship game, the intake per school didn't increase all that much. From State Fans Nation (one of the best and classic (in terms of blog years) ACC fan blogs on the web) analysis on ACC expansion:

TV revenues have doubled. According to an ESPN.com report on the most recent contract, the TV deal with ESPN/ABC was valued at $258 million, or about $37.6 million per year, which was almost double the previous contract. Furthermore, the ACC reported on its website in May 2007 additional revenues of $16.9 million from TV rights, $5.7 million from the championship game, and $3 million in bowl revenues. Total distribution to member schools was reported at nearly $11 million, up slightly from the $10.9 million ESPN.com reported the ACC had distributed to each school in 2003-04, its final year as a nine-team league. This at least supports the argument that the existing teams would not see their revenue share decrease with three additional teams.

So despite the impressive new TV K, the revenue intake per school didn't go up by all that much. It is a data point a Big-10 observer in the Detroit Free Press took note of while discussing the possibility of mass Big-10 expansion in recent weeks:

At the end of the turmoil, the ACC wound up a weaker basketball conference, roughly the same in football and with a baseball "championship" tournament that prohibits four teams every year from even competing.

The per-team television income remained about the same as when the ACC had nine members, and those all-important football championship games have done nothing whatsoever to create any sort of national interest or prestige.

So what did the ACC really gain for that extra million buck per school (which is not all that much for schools like Duke, UNC ... and on this cost for Southern Cal, UCLA and Stanford). I doubt UNC and Duke needed those extra teams to make their recent title runs. If anything the ACC basketball conference has become diluted with additions of schools like Virginia Tech and Miami. As mentioned above their football championship games can barely generate any interest in their own region. More importantly, as State Fans Nation noted, the expansion "stripped" ACC of its tradition:

Thus far, expansion has not improved the product of ACC football, but rather guided it further into parity. The ACC still sends its conference champion to the Orange Bowl the same as it did in 1992, and then the Peach and Gator Bowls still make their selections based on which team will bring the most fans rather than which team is more deserving (within the loosely-written rules). As was the case before expansion and before the Coalition, Alliance, or BCS, the conference's second-best team is not guaranteed one of its prestigious bowls and subsequent highest payouts.

Moreover, expansion has ostensibly stripped the ACC of its traditional, intrinsic personality as its leaders strive, almost in mercenary fashion, to expand its product into something generic, something readily-marketable, at the expense of the loyal. In these regards, from a strictly qualitative, subjective standpoint, expansion has fallen well short of its lofty aspirations to equate its football product to that of the SEC and Big XII.

So coming back to the Pac-10, right now there is still no hard numbers in terms of exactly what adding Colorado and Utah together does for UCLA. There is no TV contract in place. Larry Scott has been talking a big game but we will have to see if he can walk the walk, when time comes to extract the actual market value of Pac-10's TV footprints.  

Moreover, there is no guarantee whatsoever that Pac-10 is going to be able to stage a successful championship game. It's track record in hosting tourney has been a joke (and it showed no discernible improvement this past year when Scott was in charge).

Jon Wilner for the San Jose Mercury News ran his own set of calculations based on his discussions with sports consultants and industry experts and projected that the Pac-10's revenue (based upon numbers from a new TV contract and a championship game) will go up to the range of 13-14.5 million per team from the current 8-9 million.

What he doesn't mention is that the 8-9 million number could have jumped to 10-11 million range even without Utah (or Colorado).  Wilner also quoted media/marketing sources in asserting Colorado and Utah don't bring much to the table:

Three media/marketing industry sources said that Utah and Colorado bring very little, if anything in terms of additional TV revenue. Said one: "From a national cable perspective, they have no value."

In other words if Scott and his team negotiated a reasonable deal with Fox and ESPN extracting the actual market value instead of the pathetic arrangement from the Hansen regime.

So it's not clear at all right now exactly what traditional Pac-10 programs such as Southern Cal, UCLA, Washington, California, Stanford, and Oregon are getting out of this arrangement. The intake per school is not going to go up by all that much. Perhaps extra 2-3 million is a big deal for Washington State or Oregon State, but it is not all that much for a school like UCLA, which operates in the black and has the most lucrative apparel deal in the conference.

The example we have from ACC as noted above is not convincing at all. If anything it is a little alarming in how it has devalued its traditions and has not upgraded its quality of football programs. Now we could be looking at a Pac-10 conference where long standing relationships among Pac-8 programs are going to be jeopardized, just so some schools can get extra couple of million dollars.

So it will be up to Larry Scott now to not just upgrade the next TV K, but dramatically boost it. If the results of Pac-10 expansion is just as mixed and uninspiring as the ACC one, it will be a big FAIL on the part of Scott, and also on the part of UCLA officials who signed off on it for cheap dollars.

GO BRUINS.