Where is College Football Going: The ACC Future and a Pause for the Season

May 15, 2024

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We take one last look at the Merger Madness situation and the possibilities of how the ACC Grant of Rights is the super glue that binds but all glue joints can be broken. At some point something’s got to give. Before the kick and a pause, we look at how things stand as far as we can tell. Game prep starts tomorrow, so it all goes into idle until New Year’s. GO HOKIES!!!!

We are less than two weeks out from the meteorological beginning of the Fall season, which generally is looked upon as the first week of September in the Northern Hemisphere. We won’t go down that rabbit hole but the “Ber-months” mean cooling temps over the next 90 days, leaves changing, and kickoffs and whistles sounding.

There isn’t too much progress to report on the last article of the Summer pickup of the “Where is College Football Going?” Series, except to say that the ACC has a serious problem, and if it cannot find a solution that it can afford, it will meet with a sketchy relatively impoverished decade (well, more than a decade because the Grant of Rights does not expire until 2035/36).

All the media speculation has some element of truth, but the legal and organizational wrangling are far above the heads of even most athletic departments. The costs are going to mount, and the combination of litigation and its outcome are going to threaten to impoverish more than a few programs.

Without jumping into a ton of links, here are some very interesting articles that might interest the readers for background information:

ACC expansion and survival, including Notre Dame and Stanford, explained - SBNation.com

Inside the Big 12’s ‘ironclad’ grant of rights contract that helped keep the ACC together amid turbulence - CBSSports.com

Conference realignment news: What is ACC grant of rights agreement? (courier-journal.com)

Notre Dame And The Pursuit Of Its Next TV Contract - Sports Illustrated Notre Dame Fighting Irish News, Analysis and More

There is a pretty universal business consensus that the extension of the ACC/ESPN Grant of Rights agreement until 2035/36 was foolish. In a rush to finally build the ACC Network, the programs signed on to an extension that only benefitted the lower tier teams of the conference and “the Mouse” which pays out a relative pittance over time for the telecast rights to the league, with an ever-bulging difference of paid vs. profited cash.

The problem is the nature of the contract and the massive gulf between what the top end ACC programs think they can earn vs what the shared equal revenue in the contract guarantees all the programs. Even within the “Magnificent 7” (half the teams in the conference) the drop off between Clemson, Florida State, and Miami is a huge gap. FSU has already been very vocal about its desire to leave the ACC behind and head for much richer SEC waters. Clemson has been cagey about it, but there isn’t a whole lot of doubt behind their ultimate goal, either. Miami’s position isn’t too much in doubt, but their 2022 season record will probably make them a little less vocal on being “jumpy”. There is also some heavy speculation that the expansion exploration with Cal Berkley and Stanford (reportedly with heavy input from Notre Dame) was also blocked by objections from FSU, Clemson, UNC, and NC State.

There was a modification to the GoR done to try to appease the bigger revenue and winning schools by increasing their share of the post season/bowl revenues, but that is small recompense when compared to the potential revenues from an SEC or B1G media contract when you are FSU, Clemson, or UNC.

The tear here is that the Grant of Rights which contractually binds these teams to the Mouse at what The Mouse was offering in 2016 to benefit The Mouse is beneficial to half the league, and an anchor tied to the top third, and a drag chute tied to the bumper of the rest. Those teams will have to either balance the potential earnings difference if they bolt in 2024, or find one or two more bubble programs in that middle half pile smiling at their better guaranteed revenues.

A speculative list of the current teams in the conference with the most theoretical future earnings potential for both football and men’s basketball (the two revenue sports in the NCAA). Top Tier Potential Earners are presented in no particular order. Bubble teams are presented in order of bias (more prone to go first, and then less prone), and then the sticking teams that, for now benefit from The Mouse’s stipend: (Magnificent Seven teams are marked with an *)

(Remember this is a distillation of what we are currently seeing as we survey the mountain of references and stories that are reporting various aspects of this. It all could and will probably change by the end of the season.)

When you notice the breakout, you also notice the competition levels within the conference. The teams currently dominating are attractive targets for addition to the presumed two 24-team Super conferences. The teams on the bubble are either very new to the ACC or have decidedly mixed results on the football field or men’s basketball court, of late.

The baby elephant in the room remains the Men’s Basketball programs. UNC might not be known for football, per se, but it is a basketball powerhouse and drives TV viewership due to that. Duke which is currently in the ‘maybe not’ category is certainly a Basketball audience draw, and an improved level of compensation related to that sport might be enough to pull them over to the other side of the bubble.

Football is still the king of revenue drivers, but men’s basketball rules the Winter and early Spring, and programs like UVA –that are football duds- shine with other sports like lacrosse, soccer, and baseball. All those other ‘non-revenue’ sports seem like they are irrelevant, but basketball and baseball/softball do not compete with football for airtime. That means TV audience share over a broader telecast period. A quick survey of the on-air viewer guides in January through March will give you an idea of the ad revenue potential for better promoted ‘non-revenue’ sports. Those guides are loaded with Men’s and now Women’s Basketball. Not everything is football. The upshot is that there is more revenue involved than just the telecast period between September and New Year’s Week.

This doesn’t take too much in the way of deep dive analysis. The 24-team leagues are forming, and there are only a limited number of slots left for the SEC- and B1G-based super conferences. The ACC might find itself completely frozen out of those leagues if there is no room to maneuver.

This means that the first method of changing the GoR to allow for a reasonable exit would be enough of the programs, presumably 1 more than half… filling the base exit fee for each program, and then filing suit against the ACC and ESPN to force some form of settlement.

This tactic might work, but it would take years to settle, and in the meantime the revenue situation is disadvantageous to the leaving programs.

Let us speak of the ultimate failure in all of this. There is identified, a last resort to the elimination of the Grant of Rights, and the reference in the title is from “Star Trek” the Original Season. I won’t bore you with the deets on the episode, but there is one way that the ACC can absolutely dissolve the GoR, and that’s a vote by the ACC’s governing board to dissolve the league. The “auto-self-destruct” gambit.

This action would probably take much more courage than any of the other methods of breaking out of the contract, because it would result in 14 (15) independent teams with no conference association for some undetermined period. The resulting litigation burst would put the former conference and its former members into a sort of contractual legal limbo with The Mouse, and joining up with another conference would probably result in barrages of civil torts resembling a Texas Tech air raid attack.

At the top, there isn’t much in the way of brand loyalty to the ACC that supersedes the attractiveness of long-term financial gain. Perhaps if college football programs were actually “for profit” corporations with shareholders and fiduciary responsibilities there would be the organizational drive to increase the profitability of the league. That’s not the case, and the fiduciary angle on profitability is a no-go when talking about a congressionally authorized non-profit (501c3) organizations like the NCAA and as many Athletic Departments as I have seen documented. Money is only supposed to be sufficient to run the organization and educate the student-athletes. Don’t laugh. That’s actually how it’s supposed to be.

And like the ending of this episode of the Star Trek series, it turns out that much of what is going on is completely outside of the control or influence of the crew of the starship, including the self-destruct sequence.

There is one way that the ACC might actually find itself in a better than lose-lose-lose scenario, and that’s to expand. The interesting development was the supposedly Notre Dame based bait to add Cal Berkley and Stanford to what would be a rising coast to coast “Egg Head” Conference. With perhaps Notre Dame moving into a more formal football relationship with the conference. No, don’t blow that off. The B1G telecast rights are mixed between NBC, Fox, and ABC/ESPN. Notre Dame finally joining the ACC fully would give serious leverage to a renegotiation of the GoR to deal with their private deal. Their current contract with NBC/Comcast Sportsnet is set to expire in two years (2025), and their football cache has been iffy of late.

Some folks think that Notre Dame is some all-powerful brand that can drive itself, but think about it. In 2025 and beyond, big time college football (and all sports) money will be controlled by two mega-conferences, and so will the access to the championships and big money bowl game opportunities. What incentive does either of those leagues have in adding a tail wagging the dog like Notre Dame to its scheduling and post-season play?

The answer is not plainly known, here, it is just a real question that has no definitive immediate answer. That means that Notre Dame could also freeze itself out of contention for any National Championship which would presumably be between the two major 24-team leagues that benefit from their own media rights.

That means that Notre Dame’s move to have two of its traditional rivals moved to the ACC (The new Egg Head League) would give them an opportunity to play 7 games of ACC football – with no divisions, and then have two non-conference traditional rivalries pad out their schedule. That would make it possible for Notre Dame to add its football program to the ACC pile. It would also sweeten a forced renegotiation of the Grant of Rights at the 2025 expiration of the Notre Dame deal with NBC.

Don’t think sports on this one. Think media business. It’s important. Sports are just the entertainment, the money is there, not in “sports”. The big leverage in this is that adding a media powerhouse to the ACC contract would probably cause the conference to vote to open the contract to renegotiation, and ESPN would be foolish to miss an opportunity to grab Notre Dame away from NBC. So, don’t dismiss this out of hand.

The upshot of this scenario is if the ACC can’t break up, it’s going to have to grow, and with the Big XII finding traction healing itself, the ACC might find enough traction to pick up some teams to form its own 20-24 team coast to coast conference. That would definitely sweeten the audience share for the overall conference. It could generate enough momentum to continue to be relevant in the National Championship and post season Bowl picture. It’s not ideal for some programs, but if it keeps the jumpers and brings in Notre Dame, it remains a ‘Power’ Conference. The point is to radically change the terrain of the conference enough that The Mouse is forced back to the table to renegotiate the GoR. That only happens with ND and a few other of what ESPN considers big market additions to the conference.

The ACC Looks Like It Finds Itself in a Lose-Lose Situation with only one Conference win opportunity. If it loses its top 4-8 teams to either of the Super Conferences, it suffers the fate of the PAC12 (now PAC 4). If it retains everyone under duress, then it operates without much in the way of loyalty, in a dying revenue model and an inferior level of competition. That’s an invitation to perpetual lawsuits being filed. If it expands, it might rise to the level of one of the Super Conferences, but that would necessitate opening the GoR up for re-negotiation. That would allow the restless members to leave for greener pastures, anyway.

All of this takes time, and that’s not what the big money programs have. The Supers are forming, and the slots to fill are evaporating quickly. Will the SEC reserve places for a few ACC winners? Will the B1G even have anything left as this wrangling stops?

And in all this The Mouse wins because regardless of what happens to the ACC, ESPN will still get a piece of the action as the better teams move to better leagues with better audience appeal. If the ACC wants to survive as a “Tier 1” contender, it must expand with “Tier 1” level teams. If it doesn’t expand, well, the ACC will be a fun Tier 2 or 3 league and compete for what shakes out of the Group of 5 realignments.

This is just messy and we’ll keep track of it. For now, the series gets parked as the season unfolds and the maneuvering is set aside for the active season (like what happened last year). Be assured, that the Merger Madness will re-ignite as the Booger Bowls are picked and the “National Championship” cuts out annoyed programs.

(Prepare for a Dad Joke) What do you get if you cross an elephant and a rhino?

Elephino!