College athletics 10 yrs from now...

[SCarolinaCy]

Explaining ACC's grant-of-rights roadblock and what it means for Clemson football

Would Clemson athletics, including Tigers football, be willing - or able - to pay $120 million or more to exit the ACC for the SEC?

www.greenvilleonline.com

The current grant-of-rights deal would require a school to be penalized their annual revenue distribution, which was a little more than $36 million for Clemson in 2020-21, multiplied by the number of years remaining on the grant-of-rights contract. That means if the Tigers joined the SEC in 2024 – the same year as Oklahoma and Texas – Clemson would have to pay roughly $468 million to leave the ACC.

From a positive perspective, if Clemson leaves the ACC for the SEC or the Big Ten, it also would stand to essentially double, if not triple its annual revenue as those conferences are set to negotiate new TV deals in 2025 and 2024, respectively, that could result in contracts in excess of $1 billion.

 

[jdoggivjc]

Why?
It's the highest viewership games that drive the value - 400k people watching Rutgers vs Northwestern doesn't bring any more ad revenue than bowling, and thus not adding to the TV contract price.

So you're getting a higher percentage of higher value games, and splitting among fewer teams. If 80% of the B1G TV value comes from 20% of the games... why not just buy the 20% of the games for 80% of the cost, and have 50% less teams to split it with? Plus the broadcaster will keep a little more too. So ESPN will propose it, and the big brands will jump on it and leave the rest behind.

To put numbers on that, let's say the B1G and SEC contracts are $100M per school (round number) and you have 32 schools. So that's $3.2B. Now dump 12 of those schools, which reduces your inventory (the lowest valued inventory though) and markets some, so you reduce the total payout by 25% down to $2.4B. Divided by 20 schools that is $120M each, which is a win.

Similarly, the playoff money is going to be astronomical, why not just keep it all amongst the Premier League teams? Why give any of that to the also-rans at all? That's an even bigger bonus prize.

Will overall viewership go down? Yes. But concentrating the best product gets you most of the pie and you split it up into less pieces to boot. Plus I expect most of the TV execs think viewership will go UP, not DOWN, because most of them don't really understand college football anyway. I am sure they are probably modelling increases in their projections, even though we all think they are wrong about that.

Why? Because someone in that collection of top 20 brands has to lose. You think Michigan, Texas, or UCLA is going to be happy with losing records and being at the bottom of the standings every year as long as paychecks keep rolling in? You think schools like Alabama, OSU, and Clemson want to put their top dog status at risk?

This isn’t even getting into the fact that college sports are regional interest, and trying to nationalize interest in a few teams only is probably going to come back and bite major stakeholders in the ass.

 

[singsing]

10 years from now this all better be virtual reality and I'm out there playing in front of the crowd.

 

[cymonw1980]

Explaining ACC's grant-of-rights roadblock and what it means for Clemson football

Would Clemson athletics, including Tigers football, be willing - or able - to pay $120 million or more to exit the ACC for the SEC?

www.greenvilleonline.com

The current grant-of-rights deal would require a school to be penalized their annual revenue distribution, which was a little more than $36 million for Clemson in 2020-21, multiplied by the number of years remaining on the grant-of-rights contract. That means if the Tigers joined the SEC in 2024 – the same year as Oklahoma and Texas – Clemson would have to pay roughly $468 million to leave the ACC.

From a positive perspective, if Clemson leaves the ACC for the SEC or the Big Ten, it also would stand to essentially double, if not triple its annual revenue as those conferences are set to negotiate new TV deals in 2025 and 2024, respectively, that could result in contracts in excess of $1 billion.

I think the key here is that the penalty is approximately $468M... But based on how we are seeing the OUT deal work, this does not mean they can pay and get their media rights. They could pay, but that does not mean they can benefit from their media rights before the end of the contract.

I am not an expert in this, but I don't think it is as simple as, pay "x" and get your media rights back.

I do believe there is potential that everyone (or at least significant majority) in the ACC could be making so much less than everyone in the #3 conference (for example the B12) that enough schools would feel like they have options (SEC, B10, or B12) that pay more money than they are making that they end the conference and the GOR. But I don't think that happens for at least 5 yrs, maybe longer.

 

[CyHans]

In 10 years, will they require athletes to attend class? Any restrictions on grades or progress to a degree?

 

[drmwevr08]

Money has started to ruin most everything and this will certainly not be an exception.

 

[jcyclonee]

In 10 years, will they require athletes to attend class? Any restrictions on grades or progress to a degree?

There has been discussion of this happening. In my eyes, if this happens, they are no longer students. This is when the athletes would actually become employees and AD's would become taxable entities. They probably already should be. Very few (Texas may be the only one that does it regularly) AD's contribute any of their revenue to the rest of the university.
Of course, at that time, D-1 College Football probably becomes a major and will include a curriculum consisting of physical fitness, film study, offensive and defensive tactics (studying the playbook), and football nutrition.