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Teel: ACC expects record revenue in 2021-22. How best to allocate now, and in future?

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ACC Media Days Football

Atlantic Coast Conference commissioner Jim Phillips says the conference realized sizable revenue increase in 2021-22. (AP Photo/Nell Redmond)

Obscured by understandable buzz surrounding North Carolina’s veteran talent, Duke’s coaching transition and potential NCAA tournament expansion was this nugget from the ACC’s preseason basketball gathering earlier this month:

“We’re in the process of finalizing the financials from [2021-22],” second-year commissioner Jim Phillips said, “and as expected, our schools will receive a sizable increase following the ACC Network reaching full distribution last December. We are proud to have exceeded our initial projections, resulting in additional revenue to our schools.”

This is notable for several reasons:

The ACC in 2020-21 reported a league-record $578.3 million in revenue

  • , which translated to an average per-school distribution of $36.1 million. A “sizable” bump from record numbers is encouraging, even as the Big Ten and SEC continue to dominate the financial, though not competitive, landscape.
  • Even more heartening for the ACC: Revenue in 2021-22 increased despite significant headwinds. First, the approximately $15 million in NBC television rights that Notre Dame football brought into the conference during the 2020-21 COVID season vanished as the Fighting Irish returned to football independence.

Second, 2021-22 was a season in which the Orange Bowl, the ACC’s contracted New Year’s Six postseason game, hosted a College Football Playoff semifinal. In those years, the ACC does not receive its Orange Bowl payout of approximately $25 million.

In previous seasons that the Orange Bowl hosted a playoff semifinal, 2015-16 and 2018-19, ACC revenue decreased 7.4% and 2%, respectively.

Finally, 2021-22 marked the first season that no ACC team qualified for the CFP, denying the league a $6 million CFP payout.

To summarize: Despite losing approximately $46 million, or 8%, of its 2020-21 revenue, the ACC still expects to report a significant revenue increase on its 2021-22 tax forms, which won’t be filed until late spring.

That’s how valuable full ACC Network distribution, attained with December’s carriage deal with Xfinity Comcast, is to the conference, its schools and media partner ESPN.

Now ACC officials — Phillips, athletic directors, chief revenue officers and university presidents — must decide how best to allocate revenue moving forward. Should the conference continue its longstanding practice of essentially equal shares, or adopt formula(s) that reward competitive success, television appeal, academic performance and/or sport sponsorship?

Those discussions are ongoing, and a decision rests with the presidents.

“What are the revenues that [could] end up in a pot that you could distribute in a disproportionate way [without] suffocating the others but rewarding those having success?” Phillips said.

Like its Power Five peers, the ACC derives virtually all revenue from football postseason, the NCAA men’s basketball tournament and television rights. For example, in 2020-21, television ($397.4 million), bowls ($109.4 million) and the NCAA tournament ($64.1 million) accounted for 98.7% of ACC revenue.

With football driving about 75% of TV money, and with Clemson and Florida State primarily — Miami and Virginia Tech secondarily — drawing the ACC’s highest football ratings, is there an agreeable manner to reward those brands?

Now consider football postseason revenue. On seven tax filings during the CFP era, since 2014-15, the ACC has reported $730.9 million in bowl revenue, approximately two-thirds of which came from the playoff.

Clemson (six times) and Florida State (once) are the only ACC programs to reach the CFP, and while retroactive bonuses for the Tigers and Seminoles probably wouldn’t fly, rewarding future ACC playoff teams is reasonable.

The conference could do the same for New Year’s Six bowl teams. Qualifiers in the CFP era have been Pittsburgh, North Carolina, Virginia, Miami, Florida State and Georgia Tech, and those bids presently fetch $4 million from the playoff’s coffers.

Another benchmark the league could reward: top-25 finishes, which generally equate to more lucrative bowl invitations. Since the playoff debuted, Clemson (eight), Florida State and Miami (three each), Virginia Tech, North Carolina, N.C. State and Louisville (two each) have authored multiple top-25 football seasons.

The ACC’s NCAA basketball tournament revenue also could be disparately shared.

The NCAA distributes money from the championship to conferences based on “units,” aka how many tournament games in which you play. On its most recent seven tax returns — since Louisville replaced Maryland in 2014-15, through the 2020-21 season — the ACC has reported NCAA basketball tournament revenue of $266.2 million, and during that span the league’s programs played a combined 120 NCAA tournament games.

North Carolina (21), Duke (19), Virginia (16), Syracuse (13), Florida State (12) and Notre Dame (10) accounted for 91 of those contests. Georgia Tech (one), Wake Forest (one) and Boston College (zero) combined for two.

Not to suggest that the ACC shut off any revenue spigot to any school, but larger checks for the conference’s top performers could be done adroitly.

Regardless of how league officials proceed, they, in concert with their revenue consultant FishBait Solutions, need to sustain the conference’s upward financial trajectory.

Not with an impractical aim of matching Big Ten and SEC riches, but with a resolve to assure that ACC teams have the resources to continue competing at the highest levels.

Twitter: @ByDavidTeel

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