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Teel: ESPN has 'every incentive in the world' to help ACC increase revenue

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At the ACC’s annual football kickoff event this summer, second-year commissioner Jim Phillips vowed to discover “creative ways” to enhance conference revenue and said he engages “almost daily” with ESPN, the league’s television partner, to advance that cause.

Several weeks later, the ACC retained FishBait Solutions, a business innovation firm fronted by former ESPN senior vice president Rob Temple.

Most recently, ESPN’s president for programming and original content, Burke Magnus, touted the network’s partnership with the ACC, offered suggestions for innovation and explained the genesis of the long-term contract between the parties.

This synergy can only benefit the conference.

Magnus was central to the ACC Network’s creation, and his wide-ranging interview on recent Sports Media Podcast with the New York Post’s Andrew Marchand and Sports Business Journal’s John Ourand was further evidence why conferences value his input.

Ourand and Marchand focused the conversation on the college space and, naturally, began with questions about ESPN’s exclusion from the Big Ten’s new rights package. But the hosts asked specifically about the ACC and its challenge to close the revenue gap forged by the Big Ten and ESPN’s most valuable college football commodity, the SEC.

“Going forward,” Magnus said, “we have every incentive in the world to get creative with the ACC to continue to try and unearth new incremental value that would benefit their members, in terms of the financial picture of the conference long-term.”

ESPN’s incentive is the same as the ACC’s: monetary. The more television viewers the conference draws to ESPN platforms, the more profitable those ventures become.

Success, especially in football, is paramount. But as Magnus outlined on the podcast, there are complementary paths to increasing revenue.

The first he mentioned was creating more attractive inventory, and as an example he cited the potential of the SEC expanding its conference football schedule from eight to nine games.

Well, ACC athletic directors this summer voted to stick with eight games for 2023-26, but they did approve a new scheduling model that triples the frequency of matchups such as Clemson-Virginia Tech, Clemson-Miami, Florida State-Virginia Tech, Boston College-Miami and Clemson-North Carolina.

Each of those pairings has attracted at least one television audience of 3.0 million-plus in the last decade, according to a ratings database compiled by Sports Media Watch.

Further Innovation with non-conference football schedules is more challenging on three counts: FSU, Louisville, Georgia Tech and Clemson play regular-season finales versus state rivals from the SEC; Notre Dame is contracted to play, on average, five ACC opponents each season; programs such as Virginia Tech have booked their non-league schedules for years in advance.

When Magnus mentioned the ACC’s men’s basketball heritage, Marchand asked if the league should showcase the sport’s premier rivalry, North Carolina-Duke, beyond the programs’ two annual regular-season clashes.

“Listen, I don’t think anything’s off the table from a consideration perspective,” Magnus said. “Sometimes college sports tends to trap itself in its own tradition. By the way, tradition is what we also love about college sports. So you can’t throw everything out the window, but that’s a perfect example of something where if you innovate around your most valuable assets, maybe there’s a way sort of to get both things accomplished, right?”

From 1970-80, the ACC’s four North Carolina schools did just that. Duke, UNC, N.C. State and Wake Forest competed in the Big Four tournament over two nights at Greensboro Coliseum, with the opening-round matchups rotating annually and the results not counting in the conference standings.

Carolina and Duke met eight times in those 11 Big Four events.

But why stop there? If ESPN has the air time and can sell the product, why not stage four mini-ACC tournaments in November or December? With 15 teams, the math doesn’t quite work, but there’s a solution.

In addition to the Big Four in Greensboro, send former Big East rivals Syracuse, Pitt, Boston College and Notre Dame to Madison Square Garden. The southern flank of Miami, Florida State, Clemson and Georgia Tech could gather in Atlanta or Miami.

That leaves Virginia, Virginia Tech and Louisville in need of a fourth to play, perhaps in Washington, D.C. So invite former ACC member Maryland to the four-team tournament.

While its Power Five peers are poised to start new television rights deals, the ACC and ESPN are locked into a 20-year agreement through 2035-36. The contract was signed in 2016 when the parties announced they were creating the ACC Network.

The network achieved full distribution in less than three years and has helped the conference increase television revenue by 38% since its 2019 debut.

“So it’s been a tremendous success,” Magnus said on the podcast. “The trade-off for that was to extend our deal long-term, [and] the conference went into that circumstance very, very willingly. You’re not going to do something like launch a new linear network without enough time to realize a significant return on investment. It’s an incredible amount of upfront money that has to be dedicated.

“You have to hire a bunch of people, hundreds of people. You’ve got to really put your shoulder behind the distribution, and sales, production, everything. It’s literally like starting a new company, and you’re not going to do that for a five-year horizon. You’re going to do that for a 20-year horizon.”

Which is exactly what the SEC and ESPN did when they started the SEC Network in 2014. They signed a 20-year contract.

“The ACC operates from a position of strength as far as I’m concerned,” Magnus said. “We built this incredible business together in the ACC Network, which is only going to continue to get more valuable.”

Twitter: @ByDavidTeel

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