Question about the GOR.
My specific question is, "Why did the ACC agree to a 20-year GOR?"
My problem isn't so much with the existence of the GOR as it is with the length of it. 20 years is just ... dumb. That's an eternity.
It appears that signing the GOR was apparently a condition of starting up the network. I'm assuming ESPN required it. But the ACC couldn't negotiate down the length of it?
Thoughts/info?
46 Replies
The ACC has clung to their ACC Basketball past for way too long. Football
is king and that genie will not go back in that bottle. The ACC blue bloods made decisions clinging to their basketball legacy. Times have radically changed. But that "Tobacco Road" thinking, with regards of the new TV deals, have killed the ACC. Killed it. It's the new Big East.
I just hope the Hokies, who are for a change, are out in front of this, land in the B10 or SEC. I don't care...just make it happen.
(In response to this post by Will Stewart)
3y
least most of the schools did. It wasn't just something that ESPN wanted. With fears of schools leaving because we didn't have a network, having a 20 year GOR and finally a network brought stability that everyone was seeking. The finances didn't look so out of whack back then and everyone thought now that we have a network we will start to move to fairly equal footing with the SEC and Big 10. With the new network we had solved our money shortfall, and with the GOR we solidified the conference makeup. All was right with the football world, at least until we saw the real numbers we were getting and compared them to the increasing figures of other conferences. So my rememberance is that 20 years of GOR actually brought peace and tranquility to the conferance and fans because we no longer needed to worry about any teams leaving.
** Edited by wwhokie1 at 5/20/2023, 12:30:47 AM
(In response to this post by Will Stewart)
T
TerryD
3y
ESPN: You have to sign a 20 year GOR or you won't get a conference network.
ACC: We won't sign a 20 year GOR. We want a shorter one.
ESPN:
End. No ACC Network
(In response to this post by Will Stewart)
D
daveinop
3y
ESPN required the extension of the GOR (there was already a GOR) as insurance to cost share and provide a home for the ACCN...why have a network if big name teams x, y, and z aren't in it. Also recall that prior to that ESPN payed an annual offset to the conference, i.e., if we delay the network then we'll give you more money. Swofford was going to be fired if there was no ACCN.
Anyway, the length of the GOR ISN'T a problem if the contract has look-ins (like the previous contract did), fair market value requirements, etc. Even a good faith clause could be beneficial in renegotiating. But if it doesn't, and the interest of several teams in looking at the GOR suggests it may not, then there is a big problem.
If I were the M7, I'd be looking at the TV contract more so than the GOR. Suing ESPN to open up the contract might be the easier nut to crack. Each member of the conference likely has standing (so no vote necessary) and cracking it might have the byproduct of ending the GOR
(In response to this post by Will Stewart)
D
daveinop
3y
** Edited by daveinop at 5/19/2023, 5:20:24 PM
(In response to this post by daveinop)
3y
And that's that the ESPN contract is a bad deal.
The ACC makes as much in TV money as the Big 12 and PAC and is on track to do so through the end of the GOR. The ACC doesn't make as much as the SEC or B10 because it doesn't deserve to do so.
The average B10 school is 35,000 undergrads whereas the ACC average is 15,000. That translates into eyeballs on screens, then TV ratings, then dollars. We're small.
The SEC averages about 25,000 per school. But the SEC has far more big football brands than the ACC. So it attracts more eyeballs and gets more money.
Perhaps one (or two or three or four; debatable) ACC schools have SEC/B10 levels of TV followership and value, but that doesn't mean the conference as a whole isn't valued fairly.
Even in the B10 and SEC, there are schools that are underpaid if you look at individual school value. Just as Clemson subsidizes ACC football with its following (for now), Michigan and OSU subsidize the B10, and Bama and Georgia subsidize the SEC.
(In response to this post by Will Stewart)
3y
amount, I don't believe any of the Big XII's or Pac-12's TV contracts were ever as long as the ACC's current contract. At least I believe the length of the ACC's current TV contract (more specifically the decision to extend it for another 20 years) is perceived to be a bigger issue than the amount of the contract. In the time it will take the ACC to complete its current contract, the Big XII and Pac-12 will have completed 2 (maybe 3) contracts.
(In response to this post by LeadingEdge)
3y
Just because Fox and ESPN are willing to pay SEC and B1G the big bucks doesn't mean than anyone will be willing to pay more to the other conferences. The ACC's current contract is probably near fair market value, and the contract gives them a bump up in money as the years go by.
(In response to this post by VTHokie2000)
3y
a profit. Are the top 5 or so teams that good that they can carry Indiana and Rutgers? I think the planets lined up, and the networks got into a bidding war.
The expanded playoffs is where the money and contracts will be moving forward remember, the B10 was signed before the expanded playoffs, and with ESPN balking with the PAC, it's my contention that they will bid whatever it takes to get the rights to the playoffs.
(In response to this post by tarheelblue)
3y
Big XII and Pac-12 have the option to sit down at the negotiation table. I don't believe the ACC even has the option (aka a look-in clause) to re-negotiate until the current contract expires on June 30, 2036. If the clause did exist in the contract, then that information would have been shared with the press by now.
(In response to this post by tarheelblue)
I think it was designed to guarantee "stability"
Swofford had to make sure that his league was going to be stable for the foreseeable future. My guess is that he had two missions that he wanted to serve, stability within the membership ensuring that nobody was going anywhere for 20 years while showing Disney that they could invest in a network asset that had 20 years of runway.
I view it like a player that signs a long term contract in sports. It looks great at the time of signature and then looks undervalued over time. This is why players want to renegotiate when they feel undervalued. To me, the MAG 7 looks like they also want to renegotiate as economics and environmental conditions have materially changed since signature.
(In response to this post by Will Stewart)
3y
of Swofford and the old school ACC - quick change isn't what they were/are comfortable with (I get it, part of me is that way) and they didn't value - or even want to - renegotiating things that often. Every generation believes the one in front of it doesn't do things fast enough - and the ACC is/was governed by a lot of entrenched thinking people. You need new blood - restrained by some experience - not all of one or the other.
The remnants of the expansion process was still in their minds - that was not an enjoyable experience for many of them.
The longer they could "stay the same" would be better - or at least wouldn't hurt, and something they didn't mind negotiating away. Many of these people would have been just fine with Duke and UNC "Sailing with the Pilot..." forever. Some of my current colleagues often express that they wish the ACC had never expanded - that they would still be just fine as a conference without it.
(In response to this post by Will Stewart)
3y
In 2013 here was the world:
ACC was fourth in revenue
BIG and PAC already had their own channels
SEC was set to get their own channel the next year
Pitt, Cuse, and L'ville were already set to join the ACC and make it bigger
The 2012 football season ended with FSU at #10 and Clemson at #11 nationally
Then we had this ego inflating series of events.
2013 season, FSU #1, Clemson #8
2014 season, FSU #5, GT #8, Clemson #15
2015 season, Clemson #2, FSU #14, UNC #15
Going into the 2016 preseason, Clemson was #2 and FSU was #4
I think those schools, and the ACC, thought they were at the beginning of a long stretch of football relevance for their big brands. And in basketball they had a recent Duke national title, plus bringing in L'ville who had won the title in 2013. So they had the usual ACC basketball ego going.
I think the ACC thought they were going to just keep winning and that ESPN would offer up more money along the way. And that this would lock in the valuable (winning) teams.
(In response to this post by Will Stewart)
There was no choice. If the ACC was going to survive it needed a network
In order to have a network ESPN needed a long term commitment and lower payouts. It is kind of like paying off the mob for protection, it's only a short term fix. You always end up paying the piper. From ESPN's perspective, it was like putting the 6-7 bigger brands in the ACC on layaway until they knew what they could do with them. Things will get very interesting in 6-7 years when the GOR expiring is not so far away.
(In response to this post by Will Stewart)
3y
IMO primary issue is no revenue adjustment metrics to keep pace with competition / market.
(In response to this post by Will Stewart)
3y
I think the "look-ins" are supposed to occur every 5 years, so the next one would be in 2026 and then 2031.
Here's an article talking about it from shortly after the current ACC contract with ESPN was signed.
** Edited by tarheelblue at 5/19/2023, 4:51:16 PM
(In response to this post by Atlee Hokie)
H
HOO86
3y
The recent 2021-2022 revenue reported this week only has half year of the Comcast ACC Network revenue.
Next Look In is 2026. Also in 2021 Jim Phillips was new. He needs to hit 2026 now that SEC has new deal. Also B1G, which ESPN wouldn't pay.
(In response to this post by Stech)
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2hhoop3
3y
lookin was definitely bad. If everything else were to stay the same between now and 2026 that MIGHT help bolster ACC side. However, there are things looming that might bolster ESPN side as well, most notably continuing shifts between basic cable and streaming. The ACC has a developing trend of bad timing. It would be interesting to see what the lookin as well as any already agreed to rights and remedies entail and Jim Phillips and his staff are hopefully dissecting any provisions to be as prepared as possible for next lookin.
(In response to this post by tarheelblue)
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2hhoop3
3y
I have asked this question numerous times over the years, even done searches using those exact terms and got nothing. The reporting, while not wholly answering my concerns, at least reduces my anxiety that the ACC, desperate to get a network, threw basic contract negotiation principles to the wind. However, until we get more specifics surrounding the rights and remedies of those look ins I still have questions.
(In response to this post by tarheelblue)
3y
This founding member of the ACC announced in 2012 they were leaving for more money in the Big Ten. In 2013 the initial GOR was signed (and updated in 2016). Maybe the 20-year duration was meant to ensure no one else could ever really leave because of that. If a founding member could just walk out, why couldn't anyone else? So let's put 20-yr shackles on our other members to make them stay.
(In response to this post by Will Stewart)
3y
A stable, healthy conference doesn't have founding members leaving (at least since the CFA decision in the 80s).
(In response to this post by Roanokie)
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2hhoop3
3y
about a stable, healthy conference, however, that is also predicated on stable, healthy members. Maryland, although a founding member, was a train wreck due to incompetence at all levels of their administration and their President was a guy who only ever really wanted to be in the B1G President's Club. Wally Loh was a POS, not for the decision he made but, for the way he went about it. There is probably at least a bit of truth that Swofford's actions were at in part aimed at ensuring the ACC was not vulnerable to another Wally Loh.
(In response to this post by mancunian)
3y
on mismanagement in UMD's athletic department. Debbie Yow was a real disaster as AD, the next guy was no genius either. There's a link below from the Chronicle of Higher Ed about UMD's move.
(In response to this post by 2hhoop3)
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2hhoop3
3y
multiple articles from around that time in the Post as well as the article you linked and others in the New Jersey media as Rutgers joined the fray. If it was not already obvious I despise Wally Loh and a few of his henchmen that pushed UMD to the B1G with a variety of lies, omissions and misrepresentations. That, coupled with his performance surrounding the UMD football player that died leads me to trust him no further than I could spit on him.
It is also interesting that prior to their moves both UMD and Rutgers were generally reviewed fairly regularly as to their spectacular financial and operational failings in athletics but, since their moves such reviews have decreased, if not disappeared. It would be interesting to see the Post do an expose on Maryland then and now and sort fact from fiction and initial misrepresentations from actual actions.
(In response to this post by mancunian)
3y
After signing their new billions of dollar contract in 2023, the BIG will have a new contract negotiation in 2030. The SEC will sign a new contract in 2024 and a new one in 2034. All this while the ACC will still be 2 years away from their new contract. The money differential between the ACC and the Power 2 will probably be 100+ millions between schools. This will be a topic in Contract Law for all Law schools for aspiring attorneys.
(In response to this post by Will Stewart)
3y
... when negotiating this new ACCN and the money involved with espn. He was fine when televised college sports were small potatoes, and the ACC basketball TV contracts with the C.D. Chesney company could be hammered out on the back 9 at Greensboro Country Club.
In the cut throat world of big business college football, he was useless.
(In response to this post by manassashoo)
3y
(In response to this post by Atlee Hokie)
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2hhoop3
3y
others. I have asked before and will now ask again. If you sign that long term deal what about look in/adjustment clauses? Did that get negotiated away? Who negotiated and advised ACC? The GOR is kept at conference office, presumably to avoid FOIA, did the schools read what they were signing? Why now are they looking for loopholes instead of already knowing what they might be? The more that comes out, the more it looks like the ACC members and conference office were blinded to normal due diligence by their desire for a network and misevaluated ESPN's real commitment to the deal as a true partner.
(In response to this post by Will Stewart)
3y
(In response to this post by Will Stewart)
It must have been a combination of Swofford believing without the network
we would quickly sink into the abyss and also believing we had no leverage to negotiate anything shorter than 20 years.
I can’t believe he would’ve thought a 20 year contract with no mid-term reopener was advantageous for the ACC. But he should’ve known that if ESPN was willing to commit to a term that long, they knew it would be a good deal for them even under the worst of circumstances and ESPN would be fleecing us if it worked out according to projections. He likely underestimated the ACC’s amount of leverage.
Swofford was not a transformational leader but was unfortunately leading during a transformation.
(In response to this post by Will Stewart)
3y
He went all in on the network and espn said fine, but this is what we’re gonna require so they would recoup costs on the backside imo.
(In response to this post by Will Stewart)
3y
Maryland leaving for the B1G, who had projections showing large revenue growth in the future, spooked a lot of people in the ACC. There were also credible rumors that Florida State was thinking about leaving for the Big 12. The B1G, SEC, and Pac had their own networks and those conferences were all making more money than the ACC. In order to get more money and a conference network out of ESPN, the ACC was forced to sign a longer-term contract. At the time, it seemed like the best option and the only way to hold the conference together.
(In response to this post by Brewing_Hokie)
R
RJHokie
3y
But also not very smart to not have a contractual "look in" date/time frame for a contract renegotiation. I would think this is one of the "bones of contention" wrt the recent ACC Spring meetings agendas. But until the overall products on the field improve, particularly football, this is going to be an issue going forward.
ESPN has gone on record saying they are looking at the ACCN as a minimum 10 year investment. So, that means a review of that product is likely scheduled for review in another 7 or 8 years.
(In response to this post by tarheelblue)
3y
He didn’t know how to lead, when to shut up, not how to not try to protect his son’s money flow
(In response to this post by tarheelblue)