CLEMSON – An original member, Maryland, is seceding from the ACC for the Big Ten as you might have heard.
ACC commissioner John Swofford offered a 68-word statement on Maryland’s 60-years of ACC service Monday after Maryland’s board voted unanimously to leave the conference:
“Our best wishes are extended to all of the people associated with the University of Maryland. Since our inception, they have been an outstanding member of our conference and we are sorry to see them exit. For the past 60 years the Atlantic Coast Conference has exhibited leadership in academics and athletics. This is our foundation and we look forward to building on it as we move forward.”
Why does the Big Ten want Maryland and Rutgers? For the DC/Baltimore and New Jersey/NYC markets, which is explained here.
If the Big Ten Newtork can land on basic cable in those markets – containing 15 million households – it will earn $1.25 per month per subscriber. It could end up being worth $100 to $200 million per year for the conference. As we are seeing more and more in conference expansion, the quality of programs being obtained do not matter, the market size does. (I think this could be folly as explained below).
Why did Maryland want to move?
One major reason is it is in financial distress. Maryland had to cut seven sports last season to have a positive cash flow. Maryland will make more television dollars in the Big Ten. The Big Ten paid out $24.6 million in TV cash members last season. The average annual value of the ACC’s new TV deal is $17 million per year, though it is back loaded.
Projected an expanding Big Ten Network, it is estimated the Big Ten could pay out as much as $40 million per school, per year in medial dollars in the not too distant future, at least $30-35 million.
That’s why Maryland left and why the Big Ten wanted a mediocre program.
EYEBALLS vs. SEATS
Maryland president Wallace Loh also said something interesting Monday:
“(The Big Ten) is going national because of a phenomenon,” Loh said. “Attendance among college-aged students is dropping. The reason is because this generation is completely wired, and they are getting their education and entertainment on tablets and mobile devices. Everyone thinks you make your money in seats. You make it on eyeballs on a screen.”
For the first time in the history of college athletics, ticket sales are being trumped by television dollars at some schools (not yet at Clemson — which took in $16M in football ticket sales last year and $13M in TV dollars).
The home experience with HD television and a variety of channel options is dangerous for college football program’s ability to sell tickets.
But here’s the thing Mr. Loh, you have to sell tickets and take in adequate TV revenue to have a positive cash flow. You have to have both. TV dollars don’t cure all ills. Fielding competitive teams do.
Mr. Loh, do you know what Maryland’s all-time record vs. the Big Ten is? It’s 4-44-1. That’s an 8.9 winning percentage. Good luck filling an already sparsely populated football stadium. And it is a failure to fill seats, to begin with, which put Maryland in the red.
Filling seats is why Michigan hired the CEO of Domino’s Pizza to be its AD – there was a piece on 60 Minutes about him last night. The hired a pizza man for marketing reasons.
A top priority for every AD is to ensure the at-game experience is better than the TV experience. This is a big challenge going forward for every program. It helps to have an enormous TV contract, but selling tickets, having a quality product, is still at the core the most important issues for college athletic programs.
Maryland only solved one of its problems with this move. It had a better chance of solving the competitive issue by staying in the ACC.
For a few more TV dollars (OK many more) Maryland just erased six decades of meaningful rivalries, particular in basketball which helped sell tickets. No more Duke, North Carolina or Virginia to fill its basketball arena, at least not as frequently.
There will be a price to be paid.
WHAT WE CAN LEARN FROM THE SEC (AND NATE SILVER) ABOUT MARKETS
What’s interesting is the SEC became the nation’s most powerful football conference and has the most powerful brands with the fewest major markets – only Atlanta and Tampa – would be considered major cities in SEC country.
The SEC became the nation’s top football product by winning games. What a concept?
Winning at a high level creates fan interest and competition, this translates to strong programs and must-see television that compels national audiences to watch, audiences advertisers want to pay for …. all without the NYC/NJ/DC markets.
Interesting right? Quality products – not New Jersey TVs – produce interest and dollars related to football.
The Big Ten just diluted its football product by adding a ‘major market’ with Maryland. Just like the ACC watered down its product with Syracuse and Pittsburgh, which now make long-time rivals like North Carolina and Virginia something like distant relatives for Clemson. Now, Ohio State, for instance, will rarely play Iowa or Michigan State.
We need to rethink our idea of what a football “market is” as Nate Silver of 538.com and PECOTA fame did last year for the New York Times.
Birmingham, Alabama is a better college football market than Washington DC or Philadelphia or New Jersey.
This should be instructive for the ACC. The SEC is only entrenched in three of the markets above. Yet, it’s the most powerful conference. The ACC doesn’t need “major markets” it needs better football. That’s what will compel people to buy tickets and turn on their televisions.
(Markets would be more important to the ACC if it had a subscriber-fee based network like the Big Ten Network, then I would understand an interest in the NE, but it doesn’t. Maybe it will, but to date, it apparently can’t crate a viable such network)
WHO SHOULD BE NO. 14 FOR THE ACC?
I praised John Swofford last week for the new Orange Bowl deal. I have praised him many times for his 2004 raid of the Big East, for bringing in Miami and Virginia Tech and correctly identifying that the ACC needs to be more of a football conferences. I praised him for the creative arrangement with Notre Dame.
But as I’ve written before, I think Swofford’s decision to add Syracuse and Pittsburgh (along with Boston College) were mistakes. They’ve diluted the football product and are eroding long-time conference rivals (See: North Carolina-Clemson).
In an era where football drives revenues, the ACC’s latest round of expansion was about doubling down on basketball and going after the northeast footprint, where folks are not as passionate about college football.
CBSSports.com reports the ACC is interested in UConn and Louisville, which is a tripling down on basketball and luke-warm football markets.
The ACC should have accepted in West Virginia, which had the strongest football product available – after Notre Dame – and most fans of any Big East program prior to the most recent round of expansion. To be pragmatic the ACC should have shelved academic concerns.