The Maryland move: eyeballs vs. seats…What we can learn from the SEC about ‘markets’ …. And who should be No. 14 for the ACC?

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?

Say goodbye to the coolest state flag, ACC fans

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.

Per Silver:

Big East

Instead the ACC inked Pitt and Syracuse, with fewer fans, and far inferior football products.
Look this isn’t easy work.
Many of the dynamics are out of Swofford’s control and are tied to branding that began decades ago. The ACC has long been branded as a basketball conference. It’s tough to become a football conference over night but Pitt and Syracuse add even more challenges by eroding conference identity and rivalries and diluting the football product.
What would help more than anything is for Florida State and Miami to play at elite levels along with Clemson and Virginia Tech.
But if you’re going to add teams, West Virginia should be option No. 1 and South Florida should be option No. 2 due to its upside and recruiting footprint.  They give the ACC its best bets to improve its football brand and identity.
The give the ACC it’s best hope of long-term survival and success, which while hardly in jeopardy because of Maryland’s departure, it was also not  a vote of confidence.

12 thoughts on “The Maryland move: eyeballs vs. seats…What we can learn from the SEC about ‘markets’ …. And who should be No. 14 for the ACC?

  1. I can’t agree on W. Virginia and academics. I guess if Vandy can handle being the only smart kid in class we can have one slow kid, but as an engineer, the ACC’s reputation matters. We’re judged by our “friends”, and their academics are lousy and fans classless.

    Where does Navy fall in Neilson ratings? Might as well lock up our Notre Dame bait.

    I completely agree Maryland’s problems are it’s product, competing with pro-teams, and overall AD management. They have well over twice the students and alumni of Clemson. There’s no excuse for a revenue problem with that type of base.

  2. MattB,

    Ideally I’d be with you regarding academic prestige. But I think a more pragmatic path should have been take for the sack of ACC’s long-term stability. At the end of the day the ACC needs a better football product … and I just think Pitt and Syrcause will further dilute the product.

    Swofford did well to come up with a hybrid agreement with Notre Dame but is there enough of a football focus in Greensboro?

    Navy is a name i’ve heard bandied about in speculation and it’s somewhat interesting, especially if it could help compel Notre Dame into full-member status

  3. The first push should be to get ND in as a full member. I think that’s probably a pipe dream since they’re riding high being #1 and in line for a championship without a conference. But that should be first on the wish list.

    Next, I think Swofford should give a courtesy call to both West Virginia and Penn State. Not that I think either would be likely to leave their current homes (WV for being snubbed last year, PS for the money they make already). But don’t assume they’ll tell you no. Make them tell you no.

    I could also be on board with Louisville or Navy. Louisville for the football product – I know their success has been in the last few years but I feel it’s easier to build on current success than create it from years past like Syracuse and Pitt. For the ACC traditionalists, UL has a sound basketball foundation too. Navy gives the beat writers their Washington DC trip back and provides more incentive for ND to come on over.

    UConn would be the biggest failure of an addition the ACC could hope for. They’re in the northeast. They have a terrible football product. The only positives are that the education isn’t nearly as bad as UL or WV and they’ve got a good basketball program – neither of which make you significant amounts of money.

    • UCONN has a terrible football product? Not when compared across the ACC as is, and they field very strong basketball and baseball…plus very strong academics.

  4. As Travis points out, further strengthening basketball in the ACC is a dead end. The regular season, and even conference tournament, ratings continue to plummet for college basketball. The ACC is positioned to be the leader in basketball now with Pitt and Syracuse. That equals not inviting UConn.

    WV is a no-brainer. Yeah, they don’t have the academics. WHO CARES? And I’m not worried that my degree is going to be somehow cheapened because WV and USF or UL are in the league. You have to go after football at this point, and if there are contingencies in place in which you can get ND eventually, you have to go after WV. They are a poor geographic fit in the Big XII and I think they’d listen to Swofford again (even if Duke and UNC didn’t want them and voted it down in the first place, which is ironic, given UNC’s, uh, troubles with academic integrity right now).

    • (Good to have commenting back and the return of star posters Mr. Elrod and Mr. Jerdan)

      Lee,

      It is ironic that Swofford continues to tout ACC’s academic credentials – and dismiss W.Va.’s reported interest – despite UNC’s academic scandal, isn’t it?

      At some point the ACC needs to be more pragmatic about football or this arrogance over academics will threaten the conference’s viability.

      At the end of the day, college football is more business than educational experience.

  5. If dropping academics, I’d actually go after the best of the non-LSU – Louisiana schools or Southern Miss. Football hotbed for recruiting, and the Gulf is almost the Atlantic, right?

    Louisville looks the best for expanding recruiting. Cincinnati has a lot of talent around as well.

    I just took a look at Football Outsiders Almanac 2012 program F+. That measures stability and long term viability of a football program. Obviously it’s not perfect, but it’s something. Also looked at student body size (indicative of followers, but not absolute), and current athletic budget. I’d like to find data on ticket sales vs stadium size.
    S Florida – 32 – $40.4 – 47,000
    Rutgers – 44 – $64ish – 39,000
    Pittsburgh – 27 ??????? But yay! – $Unknown – 28,800
    Louisville – 59 – $68.8 – 23,000
    Cincinatti – 23 – $Unknown – 41,000
    Connecticut – 42 – $64 – 30,000
    Temple – 70 – $??? – ???
    Syracuse – 85 ($#!*) – $??? – 20,000
    Others:
    West Virginia – 12 – $58 – 30,000
    Penn State – 15 – $92 – 44,000
    Maryland – 61 – $61.4 – 37,000

    From what I read, Connecticut does attend games well. We don’t need a school with empty seats on national TV.

    • MattB,

      Thanks for posting this. Interesting.

      So West Virginia ranks 12th in long-term viability of a program? I think W. Va. is for sure top 25, ACC dropped the ball there.

      • The Hurricanes really need a new home. Its current address – Pro Player Stadium or whatever we’re calling it these -days is an awful place to watch a game. Its sight-lines are really pool and it’s a hike from campus and South Miami.

        I’m serious when I suggest Miami should play its games at the site of the old Orange Bowl – The New Marlins park. Heck, the way the Marlins are going that will be a vacant property in a couple years.

        Hurricanes don’t need an 80,000 seat stadium, much better to have a 40,000- or 50,000-seat venue look full for appearance’s sake

  6. It’s more a 5 year rolling average. Enrollment and endowment aren’t considered in those rankings, and those play in as well.

    And some things just aren’t worth getting the best football team. I’ve been around their fans, and like Texas Tech, I’d feel obligated to not take my kids to those games. Even USC fans, with as heated as the rivalry is, are generally respectful of younger age fans. Maryland wasn’t great on that front either. I like the NC State fans, and of course, Wake Forest fans are great. But Texas Tech, West Virginia, and some other fans seem to have the attitude college football isn’t for families. Texas A&M is another school that realizes passionate is not synonomous with low class and foul language. Their fans are good as well.

    We’re not perfect on that front either, but on average Clemson is better than most.

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