Analysis: Where UNC stands amid conference realignment frenzy, how TV deals tie together

The college sports economy is fueled by giant television deals that each of the major sports conferences sign with competing networks. Football, long considered the cash cow of most athletic departments, is usually the driving force behind these deals.

For an individual school, this means that the more lucrative their conference TV deal is, the more revenue the school can generate each year. This structure encourages schools to follow the money and look for sports conferences that can make more money, rather than those that make more sense geographically.

Oklahoma and Texas rocked the landscape of college athletics in 2021 when the schools announced that they left the Big 12 to join the SEC. In June, when California schools USC and UCLA announced they were leaving the Pac-12 to join the Big Ten, an Illinois-headquartered conference, the realignment once again became a national topic of conversation.

“I would have bet my life that it would never happen,” North Carolina head football coach Mack Brown said of the decision at the 2022 ACC Football Kickoff. in July.

Realignment, however, is not a new concept in college athletics.

“If you go back and look throughout the history of conferences and schools, there’s been a lot of realignment,” Louisville head football coach Scott Satterfield said during the kickoff. sending ACC Football. “It seems to happen a lot. I was one of them when I was at Appalachian State. We moved divisions and moved conferences.

There have been several instances of realignment within the ACC, which was formed in 1953 when seven Southern Conference members, including UNC, left to form the new conference.

The last major conference realignment frenzy occurred in the early 2010s.

In 2012, Maryland – a founding member of the ACC – announced it was leaving to join the Big Ten, beginning in the 2014-15 school year. Syracuse, Pittsburgh and Notre Dame — except for the Fighting Irish independent football program — all joined the ACC in 2013, and Louisville followed a year later to fill the void left by the Terrapins’ departure.

What keeps any of the current ACC member schools from defecting, like Maryland did a decade ago, is a contract member schools signed in 2013 called the Rights Grant. .

Grant of rights

The rights grant gives ACC control of the media rights for each of its member schools. Essentially, the television revenue a school makes from the ACC’s contract with ESPN goes to the ACC, and that money is split evenly among member schools.

When Maryland left the ACC in 2014, it sparked rumors that other schools would do the same, which could have dissolved the conference. To combat this, the ACC required each member school to sign the grant of rights to lock schools into the conference for the long term.

When the ACC and ESPN announced the formation of the ACC Network in 2016, the ACC extended the granting of the rights until 2036 instead of 2027, when it was originally scheduled to end. However, conferences like the Big Ten and the SEC have more lucrative television contracts than the ACC.

In the fiscal year ending June 2020, ACC generated approximately $500 million. However, in the same time frame, the Big Ten and the SEC have both brought in numbers north of $700 million, and thus their member schools will earn more revenue than ACC schools.

So, if that’s the case, why wouldn’t schools just leave the ACC and join the Big 10 or the SEC?

Because if a school does, per the rights grant, the ACC would still control all of the revenue the starting school generates from its home games until 2036, when the rights grant expires.

What happens next?

An ACC school is unlikely to leave the conference anytime soon.

For this to happen, a school would have to challenge the grant of rights, as well as assess its ability to maintain the revenue it would lose by leaving the conference and violating the grant of rights.

“I think you have to be thoughtful, you have to be smart, you have to be strategic,” ACC Commissioner Jim Phillips said at the ACC Football kickoff. “Making a move just to make a move makes no sense.”

At some point in the future, a member school might decide that the money they lose to the ACC for leaving the conference is worth the extra money they could earn from being a member of the Big Ten or the SEC.

So what does this mean for UNC regarding the Tar Heels’ place in the grand realignment scheme?

UNC may have to leave the ACC at some point if it wants to keep its 28 college sports intact.

As Big Ten and SEC school revenues grow, UNC will be able to spend the same percentage of those revenues on football. In order to keep the football program on par with other conferences, UNC will likely need to spend a higher percentage of its budget on the program. Increasing the amount of revenue spent on football would reduce the budget allocated to other college sports. That is unless UNC moves to a more profitable conference.

If you ask Phillips, however, he’s adamant that the conference is going nowhere.

“I love our 15 schools and I’m confident we’ll stick together,” Phillips said at the ACC kickoff event on Wednesday. “That’s all I’ve heard in all the calls we’ve had. We want to work together to try to provide more resources for our student-athletes, so we’re all on the same page.

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