Joe Ovies

ACC commish vague on future of dedicated ESPN channel

Posted March 21, 2016

John Swofford

There will come a time when Atlantic Coast Conference commissioner John Swofford will see the breadth of his domain and weep, for there were will no more worlds to conquer. But one conquest remains elusive under his ACC reign: a dedicated television channel from ESPN.

The subject comes up just about every time Swofford has given an extensive interview over the last few years. The talking points are essentially the same every time – the ACC and ESPN will continue to evaluate the industry landscape. However, in his latest interview with 99.9 FM The Fan, Swofford offered more of a hint as to why everyone involved is still in wait-and-see mode.

The prospects for a new channel certainly don't appear great from the outside looking in. Disney, ESPN's parent company, disclosed that the "Worldwide Leader in Sports" has lost 7 million subscribers in two years. The Wall Street Journal reported late last year ESPN has lost 7.2 percent of its subscriber base since 2011. And every consumer who reduces or outright ditches their cable package takes around $6-per-month (and the lesser rates for ESPN 2) out of Disney's Scrooge McDuck bank vault.

According to the Atlanta Journal-Constitution, ESPN's cost-cutting woes were cited by Georgia Tech president G.P. “Bud” Peterson in an October athletic association quarterly board meeting as the reason for the delay.

"[ESPN] had come back and said that in some of the other instances where [conference] networks have started, they lost considerable amounts of money in the first couple of years,” Peterson said.

In a statement, Swofford called the report of a delay "premature and speculative."

Adding to the speculation over the ACC's long-awaited channel are references to increased rights fees from ESPN in the event it misses a particular launch window.

During July's ACC football media event, Swofford explained to David Teel of the Daily Press "the other alternative is larger rights fees (from ESPN)" if the conference and the network felt the distribution wouldn't be "great" when the channel went live.

Wes Durham, play-by-play announcer for the ACC on FOX Sports Net, brought up a specific clause in ESPN's contract that would pay the ACC $45 million on July 1 in a recent interview with a Louisville radio station. However, Durham quickly walked back specific dates and dollar amounts.

"I mistakenly used the word 'reported,' when I should have used the word 'speculated,' when discussing a possible annual fee to the ACC from ESPN," said Durham. "The numbers and timeline had not been reported, but had been discussed in other circles. I shouldn't have assigned a monetary figure or deadline to my comments."

Regardless, it's clear a decision between ESPN and the ACC has to be made sometime soon. Swofford did his best to address the situation on 99.9 FM The Fan without showing his too much of the conference's hand.

Is the ACC more confident in ESPN increasing rights fees or launching a dedicated channel in 2016?

"I'm confident that our television [partnership] will turn out to be very successful and beneficial to the league. All I can tell you is those conversations are continuing, and until we reach a point where we're definitive in our path forward, there's really not going to be a whole lot to say about it. Our confidence in the future has not changed."

Does a deadline exist with ESPN related to a a rights-fee increase?

"We always have dates that we point to in our discussions, but at the same time we're partners through at least 2026-27. In any partnership, you can come together and alter that in any way the two parties so choose."

Does pressure to keep pace with SEC & Big Ten revenues mean a decision would be sooner rather than later?

"As I've said, when we have something definitive in terms of that path forward, we'll have an announcement to make."

How does ESPN present Disney's cost cutting and Wall Street speculation about the cable industry to the ACC?

"Quite frankly, when you're Disney and ESPN, or McDonald's in the fast food category, there's going to be a lot written. I think ESPN is quite healthy.

"I think some of the things written gave been overstated, probably. The change in technology is something we try to keep a close eye on, in terms of where all of this is headed, and that's very difficult for anybody to totally know. But in terms of the health of ESPN, we're really not concerned about that at all."

Given the industry trend of "slim bundles" and streaming apps, would the ACC view alternative distribution as a better investment?

"It remains to be seen. Sometimes being first is a good idea, and sometimes it's not such a good idea. That's all part of the evaluation of where the industry is going, where the technology is going. All of that comes into play. I think the most important thing, from our perspective, is that we have a very good partner [in ESPN] that's very progressive and has been at the top of the food chain for a long time and I suspect will be for a long time.

"I think we've put ourselves in a very good position as a league with our footprint and the population base that we now have, and therefore the television sets we now have, to do some things we would not have been able to do otherwise. It gets back to what I said earlier - whatever we do, we want to give ourselves the best chance, and whatever that is, the best chance to be very successful from a timing standpoint and a distribution standpoint.

"The one thing we've learned from other conferences that have taken this step, a potential channel, is that there are ways to do it that work extremely well immediately. There are ways to do it where it had to evolve and develop, like the Big Ten, who had huge growing pains its first years. And then the PAC-12, which continues to really struggle with their approach. It's all out there, so there's something to be learned from each."

Outside of a channel, are there other ways to maximize value of the ACC?

"I think there are other ways the maximize the value, and that's all part of trying to predict the technology that's out there. There's technology now that is fascinating but not financially lucrative at the moment. That's a lot of the industry at the moment, trying to figure out what parts of the technology that's available can translate into significant dollars.

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