Money Ball: ACC expansion aimed at improving revenue, competition
Posted February 16, 2012
Raleigh, N.C. — Conference expansion is all about the money.
That is what drove the ACC to add Virginia Tech, Miami and Boston College in the last nine years. But in the ACC, expansion has yet to truly pay off.
The league started in 1953 with eight teams covering just four states. The Atlantic Coast Conference was truly regional.
Fast forward to 2012. The ACC has 12 teams stretching from Miami to Boston and a brand new, 12-year, $1.86 billion dollar TV deal.
“The almighty dollar still matters a lot. The TV markets still matter a lot, even though we still argue how many people in New England are passionately following Boston College football or basketball,” said David Glenn, radio host and editor of ACC Sports Journal. “But it's still money. It's still TV.”
While expansion helped add some zeroes to that new contract, some, including Glenn, argue the product on the court isn't what it used to be.
The conference has 12 NCAA men's basketball titles – all won by original members of the conference. Recently, most of the success is in the work of Duke and North Carolina.
“Today's ACC basketball still has Carolina basketball with Roy Williams, still has Duke with Coach K,” Glenn said. “But that second tier is nothing like it was for most of the 1980s and 90s.”
Since expanding in 2003, the conference has seen three years in which just one team reached the Sweet 16. Prior to expanding, the conference had gone 24 years in a row with at least two teams among the final 16 still playing.
“It wasn't just the top tier that was fantastic, the second tier – and maybe it rotated from school-to-school or year- to-year – but that second tier was incredibly entertaining and sometimes won a national championship or went to the Final Four,” Glenn said.
The ball is also bouncing the wrong way when it comes to money.
Prior to the most recent expansion, the nine ACC schools combined for $75 million in revenue during the 2002-03 season while expenses were just under $30 million at $29.6 million. The conference made $2.52 for each dollar the basketball teams spent.
The latest numbers, with the three new teams, aren't as good. Revenue is up ($130 million), but expenses have more than doubled ($72 million). For each dollar spent, the schools made $1.80 – down 72 cents from pre-expansion numbers.
The new TV deal should improve the bottom line in the future, but that's only part of the equation for success.
“That quality depth has to bounce back in basketball, and a lot of things have to improve in football if the ACC wants to continue this nice climb in TV money that it generates in those two sports,” Glenn said.
While football has driven most of the expansion across the NCAA landscape recently, the ACC's pending addition of Syracuse and Pittsburgh was seen as a victory on the hardwood. It is designed to help add quality depth to the conference and put ACC back on top both competitively and financially.
The Sports Business Journal recently published an article that estimates the addition of the two schools will mean $1-2 million a year in additional revenue for every ACC school. That would bring the TV revenue up to $14-15 million per institution annually.
On the court, both schools have enjoyed tremendous success in recent times. Pittsburgh has reached five Sweet 16’s and an Elite Eight since 2002. Syracuse has reached the Sweet 16 five times since 2000 and won the whole thing in 2003.
The next round of conference expansion for the ACC is visibly designed to improve both the conference’s revenue streams out of television deals and improve the level of play in what once was undisputedly the best basketball conference in the nation.