Colleges

Money Ball: ACC expansion aimed at improving revenue, competition

Posted February 16, 2012

— 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.
 

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10 Comments

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  • VT1994Hokie May 19, 2012

    View quoted thread


    Ken hit it in his first paragraph. We had to expand or crumble like some other conferences.

  • Ken D. Feb 17, 2012

    View quoted thread


    I agree that bigger isn't better. But it is better than not existing at all. At least the ACC member schools seem to think so. I firmly believe that if the ACC had not expanded beyond its original schools, it would have been disbanded by now, and schools like Carolina, State, et al would be hangers on in some weak league not much better than FCS level.

    It wouldn't be the premier basketball league you remember fondly, because too many of its parts would have been poached by other conferences.

    Your first paragraph states that revenues per school are not higher since expansion. At least that's the implication of saying they are only higher because there are more teams. I just don't believe the facts would bear you out on that point. I think they are much higher. And they are expected to be higher still with further expansion.

    I, too, wish the sports world were more the way it was 30 years ago. But if you're looking to fix blame, don't look to the ACC, its members, or the NCAA. I don't think you have to look past ESPN, which is the engine driving all of these changes.

  • StillaHappyDay Feb 17, 2012

    View quoted thread


    Well Said!

  • aspenstreet1717 Feb 17, 2012

    Bad for the fans. Always is. More and more commercials. Games starting 9 PM. Play resuming while commercials are still on. Fail to see the positive.

  • SaveEnergyMan Feb 17, 2012

    The expansion is totally about the money - duh!!

    Also interesting to see how much the expenses have gone up over the last 9 years. Duke's expenses are up 30%, not unreasonable over 9 years, but look at UNC's and others - it has almost doubled! I suppose high powered coaches salaries are driving this. That's a bad thing because the general student population still ponies up hundreds of dollars per semester to support these athletic programs through REQUIRED fees because most sports are revenue negative. I wonder if they managed their money better if student fees could go down and college become a little more affordable.

  • Ken D. Feb 17, 2012

    View quoted thread


    I think your logic is flawed. It is the megaconferences - more precisely, the six power conferences - that are, if not "corrupt", at least dictating terms to the NCAA. The NCAA has no power over football except that which those conferences let it have.

  • Tarheel born Feb 17, 2012

    What I would like to see is megaconferences getting together to destroy the corrupt NCAA. Something is seriously wrong with Ohio State can do far worse than UNC and yet the NCAA finishes their investigation much quicker. The programs that bring in money -- such as Ohio State football, Auburn football, Kentucky basketball, UNC and Duke basketball -- are untouchable and if they do mess up, it is quickly covered up. Everyone else has a strict punishment. The NCAA needs to go, it protects its money and not the students....

    WADE.......I totally agree with this and really NO ONE can refute it either...

  • hi_i_am_wade Feb 17, 2012

    Well duh! The fact is megaconferences are the future.

    The beautify thing about the ACC is, while other conferences where whispering about expanding, the ACC was planning on expanding. And then one day out of the clear blue, the news broke that the ACC was adding Syracuse and Pittsburgh. John Swofford was so good, there were no rumors or whispers about it. The talking heads were debating if the ACC would be poached, and then the ACC expands. And now suddenly, other conferences are scrambling. Football money is driving expansion, but a basketball conference forced their hand.

    Notre Dame has pretty much said the only conference they would join full time is the ACC. The ACC is probably waiting Notre Dame out, because they won't be able to keep their BCS bid forever. Clemson, FSU, and Maryland won't leave because they aren't stupid. UNC and Duke are joined at the hip and they would stay in the ACC until the bitter end. Nobody wants NC State or Boston College. Virginia and Virginia Tech are also joined at the hip but only because the commonwealth of Virginia says so, and nobody wants both of them. The only team that might leave would be Miami. So the ACC is very stable. The ACC, the SEC, and the Pac-whatever are the safest conferences to be in. So the ACC can afford to wait for Notre Dame now. And then the ACC can pick whoever they want, so long as it is not a SEC team and is on the east coast.

    What I would like to see is megaconferences getting together to destroy the corrupt NCAA. Something is seriously wrong with Ohio State can do far worse than UNC and yet the NCAA finishes their investigation much quicker. The programs that bring in money -- such as Ohio State football, Auburn football, Kentucky basketball, UNC and Duke basketball -- are untouchable and if they do mess up, it is quickly covered up. Everyone else has a strict punishment. The NCAA needs to go, it protects its money and not the students.

  • Ken D. Feb 17, 2012

    "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."

    In other words, the schools increased revenue by $55 million and expenses by $42 million, for a net gain of $13 million, or slightly more than $1 million per school. This is a bad thing how? It's not the ratio of revenue to expense that matters, just the bottom line.

  • cjw6105 Feb 17, 2012

    More revenue? Only because there are more teams.

    When FSU was added, they beat down our entire conference for 10 years in football, and brought nothing to the table in basketball except for the Les Robinson Invitational.

    When Miami, BC and VT were added in '03, football took another hit with limited rivalry games and the flameout of Miami.

    Now we're getting 2 more teams, probably next season, and 2 more are sure to follow. We already go for 4 or 5 years now without hosting our closest football neighbors, and despite adding 2 more games to the league schedule, we'll cut back on the number of times we play everyone except for one other team, who is not our rival unless we're Duke and UNC.

    Competition is NOT being improved here. I don't know about revenue, but I do know that killing off rivalries is not the way to go. The Swoffords and other administrators who see only money are going to leave a legacy of having destroyed what was once a great league. Bigger isn't better.

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K. Kozlova6 77    
D. Vekic1 63    
(2) K. Flipkens79 6    
A. Bogdan67 3