(11-20-2014 08:53 AM)XLance Wrote:  

(10-01-2014 04:22 PM)JRsec Wrote:  

(10-01-2014 12:42 PM)Lenvillecards Wrote:  Instead of expansion wouldnt it be more profitable for both the SEC & ACC to merge on a network basis,.partner up? The ACC would bring in the east coast for the SEC along with great basketball, that would strengthen the SEC network. It would also leave the SEC free to expand west, if desired, to bring in Kansas, Oklahoma or Texas. Isn't there more value in this?

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Here are the issues that would need to be resolved.

1. Will the profits be shared equally? If so it is a non starter. The SECN will be way more profitable than an ACCN. Football brings many more eyes than college basketball. If football is 84% of all college sports revenue and basketball is 14% of it then you can see the issue. (All other college sports are about 2% of their revenue.) The SEC shares the states of Florida, Georgia, South Carolina and Kentucky, but carry the largest percentage of each of those states. So a split means that the SEC would share their revenue for the sake of gaining North Carolina and Virginia, part of Pennsylvania, part of Massachusetts, and part of New York. When you consider the price for North Carolina is 4 equal shares you can rule that state out. The percentage of college sports viewers in the other states is dwarfed by nearby professional sports teams. I don't think it is something the SEC could do.

2. I think the only way this has a chance to work is if their was an 85% to 15% split for states not shared. And by the way that 15% is what the SEC is roughly getting paid already for Virginia and North Carolina and all other states in which they don't have a school.

3. Mr. SEC did a creative analysis of the profitability issue with regards to ACC schools. Here is a sampling of the results:
A. Florida State would add a profit to the SEC for their content and fan travel. Just not nearly as much as adding a school from a new state.
B. Clemson is a wash. They do add their value, but not much else.
C. Schools from Virginia and North Carolina add the most, but U.N.C. won't move without Duke (discussions behind the scenes with the SEC have been held on this issue) and North Carolina won't move without N.C. State either. Virginia and Virginia Tech want to stay together as well.
D. Two Virginia schools are provide only a slim profit. Three North Carolina schools are a loss.
E. The only way to make taking the two Virginia schools and three North Carolina schools profitable is to add Pittsburgh and even then the return for diluting the SEC brand in football with two marginal football schools (Virginia Tech & Pittsburgh) and 4 basketball schools is so slim as not to be viable even if six schools that would be involved would all agree to it (and they won't).
F. The SEC could make a profit if they took the two Virginia schools and only 2 North Carolina schools.

So while sharing a market footprint is something I have suggested before, and on the face it looks appealing, the financial aspects of it are totally otherwise, and completely unthinkable on any kind of equal revenue sharing basis.

This is why (3 years ago before the realignment phase broke out and when top conference decision makers were working out the business angles of these moves) the suggestion was for the SEC to add Virginia Tech and N.C. State to pick up those markets and for the ACC (prior to N.D.) to take Texas, Kansas, Oklahoma, and Iowa State as a Western division. That's 3 AAU schools and a national brand in Oklahoma. Academically that could have been acceptable for the ACC and would have given the two conferences roughly equivalent values for market footprint. Then a shared network would have been more conceivable. Right now there is no incentive for the SEC to even consider one.

That's why Dodds said that Texas would look East. But then they started wanting things that would kill the deal like the inclusion of Texas Tech. Then Oklahoma wanted the Cowboys as the tag-a-long. All of the sudden the states of Kansas and Iowa were forfeit along with their nearly 6.5 million viewers. Therefore 35.5 million viewers for 4 schools became 29 million viewers for 4 schools. Two Oklahoma schools aren't attractive to any conference. Just ask the PAC, SEC, and Big 10 because all were shopped about taking the pair. Texas Tech, or Baylor, or T.C.U., don't give you anything that Texas doesn't already bring. Having a second school in Texas is at least doable. So now you are talking Texas, Texas Tech, Kansas and Oklahoma which is still doable. But Oklahoma says no.

So here we stand. The SECN will be profitable and the ACCN only exists in discussions which are far from certain. The inequity in income between the two is going to rise to 8 figures within three years and the real possibility for an ACCN won't exist until 2021 which is a long time in this business. That is why both the Big 10 and SEC will pose a threat to the stability of the ACC closer to the end of their GOR.

The appropriate solution IMO is for the SEC to take N.C. State and Virginia Tech along with Oklahoma State and Kansas State or another Texas school (Baylor) in a move to 18. Then the ACC could take 6 schools from the Big 12 to make it work in their own move to 18. Texas, Oklahoma, Kansas State or Kansas, Iowa State, Texas Tech or T.C.U. and West Virginia. Louisville is moved to the West division of the ACC and now you have accounted for the 8 necessary to dissolve the Big 12, increased the markets of the ACC to unprecedented levels, and can readily morph the LHN into the new ACCN.

The ACC:
North: Boston College, Duke, Pittsburgh, Syracuse, Virginia, West Virginia
South: Clemson, Florida State, Georgia Tech, Miami, North Carolina, Wake Forest
West: Iowa State, Kansas, Louisville, Oklahoma, Texas, Texas Tech
* Notre Dame

The SEC:
North: Kentucky, N.C. State, South Carolina, Tennessee, Vanderbilt, Virginia Tech
East: Alabama, Auburn, Florida, Georgia, Mississippi, Mississippi State
West: Arkansas, Kansas State, Louisiana State, Missouri, Oklahoma State, Texas A&M

(The other work around to please Texas is the SEC takes Baylor instead of Kansas State, the ACC takes Kansas State instead of Kansas, and Kansas moves to the Big 10. Only T.C.U. is out.)

Now the relative values of the two are much closer and the proposal of a shared or packaged network(s) is possible.

If the ACC is going to partner with any other conference it will be the B1G. A full merger of the two would result in three marketing entities (ACC, Eastern ((w/ND)), and B1G) with no mickey mouse distribution of money.
Why would the ACC choose this instead of "looking" south? 1-they will make a lot more money in the Big Ten (especially when the footprints are combined) than with the SEC (which has great product but very little population) and more importantly 2-they can stay together as a unit.
Just as the ACC/Big East Challenge was a precursor to the "merger" of the two leagues, the ACC-Big Ten challenge is proving to provide the same purpose.
The opportunity for the ACC to move en masse to the B1G has been the ACC's ace in the hole during the entire realignment process.

ACC
UVA, Virginia Tech, Carolina, Dook, Wake Forest, NC State, Clemson, Georgia Tech and Florida State

Eastern
Miami, Louisville, Notre Dame, Pitt, Syracuse, Boston College, Maryland, Penn State, and Rutgers

Mid-west (B1G)
Nebraska, Minn, Wisc, Northwestern, Ill, Iowa, Indiana, Purdue, Mich., Mich. State, and Ohio State.

Why am I not impressed?
1. ESPN owns you outright for a while to come yet.
2. The Big 10 is slipping and what's more they know it. It is why H1 rightly wants to see schools like Virginia Tech and Oklahoma in the Big 10. They don't need a bunch of sports fluff to continue their downward spiral in the money sport....football. Basketball my friend is the game that is losing appeal, and steadily, though by percentage points, but annually.
3. The ACC has a few football first schools: Clemson, Florida State, Virginia Tech, and Louisville is borderline. I still classify Miami as a football first culture. Georgia Tech's history is football first, I'm not so sure that their future is. So I don't see your fickle cobbled together conference staying as a unit. Besides it would be lousy business sense for ESPN to allow them to be marketed that way.
4. Not even Jim Delany is going to feed 4 mouths out of North Carolina, especially when an amicable rival is willing to feed one. If the SEC doesn't want to feed more than two out of Texas and hasn't taken a second in Florida, yet, then the Big 10 isn't going to double down on Virginia and parse North Carolina profits into the red. They don't need Pitt either, but that would be the only state I could see them taking a second product in besides North Carolina should Duke be the other school.
5. So trying to make me believe this is a credible threat just isn't going to work. Of the 5 power conferences you are the second most vulnerable but the least potent. You may have markets but you can't monetize them effectively. I doubt the Big 10 needs a lot of that. What they would like is the same 19 million viewers the SEC wants and both can have them without having to pay for 6 schools. And that my friend is the reality of the ACC position.