Crisan: Evidently, the ACC's biggest enemy has become itself taken on the South Side (NCAA)

The ACC

ACC Commissioner Jim Phillips.

I used to think the "Magnificent 7" was just a breakfast order at Perkins.

But, no, this is not a story about pancakes, eggs, and choice meats. This is a story about a Division I college athletics conference unable to get out of its own way.

And, it's anything but magnificent.

As the ACC's annual spring meetings continue this week on Amelia Island, Fla., just northeast of Jacksonville, the ongoing kerfuffle and noise surrounding the pit the ACC has dug itself into have resurfaced.

And, the latest brawl hasn't come via the conference-versus-conference scope that ACC Commissioner Jim Phillips has been vocal about -- I.E., the ACC versus the SEC and the Big Ten and how his league cannot continue to fall behind the more powerful powers when it comes to the almighty dollar.

A lofty and ambitious Grant of Rights contract constricting the 15 member schools with a media rights deal running through 2036 is being revisited -- though, not suddenly -- by seven ACC schools, according to a report from nationally renowned Sports Illustrated reporter Ross Dellenger.

Dubbed the "Magnificent 7," these schools include movement leaders Florida State and Clemson, along with North Carolina, NC State, Miami, Virginia, and Virginia Tech. Florida State was first to dig into the trench when athletic director Michael Alford publicly called out the revenue sharing of that Grant of Rights, which gives equal distribution to its member schools. He said "something has to change" as ACC schools are projected to fall behind in a massive way compared to their counterparts in the SEC and Big Ten by 2026.

That's three years from now, and that would mark 10 years until the existing Grant of Rights expires.

But, the gap has already become more of a canyon.

This is from Phillips at the ACC Kickoff event in Charlotte, N.C., back in July:

"We are really aligned to try to find some solutions to that revenue gap, but it can't be at the expense of all the other things that we're doing," Phillips said. "So there's, I think, a really good plan for us as we move ahead. Again, considering all of are our options. In these kinds of times you have to do that. This is unique what's happened over the last 12 months."

Maybe it's time to cut bait from what the ACC is doing? Member schools are already on it, anyway.

These seven schools, per reports, have been meeting since February with lawyers from each school fine-tooth combing over the Grant of Rights to look for an out. Pick any combination of these seven -- even if it's two or three -- of these to leave, and the dominoes could start to topple.

Now, if we want the hard data, just look at the annual payout projections for each member school of a given Power Five conference, posted by data firm Navigate in March of 2022.

photoCaption-photoCredit

NVGT.com

Power Five conference payout estimates through 2029.

Now, why don't schools just ... leave? The NCAA is leaning towards "super" conferences anyway, and USC, UCLA, Texas and Oklahoma have already kick-started the party, right?

It would cost an ACC member school a cool $120 million exit fee, plus whatever it might cost to actually break the Grant of Rights, which is an unspecified figure since the idea has not surfaced up to this point after it was signed in 2016.

So, it's not that easy.

(Dellenger went as far to write that breaking the Grant of Rights is an air-tight concept and "we don’t know yet if this is a possibility.")

It doesn't take much to see why Florida State and six others are starting to spin the engine. The ACC, by 2029, is expected to surpass the Big 12 in revenue, but just look at the gap cast between the SEC and the Big Ten with the ACC. By 2029, the Big 12 would be on its way to doubling the revenue generated for member schools, compared to the ACC.

But, why don't they just leave, anyway? The Big 10 and Big 12 are expanding. Why don't the ACC schools try to join the fray?

Even if a member school left the ACC, the conference would still own all of its broadcast rights and control the feeds (on the ESPN family of networks) and control all of the revenue generated for all home games, as the Grant of Rights states. So, it's not like their new conference would stand to benefit by an addition. By this point, though, it's nearly moot because of how far the ACC has already fallen behind the Big Ten and SEC. 

And, because options for the schools, as they are understood, are relatively limited. Yes, that would include leaving the league.

Talk about being backed into a corner. One that will cost at least $120 million to get out of.

(By the way, Notre Dame isn't completely safe from this. Per the Grant of Rights, Notre Dame's contract with the ACC in all sports but football was also extended through 2036, and if their independent football program were to break from independence up to that point, it is contractually obligated to join the ACC.)

The other schools -- "The Modest 8?" Pick your favorite antonym for "Magnificent" -- not involved in this current debate, to our knowledge, are Boston College, Duke, Georgia Tech, Louisville, Notre Dame, Pitt, Syracuse, and Wake Forest. Having just joined the ACC 10 years ago, a breaking of this deal would leave Pitt in a tough spot for what would become a broken-down ACC. That is, unless Heather Lyke finds that loophole within the Grant of Rights as beneficial to Pitt and the school can stand to benefit -- and generate a greater profit -- from going to another conference.

ESPN (technically, Disney) has experienced its own cuts and still has to negotiate deals with Endeavor (the company that now jointly owns the WWE and UFC), the Pac-12, and, most important, the NBA. Dellenger reported Phillips and "a few" ACC presidents met with ESPN, but "no significant cash infusion appears imminent."

Read: ESPN can reconstruct the deal to help the ACC generate more revenue.

But why would they? 

The ACC is getting about $240 million annually in revenue from the network. Meanwhile, the Big Ten is set to benefit from a TV deal spread across CBS, Fox, and NBC what will pay the conference just over $1.1 billion a year over the next seven years. The SEC reached a deal with Disney starting in 2024 and running for 10 years, and the conference is expected to earn in the range of $300 million annually from ESPN.

In addition to the Big 12 taking up Disney real estate, the NBA's deal with Disney and Turner expires in 2025, and reports have suggested the Association is seeking a deal upwards of $75 billion. One factor that -- for better or worse -- could affect that situation is a third player coming to the negotiation table. As CNBC reported in February, NBC is expected to jump back into the picture of retaining rights to broadcast NBA games for the first time since 2002. The report clarified that Disney is expected to bid to keep games on their network and Apple and Amazon expressed interest in the Association, but that doesn't mean Turner will bow out of the discussion altogether.

So, that will have to be sorted, one way or another, before the ACC can even begin to think of asking for a raise.

Even if they have "earned" it, or "times have changed," or however else Phillips and the ACC's legal team wants to spin it.

The ACC dug itself into a corner with lengthy commitment at the wrong time, and doubled down by giving ESPN carte blanche to create the ACC Network to branch within its own family in 2019, which was green-lighted in 2016 along with the extension of the rights deal until the 2036 date that we all know of.

That extension is now perceived as an anchor to a sinking ship. A 20-year sinking ship, with 13 years left to hit the bottom, while the Big Ten and the SEC are entering new TV contracts in 2023 and 2024, respectively, and are going to take laps around the ACC in line for the bank teller. 

Schools in those conferences are going to heavily outweigh what schools in the ACC make in revenue, and the ACC only has itself to blame for it because of some shortsightedness and the angst to commit to something longterm when everyone else was holding firm in its own court.

Other schools were playing chess; the ACC was playing checkers.

Check.

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