No, the ACC is not collapsing anytime soon. Yes, Syracuse is screwed anyways
Syracuse is about to pay (literally) for the mistakes of the last decade plus.
What happened in the last 48 hours?
The ACC Spring Meetings are taking place, meaning a lot of big picture ideas are being discussed and leaked to media members. Because college sports is at a turning point, a lot of these discussions are causing existential crises among legacy media members and fans on the dying flames of Twitter.
Is anything changing for this upcoming season?
Probably not. So if that’s your only concern, you can stop reading here!
So why is everyone freaking out?
Because the schools don’t like how things are, so they are naturally trying to change things up, and someone came up with a clever, sinister name (Magnificent Seven) for the group trying to create the change.
Can you just get to the part where you explain stuff?
Sure! If you’re familiar with conference realignment and the ACC Grant of Rights, just skip to "So can the Magnificent Seven actually do anything and how is Syracuse screwed?”
The ACC is one of the 5 legacy “Power Conferences” that is used to having an equal share of authority and recognition in college sports. The last decade has seen this landscape fundamentally shift and the ACC left behind by the SEC and B1G in terms of revenue and prestige. The ACC is now grouped with the Big 12 and Pac-12, all several steps below the SEC and B1G, but still a clear level above everyone else such as the American and Mountain West.
Unlike the Big 12 and and Pac-12, the ACC hasn’t lost any member schools to the “Power 2” because of something called the Grant of Rights*, which legally binds all the existing schools together until 2027 via television rights revenue. This document was drafted and signed after Maryland left the conference and the ACC retaliated by adding Louisville and Notre Dame (in a limited capacity) with the intent of making it extremely expensive to leave the ACC. It was extended to 2036 back in 2016 when the conference extended it’s deal with Disney/ESPN and created a conference TV Network. In short: the Grant of Rights has done it’s job. No ACC schools have left for other conferences, because the legally binding agreement dictates a $120 million exit fee and forfeiture of all tv rights for home games until the expiration of the rights.
So can the Magnificent Seven actually do anything and how is Syracuse screwed?
Like I said in the headline, the ACC is not collapsing, because the Grant of Rights is a really strong legal document. Schools will continue to have their lawyers earn their retainer fees by looking over the document and concluding that there’s nothing inside the document that can be used to break the agreement between the schools, the conference, and ESPN.
Teams want to break this deal and renegotiate the TV deal signed back in 2016 because the B1G just got a $7 billion TV rights deal, and think that there is more money out there for the ACC if this current deal is blown up. That assumption is based on the rising price of sports rights, which up until now has been the safest guarantee in media. However, we may have seen that non-premium inventory may not be the guarantee it once was. The Pac-12 has been holding out for a streamer such as Apple or Amazon to swoop in with mega money for their rights, but that hasn’t happened. Apple did swoop in for Major League Soccer, paying a market increase rate of $200 million a year for the top American soccer league, which has done so poorly in the opening weeks that the once pay per view program is now free and out clauses are being discussed. So if you can’t get more money for the ACC, can you get more money for yourself by attaching yourself to a new conference? Well that still requires a school to break our of the Grant of Rights.
As the always spot on David Hale and Andrea Adelson wrote back in March, all it takes is for one school to decide to leave for the entire document’s validity to come into question, and begin what will almost assuredly be years of legal battles to determine how much money a school owes for breaking the agreement and selling home TV rights to their new conference. And as I mentioned in the explainer, the Grant of Rights makes this process expensive not prohibitive. Meaning, that if the ACC is unable to increase revenues to a level deemed acceptable by ACC members or comparatively to a conference looking to poach, the math will eventually work out to a point where the new conference revenue > exit fee + lost revenue from home tv games. So, in order to get more money, leaving the conference may be more profitable than hoping the ACC can make as much money as the B1G or SEC.
So once again, why is Syracuse screwed in all this? In the short term, the ACC’s appeasement measure is to redistribute the yearly revenue. Currently, the system is equitable, but all proposals are tiered to benefit the top performing schools at risk of being poached. Longer term, Syracuse is not a desired school when it comes to realignment. FSU, Clemson, UVA, UNC, and Miami are the highest value schools, and oh how convenient, there’s 5/7 of the schools looking to make a move. (The other two are NC State and Virginia Tech.) If Syracuse wanted to try and replicate what they did with the Big East and be one of the first to bolt, it doesn’t appear as if either the B1G or SEC are interested in taking Syracuse unless it’s the only way to get multiple teams from the high value list.
Why isn’t Syracuse a good fit? Not that geography matters to the B1G, but it does to the SEC, more than likely meaning Syracuse is looking at the B1G as a safety net. In that regard, they don’t fit the school profile, (large state school) and would need to convince Rutgers and Penn State that adding another northeast school who is a historical rival is actually a net positive and not a threat to their recruiting or brand building. Syracuse’s only real in to the B1G is the addition of basketball and lacrosse competency, but both of those programs have had major scuffles that fit more in line with the bottom half of both conferences instead of the top half. In short: the school isn’t a fit, the sports aren’t a fit, and the Orange don’t have enough money to overcome both of those factors.
Naturally, if things are so bleak, someone you know will say “Why doesn’t Syracuse just go back to the Big East?” Easy. The ACC’s “lacking” television deal pays each school around $30 million each year. Even with most logical of projections, the Big East is expected to pull in around $10 million per school per year and that may be too generous. Additionally, with no support for football and minimal support for olympic sports, moving to the Big East would essentially be asking Syracuse Athletics to take a $20 million pay cut and increase resourcing around football (to accommodate life as an independent) and cut olympic sports’ funding or teams. The American would be a more logical landing space than the ACC, and at that point, you’re better off with the guaranteed Grant of Rights funding that all but ensures the ACC will at least remain a step ahead of the American in terms of funding for the length of the deal.
So to recap
The ACC has an assumed unbreakable contract with it’s schools and TV provider, they’re going to pay the bigger schools more to keep them from trying to break the contract anyways, Cuse isn’t good enough in their key sports to overcome their glaring disadvantages for realignment, and moving back to the Big East would decimate the Athletic Department’s already thin budget. It’s not great!
The ACC has enough immediate issues to content with as they modernize the league, and those will more than likely be what change soon. Conference realignment will continue to hang over the conference until it is no longer the easiest path to individual school revenue growth, so don’t expect the talk to stop any time soon.
*For those who don’t have an Athletic Subscription, 1) I highly recommend it if you’re interested in this kind of stuff, and 2) I’m going to link to them a lot, so get used to being paywalled around here for my reference links.