Jul 22, 2022
CHARLOTTE, N.C. — ACC commissioner Jim Phillips spotted Louisville football coach Scott Satterfield in the main hallway outside the interview rooms at ACC Kickoff on Wednesday and quickly came over to say hello as a full day of media appearances wrapped up.
The two exchanged pleasantries before Satterfield acknowledged the reality facing both the commissioner and the conference: Phillips has a tough job ahead.
Of course, that has been the reality since Phillips took over as commissioner in February 2021, and he’s made some strides in addressing key areas, including bringing the ACC Network to full distribution last December. Indeed, for all the sky-is-falling worries, the league generated a record $578 million for 2020-21, the short-term revenue gaps don’t figure to doom any playoff contenders and programs like Florida State, Miami and Wake Forest have all announced plans for large-scale facility projects set to be built in the coming years.
Still, the revenue gap remains the most pressing issue facing Phillips, and even he couldn’t have anticipated the scope of the challenge when he replaced John Swofford.
Rather than debating the strength of the football teams in the league compared to the other Power 5 conferences, the only two ACC Kickoffs that Phillips has attended have been dominated with questions about its long-term future.
At this very event last year, Phillips and those in attendance were forced to react after Texas and Oklahoma announced plans to leave for the SEC. This year, they faced the same questions after USC and UCLA declared they were joining the Big Ten. Phillips gamely spoke about trying to preserve what is good and wholesome about the collegiate model, but the stark fact remains: The name of the game today is about revenue generation and distribution.
The ACC is far behind the SEC and Big Ten in this significant area, and while the league is not going to be shutting its doors anytime soon, the fact remains that this revenue gap is why there are so many questions.
So many questions, in fact, that multiple schools have been sending their legal counsels to league headquarters in Greensboro, North Carolina, where there is a copy of the current grant of rights, to read and review it. Some schools are doing it as a way to perhaps see whether there is any way to challenge the grant of rights in court. Some schools are doing it to perhaps reassure themselves that the language is as ironclad as many believe it to be.
The league’s new legal counsel has also carefully looked over the document. The grant of rights — which runs through 2036 and essentially gives every school’s media rights to the ACC — was initially signed in 2013 as a way to keep members together, spurred, after Florida State explored a Big 12 move and Maryland left for the Big Ten. The league agreed to a new ESPN deal in 2016, including the creation of the ACC Network, which extended the grant of rights until 2036.
For that reason, the league feels confident it is in a far better position than the recently poached Pac-12 and the Big 12, two conferences that have their television contracts coming up for renegotiation. While nobody wants to raise pom poms and shout, “We’re No. 3!” that might not be such a bad place to be for the time being, at least from the league perspective.
“I can just go by what history has told us with the grant of rights, including in current times,” Phillips said during his news conference Wednesday. “People talked about Oklahoma and Texas leaving immediately. I think that’s pretty well-stated now that that’s not the case. They’re going to wait until their grants of rights is over.
“Listening to UCLA and USC they clearly are going to stay in the Pac-12 until their grant of rights is over. So you can follow the logic there. I would think that the significance of what that would mean, the television rights that the conference owns as well as a nine-figure financial penalty, I think it holds. But your guess is as good as mine.”
Especially when multiple sources have said they expect the grant of rights to be challenged some day in court. That day is not believed to be any time soon.
“The ACC is in a good position, but it is what it is,” Pitt coach Pat Narduzzi said. “You knew something was happening after Texas and Oklahoma. There should be no surprise.”
Phillips said “all options are on the table” for the league as it considers its next move. That is, if there is a move big enough to make.
But here is the thing, as one coach pointed out. The ACC has had the past year to come up with some options after Texas and Oklahoma left, sending shock waves across the sport. Instead, the coach worried the ACC was spending too much time focused on changing its division format and not enough time focusing on its big-picture plan.
But many options — especially as it relates to expansion — were vetted and deemed either not enough to move the needle financially, or would take away money from a school’s financial payout. As one athletic director said, “We already have too many mouths to feed.”
Does that calculus change now, especially as two of the Power 5 conferences have expanded to 16 teams? Maybe. But the bottom line is the ACC is not going to make a move if it does not add significant revenue. As for the uneven revenue distribution to help keep some of the bigger, brand-name schools happy, this is an idea that has been floated since before realignment, but will now be pursued as an option that will be more seriously considered.
Once staunchly against an unbalanced revenue distribution, Phillips said he’s more open to the idea now, as difficult circumstances dictate hard choices. But he said it wouldn’t be his first option.
One ACC athletic director said he thought the idea had more traction than in years past, but said the league had not discussed details of any specific plan on how to divvy up dollars. While the AD was unsure if any plan could garner enough votes, one coach who’d previously been averse to the idea said he’d be open to it — if the revenue payouts were based on on-field success.
Still, that does not change the overall bottom line here. The Big 12 had uneven revenue distribution to keep Texas and Oklahoma happy, and they are leaving anyway.
For now, the ACC remains together and any talk about superconferences is all speculation. Still, schools are positioning themselves for whatever scenarios might unfold in the future. History tells them they must.
“I’m not worried about Carolina,” North Carolina coach Mack Brown said. “It’ll be fine. Virginia will be fine. But I’m worried about all the rest of it, and maybe that’s not my place. But as a person who loves college football, I don’t want to see it just go away.”
Brown has been through all this before. He told ESPN.com when he was the head coach at Texas, he had a plan in place for a year and a half to take the program into the Pac-12, but the calculus changed when ESPN created the Longhorn Network and Texas stayed in the Big 12.
“We had a recruiting area set up, we had a schedule. We had travel, all of this, and I wasted all this time,” Brown said. “What coaches have decided is it’s not us. We don’t know what’s going on. Nobody knows for sure what’s happening. I need to put all my energy into coaching this team. And I’ll worry about that later, and whatever happens probably isn’t going to happen for three years, anyway, so most of the kids we’re recruiting, they’re going to be seniors before it even changes.”
Perhaps the biggest variable within the ACC’s control as it looks for ways to boost revenue is simply to have its best teams playing good football.
Florida State, Miami and Virginia Tech — all traditional football powers — have endured extended stretches of lackluster performances of late. If the ACC wants its TV partners to consider adding to the coffers, the first step is revitalizing those programs.
“For years and years, if you came to Virginia Tech, you were going to win 10 games and have a chance every year to be in an Orange Bowl,” first-year Virginia Tech coach Brent Pry said. “We’ve got to get that back to where those expectations are met. Imagine what that would do for [the ACC].”