Giglio: The SEC is expanding, don't count on the ACC following suit

By Joe Giglio, WRALSportsFan

Kansas took to Twitter last week to extoll the future excellence of its airport. West Virginia used the opportunity on social media to tout its academic bona fides.

Dating apps weren’t as popular during the last round of realignment in major college sports nearly a decade ago. With the pending exit of Oklahoma and Texas from the Big 12 to the SEC, there’s another round of movement coming. Just don’t expect the ACC to swipe right on any potential matches.

There’s only one match that makes sense for the ACC (one true love if you will) and that’s Notre Dame. Given the proposed expansion of the College Football Playoff to a 12-team model (in part, the brainstorm of Notre Dame athletic director Jack Swarbrick), which would make it easier for the Fighting Irish to regularly make the postseason, that’s unlikely to happen any time soon.

So how will the ACC respond with the SEC on the verge of adding a regular CFP participant and the richest school in college sports?

In the short term, likely by standing pat but there might be a different plan for the long term.

Here’s why:

Grant of rights

Ultimately, John Swofford’s legacy as the ACC commissioner will be “he kept the lights on.” That’s no small feat. Just ask the Big East or the Big 12.

It’s fair to give a good chunk of the credit to Swofford, a master at consensus-building, for the ACC still being a viable conference, even if it severely lags behind the Big Ten and SEC financially.

Expansion was the right decision in 2003, even though it didn’t initially have the approval of North Carolina or Duke (the conference’s two main power brokers).

It’s also fair to criticize Swofford for some of his expansion choices (Boston College in 2005 and Pittsburgh in 2013, specifically) and the loss of Maryland in 2014 to the Big Ten.

But the abrupt exit of Maryland, an original conference member, taught Swofford a lesson that led to his best decision — the grant of rights. The ACC doesn’t have to sweat the current “Super Conference” realignment hysteria (if it does play out that way) because its 14 full-time members are bound to the league through its media-rights deal through the 2035-2036 academic year.

(Note: Notre Dame, if it does decided to join a conference, is also bound to the ACC through the same date.)

The grant of rights works like this: if a school wants to leave the ACC, it would have to pay $26 million (the average annual cost of the media deal) times the number of years remaining on the TV contract.

So if the Big Ten wanted UNC or the SEC wanted Clemson after the 2021 football season, it would cost $390 million. The Big Ten and SEC have a lot of money, but it wouldn’t make financial sense to steal an ACC team at that price.

You’ll note, those rights work both ways. The ACC can’t “get rid” of any schools, either (not that it wants to), without paying a hefty price. So the fantasy realignment maps with Clemson in the Big Ten, Florida State in the SEC or Penn State in the ACC are just that — fantasy.

Playing catch up

The question being asked by national observers after the SEC’s addition of Oklahoma and Texas, “What can the ACC do to keep up?” is the wrong question. The question is, even before the SEC’s latest move, “What can the ACC do to catch up?”

Here’s the breakdown in conference revenues from the 2020 fiscal year, according to federal tax documents:

1. Big Ten $768 million

2. SEC $728 million

3. Pac-12 $533 million

4. ACC $496 million

5. Big 12 $409 million

Do the math. The Big Ten’s TV contract is 54.8 percent greater than the ACC’s. The SEC previous deal, which is about to surpass the Big Ten’s, was 46.7 percent greater. The ACC is a “Power 5” conference but it’s not in the same ballpark, not even the same neighborhood, as the Big Ten and SEC.

Even with the advent of its own cable network, the ACC ranks next-to-last in total revenue and last in per team payout (about $32 million).

Why is that?

This gets back to the idea that expansion was the right move but Swofford didn’t get the right teams. You can look at this two ways: enrollment and spending.

The ACC has four private schools (Duke, Wake Forest, Boston College, Miami) with an undergraduate enrollment of fewer than 12,000 students, according to US News and World Report. The Big Ten has one (Northwestern) and the SEC has one (Vanderbilt).

Eleven of the 14 schools in the Big Ten have an undergraduate enrollment of greater than 30,000. Florida State is the only ACC school to hit that number. More students equal more alums, equal more fans, equal more money for the school.

The ACC expanded initially with an eye on television markets, rather than interest in those markets in college sports. Boston, Miami and New York are major TV markets, just not for ACC football. That’s one of the reasons the ACC Network launched 12 years after the Big Ten’s and five after the SEC’s.

If you look at athletic budgets, which we can conservatively link the lion’s share to football spending. The ACC also lags behind here, too. There are 65 schools in what is considered the “Power 5” and 53 of which are public schools who have to report their revenue and expenses to the federal government for tax purposes.

According to the USA Today’s database (from the 2019 fiscal year), there were only three ACC teams (Clemson, Florida State, Louisville) in the top 30 in expenses and revenue, compared to 10 from the Big Ten and 11 from the SEC.

So what’s next?

Closing that financial gap was tops on the to-do list for Swofford’s replacement before the SEC’s latest power play. New ACC commissioner Jim Phillips worked at Northwestern, the Big Ten’s lone private school, and helped the Wildcats be competitive, despite not spending the same as Ohio State, Michigan or Penn State. So he understood why he was hired.

The easiest answer for Phillips is to somehow get more out of Notre Dame. The current agreement, which has Notre Dame as a full-time member in all sports except football and for the football team to play five ACC teams per year, financially helps the ACC (and Notre Dame).

Swofford was in a bargaining position of power last season, when Notre Dame needed a conference home to have a 2020 football season, but didn’t leverage it for more. Most of the league coaches would have preferred to have used that moment to get more from the Irish.

The sweeping changes to the NCAA, with the advent of Name, Image and Likeness and the basic end to the amateur model as it has been for the past century, offer new opportunities for the power conferences.

The SEC, with commissioner Greg Sankey taking advantage of a leadership void in the NCAA in football and with the turnover at the commissioner position in three of the Power 5 leagues in the past 25 months, has made the first move with the addition of two proven, national brands in college football.

To give you an idea of what the SEC is adding in Texas and Oklahoma, the Longhorns rank No. 1 in reported revenue ($223 million) and second in expenses ($204 million) while the Sooners rank No. 8 in both revenue ($161 million) and expenses ($157 million).

As David Teel pointed out on Richmond.com, the way the ACC distributes its money to each member, it would take an additional $77 million in annual revenue for a new conference member just to increase the annual payout by $3 million.

Notre Dame is the only available brand that could make a financial splash. That leaves the likes of West Virginia, Kansas, Oklahoma State and Cincinnati, hoping to attract one of the power conference’s attention but without the wherewithal to move the financial needle.

And while the concept of 16-team “Super Conferences” sweep the current landscape, adding teams for the sake of adding teams doesn’t make any sense for the ACC. Just as Notre Dame joined for the 2020 season, the ACC would be better off with a 15-team lineup without divisions.

But predicting the future in college football is a dicey proposition. Just ask Swofford. In the four years before joining the ACC, Miami went 11-1, 12-0, 12-1 and 11-2 with a national title in 2001 and four top-5 finishes.

Since joining the ACC in 2004, Miami has one double-digit win season (10-3 in 2017) and has yet to finish in the top 10 of the final AP poll, let alone the top 5.

The ACC’s best way forward might not be adding anyone, rather figuring out how to improve the dormant national brands it already has.