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May 8, 2013

ACC taking right steps to preserve conference�s future

By: Bill Roth

Virginia Tech’s teams and fans will get to continue enjoying ACC competition after the league’s recent grant of rights deal locked in every conference member for the next 14 years.

In late April, the ACC announced that each of the current and future 15-member institutions had signed a grant of media rights through the 2026-27 season. The agreement gives the conference control of each school’s television rights, which, in essence, locks each of the institutions in the ACC for the next 14 years. That period runs congruent with the league’s current television contract with ESPN.

The move solidifies the future of the ACC and protects it from being poached by any other conferences. The ACC becomes the fourth league with a grant of rights agreement, along with the Big 12, the Pac-12, and the Big Ten.

What does this mean for Virginia Tech and the ACC? Here’s a primer:

What exactly is a “grant of rights?

Effective immediately, all current and future ACC members have granted their television broadcast rights in all sports to the ACC through 2026-27. If a member of the ACC leaves the conference during that time, the league retains that school’s TV rights. That’s critical since the true value of a school to any other conference is the television revenue it can generate. A “grant of rights” agreement makes the 15 ACC schools essentially worthless to any other conference looking to expand. As of now, the league – not the school – owns the rights to Virginia Tech football games. The agreement shows tremendous solidarity among the current schools and Louisville, which joins the ACC for the 2014-15 season.

Where are grant of rights agreements used and how powerful are they?

Well, some easy-to-see examples of contracts that contain a grant of rights clause include recording contracts between musicians and artists, or publishing contracts between an author and his publisher. Many Virginia Tech alums in the IT industry are familiar with software licensing contracts that also feature similar legal clauses. It’s not new or complicated. It’s only been in the past few years when we’ve seen conference officials use this as a tool to protect their leagues from being poached.

Is this really a home run for Commissioner John Swofford and the ACC?

You bet it is. Look at a map. And look at the population of this country. The ACC, at least through 2026-27, is the rock-solid, dominant power in the most heavily populated region of the U.S. The ACC covers I-95 from Boston to Miami. The population of our country is moving south to Virginia, to the Carolinas, and to Georgia and Florida. The ACC has the TV markets, it has great schools and it has them locked up for 14 years.

How good of a year has this been for Swofford?

Well, let’s recap what’s happened in the ACC since last summer:

July 3, 2012: The league announced a 12-year agreement that will annually send the ACC champion to the Orange Bowl as part of college football’s new postseason model. Then, in November, the league announced that the opponent would be from the Big Ten, SEC or Notre Dame.

Sept. 14, 2012: The conference unanimously voted to accept Notre Dame as a new member and announced that the Irish would compete as full members in all sports with the exception of football. The Irish’s football program will play five games annually against league programs.

Nov. 28, 2012: Swofford and the ACC essentially swapped Maryland for Louisville (a program that won the Sugar Bowl and the NCAA men’s basketball national title, and whose women’s basketball team lost in the NCAA championship game.)

April 22: Swofford and the ACC announced the grant of rights agreement.

What has happened in the ACC from May 1 of last year until this year is remarkable. It’s unprecedented.

Does this mean we will have an ACC Network?

There are tremendous risks to starting a cable-only network, but there can also be huge rewards. The Big Ten Network is successful, and we know the SEC’s will be launched soon. The ACC’s current television model is different – its current syndication package of over-the-air stations covers much of the country. A cable-only network would likely mean the end of any syndicated network because a new network would need additional inventory (games).

Secondly, there are clearance and revenue issues. For example, the University of Texas, despite having more than 52,000 students and hundreds of thousands of alums within Texas, has suffered major issues in clearing the Longhorn Network even within the state. Cable operators are hesitant to raise rates just to add the channel.

If you follow this closely, you’ll see that teams like the Houston Rockets and Houston Astros own their own regional network, but don’t have clearance through much of the city of Houston. Would cable operators clear an ACC network? Would fans agree to increased cable rates? Can the ACC increase revenues for its membership without one? All are legitimate questions and everyone will be watching how the SEC network progresses in the coming months.

What will the ACC look like moving forward?

It’s immediate future is incredibly exciting. Hall of Fame coaches like Roy Williams, Mike Krzyzewski, Rick Pitino, Jim Boeheim and Frank Beamer are in the ACC. But that’s going to change. Maybe sooner than later. The league will always have tremendous coaches, but will be hard-pressed to match the star power it will have in the next few years. So we should enjoy this while it lasts.

However, the most important factor in the ACC’s success in the coming years will be its success in the new College Football Playoff. The ACC will need to win major non-conference regular-season games, key bowl games and have teams selected for the playoff.

Swofford got the ACC a seat at the table with the Orange Bowl deal and an automatic bid into the College Football Playoff. He got Notre Dame to agree to play football games at ACC stadiums. He got millions more in TV money for each school. He has set the league up for success.

Now it’s up to the teams to deliver.