The much-anticipated ACC Network is finally going to become a reality. The conference has been talking about the idea with ESPN since at least 2011, hoping to catch up to other conferences’ revenues from their networks, and there were discussions last year of a 2017 target date. While the ACC’s athletic directors have been very eager to get this off the ground, the movement on ESPN’s end has been more limited. There were some optimistic signs coming out of the conference meetings in May, though, and now those have turned into a full network (albeit one with its TV side delayed until 2019). John Ourand of Sports Business Journal reported Monday that the ACC Network is in fact real and coming to internet-connected devices (this year) and TVs (down the road):
Source: ESPN to launch a digital-only, "ACC Network Plus" in Aug 2016 and a linear "ACC Network" in Aug 2019. Full story in SBD tomorrow.
— John Ourand (@Ourand_SBJ) July 19, 2016
Why has ESPN been hesitant here? Well, their own falling subscriber numbers may have played a part, and the distribution battles we’ve seen (like the Pac-12 Networks’ ongoing fight with DirecTV) may have also been a factor. However, there may have been substantial incentive for ESPN to get something off the ground this summer, as ACC TV voice Wes Durham mentioned earlier this year in an interview with Louisville Sports Live that ESPN would have to pay the ACC an extra $45 million annually if they didn’t offer a network plan by July 1. Avoiding that payment is important for a network facing plenty of financial struggles. The ACC’s eagerness to get this off the ground probably helped, too, and it may have led to them sweetening the deal by extending their rights deal with ESPN:
ACC Network will launch by August 2019 & ACC extends conference grant of rights thru 2036, sources told @ESPN
— Brett McMurphy (@McMurphyESPN) July 19, 2016
Launching the digital network this year as a prelude to a bigger televised one makes some sense, too, especially as it’s been reported that the digital product will be available through the WatchESPN app:
— Michael Smith (@SmittySBJSBD) July 19, 2016
But why wait so long to launch the actual televised product? That may be partly about ESPN’s deals with distributors; they’re much more likely to be able to force distributors to carry the ACC Network the way they want if they can negotiate that as part of the contracts for other ESPN channels, and those don’t expire for a while yet:
Because ESPN's cable/satellite operator deals don't expire any time soon. https://t.co/xuP8CkSRnJ
— John Ourand (@Ourand_SBJ) July 19, 2016
Another issue may be Raycom Sports, which holds rights to some ACC games through 2027. There will obviously have to be some discussions with Raycom ahead of any launch of a full televised network, and this buys ESPN some time there and may even allow some of those rights to lapse. So, there are some logical reasons for ESPN to announce the creation of a network now and launch a digital-only version, while still waiting three years to launch the full version.
There are going to be a few large implications from this. First, it’s notable that ESPN is tied up with another conference network, and it seems likely that their main rationale for doing this is the fear of that $45 million annual payment for not doing so. They’ve been cutting costs on a variety of fronts lately, so a new launch isn’t exactly what’s expected, but it’s better than if they were paying $45 million a year for nothing.
It’s also notable that they’re doing the digital launch well ahead of the TV launch. That’s probably designed as a way to avoid that contractual penalty, but it may pay further benefits by allowing the network to build an audience ahead of its actual launch.
The last key thing out of this is the pressure it puts on the Big 12, which is now the last remaining Power 5 conference without its own TV network. That conference is already having its own dilemma with whether to expand or not, and now it’s facing further pressure on the TV front thanks to this move. We’ll see what comes of this, but The ACC Network going from rumor to reality is a huge deal for the sports television landscape and for college sports in general.
[John Ourand on Twitter]