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Close Calls, Delicate Timing Make Annual Expansion Talk More Intense

Thursday, September 11, 2008 11:41am
By: Accsports Staff

By Dave Glenn and staff, ACC Sports Journal
May 5, 2003 GREENSBORO — If it's spring, it must be time for ACC expansion discussions. Unlike in most years, however, they're serious this time. “Since Florida State joined the league (in 1991), I've never for one second believed that we were close to expanding again,” a high-ranking ACC administrator said. “It would come up from time to time, but it was rarely anything substantial. … This time is different. I don't know what's going to happen, but anything could happen this time, and it could happen at any time.”

One of the reasons the ACC has been happy with the status quo in recent years is that the league continues to offer the highest annual payout, on a per-school basis, of any of the NCAA's 31 Division I conferences. With more than $98.1 million in revenue for the most recently completed fiscal year (2001-02), the ACC was able to distribute (after deducting administrative expenses and other costs) an average of about $9.7 million (including bowl reimbursements) to its member schools last spring.

Nevertheless, ACC commissioner John Swofford has become a strong proponent of any expansion proposal that includes Big East football superpower Miami, and his opinion carries great weight with many university administrators. According to ACC bylaws, expansion requires affirmative votes from at least seven of the nine school presidents, all of whom listen to input from their athletic directors and even some veteran coaches.

Swofford, the former North Carolina AD who replaced Gene Corrigan as ACC commissioner in 1997, is in an extremely powerful position in league circles because of the overwhelming success of some of his recent actions and decisions. Under Swofford's direction, the conference's annual revenue totals have grown from $68.1 million (1997-98) to $77.1 million (1998-99) to $82.1 million (1999-2000) to $83.9 million (2000-01) to $98.1 million (2001-02).

As the lead negotiator for the league's contracts with Charlotte-based syndicator Raycom, Swofford showed outstanding vision (seeking cost certainty) and perfect timing (right before the economic downturn) and ultimately reached an agreement on the most lucrative basketball TV deal in the history of college athletics. He first approached Raycom officials in 1999, about 18 months before the existing deal was set to expire, and emerged with a 10-year contract that began with $28 million for the 2001-02 season. That number was up an amazing 64 percent from the total ($17 million) the previous year.

“How can you not be happy with that?” Wake Forest athletic director Ron Wellman told the Greensboro (N.C.) News & Record earlier this year. “That's a statement of the strength of the conference and the negotiating ability of John Swofford.”

Similarly, Swofford's long-term vision has been behind the ACC's targeting of Miami. With a strong talent base, an impressive nucleus of coaches, the eight seasons remaining on the Raycom contract, and the 10 years left on the NCAA's 11-year, $6 billion NCAA Tournament deal with CBS, the ACC's short- and long-term basketball future is remarkably secure and bright. On the other hand, ACC football faces some potential problems, and Swofford sees the Hurricanes as the most likely cure.

Although the ACC's football-related revenue (about $48 million) approached its basketball-related revenue (about $48 million) for the first time in 2001-02, the league's gridiron future is much more murky. Its existing contract with Raycom, which expires after the 2005 season, will bring in only $25 million in the final year of the deal. (The SEC's football TV package alone was worth $49 million in 2001-02.) In addition, the current Bowl Championship Series structure — which pays about $13 million to each of its eight participants, including the ACC champion — also is up for renegotiation after 2005.

With an uncertain economy, a so-so league history on the gridiron, a troubled dynasty at Florida State and two programs (Duke, Wake Forest) that traditionally have trouble competing in football, Swofford knows he won't have great leverage going into negotiations (with the BCS, Raycom or anyone else) regarding the 2006 season and beyond. Hence, his recent push for expansion, a topic that already had very strong pre-existing support from Clemson, FSU and Georgia Tech within the conference.

In the commissioner's eyes, a 12-team ACC with Miami and two other Big East schools (probably Boston College and Syracuse) would have as much leverage as any other league. Those three schools would add three brand-new, significant television markets to the ACC's geography, a huge factor in TV negotiations, and the 12-team format also would allow the conference to break into divisions and host a potentially lucrative postseason championship game. (In a bad year, the Big 12 makes $6 million from its game. In a good year, the SEC makes more than $13 million from its game.) A 12-team league also has 48 regular-season football games to sell, whereas a nine-team conference has only 36 games to sell.

“All things being equal, the ACC should be able to get a 33 percent jump in football TV revenue just by expanding to 12 teams,” one TV executive said. “Of course, all things aren't equal. The economy is hurting everyone, so there are few certainties anymore. On the other hand, the ACC wouldn't be adding just any three teams. Miami is one of the kings of college football, and Boston College and Syracuse aren't bad. Bottom line: (Swofford) knows he's going to get a much, much better deal if he has Miami to sell as part of the package. How much better exactly? I'm not sure anybody knows the answer to that question.”

That's one of the biggest reasons why Swofford, prior to the annual ACC meetings (May 11-14) held in Amelia Island, Fla., didn't yet have the seven votes he needed to extend any official expansion invitations. ACC administrators can do the math as well than anyone: If a nine-team conference is bringing in almost $100 million, wouldn't the projected 12-team conference have to bring in more than $130 million to justify itself? And if so, how could three schools possibly bring in that additional $30 million a year?

Except in the best-case, dream-world scenarios, there seems to be some projected shortfall, at least in the near future. Maybe the conference championship game in football would net an extra $10 million a year. Maybe the more marketable football TV package would account for an additional $10 million right off the bat. If the new ACC could manage to earn one of the BCS at-large bids (assuming such a spot still exists after 2005) in addition to the slot it fills with its conference champion, that's another $4-5 million. Maybe the existing basketball TV deal would get a little nudge. But extra, lower-tier bowl teams rarely earn surplus cash (they often lose money), and a bigger geography increases travel costs.

“I don't think even the best-case (expansion) scenario, in the short term, would have ACC schools making more money (per school) than they do right now,” the high-ranking ACC administrator said. “I know that's a serious roadblock for some people. But I think (Swofford) is looking farther down the road, trying to position this conference in as strong a position as possible five years from now, 10 years from now. In the end, he's asking people to take a little leap of faith, and that's a lot different than presenting them with a blockbuster (basketball) TV deal and asking them to sign off. That was easy. This is hard.”

In the skeptics' eyes, there's no sense in expanding the size of the pie if the individual slices end up being smaller, especially if long-standing and well-liked traditions are jeopardized or lost in the process. The ACC has a deeper, richer history than most conferences, and many of its members embrace the fact that all teams play each other in all sports where they field a team.

“My position on expansion has been consistent, and that is I think we're at a good number,” North Carolina athletic director Dick Baddour told the Raleigh (N.C.) News & Observer. “I think we have a really strong culture, and I enjoy the round-robin in basketball and enjoy playing everyone in football. I would be on the side that we should be very careful about doing anything that would alter the culture of the league.”

With private schools Duke and Wake Forest the other known skeptics of expansion, and with the positions of Maryland, N.C. State and Virginia unclear but apparently receptive to the idea, Swofford may be as close as one vote away from extending an unofficial bid to Miami and waiting for an unofficial response. (Interestingly, the league doesn't want to extend an official bid unless it knows the Hurricanes are coming, and Miami doesn't want to agree to come until it sees the details of the official bid, but if coaching searches manage to surmount such delicate issues, then conference expansion talks can, too.) Twelve years ago, Corrigan persisted through several re-counts before finally convincing the required six (of eight) members — with Duke and Maryland dissenting — to vote in favor of expansion, then managed an 8-0 vote to extend the official offer to FSU.

“That was not an easy road,” Swofford said. “This league has never been eager for expansion. (Corrigan) did an excellent sales job, and I'm glad he did.”

On the other side of the 2003 expansion equation, there is a similarly close call, although a few things are certain: (1) Miami holds all the cards, and the ACC will abandon expansion talks if the Hurricanes decline; (2) if Miami agrees to jump, its Big East brethren — with Boston College and Syracuse the early frontrunners over Pittsburgh and Virginia Tech — quickly would change their stances from happy-where-we-are to please-take-us; and (3) the person who controls the first domino is UM president Donna Shalala.

Like her predecessor at Miami, Tad Foote, Shalala repeatedly has assured Big East officials that the Hurricanes are happy with their membership in that conference. However, sources said she is intrigued by the ACC's academic reputation and its rich history in women's programs and other Olympic sports. She also undoubtedly appreciates the potential financial advantages of making a switch.

Things recently got serious enough at Miami that, at an April 25 meeting of the university's Board of Trustees, athletic director Paul Dee made a 45-minute presentation on the pros and cons of joining the ACC. He even specified that Boston College and Syracuse would join the Hurricanes if the school decided to make a jump.

Financially, Miami finds itself with a close call similar to the one many of the ACC's presidents and athletic directors are mulling these days. The Hurricanes are just crunching different numbers.

One of the Big East's greatest selling points for UM is that the league's BCS representative (usually the Hurricanes) gets to keep a large chunk of the $13 million payout, rather than turning the entire amount over to the conference. (In the ACC, thanks to near-absolute revenue sharing, lowly Duke gets almost the same amount as mighty FSU — or whoever gets the BCS bid — every year, with slight variations for bowl-expense reimbursements.) In seasons when the Hurricanes represent the Big East in the BCS, their payout from the league is in the ACC-like $9 million range. When they don't make the BCS, however, the payout can drop to less than $3 million.

So, with the ACC's football TV deal and the existing BCS structure both set to expire after the 2005 season, the timing is right in the spring and summer of 2003 for all parties to discuss expansion options. At least three ACC schools, and possibly as many as six, are in favor of expansion. At least three others appear highly skeptical. Most see the decision as a very close call, an opinion that's shared in a different decision-making process at Miami.

“This is going to be interesting,” the ACC administrator said. “Everyone is asking me what's going to happen, and the honest answer is I don't know. John Swofford doesn't know. Nobody knows. Something could happen in May, something could happen this summer, or maybe nothing will happen. If nothing happens, of course, wesre probably going to be having this same kind of discussion again this time next year.”

For more on the possible expansion, click here