Last week, we were all pretty enthusiastic about ESPN and the ACC's joint announcement on the ACC Network. This week, we still can and should be. But industry experts are also diving into the potential pitfalls this network could have when it finally hits cable and satellite packages in 2019.
Sports Business Journal's John Ourand dove into the issue of introducing a conference television network as cord-cutting continues to grow among consumers. And... you're not going to like the challenges he spells out.
The two biggest ones:
"ESPN could cut individual ACC Network deals, but most programmers and distributors like to wait until their big affiliate deals expire — and ESPN’s biggest ones aren’t up until several years after ACC Network’s planned 2019 launch. ESPN’s affiliate deals with Comcast and Charter expire in 2021; ESPN’s Dish Network deal runs until 2022."
This isn't impossible, mind you. The SEC and Big Ten Networks were able to make carriage deals in all kinds of years. But as Ourand hammers home, it's a different market now than it was when those deals were signed. That makes it even tougher to be calm about the other major issue...
"Sources expect ESPN to price the ACC Network similar to SEC Network, which at launch was around $1.30 per subscriber per month in-market and around 25 cents per subscriber per month out-of-market."
Whole lot of questions come about here. What counts as "in-market" vs. out-of-market? Ourand himself points out that Syracuse is not New York City, and wonders aloud how ESPN can expect easy pick-up there as a result. That largely ignores the value of the New York market (no team owns it and many teams have a lot of alums there). But it does raise the issue of whether or not the Syracuse Orange will count as "local" for these deals, and whether consumers are alright with being charged more for those games.
Now on the plus side of all of this, nothing's set in stone yet. The industry has been changing and will continue to change over time. Unlike the Pac-12, which has struggled to get pick-up around the country, the ACC's content will be owned by a major content producer (ESPN) and also has a ton of "local" cities to market to. If we're assuming New York counts as in-market, the league should be able to make claims for that city (the biggest one), Chicago, Pittsburgh, Charlotte, Miami, Atlanta, Louisville, Indianapolis, Boston and more. That doesn't factor in entire states like Virginia and North Carolina, or the potential that Washington D.C. and Baltimore could also factor in despite being several years removed from the league's footprint.
So yeah, this certainly doesn't paint a great picture, but as I try to illustrate above, it's not all bad either. Without being a TV package expert myself, I can say that pricing this thing the same as the SEC Network seems like a poor idea; even the top football and basketball matchups the ACC has to offer are dwarfed by the ratings/demand of the SEC's football product. But with luck, the digital-only setup for the next few years at least creates a higher demand in advance of ESPN coming around to collect the money.