Thread by @ADavidHaleJoint

The past week has been filled with a lot of speculation on the future of the ACC, so I figured I'd put together a little thread to clarify some of the issues and options the league has.

This may be long but the TL;DR is this: THERE IS NO EASY ANSWER. (1/🧵)

Start with this: In the past 12 months, Jim Phillips & ACC leadership have gotten rid of divisions & built the framework for a success-based revenue sharing model. Those were non-starter talks for a decade. It may ultimately be band-aids on bullet wounds, but it's commendable. 2/

Now, let's take stock of where the ACC stands. ... While financials for 2021-22 aren't available yet, expectation is a distribution of about $43M/school -- ahead by a bit of what we expect from the Big 12 and $30-40M/year behind where B1G & SEC will be w/new TV deals. 3/

The ACC has trailed the B1G/SEC in revenue for YEARS by $10-15M/school/year and it's still managed to win champs. But that gap is going to grow starting in 2023-24 and will keep doing so. That's the existential problem Alford and others are so concerned about. 4/

So, what can be done about it?

Based on my reporting, there are 5 options:
1) everyone waits until 2036-ish
2) ND joins or other expansion
3) ESPN renegotiates
4) The league is dissolved
5) School(s) fight GoR in court

Let's look at each in more detail... 5/

Option 1: Everyone waits. The anger this week stemmed from "the 7" but that outrage was largely by design. FSU, Clemson, UNC & others CANNOT wait on this & Alford, in particular, is driving home a sense of urgency that being a half-billion behind SEC by 2036 is untenable. 6/

Untenable why though? Hasn't the ACC always made less than the SEC and B1G and still won champs? Yes! And in all likelihood, if this was 2018 and the gap stayed around $15-20M, it'd be OK. But there are 2 bigger issues at play now... 7/

Dan Radakovich had a very important quote this week: "The gap is just not about the money. It's about schools being able to take those dollars and translate it into potentially NIL opportunities for student athletes." This isn't how NIL is supposed to work, but it's happening. 8/

More importantly, the courts could soon erase the middle man & determine athletes are employees w/salaries from schools. That'd be the end for the ACC, which is why Phillips was in DC lobbying Congress to nix employee convo & halt future litigation. That's not likely though. 9/

It's more than buying the best players tho. Multiple ADs have suggested the perception of a "Power 2" could make recruiting outside the SEC/B1G impossible. Just look how much Aresco has put into fighting the P5 label. Phillips acknowledged it's already a concern. 10/

Option 2: The ACC adds ND to get a new TV deal bridging the $ gap. Not happening. The notion the Irish would join the ACC was always unlikely... but it at least got lip service. Not now. Swarbrick wasn't in Amelia Island & no one I've talked to even has it on their radar. 11/

What about other expansion options? ACC has looked at a few, including Oregon, Washington, SMU and West Virginia. From what I've been told, the $$ just aren't there. I can explain why but honestly, you don't want to hear the TV minutiae. 12/

That said, there are some admins who are frustrated the ACC isn't considering some more aggressive expansion tactics to at least do *something*. I've heard some very outside the box ideas that are at least intriguing. But bigger issue is this should've happened years ago. 13/

I know nothing of the behind-the-scenes beyond what ACC admins have told me, but I am also doubtful that Option 3 happens without adding ND. ESPN is invested in the ACC (and 50/50 partners on ACCN) so ACC survival is important, but timelines for network vs ADs are very diff 14/

In the short term, ACC hired Fish Bait to look into ways to work with ESPN on "new revenue streams." I'm a bit dubious this will amount to much that really moves the needle. Ex. ACC wants to give schools more control over local ads but again, what's in it for ESPN? Not much. 15/

I do think ACC has real value to ESPN that it does not want to a) lose to FOX/B1G or b) have to pay tons more for in a new SEC agreement in a few years and 3) devalue a network it's 50/50 partners on. But even if ESPN opened the coffers, ACC isn't getting close to SEC $. 16/

Option 4: The Magnificent 7 dissolves the league! Few things: 1) That name is a made-up joke from McMurphy. No AD was calling it that. 2) There have been LOTS of side convos among schools: The 7 mentioned have talked. So have smaller groups. So have schools outside the 7. 17/

Yes, those 7 had lawyers review the GoR. So did most of the other 7. "You'd be stupid not to," one AD said. And no AD would confirm a nuclear option is even possible legally. Me & @aadelsonESPN wrote about this in early March... 18/

espn.com/college-footba…

@aadelsonESPN But let's indulge the idea. As noted, the B12 isn't more $ and no more than maybe 5 schools are likely to have an SEC/B1G invite (and maybe not that many). So why would they blow up the ACC now? Answer: They wouldn't. An AD from The 7 on this plan: "Completely absurd." 19/

@aadelsonESPN That leaves us with Option 5: Fight the GoR in court. Ultimately, I think this is the only remotely likely outcome... and nobody is eager to do it. It will be an option of last resort that will be ugly, costly and lengthy. See: Texas/OU spending $100M to leave ONE YEAR early. 20/

@aadelsonESPN I've talked to a few folks w/firsthand knowledge who feel they could put together a "compelling" legal case... but if they thought it was an easy winner, it'd have happened already & to leave w/o legal release from the GoR would be impossible for an ACC team. 21/

@aadelsonESPN Financially, an exit fee is 3x annual revenue (appx $120M). But the GoR isn't just about money. It means a team cannot broadcast its games because the rights to broadcast are owned by the ACC. It'd be like selling someone else's house. 22/

@aadelsonESPN So now what? Options 1-4 have a close to 0% chance of happening & Option 5 is expensive & risky. All this should help explain why a) schools are considering absolutely anything and b) nothing has happened yet. But maybe there's another option, too... 23/

@aadelsonESPN Phillips has routinely said there is no "magic bullet" but the revenue issue may be overcome by a combination of moves. That's why the "success initiatives" plan from this week matters. It's not a fix, but it's a step. So, is there a round-about path to a solution? Maybe. 24/

@aadelsonESPN 1 problem: Success initiatives could mean an extra $10+M/year per Alford... IF you're successful. Miss the CFP though and it doesn't help at all. (Indeed, you're worse off than if CFP $ was divided evenly as it is now.) And even w/CFP... still a big $ margin w/SEC & B1G. 25/

@aadelsonESPN That's problem No. 2: It's not *just* about getting more $ to the ACC. It's all relative to what the SEC/B1G get. ACC will distribute record $ this year... but SEC increases even more. In relative terms, ACC is falling further behind even when it's earning more. 26/

@aadelsonESPN Consider the "success initiative" $. If FSU or Clemson gets an extra $10M by making the CFP... but SEC gets four teams in the playoff and distributes $ evenly... there's still very little relative progress made by Clemson/FSU, etc. and that still ignores the perception gap. 27/

@aadelsonESPN True for any other revenue initiative ACC could dream up, too. If it's successful... the SEC or B1G can just mimic it & we're right back to Square 1. I've talked to some ADs who think the easier playoff path in ACC has some value compared to SEC, but not $30M/year value. 28/

@aadelsonESPN The college landscape has changed a TON in the past 3 years, so maybe that shift opens up new avenues (like forcing ND's hand?) so there's value in having *some* patience. Realignment, after all, hasn't been great for Neb, Colo, Mizz, UMd, etc. But the clock is ticking... 29/

@aadelsonESPN Best guess is we'll get to Option 5 & a court case eventually. Maybe in a couple years when the pinch of revenue gap is really felt. Maybe if courts rule players = employees. Maybe approaching NEXT round of TV in 2029/30. But as I said at the start: There is NO EASY ANSWER.
-30-

One last thing I’ll add here for context: Coaches and ADs don’t make decisions on things like realignment. School presidents and chancellors do. And many of them are not a fraction as invested in athletics as fans on Twitter are.

OK so seems like the Big 12 thing remains a sticking point for a lot of y'all, so let me try to be a little more clear: 1) The Big 12 does not offer any school more $ now and likely will not for another 7 years at least. 2) the Big 12 does not have a TV network. (cont...)

3.) Dissolving the league would leave HUNDREDS of millions on the table via potential exit fees from teams trying to leave for SEC/B1G. No reason to help them & give up exit $. 4) Dissolving the league would be a breach of contract with ESPN, so you'd have legal exposure there...

5) Many schools being talked about do not fit in B12 in any meaningful way that might appeal to school presidents. 6) ESPN is also TV partner for B12 so why would it be OK losing a valuable product to make another product more expensive? ...

7) If you're VT or NCSU or Duke... why would you go to the B12 when you can try to lean on political pressure to wedge your way into a far more profitable situation following UVA or UNC? 8) I've asked 5 ADs if 8 leaving dissolves the league. All answered the same: I don't know.

The bottom line here is there is ZERO incentive -- NONE, NADA, ZERO -- for any ACC schools to make someone else's path to more money easier by leaving for the Big 12 or any other non-SEC/B1G school. And also, the schools left behind would sue, sue, sue (sudio).

And even in a scenario in which, say, Clemson/FSU/UNC/Miami find a way out of the GoR without paying a dime and all leave. ACC could still probably add a few teams, have a comparable deal to B12, still have a network and enjoy close to $500M in combined exit fees. Sigh.