North Carolina

John Swofford confident ACC Network will close revenue gap with SEC, Big Ten

Duke athletic director Kevin White (left) and football coach David Cutcliffe (right) speak with ACC Commisioner John Swofford. Swofford is confident the ACC Network will enhance the league’s revenue stream in 2019.
Duke athletic director Kevin White (left) and football coach David Cutcliffe (right) speak with ACC Commisioner John Swofford. Swofford is confident the ACC Network will enhance the league’s revenue stream in 2019.

During the fiscal year that ended in 2015, the ACC reported more than $403 million in revenue, an increase of 33.3 percent from the previous year and an increase of more than 80 percent over three years.

And yet the conference generated more than $100 million less than the SEC, and nearly $50 million less than the Big Ten during the 2014-15 fiscal year. The gap between those leagues and the ACC is likely to only widen before the launch of the ACC Network in 2019.

Once the channel does launch, though, ACC Commissioner John Swofford expects that it will significantly close the revenue gap between the ACC and its rival conferences. Swofford expressed his confidence on Thursday at the conclusion of the ACC’s annual spring meetings.

For the first time in more than a decade, perhaps, the meetings returned to a “sense of normalcy,” Swofford said. There was no speculation about about realignment or expansion. The ESPN-backed ACC Network, meanwhile, is set for a 2019 launch after years of speculation and uncertainty.

Even so, television talk again dominated discussions at the meetings. Swofford and representatives from ESPN assured ACC coaches and athletic directors that the network is on track for its scheduled 2019 arrival, despite the uncertainty that surrounds the cable television industry.

Swofford said he remains “very confident” that the network would help the ACC compete financially with the SEC and the Big Ten, both of which have separated themselves from other conferences thanks in large part to the success of their own television channels.

“That’s why we’re doing the channel,” Swofford said. “We fully expect a gap with particularly the Big Ten and the SEC here for a couple of years. But that’s the very reason we signed to do what we’re doing.

“And we fully expect that that gap will narrow considerably when we get the channel up and running.”

The ESPN-backed SEC Network launched in August 2014. In the first year of its existence, the SEC’s television revenue increased from $210.4 million to $311.8 million, according to the conference’s tax records.

The ACC’s television revenue during the fiscal year that ended in 2015, meanwhile, was $217.9 million. Revenue projections for the ACC Network haven’t been released, and those projections have likely changed, anyway, given the shifting landscape of media consumption.

ESPN in recent years has lost tens of millions of subscribers while consumers have turned away from cable. At the same time, streaming services and on-demand television – those offered by Netflix, Amazon, Hulu and others – have become more and more popular.

Swofford said questions of television revenue growth have existed for as long as he can remember, since his early days as the athletic director at North Carolina. He’s familiar with analysts projecting that a decline, or a plateau, in television revenue is imminent.

“And it hasn’t happened yet,” he said. “That’s not to say it won’t happen. And it’s, I think, particularly hard to predict now, because of the technology and the changing technology, and the changing habits of the populace.

“You didn’t always have that. Usually it was related to, ‘Well, will the rights fees stay the same?’ Well it’s not just the rights fees thing anymore.”

Indeed, the challenges, and questions, are far more widespread. Swofford and ACC coaches and athletic directors, though, expressed little concern here this week about television revenue.

It has increased exponentially in recent years, leading to record financial growth in major college athletics. Now the ACC is hoping, two years away from the launch of its own network, that the trend will continue.

Andrew Carter: 919-829-8944, @_andrewcarter