Monday, July 19, 1999

All's Quiet in the ACC

It's July 19th.  Do you know where your Hurricanes are?

Apparently, right here in the Big East, that's where.

Around nine o'clock Sunday night, the news broke from the ACC Athletic Directors meetings ... that there was no news.  The ACC has decided not to expand this year:

No formal move to expand for ACC this year - Associated Press

There was quite a bit of talk about ACC expansion in the days leading up to and including this past weekend.  It has been about four weeks since Doug Doughty stated in his on-line Notebook Plus column that "semi-reliable" sources told him that Miami would be announced as the 10th ACC member on July 18th.

Well, July 18th came to pass, and no such thing occurred.  I don't think Doug was very far off the mark, however.  I'm 99% sure the ACC was doing some serious talking to Miami, and maybe other Big East teams, but expansion is not a thing that is easily done in the ACC.  Doug's source was probably just a chest-thumping ACC homer who assumed (a) that the ACC would make the offer and (b) that the Canes would fall prostrate at the feet of the Athletic Coast Conference.

We'll never know how close the Big East came to losing the team that the TV networks love, and perhaps one or more other teams, as well (Syracuse?  BC?  WVU?   Tech?).  My own personal opinion is that any ACC expansion that would have occurred would have involved three teams jumping in simultaneously, and that if any of the three teams balked, the deal was off.  It's quite possible that despite the public statements, three teams were seriously courted, and one or more blinked, and the offer was pulled, never to be made public.

Or perhaps all three teams accepted, but the ACC decided not to go through with it.   Who knows?  There's a lot of dancing and feinting that occurs in a scenario like this, and in the case of a breakdown, none of the parties involved want to say that they were rebuffed.

It will be interesting to see what I hear via email now that this has settled down for the time being, because before this past weekend, I was hearing that down in the Research Triangle Park area, the fans - some of them well connected - were taking it as a given that the ACC was going to expand to 12, and now.  So I was half-expecting an expansion announcement, but somewhere along the way, something broke down.

In my frank opinion, if the refusal to expand came from the ACC and not the teams possibly being courted, then the ACC blew it.  The expansion scenario that I outlined in my recent Special Feature of Tech/Syracuse/Miami to the ACC, or even Tech/Miami/WVU, would have destroyed the Big East and would have all but eliminated a major East coast competitor to the conference.  The death would have been slow and agonizing, but complete, nonetheless, in much the same way that the Metro Conference died piece by piece and step by step in the late 80's and early 90's.

But every year that the ACC puts off expansion is another year that the Big East gets stronger and more cohesive, older, and more loyal to itself.

Virginia Tech in particular was probably ripe for the plucking.  The Hokies have yet to sign with the Big East, and when they do, a hefty exit fee will no doubt be part of the deal, so from this point on, Tech will have great financial incentives to make sure that the Big East survives.  If the ACC had extended an invitation to the Hokies, they would have been courting a school that to this point has been treated more like dirt by the Big East than like the conference power they are.

In the coming weeks, though, Tech is on a path to commit itself legally, emotionally, and financially to the Big East as an all-sports member, and from here on out, any attempts by the ACC to raid the Big East will be more likely to be greeted with a hackles-up defense stance from the Hokies, and hopefully, from other Big East parties involved.  But if the ACC had asked us now, we definitely would have given them a nice long look, and probably would have said yes.  So they blew this chance.

The next big step for the Big East is when it renews its TV contract, which is up either after the 1999 football season or the 2000 football season (I'm not sure, but it's relatively soon).  If the Big East can negotiate a deal that matches or exceeds the current deal, then the conference members will be satisfied and will be less likely to jump ship.  Of course, if the Big East's next TV deal is a lame one, it's Katie-bar-the-door if the ACC comes calling a year from now, or two years, or three.


Tech and the Big East

All of this expansion talk brings up the question of what the status is between Tech and the Big East.

The Big East had their own athletic director's meeting about a week before the ACC meeting.  They addressed Tech's counter-proposal, and now the Hokies will take a look at any changes that have been made and will decide to accept the counter-proposal ... or keep on negotiating:

Hokies must decide if Big East price is right - Richmond Times-Dispatch, 7/15/99

I haven't heard a thing about what is being negotiated.   As you know, I rarely actively seek out inside information, and the voluntary sources are quiet on this one, which means that there's very little leaking out of the Tech athletic department.  But I can tell you that the general consensus of opinion, very little of it fact-based, is this:

  • The Big East is tagging Tech with an entry fee that is much higher than the $500,000 paid by Rutgers and WVU when they entered in 1994.
  • The Big East is phasing in Tech's revenue-sharing, probably over the first five years of Big East membership, which I believe was not done with Rutgers and WVU in 1994.
  • The Big East is setting a very high exit fee, which is mainly a problem if the conference implodes, but otherwise shouldn't matter.

The entry fee / phased-in revenue sharing is a double whammy.  If the entry fee is $1.5 million or $2 million dollars payable over five years, then Tech is ponying up $300k to $400k a year.  If the phased-in revenue sharing is 20% a year for the first five years, then the Hokies will only get 20% of the expected $500,000 in revenue sharing the first year, 40% the second year, etc.

Let's run the numbers for the first year of Big East membership:  right now, Tech gets $100k from A-10 revenue sharing.  Peachy.   In the first year of membership in the Big East, assuming a $1.5 million entry fee, the Hokies would pay $300k and would only receive $100k.

Gee, that's a deficit of $200k the first year (and don't forget the $500k exit fee from the A-10!).  In the second year, it's a deficit of $100k, and heck, the Hokies don't even break even until year 3.  Here's the table (assuming entry into the Big East in 2000-2001):

Year Entry Fee Revenue-Sharing
2000-2001 $300k $100k -$200k
2001-2002 $300k $200k -$100k
2002-2003 $300k $300k $0
2003-2004 $300k $400k $100k
2004-2005 $300k $500k $200k
2005-2006 $0 $500k $500k

How about that.  Think about how those numbers compare to the $100k we get annually from the A-10, and you can see that we will actually lose money compared to our current A-10 deal for the first three years.  And again, that table doesn't even include the $500k exit fee from the A-10.

Hmmm, from a financial standpoint, Big East membership makes me want to barf.

A key point is that much of the short fall would be made up (presumably) from increased men's basketball revenue, meaning primarily ticket sales, which would definitely go up with Big East membership.  But how much?  Hundreds of thousands of dollars?  At $10 a ticket, that's a lot of tickets.

And this is to get into a conference that is regularly the target of expansion rumors - in a bad way.  It's enough to make you think, isn't it?  Jim Weaver may have to make a decision that is politically popular with Hokie fans, but which sucks six digits out of his bank account for the first three years.   I'm glad he's got that job, and not me.

Well, there's good news, I suppose.  Stadium expansion is on the horizon, and as the Richmond Times-Dispatch article above mentioned, season ticket sales are booming.  The Hokies have sold over 21,000 season tickets so far, which is an increase of 2500 over last year, and it isn't even August yet, which is typically a good month for season ticket sales.

Multiply that figure of 2500 tickets by $138, the cost of a season ticket, and you get $345,000 in additional revenue over last year, before the first football is even kicked off.  I've got two things to say about that:   (1) thank God for football! and (2) hey, maybe we can afford that Big East membership after all.

Man, I can't wait until football season starts and we can stop talking about money and start talking about how many sacks Corey Moore is going to have against JMU.


Speaking of Football...

The Virginia High School Coaches Association held their annual East-West football game, and I compiled a handful of eyewitness reports, which I received via email and also stole from the message board.  Brace yourself, because it's a long piece, but if you want to hear a lot about future Hokie football players, click over now to HokieCentral's VHSCA All-Star game reports.


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