Following a series of discussions with the ACC, commissioner Jim Phillips has reportedly presented the financial model for the distribution of the monetary pool stemming from the planned expansion to all presidents and athletic directors of the league.
This will be an extra source of revenue for the league’s current teams, coming at a time when the league is seeking more streams of revenue for its schools. However, talks remain ongoing on the possibility of the expansion plan becoming a reality due to some internal opposition.
Should the league media partner, ESPN, fulfill its obligations, the addition of Stanford, Cal and SMU would contribute more than $70 million in annual revenue. This should leave around $55 million to be shared among existing teams as a result of the financial concession offered by the three expansion candidates.
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Details of the monetary pool from expansion candidates’ financial concessions
Within the ACC’s television agreement with ESPN, there exists a pro-rata provision stipulating that the network must enhance the contract’s worth by one Tier 1 share for each additional member. This share is estimated to be around $24 million per added member.
The Atlantic Coast Conference could gain approximately $72 million in fresh funds through the inclusion of the three expansion shares. Cal and Stanford have both consented to receive approximately 30% of the $24 million share each, while SMU agreed to earn nothing in media revenue.
Once the shares allocated to Cal and Stanford, as well as the associated travel expenses, projected to be around $1-2 million per school, are taken into account, the league could have a minimum of $30 million in revenue available for redistribution among existing members.
This distribution is likely to occur through an incentive pool that rewards athletic achievements. The anticipated incentives are projected to place significant emphasis on achievements in football more than any other sport. Basketball could receive some significant consideration.
Is the ACC nailing the Pac-12’s coffin?
While the impending collapse of the Pac-12 can be partially blamed on the poaching done by the Big Ten and the Big 12, it appears the ACC will finally send the Pac-12 out of existence. Adding Stanford and Cal practically kills the hope of expanding and keeping the Pac-12 alive.
After over 100 years of presence within the realm of college sports, it might just be over for the conference in 2024. This will see Oregon State and Washington State move down the ladder to Group of Five conferences, with the Power Five shrinking into “Power Four.”
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