B: NY, MA, PA, FL, GA--these states and probably some I've missed have different cable providers across the states. So if you get a provider in Pittsburgh to carry an ACC network, or a provider in part of Boston--it doesn't mean the rest of the providers in those states are going to pick up the ACC network. It is unlikely the ACC would have any more success getting picked up by the national satellite companies than the Pac did either. The ACC isn't getting full rates in NY, PA, GA, SC--many of the states that you claim. Besides while the population of the states you have teams in may be 43 million--the numbers of pay tv subscribers is FAR less in those states.
You are again confusing the # of subscriptions vs. the amount of the fee. Let's take your example with Boston. The
fee would be the same for all carriers. If the in-footprint fee was $1.00 per subscriber, then Provider A and Provider B would both pay the same fee. However, you are correct that even though Provider A carries the network, Provider B might not.
That said, it's not fatal to a network if all providers in an area do not pick up the network. For example, New York state has a total of about 7.2 households. Let's say only 1/4 of them subscribe to a network. That's still 1.8 million subscribers. By contrast, the entire state of South Carolina has only 1.5 million households. So, even if you only get 1/4 of the households in New York, that's still more than if you got every single household in the state of South Carolina. Now, let's just say hypothetically that the in-footprint rate is $1.00 per subscriber. That would mean that those 1.8 million subscribers from New York would bring in $21.6 million per year. Of course, we don't know that the fee will be $1.00. I'm just using that as an example to illustrate that the point that it's not necessary for all the households in a city/state to subscribe for a network to make money. That was the whole point of adding the Northern schools. The ACC wasn't depending on them to be the backbone of the conference. They are just there to get a percentage of the population to put the numbers over the top.
To your comment about the 43 million, you're wrong. 43 million is not the total number of households. That only the number of households that have TV. Of that 43 million, 38 million have either cable or satellite, which would be 88%. That's not "far less."
B: The ACC has talked repeatedly about this July being some drop dead date--that is well under a year is it not? The SEC bought back their rights around a year out but they negotiated for those rights prior.
Nope, the drop dead date was pushed back, as has been posted here previously.
Regarding the SEC, they negotiated about a year or so prior to forming the network. You just made it up off the top of your head that the negotiated prior.
B: ESPN would not simply be shifting their content from one channel to another. They own all ACC rights now. With an ACC network the ACC would have something like a 50% ownership like the Big Ten does probably. So yes, ESPN would be paying more to the ACC for the same rights they already own. If they didn't pay more for those rights but just put them on a different platform--what is the benefit to ESPN OR the ACC? There's no point in your mistaken "model". It doesn't work that way and neither side would benefit from that. The entire purpose for a network is to put inventory that isn't currently monetized on a new platform for both parties to make money. It isn't the same as putting the game on ESPN and shifting it to ESPN2 or ESPNU. ESPN already makes money on the ACC games they own, they aren't putting those on an ACC network and then paying extra money to the ACC for them--it would have to be the inventory from Raycom and FOX and they've said so.
No, incorrect. ESPN would not have only 50% ownership of the rights (as you indicate Fox has for the Big Ten). ESPN would have 100% ownership of the rights (and the network). They would not pay the ACC extra for those rights. The ACC would only be paid from the revenue generated by the subscription fees. For the rights to the actual games, that's already covered in the current contract.
The value to both ESPN and the ACC is the revenue from the subscriptions to the network. Right now, ESPN has only indirectly monetized ACC content. I'll go back to my example of a Virginia Tech/NC State game, televised on ESPN2. Well, whether or not that game is on ESPN2 does not affect the subscription fee ESPN gets for ESP2 (which is 88¢ per subscriber). ESPN2 does not get its subscription fee strictly on ACC content. ESPN2 televises multiple sports from multiple leagues. No one source is responsible for ESPN2's subscriptions, so therefore the VT/ NCST game does not directly account for subscriptions, and thus is indirectly monetized. It's just thrown into a pot with NBA, NASCAR, tennis, soccer, etc.
Now, contrast that with an ACC network. You take that same VT/NCST game, and put it on an ACC network. Now, you get
two subscription fees. You get __¢ from your ACC network, plus you still get your 88¢ from ESPN2. You don't lose anything by simply shifting the VT/NCST game over from ESPN2 to ACCN. You just put something else on ESPN2 (which they can do because they have plenty of content). This doesn't require paying any extra money to the ACC. ESPN and the ACC simply split the
new revenue generated by the network subscriptions. That's where your theory falls apart, because you aren't taking into account that ESPN is going to have new revenue from a conference network, and still have the revenue (from the replacement content) from the other platforms.
This is EXACTLY the model ESPN uses with the SEC. ESPN owns 100% of the SECN. The only money the SEC gets from the network is revenue from the subscription fees. Now, how does that benefit ESPN or the SEC you ask? Well, the SECN gets $546 million a year in subscription fees. Even if you split the revenue 50/50 (and I'm talking revenue, not ownership), that's $273 million per year for ESPN. Of course, some money comes off the top of the 546 to pay for operations, but you get my point. There is big money in conference networks, IF, big IF, you can get the right mix of subscribers and fees.
B: The problem for the ACC isn't how much ESPN can make--its what is Raycom and FOX going to SELL BACK those rights for? It isn't going to be cheap if they even want to do that. Raycom goes out of business as a result and FOX loses valuable east coast properties. Doubtful and nowhere close to happening.
Actually, it won't be all that expensive. It didn't cost the SEC, Big Ten, or Pac 12 that much to repurchase the syndication rights. It also doesn't make sense that Fox would be willing to resale the SEC (most popular conference) but not the ACC. The problem is, syndication rights are not nearly as valuable as original rights. You don't make a distinction between the two. Syndication is basically like renting. Raycom and Fox are really just "renting" ACC games from ESPN. ESPN still actually holds ownership of the rights, just like a renter still holds ownership of his property.
You have a point about Raycom going out of business. However, you fail to deal with the fact that Raycom has nothing once the contract is up with the ACC. Raycom is screwed either way.