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Pac 10 deal is WAY better than we thought...(and ramifications for FSU and the ACC)


Revolutionary deal...

Besides the incredibly cash, there are some very noteworthy parts of this deal.  Specifically:

Discussions advanced quickly, but throughout the talks there were several negotiating points on which the Pac-10 would not waver.

• The Pac-10 had to retain enough games to create its own channel, and the channel would receive the first pick of football games periodically through the season. That was a tough one for the networks because they've always had first choice in their conference deals.

(My comment: This is huge.  The Big 10 Network, and presumably any conference network, has generally retained very few if any premier games for their own network. You could conceivably see Oregon-Oregon State or USC-Stanford on the Pac 10 network, which gives it incredible leverage and advertising potential.  The idea that they got this kind of cash AND kept the first choice on games for it's own network is frankly astounding.)

• Digital rights had to stay in the hands of the conference.

(My comment: I've been preaching this for a couple years now.  This means they should be able to cut a deal with phone companies for "Live Pac 12 games, only on Verizon! or something like that.  Not only that, but networked devices, from televisions to blu ray players to media streamers are flooding the market.  And all the manufacturers are looking for streaming content.  Think Netflix and Hulu.  How much would Sony pay to be able to say "Live Streaming Pac 10 Football/Basketball exclusively on Sony networked products"?  May be a very small market now, but considering these deals run for 10 plus years, this could be a big revenue source in a decade)


The big takeaways in my mind are this:

- The Pac 10 will blow away the other conferences in money within a few years.  Look what Oregon has been able to do with Phil Knight money.  Many schools in that conference will be in position to do the same.  And there are some (recently) sleeping giants there in Colorado, UCLA and Washington, plus a Utah team that has a lot of momentum.

- Larry Scott is a genius.  John Swofford should be fired immediately.

- During the last round of expansion hysteria, I was constantly arguing with the people that insisted that the SEC's deal was a freak of timing, that no conference would ever get a deal like that, that the recession prevented a deal like that in the future, and that ESPN was already regretting the ESPN deal.  I insisted there was more money available.  Obviously, I was right.

- Comcast/NBC has money to burn on college football...but no conferences, except the Big East, to burn it on.  Do they look at the Big East media market and give them money on par with the ACC and Big 12?

- This must scare the crap out of the SEC.  This deal pays the Pac 12 $45 million a year MORE than the SEC, and that is before Pac 12 network revenues are rolling in.  The Big 10 network brings in over $200 million a year.  If the Pac 12 network brings in $200 million a year, that conference will be out-earning the SEC by $450 milltion to $205 million every year.

- The ACC is out of  the big boy money game.  Out, dead, done.  Barring the addition of Notre Dame, there is nothing the ACC will be able to get in the same tier as the Pac 12, Big 10 and SEC.  The only thing the ACC can do is what the Big 12 does - acknowledge that as a conference they can't compete with that, but set up a system where some of it's members can compete financially.  They do this through uneven distribution and allowing separate revenue streams through individual school networks. 

- It was humiliating when FSU was getting less TV money a year than Kentucky or Vanderbilt.  But FSU will soon be paid less in TV money than any major football program (outside the Big East).  And it's not going to be close.  Unlike the SEC deal, which locks in a $5 million a year advantage to the SEC in a contract, Big 10 and Pac 12 revenues will grow every year.  By the end of the ACC contract, it's not unreasonable to expect that FSU will be making half of what Indiana, Iowa, Arizona State, Washington, etc. are making.   

-Do you guys realize how serious this is?  FSU is not a money machine like Alabama, Notre Dame or Michigan.  Resources matter, and FSU does not have unlimited resources.  "Just winning" will not equalize resources on this level, at least not before 20 or 30 years or booster development. 

-There is one unknown in this.  It is widely understood that the SEC has the right to renegotiate their contract in the case of expansion.  Is that an exclusive right for CBS/ESPN?  Can the SEC shop around (hello, Comcast), and CBS/ESPN have the right to match?  I have not been able to find anything public on that in recent years, and it was still kept mighty secret even during all the expansion talk last summer.  We know last year that the SEC was ready to expand in response to Pac 12 expansion.  The Pac 12 expansion ended up not being earth-shaking, and therefore didn't require the SEC to act.  In my mind, this TV deal IS earth-shaking.  Will the SEC respond?  Do they have any method other than expansion that would allow them to renegotiate their contracts and get the much bigger money they're clearly worth today?  That's right, at this point the SEC is likely UNDERVALUED by it's tv deal.

- If the SEC does move to expand, it is VITAL that FSU put on a full-court press for an invitation to the SEC.  Finances alone demand it.  And FSU needs to either join the SEC, or use that invite to wrangle a very uneven distribution of ACC resources for the football schools of the ACC.  It is imperative for FSU to get this to stay part of the ACC, and it is imperative for the ACC to stay even semi-relavent.  This website has done a great job illustrating how resources are dooming Miami's program.  They're the canary in the mineshaft here.  We can look down on Miami and decide we're safe because at least we have the minimum resources to compete, and they don't.  But we don't have unlimited money and that minimum bar is getting raised very quickly.

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