Now that the ACC Network is definitely coming, how much could it make?
SportsBusinessDaily.com says the ESPN could ask for an $1.30 in-state subscriber fee and .25 outside of an ACC State.
Sources expect ESPN to price the ACC Network similar to SEC Network, which at launch was around $1.30 per subscriber per month in-market and around 25 cents per subscriber per month out-of-market.
I think this is rather ambitious if true, and for the purpose of this article let’s say ESPN can get $.90 for an in-market subscriber rate. The Big 10 was $1 and the Pac 12 at $.80. If the SEC is at .25 in their out state markets, we’ll say the ACC can get .15.
83% of American Households pay for TV. Cordcutting is real, but it is also a bit exaggerated. A linear cable channel will still be a viable revenue producer for another 10-15 years at least.
Now I’m going to take a very conservative estimate, we’ll figure in a bit more cord cutting and say 75% of American households will pay for TV in 2019.
Here is the number of households per state.
I believe South Carolina, North Carolina, and Virginia will get full carriage.
.90 in state monthly in state carriage rate
South Carolina 1.83 Million x .75 x .9 = $1.23 Million
North Carolina 3.79 Million x .75 x .9 = $2.55 Million
Virginia 3.08 Million x .75 x .9 = $2.56 Million
Florida, Kentucky, and Georgia could get full carriage, but I will say they get 75%. I understand Georgia Tech is not the flagship school of the state of Georgia, but there are two reasons why Georgia will get strong ACC Carriage. I’ve lived in Georgia and you can find regional ACC games all across the state. There are tons of Florida State, Clemson, and other ACC alumni in the Atlanta Metro area as well.
Florida 7.33 Million x .75 x .75 x .90 = $3.17 Million
Georgia 3.59 Million x .75 x .75 x .90 = $1.81 Million
Kentucky 1.71 Million x .75 x 75 x .90 = .86 Million
The Northeast states are a bit trickier, but please don’t suggest there isn’t a benefit. The 2 non-descript brands of Maryland and Rutgers added to the Big 10 Networks bottom line.
We’ll say the Northeast ACC schools can draw 50% of the cable households.
New York 7.28 Million x .75 x .50 x .90 = $2.4 Million
Massachusetts 2.55 Million x.75 x .50 x .90 = $.86 Million
Pennsylvania 4.95 Million x .75 x .50 x .90 = $1.67 Million
Notre Dame is an interesting case, as their Olympic sports will be on the ACC Network and they will get a full share of the ACC Network. Who knows what the ACC Network can show regarding Irish football, but I believe you’ll see the Irish play at least 1 football game a year on the ACC Network. We’ll call Indiana a 25% carriage state.
Indiana 2.5 Million x .75 x .25 x .90 = $.42 Million
That’s a total of $17.2 Million for instate monthly fees. x 12 Months – that’s $210 Million for 19.5 Million in state ACC households.
Depending on your source the SEC Network has anywhere from from 60-80 Million subscribers. We’ll split the difference and say the SEC has 70 Million. If the ACC just gets 1/3 of the SEC subscribers, then that’s 23.1 Million subscribers. We already have 19.5 Million instate ACC Households. That’s 3.6 Million more at a .15 fee. or $.54 Million.
That is an additional $6.5 Million to the $210 Million. So the ACC Network could earn near $217 Million in a single year. We subtract about $100 Million in operating costs. I always wonder how that’s rarely figured in when people total up conference networks. Conference networks don’t run for free.
That’s $117 Million, divide by 2 since ESPN takes half the profits. We’re at $58.5 Million for the ACC divided by 15 and that’s nearly $4 Million at $3.9 Million the ACC should make even in this extremely conservative estimate case. There may be some start up costs in year 1, so keep that in mind.
If the ACC can get full get a $1 subscription fee the number grows to $4.68 Million team, and if ESPN can get the $1.30 in state fee and .25 out of state – Then we are at $315 Million which turns out to just over $7 Million per program.
We are still at the modest 24 Million subscribers.
You may ask if the ACC Network was going to be so profitable why wasn’t it started sooner? That’s easy… Most of ESPN carriage contracts aren’t up until the 2019 and 2020 time frame. and cable operators still need to be convinced to add another channel. That is something that will be worked out in the next 3 years.
Even the much maligned Pac 12 makes $1-$1.5 million, and now has reached a couple of new carriage deals. Expect Pac 12 profits to begin to rise.
At the end of the day, The ACC Network is going to be a significant money maker, and I expect it to be in the $4-$6 Million range with very real the potential for more.
