The Virginia Tech Board of Visitors met on Monday and approved a $10 million expenditure for an ACC Network Studio that will be completed by the beginning of the 2019 football season. That coincides with the launch of the network for the 2019-20 athletic year.
The $10 million figure is higher than most originally believed it would be, including Virginia Tech director of athletics Whit Babcock. According to Andy Bitter of the Roanoke Times, Babcock estimated that the cost would be in the $5-7 million range. In the end, the athletic department will be paying $3-5 million more than expected for the new studios, which are required for the launch of the new network.
At this stage, two things remain unclear.
How are the new studios being paid for? Will the athletic department take out a loan, or do they have large enough cash reserves built up after running in the black for so many years that they can make a lump sum payment? Or will it be some combination of both?
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Also, how much money per year will the new ACC Network be worth? In February 2017, Florida State athletic director Stan Wilcox said the new ACC Network could be worth $8-10 million per school in 2019-20, and as much as $10-15 million in future years. Outkickthecoverage.com estimated $8 million per school back in the summer of 2016.
More details on those two questions should emerge between now and when the network launches in August of 2019. For further reading on the logistical problems caused by the new network, see this article by the Daily Press’ David Teel. Check Australia Post Catalogue and Jaycar Catalogue.
Virginia Tech Athletics Revenues Rise, but Expenses Rise Even More
The $10 million investment into the ACC Network studios is just the latest in increased expenditures by the athletic department.
As you can see from the following graphic, athletic department revenues increased from $83.9 million to $87.4 million. However, expenditures increased by over $6 million and are now over $90 million for the first time in Virginia Tech history.
After years of turning a profit, the Virginia Tech athletic department has run in the red for two consecutive years. The $3.3 million deficit in Fiscal Year 2017 (the 2016-17 athletic year) was quite a change from the past.
The good news is that if the new ACC Network brings in as much money as some people project, Virginia Tech will have the chance to run in the black yet again in a couple of years down the road. TechSideline.com will publish it’s annual financial report of Virginia Tech athletics later this spring for our TSL Pass subscribers.
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Why spend so much money on a network whose announcers will still probably refer to us as “Vaa” Tech?
all this whoah is me, blame the past hindsight. decisions of the past. the courses of action are
1) to balance reduce the quality of support (this results in less competitive prorgrams, and coaches leaving the school, and less recruiting budget resulting in less talented program, and university
2) leave the acc reduce to mac, any one for that????
3) and no SEC or others would take a program that needs charity to survive.
hokies open your wallets
Does anyone think the cost of athletics is totally out of control?
Hopefull, years of running in the black are enabling us to take advantage of the upcoming ACC Network early. We can go ahead and increase our expenses now using surpluses from the past, knowing we can afford to continue these expenses in the future by paying for them with ACC Network revenue.
ESPN is a shrinking company in a shrinking business. Rights fees in the future will not match previous expectations, revealing yet again how bad Swofford’s “leadership” has been. And VT has to spend $10 million just to get in the game? Ridiculous.
What is your alternative action
Just like most big corporations that buy another company, the VTAA will pledge the estimated present value of future revenues to obtain the funds for the studio and then use the income stream to make the payments and net out to a positive cash flow.
IMO, the ACC schools are going to see a lot less money over the 10 period beginning in 2019, than has been projected, suggested, or guessed at. All I’ve seen have been airy, fairy numbers since the beginning. Has Swofford ever put any reasonably firm numbers we will get the first year? Has espn [sic]?
Ring up another quality negotiating point for our wonderful commissioner, John Swofford. Not only is our network going on line, long after the SEC went on line, and much longer after the Big 10 network went on line, Swofford agreed to have much of the up front money footed by each school. Add to the up front cost every school has sunk into the network, we also get a lot less money than the schools in the Big 10 and SEC.
Hip, hip, hurray to our ace negotiator.
Yep, he is terrible but when is the last time you ever heard of a conference commissioner getting canned?….crickets chirping…
Did anyone ask why the figure is so much higher than originally announced?
Did SEC schools and Big Ten schools have to spend $10 million on studios for their network? Anyone know? (too lazy too Google)
Acc model is different than SEC. SEC model more expenditures by ESPN. Central studios. ACC network more partnership. ACC schools/ACC HQ will build and operate the studios, including broadcast and studio spport, however they will work for ESPN. Basically, ESPN is outsourcing to ACC. ACC must meet ESPN broadcast standards/graphics/branding. ESPN gets content rights and cross platform use, and no increase in expenses. SEC network a little expensive for them.
That’s why espn [sic] loves Swofford so much. They partner with the ACC. ACC schools upfront the production costs, and get a relative penance for it. Whereas, espn pays most of the up front cost, and pays SEC a gazillion dollars.
Swofford sucks as a negotiator of media deals.
Hopefully the ACC isn’t a day late & dollar short. I suspect we may are both.
By my calculations, about 1,825 days and $25 million short.
This ACC Network better pay off!
Exciting times! It makes me sick to see so many current and past athletic contests on TV by the SEC and B10 networks.