Crunching the Numbers on an ACC Network

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One of the biggest driving forces in the latest round of conference expansion
and realignment was the lucrative Big Ten Network. Launched in 2007, the BTN has
been wildly successful and is projected to pay Big Ten member schools about $6.5
million each in 2009-10. That begs the question: can the ACC do its own network?
Before you answer yes or no, take a look at the numbers.

One of the best articles I read during Expansion 2010 was printed in the
Lincoln (NE) Journal-Star on May 30, 2010. It was titled Big
Ten Network a boon to member schools
, and it contained the following salient

  • 2009 Big Ten Network Revenue: $204 million
  • Projected 2009-10 payout: $6.5 million per school, $71.5 million total (11
  • Availability: 73 million households (out of approx. 110-115 million U.S.
  • Subscriber fees: 88 cents per subscriber in the Big Ten’s 8-state
    footprint, 5 cents outside the footprint

Let those numbers soak in a little bit, and note that
“availability” in 73 million households does not equal “number of
subscribers” of 73 million. The BTN is available on DISH Network, DirecTV,
and many cable systems around the nation, but of course, not everyone subscribes
to it. (I’ve got DISH Network, and I don’t get the BTN.)

Add this number to your thinking: If the BTN made $204 million in revenue
from subscriber fees and advertising, and is projected to pay out $71.5 million,
then the rough “cost” of running the network is $132.5 million.

The Journal-Star article linked above says:

Each season, the network airs 35 to 40 football games, 105 regular-season
men’s basketball games, 55 women’s basketball games, a variety of
Olympic sports events, a nightly highlight show, coaches’ shows, classic
games and more.

That’s some quality content, and it costs about $132.5 million to produce it.
So the question becomes: Could an ACC Network that is created with similar scope
(and cost) get enough subscribers at a high enough rate to turn a profit?

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