By David Glenn
North Carolina Sports Network

DG: Aug. 15 — this year, that means next Tuesday — is the annual deadline for any ACC school to officially notify the league that it plans to leave the conference the following year.This means that if Florida State or anyone else wants to leave next summer, meaning 2024, they’ll have to notify the ACC by this Aug. 15, which again is almost here.As I’ve said before, I don’t think that’s going to happen this year, almost entirely because of the ACC’s Grant of Rights, but anything is possible right now.Barring a successful legal challenge, which as an attorney since 1994 I would describe as an uphill battle, any school leaving the ACC next year would both (1) owe a basic exit fee of more than $120 million, and (2) would leave behind 12 years worth of its multimedia rights, meaning something in the neighborhood of $400 million or more.Unless that legal picture changes, the Big Ten and the SEC have a greatly reduced incentive to extend an invitation to FSU, Clemson or any other ACC school besides Notre Dame, which of course controls its own football TV rights and also cherishes its football independence, here in the summer of 2023.

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Viewer Question #2: If a majority of ACC schools want to add some combination of Stanford, Cal and SMU, as has been reported, why hasn’t it happened?

DG: ACC bylaws specify all sorts of different voting thresholds for various conference matters. For example, some things do require only a majority vote to pass — and right now, of course, that would mean eight of the 15 schools — and my sources tell me it’s true that a majority of ACC schools are in favor of expansion right now.

However, under ACC bylaws that have been in place for many years, other voting topics require a higher threshold, either two-thirds or three-quarters, for an item to pass. On many matters, it’s even specified that its must be a quote-unquote “Absolute” vote, meaning not just two-thirds or three-quarters of those present and voting but two-thirds or three-quarters of the entire membership, even if there is a quorum of fewer than 15 members present at the time of the vote, which would be enough in some other contexts.

As you might guess, invitations to expansion candidates are considered “Absolute Three-Quarters” voting matters, as are any proposed amendments to the ACC’s constitution and bylaws.

Because three-quarters of the 15 current ACC members comes out to 11.25, mathematically speaking, that means functionally that 12 of 15 votes are needed to invite a new member. Put a different way, if there are four (4) or more schools that don’t want to extend an expansion invitation, it’s not going to happen, and at last check there were at least four (4) schools that have told their colleagues that, if it came to an official vote, rather than just these ongoing discussions they’ve had all week long, those four schools would vote “No.”

I have confirmed that Clemson, FSU and UNC have indicated repeatedly that they would vote “No” if it comes to an official vote on those particular expansion candidates, but at this moment — as I’m checking my phone every minute or so — I don’t have multiple sources confirming the identities of the fourth and/or fifth school. Perhaps another ACC journalist can confirm that before I do.

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Viewer Question #3: Why does Notre Dame get to vote on ACC expansion matters, when the Irish aren’t even full members of the ACC themselves?

DG: This is a quick and easy answer. While I see fans having a philosophical debate about this — should a school that’s still independent in football have a vote on membership matters? — the more practical conversation is very simple.

Notre Dame never would have joined the ACC in the first place if it didn’t have an official voice — meaning an actual vote — on membership matters moving forward. Period. End of story. The Irish didn’t need to join the ACC in all of the other sports the league sponsors back in 2013; they had plenty of leverage, including a lucrative football TV deal with NBC and an incredibly strong football brand name as a famous, century-long independent on the gridiron.

The question for ACC decision-makers a decade ago, then, was entirely about “Do you want Notre Dame as an all-but-football member?” Only in an imaginary, hypothetical, hindsight-style, second-guessing, social-media-or-message-board-nonsense-style world does anyone believe the Irish would have joined the ACC without full voting rights on membership matters.

It’s really that simple.

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Viewer Question #4: Why are Stanford, Cal and Southern Methodist so intriguing to the majority of ACC schools?

DG: The short answer is that, among those schools that aren’t already tied to the expanding Big Ten (which will have 18 members next year), the expanding Big 12 (which will have 16 members next year) and the expanding SEC (which will have 16 members next year), those three schools — Stanford, Cal and SMU — have been offering the possibility of creative new revenue streams in ways that most other available schools simply cannot or will not deliver.

For example, Stanford, Cal and SMU all would add both new inventory for ESPN (which would mean a total increase of more than $100 million per year in the ACC’s existing deal with ESPN) and they would add significant value to the ACC Network, which after a very slow start finally gained full distribution in December 2021 and actually exceeded its original financial projections in both 2021-22 and 2022-23.

ESPN has negotiated contract terms with its various carriers such that the ACC Network, which launched in August 2019 as a partnership between ESPN and the ACC, gets only nickels/month from its out-of-market subscribers — such as those in California and Texas right now — but more than $1/month from its in-market subscribers, meaning in states/regions with at least one ACC member. In other words, if you’re located in North Carolina, as I am, and you have the ACC Network as part of your pay-TV package, as I do, you may be paying in the neighborhood of $12-15/year for that channel. In California and Texas right now, they may be paying in the neighborhood of $1/year for that same channel.

I’d like to insert a very important reminder and be fully transparent here. Everyone who has followed me for any part of these last 37 years knows such things are very important to me, because I think it’s outrageously disrespectful and unprofessional for any media person or organization to intentionally mislead its/his/her listeners, readers or viewers.

These particular TV numbers and money references are only educated speculation and ballpark estimates, provided by industry analysts, because neither the ACC nor those pay-TV providers releases those official numbers for the ACC Network — or any other channel, for that matter — and I promise you that you won’t be able to find the price of any of these live-TV channels as a line item on your monthly pay-TV bill.

Back to the original question, about the three proposed ACC expansion candidates.

California and Texas are — by far — the two most populous states in America. Believe it or not, those two states combined make up more than 20 percent of the entire United States population.

California has about 39 million people, and Texas has about 30 million people. Combined, those two states have more than 25 million TV households and an estimated 15 million pay-TV households, meaning those that pay for live television through (1) a cable company such as Comcast or Spectrum, (2) a satellite company such as DirecTV or DISH, or (3) an internet-based company such as Hulu with Live TV or YouTube TV or DirecTV Stream or Sling TV or FuboTV. Among those 15 million pay-TV households, it’s impossible to know how many have packages that include the ACC Network, but since the ACC Network got full distribution in 2021, that has become a very high percentage.

Depending on the private contract language ESPN has used with its pay-TV partners in California and Texas (sources say it’s NOT safe to assume that every TV deal is done on a full-state basis), let’s say the additions of schools based in California and Texas would turn some significant chunk of those 15 million pay-TV households — certainly those in the very large Northern California (Stanford and Cal) and Dallas (SMU) markets — from $1/year subscribers to the ACC Network into $15/year subscribers to the ACC Network. Those are increases in those two states that are worth, in a reasonable guesstimate, tens of millions of dollars in new ACCN revenue.

So, if ESPN is going to pay a new $100 million-plus/year for those three schools, and if the ACC Network will get another tens of millions/year in new revenue from those same additions, what’s the problem? Why the “No” votes?

Well, here’s where it gets even more complicated. First, every time you expand, you’re ultimately dividing the financial pie into additional slices, which waters down the economic impact. Instead of dividing the ACC’s shared revenue 15 ways, at some point it would have to be divided 18 ways.

In part because Stanford and Cal have little leverage as members of the falling-apart Pac-12, both have indicated to the ACC that they would be willing to take only a partial financial share — perhaps 60 percent — in their early years of ACC membership. For example, if there were an upcoming year where an existing ACC school would get a $50 million check from the ACC office (and those are the projections for later this decade), Stanford and Cal would get only 60 percent of that, or $30 million each, which is actually a much better number than they could get anywhere else right now.

Thanks to some extremely wealthy boosters who believe it’s worth their long-term investment to see SMU in a Power Four conference, the Mustangs even have offered to take a zero share from the ACC for its first five to seven years of membership, an amount that over that longer period would be worth more than $300 million.

Obviously, those partial or zero shares for new members would allow the ACC to redirect more of those new million to its existing members. That certainly helps.

With the new ACC Network revenue, though, remember that (1) there, too, there would be new and significant expenses tied to incorporating those three faraway schools, and (2) whatever new revenue expansion would bring, the bottom line would be reduced by those new expenses, and then that amount would be split between ESPN and the ACC.

Once you do that additional math, the ACC Network windfall isn’t nearly as large, especially once you get to the point where you’re dividing it into 17 full shares, plus Notre Dame’s partial share.

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Viewer Question #5: Why aren’t North Carolina-based schools with strong football traditions, mainly Appalachian State in Boone and East Carolina in Greenville, ever mentioned as ACC expansion candidates or targets?

DG: I’ve seen a lot of speculation — and sometimes even angry, misdirected nonsense, often from media people who should know better — over the years that UNC and/or NC State, as the top two public universities in North Carolina and obviously founding members of the ACC, have had some sort of vendetta against the Pirates and would never allow them or App State into the ACC.

I’m not saying there aren’t people who don’t like each other, especially in those fan bases, but the “vendetta” claims miss one very important aspect that makes the entire debate an entirely moot point.

One quick side note: My only son is a proud graduate of ECU, and my only daughter is a soon-to-be proud graduate of App State, so I have a soft spot in my heart personally for both places, I’ve been to both schools dozens of times, we’re bringing our new Old North State Tailgate and Traveling Sports Circus to both Boone and Greenville this year (including for the Pirates’ trip to Boone to face the Mountaineers on Sept. 16), and they have always been a big part of what we’ve done with different incarnations of this show over the last 25 years, dating all the way back to the late 1990s.

The reality of the matter is that there has never been a shred of interest in the ACC adding ECU, App State or any other NC-based school, and it’s definitely not because of some underlying disrespect or antagonism toward the Pirates or Mountaineers from anyone at UNC, NC State or anywhere else in the ACC.

There’s a much more innocuous explanation. While there have been a small number of exceptions to this general rule, the overwhelming majority of realignment in college sports over the last three decades has included a desire to add a new state or states to a league’s geographic footprint. By definition, that means expanding to states where a league does not already have a team or teams!

Think about it. The expanded Big Ten will have 18 schools in 15 different states. The expanded SEC will have 16 schools in 12 different states. Neither of those two super-heavyweight leagues has more than two schools in any single state, and that is not an accident. That’s absolutely intentional, because it feeds the need to cultivate new and different parts of the United States in ways that inspire those new places to begin to care more about Big Ten sports or SEC sports or ACC sports or whatever.

The ACC already has not two, not three, but four(!) schools in the great state of North Carolina in Duke, UNC, NC State and Wake Forest. The only other example of such a phenomenon in any of the Power Four conferences is in the Big 12, with the absolutely enormous state of Texas, which now counts Baylor, Houston, Texas Christian and Texas Tech as members.

I would argue that it’s not mere coincidence that the ACC and the Big 12 are struggling financially compared to the Big Ten and the SEC, whose memberships for decades have consisted mostly of large, public, flagship universities in a wide variety of very populous states. Those are exactly the sorts of things, along with high-level football, that translate into bigger TV audiences and more TV dollars.

Another thing to remember, as I outlined earlier with the Stanford, Cal and even SMU examples, is the dramatic difference between what the ACC Network, Big Ten Network and SEC Network can charge to “in-market customers” versus what they can charge to “out-of-market” customers.

Adding App State or ECU adds literally zero to the carriage price of the ACC Network, because it’s already charging the much higher “in-market” rate across the state of North Carolina. While ACCN may pick up new subscribers from those fan bases, in the current TV marketplace, the value of those new subscriptions is tiny compared to the value of expanding into a new geography.

Obviously, with the hypothetical additions of schools in California and Texas, millions of households that previous paid nickels per month for the ACC Network would soon be paying more than $1 per month for the same channel. That would mean tens of millions of dollars of new revenue for the ACC Network every year, whereas again adding a school that’s located within the ACC footprint does not add any value in that very important category.

The bottom line: In the modern college sports world, which revolves mostly around football TV money, which at least in part revolves around expanding a league’s geographic footprint, why would any school in the ACC want to have more than four schools based in the same state, in this case meaning North Carolina? That’s the exact opposite of what the league’s TV partners want, and it’s not want any actual ACC members want, either.

We know that ACC officials, along with their partners at ESPN, have looked at schools such as Cincinnati, West Virginia, SMU, Cal, Stanford, Oregon and Washington in recent years. What do they all have in common? They are all located in states that do not already have an ACC member!

Again, that’s not mere coincidence, and it underlines the ongoing reality that App State and ECU haven’t even been on the fringes of the ACC expansion conversation — much less in the middle of it — not because of some imaginary disrespect or personal animosity, but because of some of the most basic elements of college football’s modern television marketplace.