We have so many new readers coming to SFN every day that many of you have missed some of the great entries of the past. Back around Christmas – when site traffic is also organically low – LRM ran a fantastic analysis of ACC expansion. We wanted to highlight it today for everyone since it was related to a couple of other new items we’ve got:
Evaluating ACC Expansion, Part One
Evaluating ACC Expansion, Part Two
I was against the idea of expansion prior to the league’s execution of the idea. I was particularly against the idea of the manner in which the league expanded.
With this said, I cannot argue too much with the financial performance of the league since the expansion. (Although one must account for natural inflation that is difficult to account for in adjustments). This recent article from the Greensboro News & Record highlights some of the ACC’s more recent financial success.
The league disbursed $137.5 million to its 12 member schools in the tax year ending June 30, 2007, according to federal returns made available this week. The increase of 5.7 percent over 2005-06 allocations is the largest since an 11.7 percent jump from 2001-02 to 2002-03.
The boost is not enough to cover increases in the members’ overall costs of running major sports programs, but it seldom serves that purpose and is not expected to do so.
The 2006-07 year was the ACC’s second with 12 members and the football championship game, the centerpiece of a television contract that delivered $39.2 million to the league during the year. That’s a 69 percent increase from the 2003 season, the final one with nine teams. Virginia Tech and Miami joined the conference in July 2004, and Boston College followed a year later.
“The financial realities of where we are have been right on target with the analysis before we expanded,” said ACC commissioner John Swofford. “It’s pretty much where we expected to be.”
The ACC’s total income, nearly half of which comes from football and men’s basketball television contracts, considerably outpaced estimates dated May 1, 2007, but that’s misleading. Those projections, for example, listed $16.38 million in probable revenue from football bowl games. The conference first surpassed $17 million in bowl revenue for the 1998 season and has enjoyed steady increases since. The 2006 season brought nearly $29 million from bowl games.
As a result, total revenue of $159,753,654 beat the projections by 33.5 percent, and cash allocated to the membership was 27 percent greater than the estimates.
