New ESPN deal will help Terps, but how much?

Posted: 8:09 pm Fri, July 9, 2010
By Liz Farmer
Daily Record Business Writer

The University of Maryland’s financial future just got a lot more stable, but how exactly that will help the school build up its athletic programs remains to be seen.

Thanks to a 12-year, estimated $1.86 billion television deal the Atlantic Coast Conference made with cable sports giant ESPN, the conference’s member schools stand to see nearly double their television revenue and get more exposure for their sports than ever before.

While the greater exposure will help Maryland’s lesser-televised sports, just how the Department of Athletics can benefit from extra money depends on the economic climate.

“A lot of it’s going to depend on where everything else is at that time,” said the university’s interim director of athletics, Randy Eaton. “If tickets and donations are still down, all it’s going to do is keep us whole. … It might not be able to move us along like people hope it will because of the recession.”

Last year marked the completion of the $50.8 million Byrd Stadium expansion project that created 64 luxury suites and 440 mezzanine seats in the stadium’s Tyser Tower. But 23 of the luxury suites still lacked long-term commitments during the season. Eaton said if season ticket sales and alumni donations pick up, the new TV revenue could be used to restore the school’s previous budget cuts.

Under the conference’s current television deal, which expires at the end of the upcoming academic year, the league reportedly receives an annual payout of $67 million. Under the deal, which was announced last week and takes effect for the 2011-12 academic year, the league will receive an average of $155 million each year, according to media reports.

But Eaton said it’s too early to tell just how the schools will benefit financially. And, he said, the ACC has yet to give its member schools the breakdown of the deal year by year.

“We will get more television revenue out of it, the question is how much,” he said. “I’m not the only CFO in the region chomping at the bit going, ‘Tell us, tell us, tell us.’”

But it’s a good bet that ACC’s member schools stand to gain by having more games available in more formats, said Steve Dresner, a Gaithersburg-based media consultant and a former producer for ESPN.

ESPN will get exclusive broadcasting rights for every conference-controlled football and men’s basketball game on one of its networks, along with some of the ACC’s nonrevenue sports on television or the broadband network ESPN3. A conference-controlled game means the game is played at an ACC member school. Raycom Sports, a 30-year partner of the ACC, will also retain syndication of conference football and basketball games.

“This new media and Internet deal is such a growing animal,” Dresner said. “And then when you take it to the next step, with the [applications] you can do on Verizon and iPhone, and this just gets nutty. As far as sports is concerned, it’s … a win-win situation for the ESPN and ACC.”

Dresner compared the ACC deal with the Southeastern Conference’s 15-year deal struck with ESPN and CBS in 2008. That deal, worth $205 million to the conference annually, also doubled the member schools’ television revenue and increased coverage.

Charles Bloom, associate commissioner for the Southeastern Conference, said that contract increased the conference’s exposure “immensely.”

“All our football games are on television in some form or fashion,” he said. “All of our men’s [basketball] conference games are on TV and a much larger number of women’s basketball games and [men’s] baseball games and [nonrevenue] sports are on.”

This past academic year, the first year the contract took effect, the Southeastern Conference distributed $209 million to its 12 member schools, Bloom said. That’s an increase of 58 percent from the previous year’s $132.5 million.

Duncan McKenzie, executive associate athletic director for the conference’s Mississippi State University, echoed Bloom, adding that most women’s basketball games are now televised. He said the increase in revenue will help pay for salary adjustments, capital expenditures, academic support, scholarship expenses, travel and recruiting expenses.

But that doesn’t necessarily mean Maryland football is guaranteed more TV time. During last year’s 2-10 season, many of the Maryland games — even in the local market — did not make Raycom’s cut. But Eaton noted the Internet platform will help Maryland sports other than football and men’s basketball get more playing time.

“There’s no guarantee [football] will be on broadcast or cable simply because the network will choose which games get picked up,” he said. “But on the Internet, there’s no doubt we’ll have more exposure. There’s a much bigger commitment from ESPN and [sister network] ABC to put some of our [nonrevenue] sports on there along with increased coverage of women’s basketball.”