Virginia Tech and conference realignment: ACC, TV deals and where Hokies fit in

BLACKSBURG, Va. — Does it suddenly feel like spring of 2003 all over again?

I go on vacation for a couple of weeks and return to a land that seems to have gone back in time, with Virginia Tech fans nervous about their future as conference realignment heats up and the prospect of being left behind in a new world order is decidedly real.

Sort of like the ACC’s expansion push almost 20 years ago, when, after some nervous months and political finagling, Virginia Tech got an invitation to the league it long wanted to be a part of.

This threat feels more alarming, though. Two conferences, the Big Ten and SEC, are pulling away from the field, soon to be lapping it in annual media rights revenues that are the lifeblood of college athletic departments, and only a precious few so far — Oklahoma and Texas to the SEC and USC and UCLA to the Big Ten — have earned golden tickets to partake.

You might have questions about Virginia Tech’s place in this current (future?) wave of realignment. Well, I’m here to answer them with conviction, even if the people in charge aren’t sure exactly what course of action everybody’s going to take.

So … is this over with yet?

It doesn’t seem to be moving as quickly as the breathless daily tweets and rumors might suggest, and history suggests these expansion waves aren’t hasty. Oklahoma and Texas were in talks with the SEC for months. Ditto USC and UCLA with the Big Ten. It’d seem unlikely that in the matter of a few weeks, more seismic changes would be coming.

In fact, it sounds like we’re all waiting on Notre Dame, the biggest fish in the sea, to see if a second wave is imminent. And if there’s one thing the Fighting Irish are known for, it’s being deliberate in calculations about their football independence. Notre Dame already gives up money in its TV contract by remaining independent. The question is if it’s willing to give up tons of money in its TV deal by not pursuing an invitation to the Big Ten, where $100 million a year TV payouts are the estimates being floated around.

There are other considerations, like where to park its non-revenue sports and if it buys its way out of its ACC agreement and what kind of access would it have as an independent to whatever future iteration there might be for the College Football Playoff.

But at a certain point, passing up on that Big Ten money might be too much of a competitive disadvantage for the Fighting Irish to stay independent. Then again, we’ve been hearing that for how many realignment cycles now?

OK, enough about Notre Dame. Is Virginia Tech going anywhere or not?

Well, I mention Notre Dame because I don’t know if realignment keeps up at its current pace if the Fighting Irish decide to stay put. And whether or not Virginia Tech could one day get an invitation to one of the big two conferences depends on how big those conferences want to get. (And make no mistake: You want to be in one of those two conferences. The prospect of a $50 or $60 million revenue gap on TV rights alone has to leave everyone not with a ticket punched to the Big Ten or SEC shaking in their boots.)

If those leagues want to go to 18 teams each, I’d be worried if I were a Hokies fan. If it’s 20, you’re on the fence. And it’s 22 or 24, you’ve probably got a good chance. All that said, I’m not so sure things will go beyond 16 in the short term, with the ACC’s grant of rights still a pretty big fly in the ointment for anyone with wandering eyes (more on that in a second) and the fact that there are so few schools left that are big enough brands to warrant expanding for.

That’s what this round of expansion seems to be about: brands. The previous round was about territory and adding new states to your footprint to get better cable TV rates. Well, cable TV is dying, so that’s less important this time around. Instead, it’s about adding enough big-name programs that people will have to pay to watch wherever you might be televised.

And with projected yearly TV revenue distributions expected to be north of $100 million per school for those two top leagues, adding new schools would require them to bring enough value to the conference that would increase that TV pot by at least that much, not dilute with more mouths to feed. Other than Notre Dame, who out there does that? Clemson? Probably. Florida State? Maybe 10 years ago. North Carolina? Given its basketball clout, perhaps. I doubt Washington and Oregon out of the Pac-Whatever, otherwise they probably would have already gotten invitations to the Big Ten.

All that is to say I’m skeptical that the Big Ten or SEC is in a hurry to add anyone else not named Notre Dame right now.

So is the ACC going to stay together?

I’d say yes, though it depends on how good the lawyers who may get involved are.

Everybody suddenly had to bone up on what a grant of rights is. Fortunately, colleague Andy Staples gave as good of a tutorial on them as you can find. Basically, it’s an agreement in which schools transfer their media rights to their conference for a set period of time. All the ACC schools signed one in 2013 after Maryland left and Louisville came up, then re-upped in 2016 through 2036 in order to push through the development with ESPN of a dedicated network for the conference.

That deal is now a double-edged sword. The ACC’s annual payout is far below market value, especially with the Big Ten and SEC set to cash in even more following recent additions. The ACC paid out an average of $36.1 million to its schools in 2020-21, nearly $20 million less than the Big Ten and SEC, a gap that will only widen over the remaining 14 years of its deal with ESPN if nothing’s altered.

But the grant of rights is also keeping the league together because nobody can leave without paying a hefty price. Forfeiting 14 years of media rights, which make up a good portion of the ACC’s annual payouts to schools, plus paying an exit fee that’s three times annual revenue (ballpark of $120 million right now), would make this a $400 million-plus decision, and that’s if the ACC would even let a team buy back its TV rights should it leave. And let’s be honest, in a life-or-death situation for the conference, why would it?

So if you’re an ACC team planning on leaving, you’d better be pretty confident in your legal strategy to circumvent the grant of rights. And so far, nobody’s even tried. Oklahoma and Texas are just waiting out the Big 12’s grant of rights rather than trying to challenge it in court, and that’s something that expires in only a few years, not 14. USC and UCLA will join the Big Ten in 2024, right after the Pac-12’s grant of rights expires.

And the notion that enough schools will want to exit the ACC all at once, thus dissolving the grant of rights, seems far-fetched. Are eight schools or whatever the number required to do so going to get invitations from other conferences all at once? Seems unlikely. And what league would want to invite a school that has to forfeit its TV rights? Some schools might poke and prod and do their due diligence to look at the legal viability of the grant of rights, but the majority of the league is highly invested in the GoR staying in place.

If, somehow, the grant of rights could be broken, how attractive of an athletic department is Virginia Tech?

As is usually the case with this kind of question, it depends.

What league are we talking about here? The Big Ten is pretty big on AAU members (that’s the Association of American Universities, a confederation of leading research universities), so much so that every school in the league is or was an AAU member. (Nebraska lost its AAU status after joining.)

This feels like a very ex post facto justification for expansion — Notre Dame is not an AAU member but would be accepted into the Big Ten in less time than it takes you to complete this sentence — but it’s been true of every member the league has admitted in the past 30-plus years, and, as much as Virginia Tech would love to have AAU status, it doesn’t at the moment. (Current ACC schools that do have it? Duke, Virginia, Georgia Tech, North Carolina and Pittsburgh.)

The SEC appears to be the better hope for the Hokies, should things ever get that far. Geography matters less in this round of expansion, though it’s not totally irrelevant, and Tech would give the SEC a state it doesn’t currently have in its footprint.

But you’re still talking about some stiff competition. Notre Dame is everybody’s No. 1 target, but after that in the ACC, Clemson, Florida State, Miami and North Carolina are bigger brand names (don’t discount the Tar Heels’ basketball influence, even in a football-mad league like the SEC).

And when you consider what other schools might be considered — Oklahoma State? Baylor? Louisville? NC State? Virginia? — attractiveness is in the eye of the beholder.

A little more than a decade ago, when Virginia Tech was a bankable football property that won 10 games a year like clockwork and appeared in BCS games all the time, this wouldn’t have been as much of a question, but it’s been a rough decade for the Hokies, and that’s eroded the program’s luster, which matters in cases like this.

I read that the SEC is more interested in Virginia than Virginia Tech. Is that true?

It could be. Again, that comes down to who’s making the decisions, and I trust our national reporters like Staples and others who have said they’ve heard that the SEC has more interest in flagship universities, which UVa is in Virginia.

I’m less convinced by Staples’ TV viewership argument, which states that UVa’s greater median audience in rated games against non-Big Ten, SEC or Notre Dame schools (1.4 million in 24 rated games compared to 968,000 in 41 rated games for the Hokies) makes the Cavaliers a more attractive football property in expansion.

That simply doesn’t jibe with anything I’ve experienced in the two decades I’ve spent covering football in the commonwealth, with stints on the beat for both schools. Interest in Hokies football dwarfs that of the Cavaliers. Readership numbers have borne that out for decades.

And I’m skeptical of the conclusions drawn or the methodology used in analyzing those TV numbers. For starters, Virginia Tech had 17 more rated games (meaning ones on network TV, ESPN channels or FS1) than UVa from 2015-21 and excluding the COVID-19 season in 2020, which to me would suggest a more attractive product to put on TV.

Secondly, if we’re talking about median audience (that is, the middle number of a set), Virginia Tech’s more frequent appearances on the lower-level of the ESPN tier of channels that are rated (rather than the ACC Network, regional broadcasts or streaming-only options that are further down the totem poll and are not rated), feels like it has a substantial effect on the total.

Going through the numbers, the Hokies had seven games broadcast on ESPNU at 3:30 p.m. on Saturdays (hardly a spot that does big TV numbers, tucked away on a cable channel and up against some big-hitters), while UVa had two such games. The Hokies averaged 389,500 viewers in that time slot to the Cavaliers’ 287,500, yet the frequency of those games dragged down Tech’s median viewer number in rated games.

That doesn’t mean I’m refuting rumors that the SEC might have more interest in Virginia, just that if arguments are being made about which school is more attractive as a football property — in fan interest, long-term success and program investment — there’s not really a comparison.

All right. You’ve written a lot here. What’s happening next and when?

Ahh, if I’d somehow been able to wager on USC and UCLA joining the Big Ten earlier this month, I’d be sitting on a beach sipping margaritas in retirement right now, because no one saw that one coming, and I can’t imagine how long the odds would have been on something like that.

And that’s the thing about these realignment moves: They usually come out of nowhere. Maryland to the Big Ten came out of the blue. Texas A&M to the SEC was a little more drawn out but still hit college football like a thunderbolt. There was a leak about Oklahoma and Texas going to the SEC, but it was very last second. And now USC and UCLA going to the Big Ten got dropped on everyone while they were on or about to go on vacation.

So consider me skeptical of many of these stories about leagues negotiating with schools about coming on board. Those discussions take place at the highest levels and usually don’t get leaked — if at all — until the deal is done.

Unless Notre Dame makes a quick decision (unlikely), it feels like we’re at something of a stasis, at least in terms of teams moving up to the Big Two. The Pac-10 and Big 12 might have some jockeying for position between them, just for survival’s sake, but the ACC’s grant of rights at the moment feels pretty solid. And if it is, nobody’s going anywhere anytime soon.

Obviously, that’s not forever protection. And as years pass and the cost of breaking the grant of rights goes down, schools might be more inclined to challenge it to see if they could get an invitation to the big-money conferences. But right now, short of some fancy lawyerin’, the ACC feels like it’s going to remain one big, smiling, totally-not-ready-to-backstab-one-another-for-a-big-pay-day family. Can you feel the love?

(Top photo: Reinhold Matay / USA Today)