The Atlantic Coast Conference may rank first in academic prestige for its 15 universities, particularly with Stanford University and the University of California, Berkeley, coming on board next year. But Commissioner Jim Phillips knows in the money-dominated world of college athletics, the ACC is a laggard facing a widening revenue deficit with the Big 10 and Southeastern conferences.
The culprit is a seven-year-old television deal signed before Phillips came on board in 2021, and before the value of college-football broadcast rights exploded.
Its ESPN contract was extended in 2016 to include the ACC Network and runs until 2036. It pays the ACC about $240 million a year, and the conference doles out about $39.4 million to each of its schools, mostly from the TV deal, according to Internal Revenue Service documents.
The Big 10 TV contract, signed in 2022 with Fox, CBS and NBC, is for seven years and pays about $1 billion a year. The Midwest-based conference pays its member schools about $56 million a year. The SEC signed a 10-year deal with Disney’s ESPN and ABC that starts in 2024 and will pay $300 million a year. Each SEC receives about $50 million a year.
Both the Big 10 and SEC will be able to sign new contracts, likely for higher amounts, before the ACC can negotiate a new deal. That means its schools will likely get more money than those in the ACC for the next decade unless Phillips can pull a rabbit out of a hat.
“We’ve been a conference that’s done a lot with not the most,” says Phillips, sitting in his Uptown Charlotte office that overlooks Bank of America Stadium. “We’re motivated to close that gap and provide additional resources. I think about that every day. But it hasn’t prohibited us from success.”
Increasing revenue for a conference considered by many to be an also-ran in the football revenue standings is no easy task. The gridiron accounts for about 85% of the revenue from media deals. The ACC will expand in 2024 as part of that strategy. With Cal-Berkeley, Stanford and Southern Methodist joining, the ACC is adding top-10 television markets in Dallas and the San Francisco Bay area.
But to maintain pace in the revenue race, the ACC has to do more. Phillips says he has a four-pronged approach to increasing revenue for the conference: Expanding media partnerships; adding corporate sponsorships; placing championship events in big cities; and creating new events. ACC revenue rose 6.7%, or $38 million, to nearly $617 million in the 2021-22 academic year, the latest numbers available. And TV revenue rose 12% while the money it distributed to its members rose an average of 9%.
The SEC saw revenue decline by $31 million, or 3.7%, to $802 million during the same year. Still, the SEC and the Big 10 are likely to produce at least $150 million more each year for its schools, for at least the rest of the decade, because of its fatter TV deals.
“What’s been playing out is that the university presidents have directed the conference commissioners to generate as much money as they can through the conference media contracts,” says Amy Privette Perko, the CEO of the Knight Commission on Intercollegiate Athletics and a former Wake Forest basketball player. “That led to an expansion of football TV markets. So the question is, is it the right model?”
The Knight Commission, an advisory group that proposes reforms to college athletics, wants conferences to enact financial incentives and financial accountability, rewarding schools that win conference championships – in both men and women sports – and that spend at least 50% of their revenue on the education of athletes, health safety and well-being. The current approach of conferences “is not in the long-term best interest of college sports,” she says.
“In our view, those kinds of objectives are ones that university presidents should be directing their conferences to implement,” says Privette Perko, who is based in Fayetteville. “But again, the commissioners have responded to the task that they have been given by the university presidents.”
To be sure, more money means that ACC schools can provide more athletic scholarships and provide facilities that attract the best athletes. Phillips, who holds a doctorate in education administration from the University of Tennessee, truly believes in that mission, according to those who work with him.
“He cares deeply about students,” says UNC Chapel Hill athletics director Bubba Cunningham. “He cares deeply about education. He has worked his whole career to try to balance the ambition of incredible students who want to compete at elite levels…I have a lot of respect for him.”
A Chicago native and the youngest of 10 children, Phillips was a basketball team manager at the University of Illinois and then an assistant basketball coach at Arizona State University before moving into athletic administration roles. He was senior associate director of athletics at the University of Notre Dame and then athletics director at Northern Illinois before becoming Northwestern University’s AD in 2008.
During his last five years at the Big 10 school, Northwestern spent more than $500 million in new and renovated sports facilities at its suburban Chicago campus. The school’s graduation success rate led all 133 Football Bowl Subdivision schools for his last three years there.
His family is immersed in college sports. His daughter Meredith plays soccer for Yale, and his son Luke ran track at Notre Dame. Another son, John, plays club soccer at Harvard. “I’ve seen [the impact of college sports] in my own house,” says Phillips.
Phillips succeeded John Swofford, who was UNC Chapel Hill’s athletics director for 17 years and then ACC commissioner for another 17. Swofford negotiated the existing ESPN contract, also reviewed by a committee of athletic directors, for the conference. Phillips’ annual salary is $2.4 million, significantly more than most of the ACC university presidents.
To the chagrin of Triad civic leaders and some conference traditionalists, he engineered the move of conference headquarters in August from Greensboro, where the organization had formed in 1953. It considered Orlando and Washington before selecting Charlotte, aided by a $15 million incentive from state government that hinges on a 15-year commitment to North Carolina.
Charlotte has been “a big plus for the conference and many of the schools from a transportation standpoint and an image standpoint,” says UNC’s Cunningham. It’s easier for representatives from schools such as Pittsburgh, Syracuse and Boston College to fly in and out of Charlotte Douglas International Airport than Piedmont Triad International.
PAC 12 IMPLOSION
PAC Given the jockeying in college football today, a commissioner’s job also includes constant consideration of expansion, and Phillips meets with the school presidents and chancellors on a bimonthly basis. He declines to discuss specifics other than to say, “There wasn’t really anything that made sense to us until this summer.” That’s when the Pac 12 imploded. Hoping to hold the Pac 12 together, ESPN had proposed a deal providing each school
$30 million in TV revenue, but walked away when conference officials asked for $50 million per university.
Oregon and Washington then announced they were leaving for the Big 10, and Arizona, Arizona State and Utah announced they would join the Big 12.
That left Cal and Stanford with just two other Pac 12 members. They quickly agreed to join the ACC along with Southern Methodist, a member of the American Athletic Conference since 2013. The three schools won’t receive a full revenue share from the ACC for 10 years. “I believe that this was the strongest strategic move of the options that existed,” says Wake Forest athletics director John Currie. “Galvanizing 15 presidents and athletics directors to move forward in this expansion is a very significant achievement.”
As part of a less prestigious conference, SMU was receiving only about $7 million a year from the American Athletic Conference media deal. But its donors quickly raised $100 million after announcing the switch to the ACC, reflecting a Texas-sized commitment to football success.
Phillips says adding teams in Texas and California in addition made sense for the conference, which also has members in populous New York and Florida metro areas. “It needed to be additive in value for any move to be made,” he says. “It wasn’t about sheer numbers. It was about value and markets and what would make the ACC better, along with like-minded institutions.”
UNC Chapel Hill, Clemson and Florida State reportedly voted against expansion, with pundits noting that the three newcomers don’t have powerhouse football programs that can draw strong TV ratings. But the move should add $50 million to $60 million in annual revenue for the ACC, ESPN reported.
Phillips says he wasn’t worried about the vote, noting there was opposition to adding Miami, Virginia Tech and Boston College to ACC in 2004. “It’s never personal,” he says. “The collegiality is the best it’s ever been.”
One frequent criticism of the West Coast expansion is the impact of so much travel for student athletics. The existing ACC schools will adjust their non-conference schedules and make those games and matches more local instead of traveling long distances, Phillips says. For football, no school will travel to California in back-to-back seasons, and the two divisions have been dropped. Cal and Stanford will travel east together for sports such as basketball, allowing them to get in two games in one trip.
“The way that we were very quickly able to figure out a schedule model for football that factors in the three new schools is almost miraculous,” says Wake Forest’s Currie. “Everybody had to give a little bit, but the net result vs. where it was two years ago, it’s unbelievable.”
An ACC study noted that UNC Chapel Hill had traveled to the West Coast 90 times in the past decade for various sports. “The expansion has been something that we’re still wrestling with to make it as good as possible for all of the teams,” says UNC’s Cunningham. “It’s still too early to tell.”
Phillips’ four-part strategy is beginning to show results. The additional schools will boost the ACC’s future television revenue, which rose 11.7% to $443.7 million in the 2021-22 academic year. That figure likely rose again during 2022-23, the first year that the country’s largest cable provider, Xfinity/Comcast, carried the ACC Network, which launched in 2019 and airs 1,500 events a year. The conference splits the network’s revenue 50/50 with ESPN.
In July, ACC announced a deal with The CW Network to air 50 ACC football and basketball games a year through 2026-27. Although he says that the ESPN deal through 2036 is unchanged, Phillips is eager to add ACC sports into new markets. The commissioner has done “a really good job of navigating a very difficult time,” Wake Forest’s Currie says.
NOT AN NIL FAN
Ally Financial, the Detroit-based bank with a large presence in Charlotte, became the title sponsor of the ACC women’s basketball tournament and women’s soccer championship in 2023. It’s also the exclusive presenting sponsor of the 2023 ACC women’s lacrosse championship. Phillips also hosted the Disney/ESPN/ACC Network sales summit at the beginning of the 2023 football season and anticipates making future sponsorship announcements soon.
The conference has been moving its championships to major metropolitan areas to boost revenue from attendance and gain media exposure. The men’s basketball tournament, which had traditionally been held in Greensboro or other ACC cities, was in Brooklyn in 2022 and will be in Washington, D.C. in 2024.
New events are also on tap that will bring in more money. The ACC/SEC basketball challenge started in November and included men’s and women’s teams. In August 2024, ACC schools Georgia Tech and Florida State will play football in Dublin, Ireland in the Aer Lingus College Football Classic.
When he’s not working on ways to boost revenue, Phillips can be found at ACC events. He saw every football team play in person and has been to at least one home game for each school. In November, he visited Charlottesville, Virginia, for the field hockey tournament as well as Cary for the women’s and men’s soccer tournaments.
He remains concerned about name, image and likeness regulations across the conference that allow athletes to generate income. He believes that college athletics would be better served by national laws passed by Congress instead of state laws that “have created confusion and imbalance.” He also opposes using NIL deals to recruit athletes. “We’re in 10 different states in the ACC, and what you can do in Florida is what you can do in North Carolina, and what you can do in Georgia is different from what you can do in New York,” he notes.
For those hardcore ACC fans who long for the days of Tobacco Road, when basketball dominated the league, Phillips says it’s a different time. “The regional conference concept has been shattered. It was important for us to move ahead and be progressive. I’m feeling bullish about the future of the conference.”
Now he just needs to get ACC’s revenue on par with the Big 10 and the SEC. ■