Chansky’s Notebook: Where’s The Money?

Here is what the ACC Network is up against as the launch nears:

When the ACC and ESPN made a deal years ago to offer a conference-dedicated slew of programming, the so-called cord cutters hadn’t yet sharpened their knives and scissors. Cable TV was still in its prime, the most common way for viewers to get the games.

What has happened since is an important distinction in trying to figure out the future of the ACC Network. While dozens of smaller cable companies and streaming services have signed up to carry the ACC programming, no major cable provider has agreed to yet. And the money those cable companies would pay ESPN could determine what distribution each ACC school receives annually.

If ESPN doesn’t sign the ACC Network to these major carriage deals, its advertising sales will suffer. Meanwhile, the cable companies are already losing revenue with cord-cutters who have been dropping cable service by the millions. DIRECTV NOW, Comcast, Spectrum and AT&T U-verse lost more than 1.3 million subscribers in the second quarter of 2019, which is about 14,000 every day.

If the trend continues, more than 5 million cable customers will be lost by the end of the year. That may be why ESPN and the major cable companies have not been able to make a deal. Whatever they pay, the cable providers have to charge their subscribers to get their money back, and they don’t want to chase away more of them.

Some cable companies will see their subscriber loss double by the end of the year, according to a story on Cord Cutter News. And if the projected revenues are not filtering down, either ESPN has to cover the losses or the ACC schools will not realize the increase in annual distribution they are expecting and have already invested $10-15 million building new production studios on each campus.

The ACC Network seems like a victim of bad timing, caught in the throes of cord-cutting from cable providers but before many people are satisfied switching to unfamiliar streaming services to get their favorite games. With less money coming in than projected, either ESPN/Disney will cover such losses or the member schools won’t have the expected increase in revenues.

Depends on who guaranteed what to whom.

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