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Inside the deal: How John Swofford helped save the ACC

By Andrew Carter
acarter@newsobserver.com

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  • Inside the deal: How John Swofford helped save the ACC
  • What grant of rights means

    The ACC is the fourth major conference – joining the Big Ten, Big 12 and Pac-12 – to enter into a grant of media rights agreement. In a grant of rights agreement, schools agree to surrender their television media rights to their conference for the duration of a television contract.

    The ACC’s contract with ESPN, which beginning July 1 will pay schools an average of a little more than $20 million per year, runs through the 2026-27 academic year.

    The grant of rights extends any time a new TV contract is renegotiated.

    If a school left the ACC, its TV rights would remain with the ACC for the duration of the ACC’s TV contract. A departing school would potentially lose hundreds of millions of dollars in TV revenue, and would bring no TV revenue to another conference.

    Additionally, any team leaving the ACC still is subject to the exit fee, which is three times the operating cost of the league budget (now more than $50 million).



Not too long ago somebody told John Swofford about his nickname. He had never heard it. He had no idea people – sportswriters, radio personalities, college sports fans on Twitter – had begun calling him “Ninja Swofford.”

Sitting in his office Thursday in Greensboro, Swofford, the commissioner of the ACC since 1997, smiled at the thought. He seemed to think it was amusing, the comparison of a 64-year-old man with the polished look of an executive to ancient Japanese warriors known for martial arts and their ability to execute covert missions.

It fits, in some ways. Swofford has always excelled in the shadows, behind the scenes. And so while months-old rumors continued to circulate about the ACC’s demise, with speculation that some schools – Florida State, Virginia, Georgia Tech, even North Carolina – might leave, he went to work.

Amid perhaps the most tumultuous period in the league’s history, Swofford less than two weeks ago completed a deal that stabilized the ACC’s future and might have ended major conference realignment.

For four months, securing the deal, a grant of rights media agreement that would make it financially difficult for schools to leave the conference, consumed Swofford. He made trips to Florida and Virginia, sat in long meetings with trustees and school presidents, discussed everything from recruiting territory to top-30 television markets. He worked the phones and worked his contacts. The grant of rights deal, he said, was his priority.

The league presidents in recent years had discussed such an agreement, which allows a conference to retain a school’s television rights revenue in the event that school defects. It’s like an exit fee, only so expensive that it makes leaving virtually impossible.

For years, the Big Ten, Big 12 and Pac-12 have had a grant of rights. The ACC during its fall presidents meeting in 2011 discussed it briefly. The presidents considered it again last year, when they formally approved Notre Dame to join the ACC. Again, the conversation was short.

Such an agreement didn’t appear necessary. Especially not after adding Notre Dame and increasing the exit fee to three times the operating cost of the ACC’s budget – which translates now to more than $50 million. Swofford hoped those moves in September would once and for all stabilize the ACC.

But things can change quickly.

Swofford understands this better than most. His tenure as ACC commissioner began when basketball television dollars still drove college athletics. Swofford knew that wouldn’t always be the case. In 2003 he lured Boston College, Miami and Virginia Tech from the Big East in hopes of strengthening ACC football. In 2011, amid expansion by the SEC, Big Ten and Pac-12, Swofford added Pittsburgh and Syracuse, which will officially join the ACC in July.

But those moves did not solve the problem. Two months after adding Notre Dame, Maryland, citing the financial difficulties of its athletic department, announced its plans to join the Big Ten. Maryland was a charter member of the ACC, and its defection blindsided Swofford.

“A big shock,” he said.

The ACC moved quickly to add Louisville. The formal announcement came in late November. Around the same time, Swofford and some of the league’s athletic directors and presidents began supporting the grant of rights.

“Maryland’s departure was surprising to all of us,” Swofford said. “So that was a factor. I think the continual rumors, as unfounded as they have been, were a factor. I think the presidents and athletic directors in our league got tired of that, and tired of being asked about things that weren’t even happening. I think that was a factor.

“But I think the real factor was the fact that these 15 institutions are very committed to each other (and) wanted to guarantee their commitment to each other.”

The ACC’s Council of Presidents attempted to illustrate that commitment in early December, when the league sent out a joint statement, 15 names strong, to quell the speculation that Maryland’s departure ignited. The statement spoke of “commitment” to the ACC and a desire to “protect the future” of it.

Statement lacked power

It characterized the rumors about schools talking to other conferences as “totally false.” The statement was a nice gesture of solidarity, but it lacked power. In December, when Swofford began speaking with schools about adopting the grant of rights, he reminded athletic directors and presidents of the peril of relying on words alone.

“I said if you want to back up your words with action, this is how you do it,” Swofford said. “With the grant of rights.”

At some schools, such as Duke, support was immediate and came without question.

“I think people were looking at how can we kind of regain some stability within the landscape, and what are the mechanisms that might be employed,” said Duke athletic director Kevin White, a self-described traditionalist. “… Most of us within our industry kind of thought that there would be a mechanism that could be created to kind of halt this movement.”

Others, like Florida State trustees who had become wary of the ACC, were skeptical. And some, like North Carolina athletic director Bubba Cunningham, wanted to ensure league schools gained something out of the grant of rights, aside from increased stability.

“I thought it was a good idea,” Cunningham said, “if we could close the gap (with other conferences) a little bit financially and increase the opportunity for our Olympic sports to be telecast.”

Cunningham and other league athletic directors and presidents knew the ACC’s television deal would be restructured after adding Notre Dame, which in July will join the conference as a full member in all sports except football. But when Swofford began attempting to build support for the grant of rights, it was still unclear how much more television money the ACC would generate.

ACC schools were set to receive an average of $17.1 million per year from ESPN, which owns all of the conference’s television rights. If the ACC was going to agree to enter into a grant of rights, Cunningham believed the league should be in line for a significant increase in television revenue.

“(ESPN) said obviously, we don’t like it when we hear rumors of people leaving,” Cunningham said. “That is instability in our league. So I guess what you could tell us as a league is if you’re bound together, then we might pay you more for that – or do more things with you or for you.”

During this time, Swofford also worked with ESPN to restructure its contract, which runs through the 2026-27 academic year. The grant of rights, though, was the priority.

And to build confidence in that agreement, Swofford had to ensure members remained confident in the ACC.

“When Maryland made the move, we all stepped back and said, what are they doing and why are they doing it?” Cunningham said. “Is it that much more money? Is it that much more exposure? Is it worth giving up the traditional rivalries and the geography? And so then I think through self-assessments say, does that make sense for us?

“And I think there were a number of schools that were asking themselves that question. … But I also (said), and we said it six to eight months ago, that we thought it was important to keep the ACC together, and we were going to do whatever we could to keep it together.”

That meant generating support for the grant of rights. It meant phone calls, and face-to-face meetings. Cunningham and Holden Thorp, the university’s outgoing chancellor, voiced their support for the grant of rights during frequent conversations with colleagues.

Swofford mostly communicated with schools by phone. Often, he was on the line with an athletic director, or with a university president. Sometimes he preferred face-to-face communication.

FSU’s support vital

That was the case with leaders from Florida State. For years, speculation about Florida State’s future had become nearly as much a part of the culture as the Seminoles’ home football game tradition of planting a flaming spear at midfield.

Some FSU supporters, tired of the ACC’s mediocre reputation in football, encouraged the university to explore leaving.

Andy Haggard once was FSU’s most influential critic of the ACC. A university trustee, Haggard was chairman of the board last May when in an interview with Warchant.com he spoke out against the ACC’s newly-announced TV contract. Haggard told the website FSU should listen if the Big 12 called.

“Hell, we were going to the Big 12 one time because of a comment I made,” Haggard said last week. “I never made that comment. I said we ought to listen – not go somewhere.”

Convincing Florida State to agree to the grant of rights was critical to Swofford, who acknowledged that he made, “oh, just a couple” of trips to Tallahassee to speak with university leaders.

“But they were important ones,” Swofford said.

One came before a Florida State trustees meeting scheduled for March 7. Swofford and Dean Jordan, the managing executive of global media at the Raleigh-based Wasserman Media Group, flew to Tallahassee to meet with Haggard and other trustees.

Swofford wanted to address misconceptions, answer questions and share his vision for the conference’s future. Haggard had his doubts. They met in a conference room.

“I wanted to be assured of what was going to happen, and why we would do (a grant of rights),” Haggard said. “And what would happen if we didn’t do it and what the repercussions were and all of that. And (Swofford) really spelled it out. And he answered all of my questions.

“I went in cautious. And came out impressed. And really thinking highly of John Swofford.”

During the meeting, Swofford and Jordan told Haggard what the grant of rights could do for the league. There was talk about an ACC channel down the line and the revenue that could generate.

“The connection with the ACC and ESPN (won me over),” Haggard said. “The idea of a possible television (channel) with the ACC, that it would be $5 million more a year, if we could do that. And probably more than that.”

Haggard in 1991 served on the Florida State committee that approved joining the ACC. He had seen the Seminoles thrive in the conference, throughout the 1990s, and then had been on the other end – a part of discontented fan base that hoped to move somewhere else.

But now, Haggard said, “I can’t emphasize more how excited I am about (the ACC). Because it’s been a mixed five years here. You had a lot of alumni and boosters and lot of big-time people very unhappy with the ACC. And I was there, too, with them. And I am 100 percent turned around. I’m excited about it. I believe in it.”

Swofford and Jordan also visited Charlottesville to meet with leadership at Virginia. One of the most important meetings came during the ACC tournament in Greensboro, where Jordan presented his analysis to the league’s athletic directors and presidents.

By then, the results of Swofford’s negotiations with ESPN had become clearer. It appeared likely that ACC schools would receive an average of more than $20 million per year in television revenue.

Jordan, meanwhile, spoke about potential. His presentation showed that the ACC has more top-30 television markets than any other conference, more households with televisions than any other conference and a greater population base than any other conference.

“If you were an entrepreneur and you were starting a business and you looked at the ACC’s markets as a street corner, it’s a street corner you’d want to be on,” Jordan said. “It’s the best location.”

Swofford rescues league

Even now, months later, Swofford’s tone changes when he talks about Maryland leaving. It’s difficult for him to hide his disappointment, and he quickly changes the subject to more positive things – the not-far-off arrival of Notre Dame, Pitt and Syracuse. The addition of Louisville.

Swofford grew up in North Carolina, played football at UNC, became the athletic director there in his 30s. In some ways, a lot of ways, the ACC has been his life. And so yes, he admits, he has been motivated by the thought of how the ACC wouldn’t be spoiled under his watch. Not with him in charge.

“That was a part of it,” he said. “I’d be less than honest with you if I told you that wasn’t a part of it, because it was.”

It was a Friday when the ACC’s presidents scheduled the vote to decide the grant of rights. April 19. Swofford organized a 7 a.m. conference call.

He was confident it would pass but still, there were some last-second doubts. For the grant of rights to be adopted, every one of the league’s 15 presidents – including ones at Notre Dame, Pitt, Syracuse and Louisville – had to vote yes.

“I feel like there was a risk in even taking the vote,” Debbie Yow, the N.C. State athletic director, said last week.

The presidents had until noon that Friday to submit their signatures. They all did. Swofford then added his.

The ACC announced the news the following Monday. That afternoon, Swofford boarded a flight to California, to the annual BCS meetings. The grant of rights agreement behind him, Swofford savored a celebratory glass of wine. He and his wife shared a nice dinner.

He’s hoping now for some calm. There are still important matters ahead. The ACC’s spring meetings convene soon, and Swofford and the league’s leaders will discuss bowl tie-ins and, undoubtedly, the prospect of an ACC channel. But for the first time in a long while, the specter of realignment won’t be present.

“Now it’s a case of getting back to some sense of normalcy,” Swofford said, though he admitted that after all this time, he wasn’t quite sure what normal is anymore.

Carter: 919-829-8944 Twitter: @_andrewcarter
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