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What recent conference realignment news means for the ACC, NC State

With the news Monday that Texas and Oklahoma will not extend their grant of rights in the Big 12 beyond 2025, conference realignment in major college sports has become a present reality.

Both the Longhorns and Sooners athletic programs are planning a transition to the SEC, which would make what is already the most powerful conference in college sports even more powerful.

With the loss of Texas and Oklahoma, the news is likely to result in being the kiss of death for the Big 12 conference.

The remaining Power Five conferences, which include the ACC, Big Ten and Pac-12, are now at crossroads where they could choose to expand or stay put and hope for the best.

But those leagues are now forced to at least consider expanding to keep up with the inevitable increase in per-team payouts the SEC will now be able to offer with its new big-name additions.

If they aren't able to expand, those conferences, most notably the ACC and Pac-12, could face the same reality the Big 12 is now facing in the not-so-distant future.

So what does this mean for the ACC and NC State? We dive deeper:

ACC Commissioner Jim Phillips
First-year ACC commissioner Jim Philips addressed the media last week at his first ACC Kickoff since taking the job. (Grant Halverson (ACC))
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Why the ACC should be concerned 

With the news of Texas and Oklahoma's eventual departure from the Big 12, the ACC has to self-reflect to calculate its own vulnerability ahead of the impending conference realignment that is sure to follow the Big 12 news.

Could the ACC be at risk of losing any of its 14 full-member schools? For now, the answer is no. But depending on how Texas and Oklahoma's exodus from the Big 12 takes place, the league could find itself in a vulnerable position.

Currently, all 14 of the ACC's member schools are under a grant of rights through 2036 that would make a departure nearly impossible based on the financial consequences it entails. If a member school wanted to leave the league for another conference, the ACC would have the school's media rights for all revenue of homes games through 2036.

Texas and Oklahoma currently have a similar deal with the Big 12 through 2025, but both schools announced Monday that they will not be extending those agreements beyond that year.

Where those two schools' departures could impact the ACC is based on whether or not they will attempt to get out of that deal before 2025. If that is the plan, the next step would be to legally challenge the Big 12's grant of rights deal.

From there, the Big 12 could attempt to settle out of court. If it didn't, a judge would decide whether or not the grant of rights deal is enforceable. And if the judge decided it wasn't, that decision could set a new precedent that would essentially make any other grant of rights deals obsolete.

This is where the ACC should be concerned. The league's grant of rights deal is the only thing protecting the conference. Without that, the 14 member schools could become free agents that could entertain suitors from other leagues.

Based on the ACC's current media deal and subsequent per-team payouts, the league will have every reason to be concerned if the grant of rights deal were to become obsolete.

The league's media deal with ESPN, which operates the ACC Network, is the lowest of all of the Power Five conferences when divided into a per-team amount. Subsequently, the league's annual per-team payout, which also includes revenue from non-media sources, is among the lowest of the Power Five and lags far behind the SEC and Big Ten.

Here were the reported per-team payouts for each of the Power Five conferences from the fiscal year 2019, per USA Today:

Big Ten (~$55.6 million)

SEC (~$45.3 million)

Big 12 (~$38.2 million - $42 million)

Pac-12 (~$32.2 million)

ACC (~$27.6 million - $34 million)

The name of the game in conference realignment is maximizing revenue. If a scenario presents itself that could make the involved parties more money, it's a possibility. If that isn't the case, it won't happen.

This is why the immediate future is so important for the existence of the ACC. For now, the league is protected. But it's also not out of the question that the conference's current legal protections could cease to exist before 2036.

If the grant of rights deal became impotent, the league would have to put itself in a more advantageous financial position for its members to keep the conference intact. If it does nothing, schools will be attracted to join other conferences, which by that point, would likely be able to offer double or even triple that amount of per-team revenue than the ACC currently can.

But the ACC is also locked into its current deal with ESPN, which extends into the 2030s. That media deal is the primary driver of revenue for the annual payouts, so the only way to increase the conference's revenue enough to significantly boost the per-team payouts is to get back to the negotiating table with ESPN. And the only way that is possible is to expand the league, which leads to our next topic.

The Notre Dame factor  

The easiest answer to the ACC's financial debacle is to add Notre Dame as a full-time football member of the league.

That's easier said than done, but there really isn't a positive outcome for the ACC that doesn't involve Notre Dame joining the league.

Overnight, the Fighting Irish would become the most financially valuable football member of the ACC if it were to join.

According to a study in The Wall Street Journal from 2018, Notre Dame was the fifth-most valuable football program in college football. Of the current ACC schools mentioned in that study, Clemson was the highest-ranked nationally at No. 26. NC State was No. 46.

But the question isn't whether or not the ACC should add Notre Dame as a football member. If it could, the league would add the Irish tomorrow.

Rather, the question is whether or not Notre Dame will choose to join a conference. Or more specifically, will the Fighting Irish agree to become a football member of a conference.

Notre Dame is already a member of the ACC in all sports except football and hockey. Because of that, it's hard to imagine the Irish going to any other conference unless the ACC began to crumble like the Big 12.

From a financial angle, however, football membership is by far the largest element of joining a league. Notre Dame may have begun the process of becoming culturally acclimated to the ACC years ago when it became a part-time member, but if the finances don't make sense, the Irish football program won't be joining the league.

Notre Dame is at a perplexing crossroads itself.

For over a century, the Irish have valued their football independence, and it's worked out well for them so far. Notre Dame is as synonymous with college football as Coca-Cola is in the soda industry.

But can an independent football program continue to thrive in 2021 and the decade ahead?

With the emergence of the SEC becoming a super league with the additions of Texas and Oklahoma, most decision-makers in the college football world believe a split from the NCAA is a foregone conclusion.

Other conferences will poach the remaining programs from the Big 12, and they may look at the Pac-12, ACC and AAC next. That will form a collection of surviving super leagues, who would then break away from the NCAA to operate as they choose and to keep all of the profits for themselves.

At the moment, Notre Dame has the leverage to create an advantageous deal for itself with the ACC. With the recent emergence of the 12-team College Football Playoff model, however, the program doesn't need to join a conference for now.

By far, the winner of a move to a 12-team playoff is Notre Dame. Because that model would have several open slots for at-large bids outside of five automatic conference champion qualifiers, a two-loss Fighting Irish program could become an annual mainstay in the playoff. And if your football program is in the College Football Playoff every year, your athletic department doesn't have to rely on conference media payouts to pay the bills.

Whether or not Notre Dame bites the bullet and joins a conference will likely come down to the playoff model. If the 12-team model becomes official, it's hard to imagine the Irish joining a conference in the near future. But if the eventual super leagues box out an independent like Notre Dame by playing only conference games or adjusting the playoff model, the program would need to join a conference and will wish it had acted when it had all of the leverage.

Other options outside of Notre Dame? 

Whenever conference realignment comes up, fans and media alike become very creative in imagining what a future with super leagues could look like.

Rivalries, regional proximity and academic similarities, however, aren't what conferences are looking at in 2021 as it relates to expansion. The only thing that matters is the finances. The only reason a program will join a new conference is to make more money, and vice versa.

So what are the expansion options for the ACC outside of Notre Dame?

There are no programs in play that scratch the surface of the impact the Irish would make, but it seems likely the league would try to add one more team outside of Notre Dame to get to 16 teams.

The most logical candidate for that would be West Virginia. For one, there is interest from the Mountaineers, who according to The Athletic have circled the ACC as its preferred destination in the event they leave the dying Big 12.

West Virginia checks many boxes. It has a competent football program and a top 25 basketball program. The Mountaineers also have traditional rivalries with former Big East foes Syracuse, Pittsburgh and Louisville.

The ACC could also scalp the AAC of one of its top programs such as Cincinnati or Central Florida, who have built two of the top football programs in the country outside of the Power Five.

None of those schools, however, are likely to move the needle when it comes to getting the ACC back to the negotiating table with ESPN, which is the whole reason the league is considering expansion in the first place.

According to the same Wall Street Journal study that ranked Notre Dame the fifth-most valuable college football program in the country, Central Florida came in at No. 65, West Virginia was No. 68 and Cincinnati was No. 77.

For perspective, private institutions Boston College and Wake Forest came in at No. 62 and 65, respectively.

When it's all said and done, Notre Dame may not be the only program the ACC targets to expand its league, but it's certainly the only one that matters in the long run.

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