The University of Louisville has been a part of the Atlantic Coast Conference since 2014. Louisville originally accepted an offer to join the ACC in 2012 as they were in conference limbo. In 2012, the Big East disintegrated and forced Louisville to join the American Athletic Conference, a Group of Five Conference that is still considered Division I.
The Louisville athletic program has been the red-headed step-child in conference realignment. They continue to be bounced around like a pinball from conference to conference, and it appears that scenario could very well happen again in the foreseeable future.
One year prior to Louisville joining the ACC, the ACC Commissioner agreed to a deal, in what is known as the Grant of Rights Agreement, with ESPN that would run through the 2026-2027 season. Unfortunately, the ACC renegotiated the deal in 2016, particularly surrounding the launch of the ACC Network, and extended the contract through 2036.
The reason this is unfortunate is that revenue will only continue to go up, inflation will most likely continue to go up, and there is no chance to reset the market with astronomical deals. The total value of the ACC contract is $400 million dollar annually with each of the 15 member schools receiving between $35 and $38 million dollars per season.
The 2016 renegotiation was massive for the ACC because it covered the member schools from leaving the ACC to join competing conferences. The 2013 deal did not include that kind of language. So, the main two reasons for the renegotiation were because ESPN introduced the ACC Network and to protect the ACC from losing its schools.
In the 2016 contract, per a report, the estimated penalty for a school leaving the ACC is an estimated $120 million dollars of financial penalties, in other words, a “buyout” of their share of the contract. And that number is three times the amount that each school receives annually.
All of that is a backdrop heading into the ACC spring meeting in Amelia Island, Florida.
Per reports, the meeting got heated between a couple of athletic directors, but the main storyline that emerged from the Sunshine State is the identification of the “Secret Seven” schools who are seeking a possible exit strategy from the ACC. Those seven schools are Clemson, Florida State, Miami, North Carolina, North Carolina State, Virginia, and Virginia Tech.
In Louisville’s case, that news was nerve-wracking because if the ACC lost these seven schools, then the ACC would be in shambles and Louisville would be in an incredibly tough situation. Yet again, they would be in a scenario like they’ve been before where they are on the outside looking in and needing to realign in another conference.
There have been rumors circulating among internet message boards that Louisville intends to join the group of seven, but it has not been confirmed. And if they were to depart from the ACC alongside these seven schools, then rumors are linking the University of Louisville to the Big 12, which would make the most sense with the options available.
The Big 12 Conference has several programs that are not too far from Louisville, KY, geographically, and they have a recent media rights deal that could benefit the Cardinals.
For context, the Big 12’s media rights contract runs through 2025 with a total annual value of $220 million dollars per year. After 2025, their new contract kicks in that will pay them out an annual distribution of $380 million dollars per year.
Oklahoma and Texas are scheduled to leave the Big 12 in 2025 also. But, Big 12 Commissioner Brett Yormark tempered the massive loss of those two schools with the additions of BYU, Houston, Cincinnati, and UCF. And now they could have the potential to add one or more of these eight schools that are exploring a departure from the Atlantic Coast Conference.
If you do quick math, then you would realize that $380 million divided over its members is only $31.6 million dollars per school, which is less than what Louisville is making now in the ACC, per reports. But, the difference comes, allegedly, from the additional money that they make from the NCAA College Football Playoff and the NCAA Men’s Basketball Tournament.
With those additions, it brings the annual school distribution to around $41 million dollars, per Iowa State’s Athletic Director. And that was on their previous deal that expires in 2025. Their new media rights deal will, allegedly, pay each school nearly $50 million dollars per year.
Huge day for the future of @CycloneATH and @Big12Conference - with CFP and NCAA this will bring our annual Big 12 revenue to close to $50M per school, up from $41M this year. Congrats to @brettyormark for delivering in the clutch. https://t.co/L2XZoDjwB9
— Jamie Pollard (@IASTATEAD) October 30, 2022
If Louisville were to leave, then the Big 12 would appear to be a great spot to land. But, the Big Ten and the SEC cannot be ruled out as potential landing spots either.
A brief overview of the legal battle that could ensue between the ACC and its member schools.
As stated earlier, the potential financial penalties that could result from a school’s buyout would be around $120 million dollars. However, that was on the low end of the spectrum. After all is said and done, the legal battle that would have to take place to even start the exiting process could result in approximately $500 million dollars.
However, there could be a loophole. Although it is not confirmed there is a possibility that if more than one school leaves the ACC at the same time, then financial penalties could dissolve, per report.
"“However, the identification Monday of those seven schools was yet another shot across the ACC’s bow. It’s possible — though not yet assured — if more than 50 percent of the conference’s membership leaves en masse, the grant of rights dissolves and financial penalties disappear. The ACC would certainly fight that argument in court rather than shrink into obscurity if eight schools depart, and FSU and Clemson form their own conference or apply for membership in the SEC.”"
There are still a lot of scenarios and a lot of hypotheticals, but it will be interesting to see how all of this shakes out and where Athletic Director Josh Heird decides to take the wonderful University of Louisville. If there is anyone I would trust with this decision, it is Josh Heird.