As Pac-12 crumbles, dollars win again – in a landslide
No one wanted to see the Pac-12 Conference implode. No one wanted to see a Conference of Champions that produced UCLA basketball and USC football dynasties and countless other indelible memories through the annals of its 108-year existence be reduced to what it is today: a fast-eroding property that fans – as of now – have no way to even watch on TV after next July 1.
Whether the Power 5 conference even exists by that time, and, if so, in what form, is in doubt. But what this frenzied realignment cycle has hammered home is this: In a battle pitting the relentless pursuit of escalating TV dollars against whatever landscape may be in the best interest of the broader collegiate sports enterprise, the latter stood no chance.
Dollars win again – in a landslide.
The two biggest brands in a Pac-12 post-USC and UCLA world – Oregon and Washington – are now headed to what will be an 18-school Big Ten superconference, stretching from Seattle to Southern California all the way to Central New Jersey.
Arizona is poised to follow Colorado and help Big 12 Commissioner Brett Yormark double down on his strategy to bolster what is already the nation’s premier college basketball conference. Also in play is the potential – if not likelihood – that Arizona State and Utah follow in lockstep to what would be a 16-member Big 12.
A Big 12 source with direct knowledge of the league’s strategy told On3 that 14 members are not a “hard stop” if they see value in additional schools. Expanding to 16 would likely warrant additional conversations with TV partners – at least with FOX Sports if not ESPN – regarding increasing the financial value of the deal in order to deliver the Power 5 school’s full revenue shares.
One longtime college administrator told On3 that the dizzying swings in realignment momentum – or at least perceived swings – over the past 48 hours were rooted in the fact that no one wanted to be the one to pull the string, prompting a century-old pillar of the college sports world to fall like a house of cards.
“Everyone wants plausible deniability,” one TV source said. “No one wants to be the one.”
One veteran ACC athletic director even told On3 on Friday morning: “If we can help support the Pac-12, I’m all for it. College athletics needs the West Coast league.”
But what awaits those departing in the mass exodus, of course, is stability in an unsettled economic and challenged media rights climate. Arizona and Colorado are expected to receive the Big 12’s full revenue share of $31.7 million annually.
Oregon and Washington are expected to receive a partial share initially in the Big Ten, perhaps $40 or more. On3’s Pete Nakos was told that involved stakeholders are willing to boost that amount to seal the deal. [A full revenue share for Big Ten members is in excess of $60 million annually, by virtue of the league’s landmark $7 billion-plus rights deal with FOX Sports, NBC and CBS.]
The point: Even a partial revenue share in the Big Ten likely trumps the full-revenue dollars a school would receive in the Pac-12.
Pac-12 didn’t understand ‘linear is critical’
The proposed media rights deal each member assessed during multiple meetings this week with Pac-12 Commissioner George Kliavkoff – in addition to countless calls to lawyers and consultants – was, at best, high risk and, at worst, severely underwhelming, according to several TV sources.
After a protracted year-long negotiation, Kliavkoff’s best deal unveiled to university presidents was heavy on streaming. The proposed Apple TV+ partnership included a baseline annual revenue figure plus subscription-based incentives.
Among the problems, industry sources stressed: There was no guarantee that there’d be enough subscriptions added to boost the annual revenue distribution even close to the $31.7 million that Big 12 members will receive. Plus, with annual rights revenue contingent on subscriptions, it would be impossible for school administrators to accurately budget.
What’s more, the absence of a linear TV network – much less one that dominates the rights deal – raised massive red flags. Long-entrenched fans – not to mention recruits – are accustomed to easily finding Pac-12 games on linear networks, which offer far greater brand visibility and incessant league promotion.
Neal Pilson, the longtime former CBS Sports president, told On3 that he estimated the Pac-12 audience would diminish by 50% with a heavy streaming deal.
“Linear is critical,” one conference commissioner told On3. “Nobody wants to be strictly streaming.”
One veteran media rights source said Friday that the Pac-12 pitch likely involved asking members to maintain confidence that Apple would purchase a stake in and become a strategic partner with behemoth ESPN. While ESPN has explicitly stated it will need to be more selective with media rights choices in the coming years, the network is actively looking for an entity – be it a Big Tech company or a sports betting operator – to purchase a stake in the network.
“If that happens, there’s your promotional piece – now you’re back in business,” the source said. “Why would Apple be willing to spend $200 million for the Pac-12 if they weren’t going to promote them? They have another plan. You’re basically laying out a plan that, to me, makes sense. But it’s all about, can you get them to buy into that as the plan without anyone from Apple saying that is the plan?”
A concern about ‘who has got the leverage’
The moves underway also underscore the oversize influence TV networks may have in helping to shape the college sports landscape.
With deals with the Big Ten, the Big 12 and Mountain West Conference, FOX Sports now has a dominant college football stronghold. Not to mention it is in the process of securing coveted markets up and down the West Coast: Southern California, Seattle, Portland and perhaps the Bay Area if California and Stanford ultimately join the league to round it out at 20.
Just how much sway networks have in the realignment puzzle has long been – and perhaps increasingly been – a subject of interest and concern among many stakeholders. Remember Bob Bowlsby‘s pointed criticism of ESPN’s alleged involvement in luring Texas and Oklahoma from the Big 12’s clutches into the SEC umbrella two years ago.
There can be an appearance, at the least, that the networks are pulling the strings.
“When FOX is sitting at the table, there is a concern about who has got the leverage,” a veteran college administrator told On3. “They are looking at that last window. That 10:30 p.m. window is valuable on the West Coast.”
Over time, the escalation of media rights revenue got so big that some conferences and some school administrators, pressed the panic button in pursuit of a windfall to try to keep pace. True, many upper-echelon schools generate a lot of money. But they rarely lack a thirst for more. There’s also the fear of missing out (FOMO) element.
It became a zero-sum game. And commissioners, eyeing one another, know the game: You either poach, or you get poached.
‘Sounds horrible, doesn’t it?’
Some stakeholders question what is lost in the process. Age-old rivalries abruptly die. Traditions go by the wayside. What about the unique charm and quirkiness that is woven into the fabric of college athletics?
Increasingly in its place is a more professionalized configuration. The NFL has the AFC and NFC. College football is steadily marching toward an ecosystem of two superconferences. As some joke, you may as well take the Big Ten and SEC and rename them Fox and ESPN.
But with more money in the coffers of some conferences comes pronounced logistical challenges. Case in point: travel. Now we eye a world in which teams will make midweek cross-country trips from Seattle to New Jersey for games.
“Sounds horrible, doesn’t it?” a longtime college administrator told On3. “And the notion of regionalizing all sports except football and men’s and women’s basketball cannot withstand legal scrutiny via Title IX. Going to get sued if they try that. All current athletes in any school that changes leagues should get a free pass to transfer because the change is dramatic – not what they signed up for.”
‘Nobody is brokering compromise’
As dollars increasingly flow to some ever-expanding leagues, it begs the question: Who is the steward of college sports, charged with protecting and enhancing what’s in the best interest of the entire enterprise?
“No one,” said Rick Neuheisel, the former Washington football coach and current analyst on Full Ride on SiriusXM College Sports Radio, told On3 Friday. “Somehow, someway at least [NFL Commissioner] Roger Goodell‘s job description is to create consensus. There is nobody trying to create consensus. Nobody that is brokering compromise in college sports. There’s nobody doing that in college athletics.”
Neuheisel said that SEC Commissioner Greg Sankey is the closest to one because he views the landscape globally. But he also must protect the turf of the SEC. New Big Ten Commissioner Tony Petitti has said that he has two jobs: the day-to-day Big Ten job so the conference is best positioned for the future and also addressing the larger theme of college athletics in totality and the Big Ten’s position in it.
The industry current is moving steadily toward the superconference era, as one Power 5 conference is being torn asunder and others are expanding their footprints nationwide. For better or worse, the superconference era is coming.
“It’s easy to see that track – there’s no question,” Neuheisel said. “I keep hoping that the leaders of this enterprise will come to the conclusion and say, ‘It’s up to us to fix this and maintain the regionality and the charm of the game.'”
Don’t hold your breath. As one Power 5 conference facing a media rights crisis crumbles amid defections, this avalanche of realignment moves hammers home one thing: ESPN’s Tony Kornheiser has long quoted the late Don Ohlmeyer, the iconic TV innovator, as saying, “The answer to all your questions is money.”