“You come at the king, you best not miss."

PAC 12 Conference News
1

I have a two-part strategy for saving the PAC that some of you may like and others may hate. It’s written like it is going to the PAC for consideration. I’m just looking for input…

Part 1 is an unannounced agreement among these schools to form the core of a PAC 8-9-10:

Oregon State
Washington State
Boise State
Fresno State
San Diego State

Part 2 is to attempt to convince the 4-corner (4-C) members to reverse course and to stay in the conference:

Arizona
Arizona State
Colorado
Utah

I believe that the PAC 2 should take a run at recapturing the 4-C members because, if the money is sufficient (and I believe it would be), there are several reasons that it would make sense for them to return.

  1. From everything I read, the 4-C members didn’t really want to leave the PAC 12. When the PAC looked like it was imploding, everybody ran for a life raft – and that’s all the Big 12 ever was to these schools; a life raft, not a goal. As of now, they have no loyalty to the Big 12 – and they do still have considerable loyalty to the PAC.

From an article in this week’s “The Athletic”, “(Arizona President) Robbins absolutely loved the Conference of Champions. It’s heartbreaking to him to think about this iconic league, with more than 100 years of history, possibly going away…” He’s not the only President to have made such comments. The 4-Cs didn’t want to leave and, if you can find a stable and economically feasible alternative to leaving, I believe that they would consider calling the whole thing off.

  1. As I understand it, the 4-Cs have yet to formally leave the PAC – and I don’t see how they can until the lawsuit is resolved – which means to me that they have not formally joined the Big 12. As such, they are not yet subject to exit fees or grants of rights problems if they change their minds and stay in the PAC.

Colorado has apparently signed an agreement to join the Big 12 and, as part of that agreement, they have received a $2.5 million signing bonus. Utah is reportedly working on a similar agreement – but it is not finalized and there is no word on what the Arizona schools have done or may yet do.

I’m hoping that the agreement does not bind the 4-Cs to the Big 12 so strongly that it is cost-prohibitive to remain in the PAC. If it is not, if there are no prohibitive financial or other penalties or restrictions tied to it staying in the PAC, then I don’t believe that the signing bonus would be a significant impediment.

  1. The coming 12 school college football payout is (for now at least) paid per conference and then the money is divvied up among the conference members. As it stands today, there is no adjustment made for conference size. If that doesn’t change, then the payout for the 4-Cs, as members of this PAC 8 or PAC 9, would be roughly double the per school payout of a 16 or 18 member Big 12. It sounds like adjustments will likely be made but unless they go to strict adjustment based on membership size , staying in the PAC could be worth several million dollars a year each to the 4-C members – especially come 2026, when the contracted payouts are expected to skyrocket.

  2. Further, while I have no idea what the amount is, I understand that the PAC’s net assets are significant. If the 4-Cs leave, they lose those assets to the PAC 2 members. But if the 4-Cs change their minds and stay in the PAC, then they would share in those assets – to the extent that they are shared rather than spent on conference operations. (Perhaps there are funds there that could be used to pay back any “signing bonuses” described above.)

  3. It was important to the 4-Cs to maintain a presence in the Pacific Time Zone and particularly in the state of California. They wanted to maintain a connection to their alumni bases, both athletically and academically. And they wanted to maximize their recruiting opportunities and television presence. So far at least, the Big 12 has failed to expand into the region.

  4. It’s early, but this PAC 8-9-10 may be a stronger football conference than the Big 12. Ignoring the 4-C teams for a moment, of the five proposed “core” schools in the PAC, three are ranked in the top 25. And of the 12 continuing schools in the Big 12, not one of them is ranked in the top 25. The Big 12 also has some bad losses, including two to the Sun Belt Conference. But even if the Big 12 is stronger than the PAC 8-9-10 at the moment, the three MWC schools are doing it with G-5 money and exposure and have considerable upside.

  5. And then there is travel. As Big 12 members, the 4-Cs will incur considerably greater travel time and expense and, more importantly, it WILL impact both academic performance and athletic performance. It is much easier traveling north-south with only one-time zone change than it is traveling east-west across two or three time zones. And members of non-revenue sport teams at some schools have already objected publicly to the new travel demands: “That isn’t what we signed up for.”

A western regional alternative to the Big 12 / Big 10 would aid in recruiting for all sports. Most parents, and many students, realize that the chances of going pro are limited and that a degree is more valuable than playing (or worse, not playing) on the biggest stage. A regional conference furthers academic performance and, if you are a star, the NFL will find you no matter where you are.

  1. Not insignificantly, instead of being partly responsible for the demise of the 100+ year old PAC 12, the returning 4-C members would be able to claim much of the credit for saving it.

The big question, of course, is money. Playoff money is unclear but would probably be materially better in the PAC. Television rights and television money are above my pay grade. I don’t know what limitations ESPN and Fox are operating under and I know little about streaming.

But…

  1. Going forward, ESPN has very little presence in the Pacific Time Zone. Stanford, who just lost to Sacramento State, and Cal are not attractive TV draws in the west – especially when playing a largely east coast, ACC schedule. Further, if the 4-Cs were to stay in the PAC, ESPN would lose their only Mountain Time Zone product as well and would be left with almost no college football in the Western US. I can’t imagine ESPN not being a very interested bidder for the broadcast rights of the only western power conference. I just don’t see them writing off 80 million people; 25% of the nation’s population.

  2. I am less certain of Fox’s interest in broadcasting the new PAC 8-9-10. They have the four PAC/B1G members and part of the MWC package – but you’d be taking their top three MWC members. If the 4-Cs stayed in the PAC, Fox’s entire western product would consist of the 4 B1G members and the generally small market remainders of the MWC. I can’t imagine Fox allowing themselves to be so weakly positioned without a fight.

The negotiating landscape has changed considerably from even just a month ago. It is entirely possible that you could have two linear bidders and a whole new negotiating ballgame. That would tend to drive the contract value up above recently rumored numbers. While I don’t have the expertise to quantify what a TV deal would fetch for this new PAC 8-9-10, based on what I’ve read over the past year plus, in this market, this just “feels like” a $25+ million per school conference. That valuation, along with the additional playoff money and with the other advantages named above, may be sufficient to recapture your 4-C members.

I understand that you are talking with the MWC about a promotion/relegation relationship. That’s creative but it’s also an admission of defeat, and it is no guarantee of power conference status. I hope that you will make a run at retaining your 4-C members before making the MWC deal. This new PAC 8-9-10 would make for a much stronger conference than would any relationship which included the mid-to-lower level MWC members. Eventually, if not immediately, it would make a stronger football conference than the Big 12 and most importantly, not only would the PAC survive, it would survive as a top-level conference.

One last thought… If you recaptured your 4-C members, you wouldn’t need to win the lawsuit against the departing PAC schools. You’d have the votes needed to prevent the departing members from gutting the conference and liquidating the assets.

I have this visual image of the Big 12’s presidents, smugly sitting around, patting each other on the back for having taken the PAC 12’s kill shot. But they left the door open and I think that they are vulnerable to a surprise counter attack. With headlines out there like “How Brett Yormark Took Down the Pac 12”, wouldn’t you like to be a fly in the wall when you announce the return of the 4-Cs?

As the line goes, “You come at the king, you best not miss.” When the Big 12 left out the west coast, and especially California, they missed and they missed badly. Hopefully you can make them pay for it. Best of luck to you.

Thank you for your consideration and, if you think this missive has merit, for making certain that it gets into the proper hands.

2

The PAC 2 lawsuit is the possible game changer. It will be interesting to see how the Federal District Court opines on it.

The truth is sometimes the “Big Money” ain’t enough money.

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3

Technically, with what I am suggesting, they would not need to win the lawsuit. The P-2, plus the 4-Cs, would be a voting block sufficient to defeat any plans to liquidate the conference and split up the assets.

4

A large part of the problem is that the PACX without USC, UCLA, Oregon, and Washington is not the conference with 100 years of history. Replacing them with Boise, Fresno, and SDSU does not restore the conference of champions.

I agree that your group of teams looks as good as next year’s B12 if you take the media rights out of the equation.

The 4 Cs took a sure thing rather than a possibility. Your plan would have to be a sure thing or it will not succeed IMO.

5

First, thank you. I appreciate constructive comments. I realize that this is a long shot and I don’t really expect to convince anyone to do this – there is a lot of water under the bridge to bring this up now.

But, still, counterpoints…

  1. I agree – “the PACX without USC, UCLA, Oregon, and Washington is not the conference with 100 years of history.” But at the same time, the Big 12 without Oklahoma, Texas and the schools that they’ve lost previously are not the real “Big 12” either. They have no ranked teams that are remaining in the conference. So it’s kind of a case of picking your poison. I think that my proposed PAC has greater upside potential than does the Big 12.

  2. I’m not saying that the 4-Cs made the wrong decision at the time. Hell’s bells, I wanted Fresno in on that. But now that the dust has settled, I think that the landscape looks materially different than it did when everybody bolted for the door.

I agree, however, it only works if the money works. While SDSU, Boise and Fresno don’t replace USC, UCLA, Oregon, and Washington from a TV viewer standpoint, neither do most of the Big 12.

And if ESPN thought the PAC 12 with those schools to be worth (as rumored) $25 mil, then you would expect this new PAC 9 ( or whatever) to be worth materially less. But I’m thinking that the negotiating environment is hugely different than when they valued the PAC at $25 mil per school. If the 4-Cs stay in the PAC, then ESPN has almost zero college football product in the western US. And all FOX has is the 4 B1G schools and the bottom dweller / small market remainders in the MWC.

So, I may be wrong, but my argument is that the scarcity or product in the western US more than outweighs the drop in prestige from the change in membership. Instead of no linear bidders on your TV deal, I think you’d have two linear bidders competing against each other.

I just can’t believe that ESPN would literally write off 25% of the US population over a few million dollars in contract value. And I can’t believe that Fox would be satisfied with such a minimal product inventory. You’re not likely to get both of them needing product at the same time very often.

Anyway, again, thank you for contributing. I’m not so much trying to sell this to everybody as I am trying to find the fatal flaws – if any. Everybody’s input is hugely appreciated.

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6

With the shifting media portals and the shift of Cable TV - Satellite TV to Internet Streaming, it is likely we may see many (if not all) of these media rights deals fall apart due to the revenue streams drying up. We’ve seen it with MLB and the NBA. Given the ways the PAC 12 negotiations of media rights kept moving around (and not in a good way) it calls into question a lot of the other deal’s ability to actually pay out over the terms of the contracts.

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7

I would love it if they somehow walked back all the Pac12/Big10/Big12 (and, I guess, ACC) crap that happened this year and keep the Pac12 alive with a new TV deal and a few new teams.

Unfortunately, I have no say in any of this.

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8

Two points:

First, I don’t see any ESPN/Fox or other major media contracts falling apart. Revenues will not dry up because the broadcasters have contractual obligations and the assets to fulfill them. However, there could be the kind of major shift that you suggest over time and these linear deals may not get renewed at their current values. But that’s 2030’s problem.

Second, I’d note that if a new PAC 8-9-10 TV deal with ESPN or Fox were to fall apart, then those broadcasters deals with the Big 12 would also fall apart. If one goes down, then they both go down.

9

I’d love to see Apple or some other group (NBC, ESPN/FOX) realize that this realignment is terrible for players/fans and go to all PAC12 schools and come up with a number that would keep the latest PAC12 together. I realize that is a pipe dream but with the PAC12 enjoying significant success this season strike while the iron is hot and make it happen.

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10

The point I was trying to make (and obviously booted it) is I am a believer these massive money GOR contracts are unsustainable to the major networks that wrote them.

Simply put, the projected revenues they used to come up with these figures didn’t take into consideration the escalating shrinkage of viewership purchasing cable and satellite services. The fact that Disney is considering selling ESPN - a financial keystone of its media empire due to ongoing losses should be sounding alarms to anyone with a contract with them. FOX is having similar problems with its platforms. In short, selling a GOR to “Boomer TV” (and budgeting against those projections) is probably a bad thing to do.

It is why the Utah Jazz, Phoenix Suns, and some other sports teams have packaged their GOR to local TV and internet streaming to avoid the exposure. MLS dumped TV outright for Apple +. In some of these cases, yes they are giving up millions by doing so; but given how the other platforms are falling apart. A planned revenue decrease (and more eyeballs watching the games - and yes it will be more eyeballs) is a better operational position than betting on a Paper Moon.

Honestly, I expect our stay in the BIG 12 to be a short one, as I do Washington’s, Oregon’s, Cal’s, ‘Furd’s, U$C’s, and UCLA’s in the B1G. In the end, the House of Cards will fall - hopefully sooner than later.

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11

This is an interesting, if also Hail Mary on steroids, proposal, in my view. The devil lies in the details and include what seem like the following likely show stoppers:

  1. TV money. You are correct that future revenue on existing contracts may be problematic. Even more so is the present. A key reason that the Pac floundered and collapsed was the payout differential and lack of guarantees. There was enough money left for one more good TV deal when the Pac started its negotiations. Fortunately for the Big-12 (and unfortunately for the Pac), Bret Yormark read the situation correctly and beat the Pac to the punch. But for that, the conference roles are likely reversed today.

  2. The Pac’s final (only?) deal had the potential to exceed what the Big-12 was guaranteed, including that same amount for adding up to four teams. Theoretically, it could have exceeded the SEC’s payout, if enough people subscribed. Realistically, that was so unlikely that the Big-12’s bird in the hand was more than enough to carry the day. As the Steve Miller band put it, “take the money and run,” which the four corners schools did.

  3. As a result, the four corners schools each get $31.7 million year/in the Big-12. If they leave, that presumably frees up that much to possibly go to the Pac, which is to say $126.8 million year. However, this reconstituted Pac will split that amount 9 ways (10 if you count the league office). That translates to $12.26-14.09 million per team. It also assumes that ESPN and Fox are willing to pay out that much and don’t tighten their purse strings in the bidding that will ensue if the 4 corners leave. As you mentioned, there may be future revenue constrictions so there’s no guarantee that either network is able or willing to transfer that amount from the Big-12 to the Pac.

  4. There’s also nothing guaranteed up front, which puts the Pac in a tough spot and susceptible to low balling, even if the networks have the cash to pay that much. If the Pac-10, prior to implosion, was in a weak position, this new Pac-9 will seemingly be in an even worse bargaining spot.

I could be wrong or incomplete in these conclusions. Furthermore and as a committed capitalist, if such a venture can succeed, have at it. Who am I to say this is any more far fetched than the notion, little over two years ago, that the Pac would effectively cease to exist? If someone had told me that in the spring of 2021, I would have concluded that some sort of powerful hallucinogen was at work.

12

Okay, I tend to agree with you that linear is fading as a provider generally. But what’s next?

Will conferences stream their own product and, if so, why? I mean schools don’t need conferences to make streaming deals. Michigan, for example, could make more money streaming their own product than they would with a B1G streaming deal where they had to carry Iowa (or whomever).

I also don’t think that these super conferences will last for long. They are short term constructs designed to maximize income in the short term without regard to all the other factors that make a conference great.

13

[quote=“SPCoug, post:11, topic:8794”]

  1. TV money. You are correct that future revenue on existing contracts may be problematic. Even more so is the present. A key reason that the Pac floundered and collapsed was the payout differential and lack of guarantees. There was enough money left for one more good TV deal when the Pac started its negotiations. Fortunately for the Big-12 (and unfortunately for the Pac), Bret Yormark read the situation correctly and beat the Pac to the punch. But for that, the conference roles are likely reversed today.[/quote]

Sorry to split my response up but I’m not entirely familiar with this script.

As respects your first post, I don’t entirely agree with you. I think that the PAC used Yormark’s early deal as an excuse for their own lack of success. They wanted too much money for their TV rights and held on while the market fell, hoping to get it. It was like trying to sell a house worth $1 mil for $1.3 mil and holding onto that number while the economy tanked and the real worth fell to $800,000. From everything that I’ve read, they could have more-or-less matched the Big 12’s $31.7 mil per school deal but because they HAD to beat it because WE ARE THE PAC 12, the market went to hell and their buyers lost interest.

But now, I think, the markets would be very interested. ESPN cannot NOT bid when they have zero college football product in the Pacific or Mountain Time zones, except Stanford and Cal – who don’t draw flies when playing western competition – much less when playing east coast schools that are of no interest to those of us in the west. They are not going to write off 80 million people; 25% of the nation’s population.

Ditto with Fox, who (if you added Boise, Fresno & SDSU) would leave them with nothing in the west but USC, UCLA, UO, UW and the small market remnants of the MWC. I don’t see them being comfortable with such a limited western inventory.

14

That’s the problem, in my view. The goal wasn’t to get the best deal that they could get – the goal was to beat the Big 12’s deal, no matter how long it took. They made that clear a dozen times and there were quoted officials who said such things as “beating the Big 12 would be a slam dunk”. And in the meantime, the market tanked.

I read somewhere that the PAC 12 has “X-many” living alumni in the west and, in order for the Apple deal to work, they would need an unrealistically high numbers of subscribers. So I don’t blame the 4-Cs for bolting. I would have done the same thing.

But the negotiating environment now is entirely different and, I believe, that you would have at least one and probably two linear broadcasters (as well as APPLE, if you wish) bidding.

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15

I’m the first to admit that I am no expert, but I am much more optimistic than you are. Because of the changed negotiating environment, I think that $25+ mil per school is very realistic. It’s a supply and demand question and there is a dearth of supply right now in the west.

Obviously, before a deal like this is done, the PAC would have to begin to negotiate with both ESPN/FOX on the hypothetical – what would adding these schools generate in terms of TV revenue. If your number is right, my idea is DOA. If my number is right, then there is reason to keep talking…

16

If you have two linear broadcasters interested, then there would be no lowballing. It doesn’t mean that you could get greedy – a strategy that has been proven not to work – but I think you’d be able to get $25-$30 mil per school.

And obviously, I could be wrong too. I’m not seeking to get this plan adopted; I’m seeking to get it an audience with the Presidents/ADs in this proposed conference.

If anybody could help with that, please feel free…