Pac-12 financials in danger as revenue sports struggle

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With the launch of the ACC Network this fall, every one of the Power Five conferences has dipped its feet in a conference-oriented network, but only one of them struggles in a fashion with which Cal fans are so intimately familiar. To put it bluntly, the Pac-12’s network — along with its finances — is in shambles, and Commissioner Larry Scott is only making it worse.

The Pac-12 conference distributed $31.3 million to each member school in 2018, which is behind the $36.5 million per school in the Big 12, and a far cry from the $43.7 million and $54 million per school in the SEC and Big Ten conferences, respectively. This is slightly ahead of the $29.5 million per school in the ACC, a conference that has added four members and lost one since 2013, but that is expected to change with the launch of the ACC Network.

This boon is already going to a conference that has seen an 11.1 percent revenue growth from 2016-17 to $464.7 million. Meanwhile, the Pac-12 revenue has stagnated in the last three years, rising from $488 million in 2016 to $509 million in 2017 only to fall again to $497 million in 2018. Similarly, the Pac-12 Network only generated $2.2 million per school last year and is projected to remain flat this year while the Big Ten Network generated four times that.

The Pac-12 Network, unlike other networks, is independently owned by the Pac-12, which means that it is very difficult to get contacts with big TV providers. The ACC Network, owned by ESPN, and the Big Ten Network, owned by Fox, are both available on Verizon Fios, DirecTV, YouTube TV, Hulu live sports, PlayStation Vue and online streaming sites operated by ESPN and Fox, respectively. The west coast network, however, is available only on Dish, Frontier FiOs, Sling TV, and fuboTV. The Pac-12 Network is only in an estimated 19 million homes as opposed to 59 million and 51 million from the SEC Network and the Big Ten Network, respectively.

Even as the Pac-12 Network is struggling — it was dropped from AT&T U-verse at the end of 2018 — Scott continues to bleed money from the conference. In 2017, he made just under $5.3 million, which is more than $1 million higher than the commissioners of the SEC, Big 12, and ACC. His salary in 2018 was more than the entire conference will earn when the payouts are finished from the 2018 NCAA March Madness tournament. 

Scott has also drawn criticism from other financial dealings with the conference. He received a $1.9 million reallocation loan that he has yet to repay, and in 2019 he allegedly stayed in a $7,500 a night hotel room that included a private butler in Las Vegas for the Pac-12 Basketball tournament. This alleged extravagance is completely inappropriate for the commissioner of a conference that is struggling in almost any financial measure.

Individual schools are also feeling the heat. Washington borrowed $85 million to renovate the football stadium and Cal is $440 million in the hole after its own renovations

The Pac-12 also sold most of its marquee football matchups to ESPN or Fox until 2024 when it will be able to renegotiate its network deals, but unless the conference athletics improve dramatically in money-making sports, it is unlikely that it will get a better deal. The last time a Pac-12 team made the College Football Playoff was in the 2016-17 season, and with this year’s favorites Washington and Oregon taking early losses, it might be another year with no playoff team. Just making the playoff secures a $6 million payout to the conference, not to mention the value of playing on the biggest stage in college football.  The lack of a championship-caliber team that every other major conference has not only hurts the entire conference financially but also in other ways, such as less press coverage and harder recruiting. 

Men’s basketball is the other big money-maker for schools, and the Pac-12 is struggling there just as much as football. Each game played in the annual NCAA March Madness tournament gives a conference one unit, which is paid out over six years with an annual increase of 3 percent. In 2019, a unit is worth $280,000. Last year, the Pac-12 was paid for 64 units, which is dead last for Power Five conferences. Since a 10-unit 2013 season was replaced by a seven-unit season in 2019, next year the Pac-12 will be paid for only 61 units, just one higher than the Big East conference.

The Pac-12 needs to change its game plan for it to become competitive in revenue with the other major conferences. Finding a way to rework its network deals and improve its athletic performance is critical to its success, and it is unclear if Commissioner Scott is up for the challenge.

Trilok Reddy covers men’s tennis. Contact him at [email protected].