Not a week goes by without news, quasi-news or non-news related to the Pac-12βs media rights negotiations and fight for survival.
Hereβs the Big Ten, reportedly meeting with Oregon and Washington representatives to assess βcompatibility.β
Thereβs the Big 12, announcing a media rights deal earlier than expected.
Hereβs the University of California Board of Regents, debating the merits of UCLAβs move to the Big Ten.
Thereβs a popular media personality, reporting on imminent Pac-12 expansion.
The only entity not making news about the Pac-12βs future is the Pac-12. Aside from occasional comments by commissioner George Kliavkoff β and those are designed to provide context, not reveal actual news β the conference has been radio silent since the momentous mid-summer day when USC and UCLA bolted for the Big Ten.
But away from public view, Kliavkoff and his advisers are plowing forward in pursuit of a media contract that will make or break the Pac-12βs future.
The Hotline has written dozens of stories on the topic over the past four months, including the role Pac-12 Networks infrastructure could play in saving the conference, our vision for the future of the sport and a proposal to sign an all-in deal with Amazon.
But with the process closer to the end than the beginning, this seems like the right time to step back and assess the basics.
The Big Ten threat
The chief obstacle to Pac-12 survival has always been another round of Big Ten expansion that targets Oregon, Washington, Stanford and Cal.
We do not believe the formation of a Big Ten western division is imminent, for three reasons:
Big Ten presidents donβt have the appetite to destroy the Pac-12.
Big Ten media partners donβt have enough cash available to support four more schools.
Remaining West Coast options donβt carry media valuations (as a collective) that make them accretive for the Big Ten.
To be clear: Nothing is official until (unless) the Pac-12 presidents approve a media contract and sign a grant-of-rights agreement.
But the Big Ten appears likely to stand down this fall, leaving Oregon, Washington and the Bay Area schools with no option but to remain in the Pac-12.
(If youβre pondering the Big Tenβs long-haul strategy, consider the potential for expansion into Florida. Itβs the third-most populous state, and the Big Tenβs primary media partner, Fox, doesnβt have a foothold. Instead, the Sunshine State is ESPN territory through the ACC and SEC.)
The Big 12 threat
This has always been a secondary issue for the Pac-12.
We believe Arizona, ASU, Colorado and Utah prefer to stay in the Pac-12 β their alumni bases are on the West Coast, after all β rather than join a conference rooted in the Southern Plains.
That calculation would change if the revenue disparity were transformative, but all signs point to the Pac-12 signing a media contract comparable to the Big 12βs recently reported deal of $31.66 million per school per year.
The Big 12 left money on the table by renewing its partnerships with ESPN and Fox rather than going to the open market in 2024.
But the move was based on a desire for security, binding the eight continuing members and keeping the four newcomers out of play (in case the Pac-12 developed a wandering eye).
The UCLA factor
Why hasnβt the Pac-12 moved quickly to sign a media contract?
We believe the conference is waiting on the University of California Board of Regents to make a final determination on UCLAβs planned move.
The regents have the authority to reverse the decision made by chancellor Gene Block, but that outcome seems less likely than forcing UCLA to subsidize Cal (for lost revenue) or doing absolutely nothing.
Clarity should come Nov. 17, when the regents are scheduled to take up the issue.
The timing
Kliavkoff is expected to present a media deal to the presidents for approval within the next month, according to sources familiar with the situation.
Essentially, the process will gain speed once the UC regents meet next week. (Completing any agreement without knowing UCLAβs fate would be foolish.)
Final approval might not be quick and clean given the differing long-haul goals for the various universities. But ultimately, an agreement β the 10 schools moving forward together β is the most likely outcome.
The dollars
The $30-something million question is how closely the Pac-12βs media contract will compare to the Big 12βs deal β and how far it will be from matching the Big Tenβs agreement, which is believed to be worth $1 billion annually, or $62.5 million per school.
If the Pac-12 contract falls short of the Big 12βs deal, it wonβt be by much.
Hereβs the challenge:
The Big 12 took a below-market price when it decided to renew early with ESPN and Fox, thereby lowering the valuation floor and potentially limiting the Pac-12βs upside.
We believe there are three outcomes for Pac-12 schools on the revenue front:
Approaching the Big 12 ($29 million-to-$31 million per year)
Slightly surpassing the Big 12 ($32 million-to-$35 million per year)
Easily exceeding the Big 12 ($36 million-to-$40 million per school)
(Note: Those estimates assume UCLA does not return and are only for broadcast rights. The NCAA Tournament and College Football Playoff account for approximately one-third of each leagueβs total annual revenue.)
The other essential component for the Pac-12 is exposure.
A decade ago, the conference chased the money (from ESPN and Fox) at the expense of exposure, and the athletic directors, whose advice was ignored, have been stewing about it for years.
Our best guess is Kliavkoff aims for a mixture of revenue and visibility and crafts a three-pronged agreement with ESPN, Fox and Amazon.
Also, donβt discount Apple being involved in some form or fashion.
Expansion plans
Contrary to a report Monday by media personality Dan Patrick, the Pac-12 is not offering membership to San Diego State this week.
Any decision on expansion will be made after the media rights agreement is signed.
In other words, the conference is weeks, and perhaps months away from solidifying its future membership structure.
While San Diego State makes sense on multiple levels and is the Pac-12 expansion target mentioned most often, the Hotline believes there is equally strong interest in adding SMU. The Mustangs meet the Pac-12βs academic profile, have gobs of money, provide access to an untapped media market and could enhance recruiting efforts in talent-rich Texas.
If we were handicapping the expansion landscape, SMU would be a co-favorite with SDSU.