For all the change across the Pac-12 footprint since last summer — one new commissioner, two new alliance partners, four new football coaches and 12 campuses aligned as they haven’t been in forever — one thing remains as it was.
The feeble revenue stream.
The conference is expected to distribute far less revenue to each member school in coming years than its peers across the Power Five, according to the Hotline’s post-pandemic analysis.
We calculated the average payouts for each conference over a four-year span to illustrate the Pac-12’s continued position of weakness — a position caused, almost entirely, by media rights contracts that are locked into place until the summer of 2024.
"We have 30 months left, and I’m counting every hour,’" commissioner George Kliavkoff told the Hotline recently. "I’m exploring every avenue possible (to make changes before the 2024 football season).
"I guarantee it will be fixed in 30 months, but I’m trying my hardest to do it quicker."
The timeframe for our analysis begins with the 2021 fiscal year and runs through FY2024 — in other words, the remainder of the Pac-12’s current media rights cycle.
Before we dive in, let’s be clear on the three buckets of media rights at the heart of the projections:
• March Madness payouts (funneled through the NCAA)
• Football postseason contracts (mostly the College Football Playoff)
• Direct payments from broadcast networks for regular season football and basketball games
Now, five broad assumptions:
No. 1: Because we cannot predict the number of NCAA Tournament bids or CFP participants, the Hotline is treating those revenue streams as fixed for each conference for the duration of our timeframe.
No. 2: For the direct payments from broadcast partners, we are using a 4% annual escalator.
No. 3: The College Football Playoff doesn’t expand before the 2024 season.
No. 4: Texas and Oklahoma don’t join the SEC before the 2024 season.
No. 5: The SEC’s new contract with ESPN for the ‘Game of the Week’ package (currently on CBS) doesn’t begin until the 2024 season.
Here we go:
FY21 (estimates unless otherwise noted)
Big Ten: $43.7 million per school
SEC: $41.4 million
Big 12: $34.5 million (official)
ACC: $29.4 million
Pac-12: $21.5 million
Assumptions: The Pac-12 estimate is based on revenue figures cited in FY21 NCAA financial reports from three schools (Cal, Utah and Colorado). Conference distributions vary incrementally by the school, depending on withholdings … The Big 12 announced its distribution totals for FY21 last spring. The amount represents a 9% year-over-year drop due to the pandemic and is the first year in which Tier Three rights have been pooled at the league level (for all schools except Texas and Oklahoma) … To estimate the pandemic hit for the ACC and SEC, we have used the same 9% drop experienced by the Big 12, because all three leagues completed close-to-normal football seasons … The SEC figure does not include $23 million-per-campus COVID support payments from the conference office that are advances on future media rights deals.
FY22 (estimates)
Big Ten: $58.8 million per school
SEC: $49.2 million
Big 12: $40.8 million
Pac-12: $36.3 million
ACC: $34.9 million
Assumptions: The Hotline generally applies a 4% escalator to account for annual increases in media rights payments. The FY22 figures are based off what would have been a normal distribution amount for FY21.
FY23 (estimates)
Big Ten: $61.2 million
SEC: $51.2 million
Big 12: $42.4 million
ACC: $40.3 million
Pac-12: $37.8 million
Assumptions: FY23 will mark the first full year of ACC Network distribution on Comcast following a deal announced in Nov. ’21 — after the football season. Although the specifics of revenue increase is unknown, we have assigned a $4 million bump to each school’s distribution resulting from the added Comcast subscribers in the footprint. Generally speaking, each in-market cable home is worth about $1 per month to a conference network, and Xfinity has a massive presence in Pennsylvania, Georgia and Florida.
FY24 (estimates)
Big Ten: $86.9 million
SEC: $53.2 million
Big 12: $44.1 million
ACC: $41.9 million
Pac-12: $39.3 million
Assumptions: The Big Ten’s current media rights deal expires at the end of FY23, so the 2023 football season will be the first under a new agreement. To account what should be a whopping increase, we first assigned 70% of the annual conference distribution to direct media rights; the remaining 30% includes the fixed payments (for our purposes) from the College Football Playoff and the NCAA Tournament. We then increased the direct media rights valuation by 60% to account for new contracts. That figure split the difference between the increase in NFL media rights from its new agreements (80%) and the increase in MLB rights from its new deals (40%), plus the underlying assumption that football is more valuable than baseball — especially when you have the ratings machine known as Ohio State available 12 times a season. So in raw numbers: 70% of the FY23 distribution is $42.8 million. A 60% increase there becomes $68.5 million, plus the fixed indirect media rights (CFP and NCAAs) from the FY23 amount pushes the total to $86.9. Please note: We did not include a signing bonus that could be paid in FY24, nor did we account for a differential in new media money between Tier One partners and the Big Ten Network.
Totals FY21-FY24 (estimates)
Big Ten: $250.6 million
SEC: $195 million
Big 12: $161.8 million
ACC: $146.5 million
Pac-12: $134.9 million
And finally …
Four-year deficit for each Pac-12 school compared to peers in the …
Big Ten: $115.7 million less
SEC: $60.1 million less
Big 12: $26.9 million less
ACC: $11.6 million less
What can be done? Not much with the Pac-12 locked into its distribution contracts through the spring of 2024.
Any revenue increases not tied to media deals or playoff expansion will assuredly come on the margins.
