What's next for the Pac-12?
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It’s no secret that the Pac-12 has struggled on and off the football field as of late. The Pac-12 Network hasn’t reached protected revenue or carriage projections. The league has failed to produce a College Football Playoff contender or elite men’s basketball team for several seasons. Even after the next round of media deals, the conference is still projected to make less than the Big 12, not to mention the Big Ten, and likely substantially less than the SEC.
Without a fall football season, some Pac-12 schools may need to make substantial cuts as well. Stanford turned heads throughout the industry when they cut multiple sports earlier this summer. Most recently, Utah’s athletic department announced everybody would get furloughed, even the athletic director.
It’s critical for the Pac-12 to find ways to grow revenue over the next several years, especially from their media rights package. That’s going to require some out-the-box thinking.
The Pac-12 CEO group is reportedly looking for some of that thinking…outside of the conference. They’re reportedly looking at bringing in an outside consultant, somebody that would report to them, not Pac-12 commissioner Larry Scott. And that consultant might even look at overhauling the “entire structure and composition” of the Pac-12.
What does that mean? I asked a few experts
I reached out to Karen Weaver, a sports business professor at Penn, for her thoughts on the story. She told me that “this is all very dysfunctional to me. It looks like something is not going right between the presidents and Larry Scott. It looks like the CEOs are not trusting his judgment.” Given that Scott’s contract only runs through the end of 2022, and an early buyout has been rumored to at least be a possibility, this could be a sign that Scott’s position is very tenuous.
But not everybody sees things that way. Sports marketing and PR expert Joe Favorito saw things a bit differently. "
“I don't think this is unusual. Many large organizations and companies use consultants to better understand what they don't know all the time, even other athletic conferences. The fact that this group reports to the presidents, rather than Larry Scott, isn't necessarily a lack of confidence in conference leadership either. It could just be a desire for a second opinion. It's important for the Pac-12 to get these decisions right."
The next media deal is indisputably critical for the conference, but on the outside, it looks like they’re entering those conversations without much ability to completely change strategy. The league’s geographic footprint limits traditional television exposure, and doesn’t include as many die-hard college football markets as the Midwest or the South. High school football participation in California is declining, and the Pac-12’s footprint doesn’t produce as many elite high school football players as it used to, making it harder for the league to build strong depth or compete for national titles. And thanks to COVID, the recession, the struggles of the Pac-12 Network, and various institutional-level choices, several Pac-12 schools are facing deficits, and need cash now.
But maybe the Pac-12’s hand isn’t all bad
Favorito still sees reasons to feel bullish about the Pac-12. “You have tremendous research universities, universities with deep ties to the business community, and to great centers of technological innovation. You have diverse, 21st century US cities. You have a deep history of Olympic sport success, and unique stories and personalities that could be told in those sports. The league may not have the football fervor of other markets every year, but while college football is very important now, given the participation rates across the country and what the interests are of a student body that is more global than ever, will it always be that important?”
Some of those assets might have appeared more valuable pre-COVID, particularly the globalized nature of some Pac-12 institutions and markets, but it isn’t hard to see positive things about what the conference brings to the table. The world’s biggest technology companies and business incubators are in the league’s footprint. Some of the fastest growing cities are in the league’s footprint. If conference leadership, either with Scott or elsewhere, can find ways to financially unlock more of those assets, perhaps in less traditional manners, the league might end up in better shape than analysts project. But that’s a tall order, especially in a post-COVID world.
That’s essentially how Favorito sees things.
“I believe there are real assets with this league, but utilizing them will require the league to do something different from other power leagues. That may mean making up revenue with different relationships to the tech and business community. It may mean growing revenue from non-football sports. I would do a lot of listening and fact-finding outside of sport or what insiders may consider a traditional way of thought, and I would encourage them to not think just about the short term.”
But with dire financial needs now, not thinking about the short term could be a real challenge
Utah’s entire athletic department is facing furloughs. Cal is looking down the barrel of massive athletic deficits. UCLA needed a bailout from campus even before COVID. Washington State’s athletic department is facing massive deficits as well. Many schools were not in great financial shape even before losing a fall football season and an NCAA Tournament. Another big payday in 2032 may be nice, but the incentive to secure real money now is strong. That’s partly why the Pac-12 explored selling a stake in future media rights to begin with.
Weaver told me she’d recommend the Pac-12 look to try and frontload a future media deal, to help assuage some of those concerns. '“I'd say you try to strike the best deal you can as soon as you can. That front loads cash to us on the front end. And then I’d try to make that deal more performance oriented versus a flat rate every single year.” Betting that various conference programs can only improve might be the only way to secure a big payday in a conventional media deal.
Weaver has an unconventional suggestion for the Pac-12
And listen, this suggestion isn’t message board fanfic when it comes from a Serious Professional.
“Since the Big Ten and the PAC-12 are such synergistic partners…why not merge the two conferences?”
The two leagues have been philosophically aligned for most of college football history. They’re mostly full of AAU, research-oriented universities. You could mostly limit conference play to geographic regions, use the Rose Bowl as some sort of conference championship game, and pool media rights together. It’d be like a 21st century version of the failed Airplane Conference (which you can read all about in my book).
Is that practical? Likely? No. But this also the conference that came surprisingly close to pulling off the Pac-16. Swing for the fences. Try that ridiculous conference realignment scheme. Who the hell knows what 2023 looks like?
Here’s what I think
My first reaction after reading the Mercury News' story was something closer to Weaver’s, rather than Favorito’s. It’s possible that Pac-12 CEOs reaching out to third parties is just due diligence, but given the rest of the context around the last year or so of the Scott era, I’d wager it’s also at least some tire kicking of other potential conference commissioners.
I’m a bit skeptical of the reflexive anti-Larry Scott narratives, in large part because I don’t think all of the Pac-12 struggles are his fault. Larry Scott didn’t cause the Varsity Blues scandal. He didn’t make bad coaching hires throughout the conference, or force basketball programs to get in trouble with the NCAA. Tepid institutional leadership isn’t a Pac-12 conference office problem. Scott’s failings are well-documented, but if the league is in a difficult position, it isn’t just because of anything the central office did or didn’t do.
Even if Scott is canned tomorrow, the league may not be able to execute on a new strategy to monetize their assets in time. Interest from FANG-type companies (Facebook, Apple, Netflix, Google) hasn’t completely materialized yet. Maybe seeking more consulting help is a good idea, since running a large research university and selling sports entertainment inventory are two completely different skill sets.
If anybody is tired of reading the daily headlines of drama within the Big Ten though, keep an eye out West. I don’t think we’ve seen the last of potential administrative drama in the Pacific Time Zone in the near future.
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