For the Pac-12, the current competition for broadcast dollars among college football's Big 5 power conferences has gone bad and is getting worse.
Not only has the Pac-12 dropped from the top spot with its most recent TV contract starting in 2012 that was the envy of the college sports world -- for about a minute, it seems -- it essentially occupies a spot down near the bottom of the five-league barrel today. Conferences the Pac-12 far surpassed just a couple of years ago like the Big 12 have rocketed ahead as the Pac-12 battles the ACC to stay out that last spot.
But it's not where the race stands right now, it's the way it's going.
The Pac-12 has not only fallen behind after its big head start, it's falling so fast that it will soon be way, way behind -- almost in a place where it cannot legitimately compete with the SEC and the Big Ten -- or even a Big 12 that most are speculating won't be around much longer.
But if and when the Big 12 does implode, a league with just 10 teams including one way off in West Virginia, no TV network, no championship football game in recent years and just two top 25 metro markets -- both in Texas -- it will do so while putting more money into its members' pockets than the high-spending Pac-12 has been able to do despite the seven top 25 media markets in the Pac-12 footprint.
Remember how lucky the folks at Colorado and Utah thought they were when the Pac-10 took them in and nearly tripled their TV revenue -- from $8 million/$9 million a year -- to nearly $21 million. But if the Buffs were to look around today at their old league, they'd see a Big 12 that's more than quadrupled its revenues to an average $34.5 million per team, according to the the conference's most recent announcement this week, compared to a Pac-12 that's gained just a third more -- to some $28.7 million per school according to the Pac-12's most recent tax returns.
For the Big 12, that's the 11th straight year of increased revenues and a jump of $4.4 million per school in the last year alone, they note. And those numbers are hardly inclusive. Since Big 12 members each own their individual Tier 3 broadcast rights, Texas took in a total of $50 million, with $15 million of that coming from the no-longer-stumbling Longhorn Network shared with ESPN, and Oklahoma pocketed $42 million.
The ACC, which jumped from $232 million in income in 2013 to more than $403 million in 2015 was stuck in place after a one-time payment of $31 million from Maryland as it left for the Big Ten went away but it still managed to distribute as much as $27.9 million to each of its schools in 2016, barely behind the Pac-12. But the ACC is on an obvious upswing here as it moves to its own network with ESPN.
The two leagues we haven't gone into detail on yet, the SEC and the Big Ten, are where the problems really show up for USC and the other 11 Pac-12 members. The SEC offered payouts to conference members of $41.9 million to $39.1 million for 2016, USA Today reports, with the average $40.4 million -- about $12 million per school more than each Pac-12 program received from the conference.
The Big Ten awarded its 11 long-time members $34.8 million each with slightly less to newcomers Nebraska, Maryland and Rutgers.
And while it won't exactly be front page news, according to Jon Wilner of the San Jose Mercury News who is by far the person most on top of the Pac-12 TV stuff, that $28.7 million distributed per school included a slight bump up (from $1.5 million in 2015 to $2 million in 2016) from the Pac-12 Networks.
Yes, that's better. No, that's not nearly better enough when the Longhorn Network is paying out $15 million and the Big Ten and SEC Networks are approaching $7 million per program. And not when the SEC, for example, went from $32.7 million in 2015 to some $41 million in 2016. That's an increase that matters. For context, USA Today's Steve Berkowitz notes that the SEC's reported income of $639 million for 2016 was two-thirds of the $952 million the entire NCAA organization reported in its last IRS filings.
But it gets worse. The Big Ten's new $440 million-a-year TV deal kicks in this season and fires them into a first-place tie this next year enabling them to pay each of their 14 schools $45 million, the same as the SEC's projected $45 million per-team disbursement.
No wonder the Big Ten has rewarded Commissioner Jim Delany with a future bonus of some $20 million, finally allowing him to pass the Pac-12's Larry Scott, at $4.2 million a year, as the conference commissioner with the highest remuneration. But heh, Delany's had to work for it. Thanks to him, it's the Big Ten's second bite of the apple at negotiating since the Pac-12 deal in 2012. And before the Pac-12 gets its first renegotiation in 2023-24, the Big Ten gets another shot. Whoops, there goes the money.
And the Pac-12, projected by Wilner to bump up to $31 million per school next year, will be $14 million per school behind the Big Ten and the SEC.
And yes, that is an unsustainable path -- for USC, anyway -- and any other Pac-12 program like Washington and Stanford with national championship ambitions.
Let's make this as specific as possible. Starting this year, programs like Rutgers, Maryland, Illinois and Purdue along with Mississippi State, Missouri and Vanderbilt, will pocket a minimum of $105 million more from their conference deals -- and probably more -- than USC will receive from the Pac-12. That's a deficit of $15 million per school per year -- every single year.
Are there downsides for the Big Ten here? Just one that we can see. By going all-in on its latest Big Ten deal, Fox gets first dibs on game selection, something it said it would use for the Ohio State-Michigan game every year. But because Fox also has the World Series in October, it won't be able to show the Penn State-Ohio State game, almost certainly the big game in the Big Ten this year, in prime time. Seems like a small price to pay for all that cash.
And maybe the Pac-12's $28.7 million number is fine with Oregon State, Washington State, Cal and Arizona. But if you want to play for a national title with nationally competitive facilities, and with 21 team sports that by their history and expectations at USC, are supposed to be competing for national championships all down the line, something has to change.
But how, and when? Commissioner Scott recently told SI.com's Andy Staples that it's anyone's guess: “I don’t think anyone knows exactly what the landscape will look like or what health ESPN or Fox will have in 2023 when we’re negotiating or how significant a player a Twitter or a Facebook will be. My sense is that there will be more competition. There will be more and different types of players. And there will still be very limited and highly valuable sports properties.”
But will they be valuable in a way that comes close to making up that $14 million/$15 million annual deficit USC and the other 11 Pac-12 schools are facing between now and then?
I think we all know the answer to that one.