This is true: The Pac-12’s television deal signed earlier this decade continues to make member institutions significantly more money than before.
This is also true: The Pac-12’s television deal and own network are keeping it way, way behind schools in the SEC and Big Ten, unleveling a playing field we thought had been previously made level.
Jon Wilner of the San Jose Mercury News reported today that, overall, revenue for the conference jumped to $488 million in the previous fiscal year, a nearly $50 million dollar increase. Wilner reports most of the increase came from a jump in the TV contract’s payout and a substantial increase in money from bowls.
As far as Washington State goes, the school received a hair over $28.61 million from the conference in FY2016 (which ended last June). Colorado received the smallest payout at $28.56 million while Stanford received the largest at $28.75 million.
That’s an awful lot of money! When you consider what kind of money the school and conference were making from the mish-mashed television deal they had before Larry Scott signed the conference into its current 12 year contract, it’s quite the increase.
The problem is though while it is a lot of money, it’s a lot less than schools in conferences that already had advantages over Pac-12 institutions are currently getting. As Wilner notes, the SEC paid each school an average of $40.5 million and the Big Ten paid out $34.8 million per institution. That SEC is especially notable considering it’s almost $8 million more than FY2015.
That brings us around to what has been a fairly constant problem when it comes to the revenue figures for years: the Pac-12 Network. Don’t get me wrong, having the Pac-12 Network has been fantastic. Every football game guaranteed to be on along with a vast majority of basketball games. It has been hugely important.
Problem being, Wilner estimates only $2 million of each payout to the schools came from the network even with $128 million dollars in income. That’s ... not good.
Running a television network that you built from the ground up is not cheap but only making $24 million in payouts to your member institutions is bordering on unacceptably low.
Now, it can be very good that the conference completely owns and operates it’s own television network because you aren’t sharing that money with anyone else. But it’s only good if you can at least be relatively keeping up with the Joneses when it comes to revenue and the Pac-12 clearly isn’t. The solution could be, as we’ve explored before and the Pac-12 actually had the framework in for in the past, is selling off part of the network but that doesn’t seem palatable to the conference CEOs.
So what are other ways to cut down on expenses? Slashing the number of channels you operate from seven to two with a ton of online streaming options would be a good place to start. Basing your network in downtown San Francisco also isn’t helping the bottom line either and even moving the operation to Los Angeles, despite its nearly as high cost of living, would likely help things. Finally, and I know fans don’t really like it but if it’s done carefully it can work, calling games remotely. Airfares, hotels, other expenses really, really add up, especially when you’re trying to broadcast over 800 live events every year.
Also not helping things: what the conference is paying higher ups. Larry Scott made $4.2 million in FY2016, while the outgoing president of the network, Lydia Murphy-Stephans, made $1.3 million. At least six other people working for the conference made over half a million dollars as well.
So the numbers got better. That’s very good! But the Pac-12 is still miles behind the Big Ten and the SEC is starting to fade into the distance when it comes to revenue. And that’s really bad.