“Call FEMA. Because this is a disaster.”
That was the verdict of one sports TV executive as the sports world reeled from the news that USC and UCLA are negotiating to leave the Pac-12 Conference for the Big Ten.
Their pending departure could not have come at a worse time for the Pac-12.
The embattled conference is poised to start negotiations for its media rights later this year. The loss of its two highest-profile schools could potentially cost the conference hundreds of millions in rights fees, said sources.
The Pac-12 hoped to roughly double its media rights fees to $500 million annually from the current $250 million a year. But those numbers are probably wishful thinking at this point. Especially if Oregon and other member schools also head for the exits.
Under its current 12-year, $3 billion deal, Fox Sports and ESPN split Pac-12’s TV rights. But how interested will these networks be in a 12-member conference that’s losing its two marquee schools?
Especially when they’re both located in Los Angeles, the second-largest TV market in the U.S.
“Look, in every major conference, you’ve got elite schools. The elite schools in the Pac-12 are USC, UCLA, and Oregon. Of those three, USC and UCLA are in the largest media market,” noted sport business expert Lee Berke, owner of LHB Sports, Entertainment and Media.
“These schools have a huge tradition — and a lot of impact. They tend to get the lion’s share of national television appearances. So the timing is very difficult. The Pac-12 is going to be challenged to come up with a substantial multiple on their current rights.”
The conference’s current media rights agreements expire in 2024: the same year that USC and UCLA are expected to bolt to the Big Ten.
That leaves the Pac-12 with three significant business challenges.
- It enters rights negotiations this year in a weakened state, giving bidders ranging from TV networks to streamers and tech giants an advantage at the table.
- The pending realignment comes during the final bidding stages for Big Ten media rights that could exceed $1 billion a year; Fox, ESPN, and NBC Sports could decide to shift money they were going to use on the Pac-12 into more valuable Big Ten rights.
- Third, the Pac-12 will have to eventually replace the TV “inventory,” or game telecasts, that would’ve feature the Trojans, Bruins, or other departing teams.
Few schools have the TV appeal of USC or UCLA, and the Pac-12 isn’t out of the woods if the Big Ten and SEC gobble up more of its schools.
All is not lost for Pac-12 Commissioner George Kliavkoff, added Berke. TV rights negotiations haven’t kicked off yet. That gives him some runway.
“I think he’s going to come up with a lot of creative approaches in terms of replacement schools and additional ways to develop their media rights,” Berke said. “He does have the time. He’s not in negotiations right now. He’ll use that time wisely to recover from this — and come up with a different approach.”
By jumping to the Big Ten, USC and UCLA could boost their annual rights payday to $100 million from a current $20 million, according to reporter Jon Wilner, who broke the USC-UCLA news Thursday.
Their addition to the Big Ten would “create a cross-continental superconference” on par with the expanding SEC, notes CBSSports.com.
With Texas and Oklahoma joining the SEC in 2024, both the Big Ten and SEC would become mega-conferences with 16 schools apiece.
