The Pac-12 Conference is reportedly exploring a loan program worth up to about $1 billion dollars to help athletic departments bridge the gap until the next media deal if the 2020 football season is canceled.
According to a report from The Mercury News, emails between conference personnel show the loan could provide a maximum of $83 million for each member school at a rate of 3.75% over 10 years. Football generates approximately $50 million in ticket sales and media rights alone per season for each school.
For some schools, football revenue is much higher. At Oregon State, for example, the sport accounts for 80% of its annual revenue, or $80 million. For Utah, football brought in $66 million in the 2019 fiscal year.
The Pac-12 is currently planning for a 10-game, conference-only season. If the season occurs as planned, the loan program “could be pushed aside entirely.”
If the conference moves forward with the program, individual athletic departments would decide whether or not to opt in. The loan total would be $996 million, backed by investment bank The Raine Group, if all 12 schools participated to the program’s fullest amount.
Multiple sources told The Mercury News that not every school is interested in participating, however, and that some would “seek substantially less” than the maximum loan amount. They also said that the two private schools, Stanford and USC, “would be unlikely to participate in the program.”
Key to the plan is that the conference is owed $917 through its media rights contracts with ESPN and Fox for the 2022-24 fiscal years, which would be enough to cover the loan as long as all 12 schools didn’t take the maximum loan option. Reportedly, one idea is for the conference to take on the loans, and then shift responsibility to its schools in 2024 when the current media deal ends. Another would be for schools to repay the loans after the conference inks its next, and presumably lucrative, media rights agreement.
According to an email, Cal Chancellor Carol Christ pitched the idea of the conference serving as a facilitator of the loan.
News of the proposed plan comes as hundreds of Pac-12 football players have threatened to boycott their upcoming seasons if a series of demands regarding COVID-19 safety measures, name, image and likeness compensation, and racial equality are not met.