Can the new and improved Pac-12 actually earn a decent rights deal?

Big college football news hit last week with the reconstituting Pac-12, as four Mountain West teams agreed to move to the two-team Pac-12 starting in two years.  The once historic conference, which disintegrated last year as ten teams fled to the Big 12, ACC and Big 10, still needs two more teams by 2026 to meet the eight-team minimum standard for conferences set by the FBS.

Kudos to the so-called Pac-2 – Oregon State and Washington State – for not crying in their milk after losing the game of conference realignment musical chairs.  But are they setting themselves up for the same media deal dollars heartbreak that doomed the predecessor conference? 

Reports are the new Pac-12 is seeking a TV deal worth up to $12 million per club annually, which is far off the ACC’s distribution of $30 million per school and not even in the same universe as the Big Ten and SEC media deals.

So the new Pac-12’s goal seems doable, right? Maybe not.

“When we look way out strategically, I’m still struggling, first of all with how everybody gets paid next time, right?” said media consultant Patrick Crakes. “If you think about consolidation and all the problems all the media companies are having, struggles they’re having, and the fact that internally, even for the Amazons of the world, (sports) is not on a cost accounting basis. In Apple’s case, they’re reviewing what they’re spending on entertainment content, which is a big deal, I think, underreported. How they view media in five or six years may evolve. And if there’s less buyers in the marketplace, I don’t know if they have any incentive to pay 3x for anything.”

Crakes estimates a new PAC-12 could get, generously, $50 million per year for the conference. That comes to less than $7 million per club if there are eight teams, and obviously lower if there are more. That’s far less than the $12 million per team floated in the press. Even assuming Crakes is on the low side, why does he think there is so little cash around for a Pac-12 while gushers of Benjamins flow to the CFP, NBA, NFL, and the big college conferences?

First, reconstituting the Mountain West with the two also-rans of the Pac-12 is not so compelling a narrative, even if the games fill some empty late-night windows. The full Pac-12 only received a lowball bid for rights from Apple of around $25 million a year per team, an offer that was rejected and led to the shattering of the conference.

Also, not every sport is enjoying rising tides. Scores of MLB, NBA, and NHL teams are breaking away from the regional sports ecosystem. While their new local free-TV deals offer far wider coverage, they also mean far lower income. The announcements of these deals are gussied up with favorable talk and optimism about how many more fans can now watch, but there is no guarantee these teams ever return to the gravy train that was the RSN universe in the heyday of the pay-TV business.

Similarly, the PAC-12 may be aiming for a world that doesn’t really exist: of high-paying networks with a cash-rich streaming deal supplementing income. The networks have made clear their dance cards are largely filled, and as Crakes points out, there is no guarantee the tech companies are riding over the horizon to save the day.

All that said, Crakes describes the evolving Pac-12 as a good thing. Oregon State and Washington State couldn’t survive on their own, and the alternative may have been to join the Mountain West. At least this way there may be some value in keeping the Pac-12 brand, and the conference winner could get into the expanded College Football Playoff.

“The new number will go higher, but it’s not going to turn into something that knocks everybody’s socks off,” he said. “But it will be good for the schools, and they do have a position now for the college football playoff. And so it’s positive news for everybody involved.”