2018 Conference Projections

ACC, by plan, does not project revenue like every other conference (because it's dead last).


http://www.mercurynews.com/2017/06/20/pac-12/

All of which brings us to the jaw-dropping news from last week: The report that Big Ten will send $51.1 million to each campus starting in 2018.

That’s not speculation, folks.

That figure came from a respect journalist (Angelique Chengelis) working for a respected publication (Detroit News) having obtained documents from Michigan itself, in the form of a FY18 budget presented to the university’s regents.

The only issue, it would seem, is whether Michigan’s estimate is correct.

I did some digging and found that past UM budget projections of Big Ten payouts were accurate to within $100,000.

Which means they were pretty damn accurate.

Which means that we’ll assume the Big Ten will send $51.1 million to its members in FY18.

Which means the Hotline needs to update the FY18 distribution projections made last month:

Big Ten: $51.1 million
SEC: $45+ million
Big 12: $37.5 million (does not include Tier 3 rights)
Pac-12: $32.5 million

That’s not a pretty sight for the Pac-12, which is getting lapped even by the Big 12 when Tier 3 rights are added to the mix.

The dollar disparity is crucial from a competitive standpoint (recruiting budgets, coaching staffs salaries and capital expenditures).

In regard to the Big Ten specifically (Pac-12 presidents/chancellors view the B1G as their one true peer/rival academically and through the Rose Bowl relationship):

The distribution gap is essentially $19 million per school, or a $228 million, single-year conference-wide deficit.

Tally that up over the lifespan of the current Tier 1 contract — we’ll assume, for this exercise, that the rates of increase are equivalent — and the Pac-12 will lag the Big Ten in distribution to campuses by $1.6 billion over the sweep of the next seven years.

Now, Scott has been fairly adamant that the P12Nets business model is right for the long haul, because 100 percent ownership of content 1) allows the conference to “be nimble” (his phrase) in a rapidly-changing landscape of technology and consumer behavior, and 2) will provide great flexibility when the Tier 1 deals expire.

In the meantime, it appears, the Pac-12 will get flattened in the revenue game — unless something changes.

The Tier 1 deals can’t change. The only thing that can change is the P12Nets business model.

Will seeing the whopping numbers … the Big Ten handing out $51.1 million to its campuses … the $19 million/per year/per school disparity in distribution … prompt the Pac-12 chancellors/presidents to insist on an equity sale?

(And would an equity sale in the next two or three years bring maximum value for a network that is viewed as less than a roaring success?)

It’s far beyond my scope to guess what the bosses might be thinking.

But this much seems clear: If those numbers … $51.1 million payout/$19 million annual per-school gap … don’t prompt a change, nothing will.

For the next seven years.