DROP YOUR SOCKS AND HOLD ONTO YOUR JOCKS!
As all Ducks fans are well aware, the College Basketball Santa ran into a COVID-19 blockade. No soup, or at least only watered down soup, for you!
Sabrina was dissed; the Pac-12 was stiffed. It was CBB coal and not oranges, for Pac-12 boys and girls.
Now, with the college football season on the COVID brink, things are approaching an existential as well as an essential, financial reckoning.
How big a spoon does college football bring to stirring the athletic department’s pot? One hell of a lot.
Here are a few sobering numbers from seven Pac-12 conference schools’ athletic department 2019 fiscal year reports.
CAL – Total Athletic Department Revenue (TR) – $92.6M, Football Revenue (FR) $38.1M.
COLORADO – TR – $93.9M, FR – $43.4M.
UCLA – TR – $108.4M, FR – $43.1M.
UTAH – TR – $99M, FR – $65.7M.
WASHINGTON – TR – $134M, FR – $84M.
WAZZU – TR – $71.7M, FR – $44.5M.
OREGON – TR – $127M, FR – $72.1M.
That’s a total of $726M in revenue with $345.7M (47.6%) coming from college football.
However, the above numbers do not include ‘non-program specific’ revenues of hundreds of millions of dollars.
For example, in 2019’s fiscal year, CAL generated $17M in college football associated revenue including licensing fees, game-day advertising income and merchandise sold on game days.
Washington brought in $14M in non-specific income.
And, take a deep breath and wait for it, Oregon brought in $39M in non-specific income.
And these numbers do not include apparel and foot-ware income. Apparel deals are not based on what the guys and gals on the golf and tennis teams are wearing; they are generated from what college football and to a lesser extent, college basketball players are wearing.
Also, revenue numbers do not include school specific generated funds. In the case of ASU, this comes in at $20M a year.
So, as Jon Wilner of the San Jose Mercury News reports, it is entirely reasonable to estimate that CFB brings in 75% of a Pac-12 athletic department’s revenue.
And many of the Pac-12 athletic departments are already deeply in the red.
Washington State is running a $100M deficit.
UCLA – $40M. In 2019, the UCLA athletic department had to borrow $20M from the school’s general funds in order to meet its financial obligations. In other words, California taxpayer’s are keeping UCLA athletics afloat.
CAL – is running a ‘modest’ $15M deficit. However, even had the football season played out as it was originally scheduled, CAL was estimated to go an additional $15 to $20M in the red.
And Stanford, an institution with all of its sports supposedly fully endowed, has already announced that it is dropping a number of sports from varsity to club status.
Jon Winer reports that things are so dire that the conference is in serious discussions to secure a loan for $993M; $83M for each university that decides to sign the promissory note. The loan would have a 10 year term at a coupon rate of 3.75% per annum.
The collateral for this loan? A Peter for Paul pledge of the $1.2B broadcast payments the conference is expected to receive in the next four years from ESPN and Fox. This, my friends, is leveraging assets circa 1929 and 2007. It is putting even more on the Pass Line of the next media deal. Prior to the negotiation of a new media deal, it is evidencing a clear financial weakness to the conference’s media partners. They are going to step up with a huge increase for conference media rights, why? A tech company is going to see Pac-12 sports as a good investment, why?
And this loan does not come in tandem with the closing down of a functionally insolvent network, a what should be 50% cut at least, in the conference commissioner’s salary. This, along with a financially responsible relocation of conference headquarters out of San Francisco and to a far less expensive location in the Pac-12 footprint.
No wonder the conference powers-that-be are doing everything they can to play the 2020 season; to hell with player safety. They are now paying the price for supporting a wholly-owned, ill conceived, conference network; paying $4M plus a year to a clueless leader; paying headquarter and operating expenses far in excess of the other Power 5 conferences; surrendering the Rose Bowl for next to nothing and having zero down-side planning. Including, taking out pandemic insurance as did, for example, the British Open.
My dear Ducks friends, this is no longer Jon J calling wolf; this is Jon J calling Pac-12 Defcon-1.
The Ducks simply has to find a better place to feather its nest. A place with cogent leadership. A place that can bring better media income to the bottom line. Internally, in my opinion, Oregon has to bite the bullet and drop a number of non-revenue varsity sports to club sports.
Top Photo from Twitter
Chris Brouilette, the FishDuck.com Volunteer editor for this article, is a current student at the University of Oregon from Sterling, Illinois.
Jon Joseph grew up in Boston, Massachusetts but has been blessed to have lived long enough in the west to have exorcised all east coast bias. He played football in college and has passionately followed the game for seven decades. A retired corporate attorney Jon has lectured across the country and published numerous articles on banking and gaming law. Now a resident of Aiken South Carolina, Jon follows college football across the nation with a focus on the Conference of Champions and the Ducks.
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