Canzano: 'Pac-2' asking questions... network? Offices? What else?
Oregon State and Washington State exploring plans.
The ears of the ‘Pac-2” Conference perked up last week when NCAA President Charlie Baker started spitballing about changing the framework of college athletics.
A new top tier of schools?
One where the richest programs would compensate athletes?
Oregon State and Washington State have stared into the abyss since August, lamenting how they got squeezed out of ‘Power 5’ existence. Those schools are now wrestling for control of the Pac-12’s assets in court.
Baker’s proposal will undergo all sorts of permutations as it works its way through government and the NCAA legislative process. But the core principles raise a question: Is a new framework good for OSU and WSU?
There isn’t a simple answer.
In part, because nobody knows what the costs ($6 million to $11 million a year?) might be or how many schools (50? 100?) the high-rent tier might include. Or even how many sports will be affected by it. Or if Oregon State and Washington State will get a windfall at the end of their ongoing lawsuit. Still, I’m left thinking that some kind of shakeup of the ecosystem is exactly what the Beavers and Cougars need.
‘Pac-2’ blocks $61 million payout
As Baker’s proposal went public, OSU and WSU moved to block a $61 million midseason revenue distribution to the conference’s 12 members. It was first reported by Jon Wilner of The San Jose Mercury News. The 10 departing schools aren’t happy, but the Beavers and Cougars have liabilities to consider given that they’d like to keep the Pac-12 doors open beyond August.
Oregon State and Washington State issued a statement: “No member acting in the Pac-12’s best interest would allow departing schools to drain the Conference’s assets on their way out the door, while they refuse to pay their fair share of the liabilities.”
The Pac-12 is named as a defendant in multiple lawsuits, including a class-action suit filed by former Arizona State swimmer Grant House on behalf of thousands of former athletes. House v. NCAA could be a doozy.
That lawsuit contends that colleges illegally blocked athletes from maximizing the amount of money they could be earning in NIL. If the athletes are successful, the conferences may pay billions of dollars in damages.
Does the Pac-12 Network have a future?
Oliver Luck is still consulting with the ‘Pac-2.’ I’m told by a source on the OSU/WSU front that Luck has been focused on the future of the Pac-12 Network. He did not return messages seeking comment.
Last January, the Pac-12 signed a five-year lease for 42,000 square feet of office space at Bishop Ranch, in San Ramon, Calif. The conference built out a state-of-the-art production facility. Network staffers tell me the facility is an upgrade of the downtown-San Francisco studio. The new facility wasn’t just equipped to serve the Pac-12 (or Pac-2), but also operate as a production arm that could produce live-sports programming for other entities.
Amazon? Apple? MLB? The new National Women’s Soccer League?
“It’s an incredible set-up,” said one person familiar with the facility.
Luck and his team have been charged with exploring whether there’s a business model that would support keeping the Pac-12 Network operating beyond this summer. One question that continues to come up in my conversations with leaders at the 10 departing schools is whether they’ll need production services themselves. They previously relied on the Pac-12 Network, which was linked directly to each campus.
“All of the departing members will have obligations to produce content,” said one campus administrator, “the Pac-12 Network handled all of that for so long.”
Oregon State and Washington State will have at least 13 home football games next season that may need production. Also, it’s possible the Pac-12 Network could pick up contract work on some ESPN football events in the Pacific Time Zone.
What is the 2024 ‘Pac-2’ football schedule worth?
That has me thinking about the media-rights revenue possibilities for Oregon State and Washington State in 2024. They won’t reap $25 million-plus in media-rights revenue from football and men’s basketball as they did in prior years. But what can the Beavers, for example, reasonably expect to generate from seven home football games in 2024?
Oregon State is expected to host:
3 Mountain West Conference opponents
What is that home schedule worth in the media-rights world? Industry insiders tell me that they think OSU will try to sell the games a la carte. There’s a market for Oregon State football games, but everyone I spoke with was skeptical that one media entity would go all-in and take all seven home games.
The Civil War game vs. Oregon is a premium event. OSU’s home games vs. Purdue and Cal would be attractive as well. Those 2-3 games are desirable. The remaining OSU schedule could end up alongside the Mountain West Conference games on CBS, FOX or even land on a regional network such as ROOT.
Estimated revenue: $5 million to $7 million, most agreed.
One source told me: “I’d think Oregon State might value the exposure more than the money.”
Pac-12 may retain operational staff
The Pac-12 has 192 full-time employees. Some of them will leave at the end of this calendar year. Others will stay through the spring. A third group is supposed to remain on the job through the end of July. They’ll all receive severance packages and incentives to stay through the end of their employment.
What happens after that?
Oregon State and Washington State are busy exploring how many employees might be needed to keep the lights on for the “Pac-12” after August 1 of next year, a source told me. Deputy Commissioner Teresa Gould is part of a small team exploring whether a ‘skeleton crew’ might stay on. It’s unknown if Gould would remain employed.
The conference’s employee retention plan was put together, per an involved source, “with optionality for OSU and WSU to reconstitute the conference.”
How many sports will be managed by the ‘Pac-2’ office? How quickly are OSU and WSU going to rebuild? Is this just someone opening mail and picking up the telephone or are there other responsibilities such as the Pac-12’s website, social media accounts, etc.? And how much will the Mountain West Conference handle as part of its scheduling partnership?
Some of the people I spoke with thought the “Pac-12” would need somewhere between 10 and 20 full-time employees to continue to function. By comparison, the MWC has 23 full-time employees. The Big Sky Conference has 12.
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