How the New Pac-12 Media Rights Package Impacts Cal
By Herb Benenson, Intercollegiate AthleticsMay 5, 2011
The landmark media rights package announced by Pac-12 Commissioner Larry Scott on Wednesday morning will clearly benefit all members of the conference by generating new revenues, expanding the reach of the conference and providing more national exposure. The agreement, which goes into effect in 2012, extends existing partnerships with ESPN and FOX and includes opportunities on both broadcast and national cable platforms.
At Cal, the deal comes as welcome news during this time of financial uncertainty on campus and will be another key element for the athletic department's path toward achieving long-term sustainability.
"This is fantastic news," Director of Athletics Sandy Barbour said. "Larry and the conference staff have done a phenomenal job of positioning the conference, which is exactly what he was hired to do."
For the Golden Bears, the increased coverage means a larger spotlight on the more than 800 student-athletes who represent the Blue and Gold each year. Not only will every football and men's basketball game be aired live, but hundreds of other events will appear on ESPN and on two outlets that have yet to be finalized but will be active by the fall of 2012 - a Pac-12 Network and a Pac-12 Digital Network.
"Overall, the commitment that we've gotten from our television partners has been focused on national exposure for the Pac-12 in both basketball and football," Barbour said. "However, I think the bigger benefit in the long term is what this means for the national profile of our entire program. We as a campus are very excited about this new opportunity for hundreds of student-athletes in other programs that have not gotten the promotion and exposure that their excellence deserves."
Financially, the contract is expected to provide about $15.4 million in gross revenue to the school in the first year. Payments will escalate over the 12-year length of the pact. However, after taking into account new costs associated with implementation of the deal, including the need to buy back existing local broadcast rights from IMG College (the department's multimedia rights holder) and increased travel expenses, the net value of the new contract for Cal will be about $5-6 million more than was received last year from through the existing conference TV pact.
Well before Wednesday's announcement, the likelihood of higher Pac-12 media revenues had been factored into the department's long-range planning and analysis process that followed Chancellor Robert Birgeneau's decision to cap campus support for the department at $5 million by 2014. Prior to the scope reduction decisions announced last September, University and athletic department officials consulted with the conference office and received an estimate of $4 million in additional money from a new rights package, or $1-2 million less than the actual contract will provide in its first year.
While the additional funding beyond what was anticipated is certainly helpful, Barbour said that it does not replace or devalue the importance of Cal's donor community, especially in light of the new financial challenges that have emerged in recent months. These include new cuts in state appropriations for higher education and the possibility of more to come, the likelihood of new increases in student tuition that will have a significant impact on the cost of athletic scholarships, and the impact of a required renewal of pension contributions and increased benefits costs for University employees.
"As we calculate it today, there is about $1-2 million in additional money beyond what we anticipated and what we put into our financial model as we made the decisions about whether or not we could maintain 29 programs," Barbour said. "When you step back, it becomes apparent that, taken together, the media contract funds and the incredible efforts and commitment of our donors will provide us with a more stable financial foundation that should help us to weather the continuing storm and confront these new financial challenges. That sort of stability is essential for the core of our mission: providing our student-athletes with the appropriate resources they need to excel on and off the field."
Scott said that details on the Pac-12 Network and Pac-12 Digital Network, which will be organized under Pac-12 Media Enterprises, will be provided at a later date. However, he did emphasize that the platforms will provide more than just athletic programming and will look to the all 12 schools to supply content highlighting the academic achievements on each of the conference's campuses.
"Obviously, at an institution that's involved in a lot of research for the public good, this will be an enormous opportunity for us to provide original content for network programming and shine a light on the incredible work that happens on this campus," said Dan Mogulof, executive director of Public Affairs on campus. "That's something we've already begun to look at."
Once the details of the new media rights package are sorted out and all elements of the plan are in place, the long-term deal will benefit University and Cal Athletics for years to come.