Pac-12 exploring options to save itself, but the latest idea makes no sense
Larry Scott and the Pac-12 may have lost their darn minds. They have cooked up a new idea, but it makes no sense.
According to John Canzano, The Oregonian, Pac-12 Conference leaders are exploring taking on private equity partners. No, it’s not April Fools, but it is time for Larry Scott to find a solution to his conference losing ground. Maybe the better idea for Arizona Athletics, is to leave the conference? Some fans have been suggesting they do just that, even though logistically it may not be convenient for travel, you may be able to watch more games at home and on the road.
It would be fun to own part of the Pac-12 Conference, but not in its current state and not with Larry Scott at the helm. Read our New Years resolutions post from this week and you will see what we mean:
The Pac-12 is one of the least profitable conferences of the Power Five Conference paying high rent in San Francisco and bringing in less income than other conferences, something needs to be done, but this? We are dying to know how the presidents and chancellors (or “Pac-12 CEO Group”) of the Pac-12 universities reacted to this plan during their November meeting.
There was also a follow-up conference call in December, according to Canzano, “Private investors would own 10 percent equity in the newly formed entity in exchange for a $500 million investment.proposal.”
You can view three pages from the proposal HERE obtained by The Oregonian/OregonLive.
The new plan would give money from the $500 million to each school, but where is the incentive for investors when a DIRECTV deal isn’t possible for at least three to four years and the game times suck for most of the country.
Canzano, who has been reporting on the state of the Pac-12 stated the following about revenue and a huge assumption in his latest post:
"The projections, however, include $36 million in annual revenue from DirecTV beginning in 2020 and a one-time payment in 2024 from ESPN in the amount of $347 million. Neither is certain. Also, the plan assumes FOX would renew its current broadcast contract with the Pac-12 in a 10-year deal worth more than $2 billion.The Pac-12 current television rights contracts expire in 2024"
One reason that the Pac-12 schools need more money is to be able to attract and pay assistant football coaches more money.
The Clemson DC makes $2.2 million. How many @pac12 assistants make $2 million or more? Maybe Kliff?
— Garrett Schwartz (@garrett_ds) December 30, 2018
Here is some of the reaction from Canzano’s report:
Generally speaking, private equity companies recognize companies desperate for cash, and for that, they’ll maximize profit while saddling the company with debt.
— Dan Rubenstein (@DanRubenstein) December 29, 2018
Fixing costly mistakes with an infusion of strings-attached money isn’t a long term business model. https://t.co/mcGJ24g5g2
Next. 2019 New Year's resolutions for Arizona Athletics!. dark
Why not just leave the conference? It would make it harder for fans to travel to away games, but you could watch more games on TV at home and on the road. Arizona Wildcats would get more exposure to help them get professional jobs. There has to be a better answer to the Pac-12’s financial problems than to get private equity investors who will end up pissed off and frustrated at some point.