Deep Analysis: Collapse Of the PAC-12
The day is July 21, 2023, and media rights negotiations are going well. The Pac-12 has a proposed deal with Apple. Then, the deal fell through, and the Pac-12 collapsed, with ten colleges leaving for other conferences. What in the world happened for this to happen? Well, today, I will be going in-depth into the reasons why the Pac-12 fell apart.
When I first heard about this story, I was shocked. I could not believe a college football conference could lose over 80% of its members in one offseason. As a result, I started researching why this happened and stumbled across this article about the situation. After reading, I ultimately agreed that the Pac-12 collapse was several years in the making.
First, former commissioner Larry Scott said five years earlier that the conference would “adapt, react and take advantage of this new world media order that’s coming in a way others can’t.” This statement was ironic because it demonstrated what rival conferences did. Also, the Pac-12 has not been the most competitive conference lately. According to information by Wikipedia, the Pac-12 only had one top-nine-ranked team in 2022. Therefore, the number of companies who wanted to strike a media rights deal with the Pac-12 decreased heavily.
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Furthermore, media rights have surpassed ticket sales and donor contributions as the primary revenue stream. According to a Knight Commission and Syracuse University database, only 19% ($123.08 million) of revenue came from media rights. However, in 2022, the number had skyrocketed to $399.89 million, or 35% of the Pac-12’s revenue. Simply put, the Pac-12 needed to reach a media rights deal to keep the conference afloat. Yet, once the speculated date for the agreement came and went, many believed it spelled the end of the Pac-12.
In the end, there were two tremendous obstacles the deal had to overcome: lack of money and exposure. Money was significant to the schools because if you look at the data Wikipedia compiled, most schools were breaking even or barely making a profit. Also, with Apple, there was no guarantee that games would be on other linear networks. Therefore, programs were worried about the lack of exposure they would be getting. Also, the deal had milestones for the conference’s subscribers for schools to earn more money. These milestones were if the service reached 2.5 million and 3.7 million subscribers. If they get 2.5 million subscribers, schools will get $30 million annually. On the other hand, if the service reached 3.7 million, the schools would be getting paid $50 million, which is a little behind other conferences like the SEC and the Big Ten.
Ultimately, there are many reasons why the collapse of the Pac-12 happened. From the lack of exposure to the conference’s insufficiency to win, there were too many obstacles to overcome for a deal to finalize. With most of its members leaving, the Pac-12 will only have two members next year, and they will be desperate to recruit new colleges. Still, there is a lot to take away from this situation.
Here’s the bottom line: When a competitive partnership cannot adapt, innovate, and improve, it will cease to exist.
