Lets play around with a large language model that I have been developing to figure out what is the total cost of UNLV to leave the mountain west. Everything represented in the graph is coming from my program.
I am including a 3% inflation rate into these models as a baseline. If I knew what the actual inflation rate would be, I would be a wizard and I wouldn't be wasting my time on this scenario. I would have already just given UNLV the money to exit.
So lets start with our baseline cost to leave.
| Component | Amount (in Millions USD) |
|---|
| Exit Fee | $17.0 |
| Poaching Distribution Loss (24.5%) | $12.0 |
| Annual Loyalty Guarantee Loss (7 years * avg. $1.65M) | $11.55 |
| Total Cost to Leave | $40.55M |
From there lets do a projection assuming the mountain west is getting 4.5m per school, and the Pac is getting 8m.
| Year | MWC Payout (Adj.) | Pac-12 Payout (Adj.) | MWC Cumulative | Pac-12 Cumulative | Net Gain/Loss vs MWC | Net Gain/Loss vs $40.55M Cost |
|---|
| 2026 | $4.50 | $8.00 | $4.50 | $8.00 | $3.50 | - $32.55 |
| 2027 | $4.64 | $8.24 | $9.14 | $16.24 | $7.10 | - $24.31 |
| 2028 | $4.77 | $8.49 | $13.91 | $24.73 | $10.82 | - $15.82 |
| 2029 | $4.92 | $8.74 | $18.83 | $33.47 | $14.64 | - $7.08 |
| 2030 | $5.06 | $9.00 | $23.89 | $42.47 | $18.58 | $1.92 |
| 2031 | $5.22 | $9.27 | $29.11 | $51.75 | $22.64 | $11.20 |
| 2032 | $5.37 | $9.55 | $34.48 | $61.30 | $26.82 | $20.75 |
Break even point is around 2030 in this scenario, or just before projected conference realignment
Now lets assume we can negotiate exit fees down to 30.5m and run the projections again.
| Year | MWC (Adj.) | Pac-12 (Adj.) | MWC Cumulative | Pac-12 Cumulative | Pac-12 Net Gain/Loss |
|---|
| 2026 | $4.50 | $8.00 | $4.50 | $8.00 | -$22.50 |
| 2027 | $4.64 | $8.24 | $9.14 | $16.24 | -$14.26 |
| 2028 | $4.77 | $8.49 | $13.91 | $24.73 | -$5.77 |
| 2029 | $4.92 | $8.74 | $18.83 | $33.47 | $2.97 |
| 2030 | $5.06 | $9.00 | $23.89 | $42.47 | $11.97 |
| 2031 | $5.22 | $9.27 | $29.11 | $51.75 | $21.25 |
| 2032 | $5.37 | $9.55 | $34.48 | $61.30 | $30.80 |
Here is better, we break even about a year earlier in 2029.
Things to remember:
1. We would be floating interest on exit fees and debt we are already carrying.
-That would shift the 17m for exit fees to 22m based on a 4.5% interest rate over 6 years (The exact term of time we would have to pay off the exit fee as it incurs interest).
YES this could go down if we are successful in negotiation.
-In addition the 25m or so that we are floating in debt would grow by 6m to 7.5m (if we account the time it would take to reach a break even point)
2. These are projected "estimates" that do not include ramp up schedules to payments that are common in media deals. I have no way to calculate that, so I used raw "median" values. That would take our break even times and move them to the right to about 2031-2032 in both scenarios.
3. This assumes that the pac deal runs to 2032 and is not more short term. I used that timeline because it is projected that the next round of power realignment could happen in 2031-2032 if not sooner.
