Boyzee is going to shit their pants when they add up the numbers and realize they are going to make 1-2 million less than what they were getting with the MWC. After exit fees spread out over 6 years of course plus the loss of those Tourney units.
Assuming Hawaii gets done..Then what?
- Thread starter Bullmastiff 1
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I expect they will all short term regret their choices... Both Boise and Gonzaga built this conference to give them the most financial advantages they could get with equal TV media pay deals. Boise anticipates making the CFP and Gonzaga the S16 every year. that gives them the most advantages they could ask for... Whats annoying is them pretending it was for a better conference and to play against programs that invest in athletics, etc. when its really about getting a leg up financially. Boise wont hesitate to jump ship and run in a few years if Big 12 came asking, especially with a terrible TV deal. Meanwhile the MWC value got dragged down because of this stupidity. A MWC with Hawaii, OSU, and WSU all as full members would all be talking about possibly 15-20 million...Boyzee is going to shit their pants when they add up the numbers and realize they are going to make 1-2 million less than what they were getting with the MWC. After exit fees spread out over 6 years of course plus the loss of those Tourney units.
I just dont know why peoeple would value the MW more than they do right now. the 3.5 number. Have a hard time seeing the MW get more than 5. What are the media networks paying for? San Jose v. Wyoming?
There are three primary reasons:
1. Inflation. The current deal started in 2020. Prices are 23.3% higher than before the covid recession began in February 2020, with the current annual inflation rate at 2.8%.
2. No more sweet heart deals. Take Boise’s inflated deal and we pass the savings onto the rest of the conference.
3. Hawaii. This is a bit bigger than people think. We get almost no returned value since Spectrum owned their rights. Hawaii and the other Pacific Islands add another 2m-3m viewership base to go with the other islanders on the west coast that might not have been able to have easy access to Hawaii games. They are also a highly bet on game because their home games are usually the last to play.
I worked for Paramount Global. I have seen the CBSSN numbers from all of the schools going to the Pac. They aren’t nearly as great as people assume. We’re talking a factor of tens of thousands to low hundreds of thousands in separation. Numbers that were generally LOW enough that a game scheduled wouldn’t have stopped us from pushing an application update.
That being said as I have maintained, the Pac will undoubtedly end up being a better conference. But it won’t have nearly as much separation as people initially believed (some thought 18m+). Without a doubt they are the less stable than the MW.
That's a big thing sabotaging their media deal. If I am a media partner, am I really paying top dollar for a conference where everyone has a foot out of the door? I wouldn't pay top dollar, and I certainly wouldn't commit to a long term contract. IF they go streaming, it will most likely be paid out based on the amount of new subscribers they get. I think that's a hard sell to the schools. Its a lot of uncertainty combined with awful brand reach.
That being said, 15-20m seems like a high payout for the conference in that configuration. What you would really be saying is that Hawaii, OSU and WSU would be worth enough to bring up the value of the conference media deal by 184m+. That's a bit steep.
Both conferences are offering a free pass to a power league. I guess that the PAC have more realistic than the MW now considering that UNLV is pretty much the only one with a chance. Do you think that hurts the PAC more the MW considering both have the free pass?
As for similar numbers in the MW the past few years? I don't doubt it. I think teams have more value based off potential and perhaps how they performed in OOC games or on different networks. I think that a lot of MW have similar numbers simply because CBS sports network is pretty much a forgotten channel. With FS1 and FS2 similar, though not nearly as bad. Sure large fan bases will find the team that they want regardless of channel, but not a lot of casual fans support. But bottom line people aren't watching CBS sports much by chance.
But I think it isn't hard to see that CSU or SDSU has a much better potential than a SJSU, Wyoming, etc.
No way a merged conference gets 15-20 million. No way. How does a conference that is making 3.6 before bonuses merge with 2 teams worth a max of 15-20 a piece at get to 15-20 per team, even with inflation.
The best a merged conference will probably be what the PAC will get minus 15-20%.
As far as the free pass, it is true that both have it. But I think UNLV is the only realistic option to leave in the MW. The Pac could send 2-5. It absolutely hurts the pac more. I don't think I could guarantee a payout to the Pac. Who would they reload with? Pac fans would say they would pick from the MW. But who? Unless they're merging with the AAC/MW, I don't know if they have any more options beyond pulling in teams that would absolutely crush their value.
CBSSN focuses primarily on their P4 league. That's all I can say on that. But the undertone in your statement is correct.
Agreed, CSU and SDSU have way more potential that SJSU and Wyoming. SJSU is a bit of a paradox. Great media market, terrible media market penetration. I'm not sure what the solution to SJSU is. Most of their student base either transfer to better local Universities, or they move away after they graduate.
CSU and Colorado have really come up.
I totally agree that the PAC wont get some unreal deal, but were only comparing the new PAC deal to the new MW deal.
1. But that inflation applies equally to the PAC school, and the new MW is at least 23.3% worse than the current MW. Even with inflation, the conference is worse enough that I don't see the MW getting enough to give it a 5 million annual media deal or more.
2. The boise deal being gone does help, but they had 1.5 additional per year on top of their 3.5 deal. That helps, but its not substantial enough to offset their loss in any real way. In fact, the 1.5 probably didn't even adequetly compensate them for what they were providing.
3. Hawaii helps yeah, but their football was literally already apart of the MW, were not adding Hawaii Football, they're already there. Adding them for the rest of the sports adds substantial travel costs to all schools. I don't think Hawaii being a full member is additive at all.
if the PAC can get to 10, and the MW is at 4-5, it was a big mistake to stay in the conference. In the PAC you're going to get more tournament units and better bowl matchups, financially I just don't think staying in the MW was a responsible decision, even if it was the easier decision.
1. The base contract is no less than $3.5m Most years, the average during this contract has been roughly $5. I expect our deal to increase with inflation and because we have added four new markets. I will stand firm that the Pac will still earn more.
2. Boise received 7.9m For fiscal year 2022. Most MW schools got around $5m that year.
3. Hawaii got paid 500k by the MW for football only and receives a total of 3.1m from spectrum. Spectrum's deal was very media friendly and the situation around their current structure ultimately screwed Hawaii. Their number was decided 2 years before the MW got their new contract. Hawaii is worth more than what they are currently getting. They also don't receive any MWC TV money for their away games.
A unique problem with the mountain west and the Pac is that neither conference allows their member schools to keep their own Tier 3 tv money. All tier 3 money is taken and distributed equally. Hawaii is the exception. The big 12 for example, lets BYU and Texas keep their operate their own networks, and keep their own revenue.
I agree with your point on the Pac. However, if the Pac receives 8ish, and the mountain west is at 5ish, then the better short term move will be to stay until realignment. $17m+ the other costs of transitioning conferences is a lot for us to spend ahead of realignment. That's not also including the cost of being in a smaller conference. They also have to play with adding more out of conference games, which drives up travel costs.
At what point financially would you say its a bad decision?
What number exactly would the PAC have to get to and what number would the MW have to be at.
Add in increased attendance in the PAC because the matchups would be better, add in NCAA Tournament revenue with schools like SDSU and Gonzaga, add in better bowl matchups to the equation as well.
For me if the MW is 5 and the PAC is 10, its a fiscally irresponsible call to stay in the MW
For me it will depend on how many years it would take for the new deal to offset not receiving the (TBD) incentive from the MW and paying the separation fees. If it takes more than 5 years, then it is not a good move.
A lot also depends on the poaching fees and what happens there. the MW gets all of it, and UNLV gets a decent payday. It helps.
Exit fee negotiatios are something as well. It WILL get reduced, it is just a matter of how much. I can't see it being more than 11 mil per team, as that is the high end of the industry standard ( 2 year value of the current media contract). I can see that also get negotiated down further depending on the poaching fees.
Another factor was that the PAC at least offered us 6 mil in exit fee help when we turned them down the first time. Exit fees are often paid over a couple of years. So the up front cost may not be that much for jumping ship.
But unfortunately all of this seems moot. After actually signing the GOR, it seems like we are locked in, even if the poaching fees are completely dismissed and we get a fraction of the exit fees. Which is unfortunate. I get turning down the PAC at the time. They weren't offering a free pass, we thought we would get nearly 25 mil, we didn't know what the MW additions would be.
But fast forward to signing time, we know our conference which didn't seem to move the needle much. Even with the inflation bump, the base value is likely going to be close to the same as before, which is a net loss. All of the fees from the PAC are contested, etc. We had a chance to hold off on the GOR to keep the door open. That is the frustrating part, there was a window to at least keep more options open and we let it close. Also with seemingly even more leverage, you would think that exit fee help would go up from the 6 mil they offered us before. And of course with our media value being higher now than it was when they excluded us the first time, the value with the PAC with UNLV probably moves up a good amount from what they are looking at now.
Like I mentioned before, it is possible that to goal is to be a big fish in a small pond, rack up wins and hopefully earn a spot in the playoffs, though the magin of error becomes razor slim that way. Playoff berths, being a fixture in the top 25, and hopefully showing up for games will get us a B12 invite the fastest.
The pac dropped the ball several times during all of this. They had only offered Memphis, and the other AAC 4 $2.5m each. They only gave them 24 hours to decide, and there wasn't much room for negotiation. If they were serious about them, why not see if getting to a yes was feasible.
I do wonder about that 6m they offered UNLV. If they really wanted us, why not open up the war chest? It seems like a low ball number against another known exit fee. Unless the money is already accounted for, or they weren't serious about taking us on.
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The 2.5 mil in help was just sooo stupid that I honestly question if that was the real number. Maybe it was 2.5 mil per year for a few years? That makes much more sense.
Either way they should had a better plan given the AAC had that 27 month stipulation. Now that would have been negotiated down just like it did for Houston, Cincy, etc a couple year ago. But still you should offer more insurance money than a measly 2.5 mil.
What they should have done is come to UNLV and AFA first, you have your 8 and it is a solid 8. Still go to the AAC teams and shoot for them to join in 27. Get that signed on paper and get the media deal done. Their cost goes way, way down.
That could be 12-15 range easy.
They also probably should have hired Octagon from the beginning, since they have been able to get more media partners on board. Seemingly starting with potentially only with the CW is a weak ass plan.
There seems to be some smoke with UTSA and North Texas. I can see them being part of a phase 2 plan in 27.
They totally screwed the pooch with Memphis and Tulane. That is for sure. Just completely unprepared.
I question if they wanted Air Force at all. I don’t believe they ever offered them. I was surprised that Air Force didn’t join the other academies in the AAC in the aftermath of the Pac4 leaving.
Personally, if I were the PAC, I would have offered UNLV, AFA, and UTEP (play for the potential here). That gets you to your 9 for football scheduling. I would have then offered New Mexico, Gonzaga, reno, GCU, and USU for basketball only for a total of 14. MW is forced to join either CUSA. PAC looks solid.
As a tangent: In that situation, I’d love to have UNLV do a home and home schedule that would alternate each season between Hawaii/ Reno (each year we play one of them, the next year we play the other).
Google Dan Wolken USA today Pac 12.
It's an article from September and lays it all out. The PAC attempt at Memohis and company was absolute amateur hour. They presented a consulting firm estimate on a media deal with 15-18 million in projections. Media insiders scoffed at the idea saying it was greatly inflated. AAC ADs / President's agreed there was no way they would see that type of payout.
Larger concern was the actual stability of the PAC. This was echoed by Tulane AD in separate interview.
Memphis AD has been quoted multiple times it was a bad offer, and that there have been no further communications. Is he telling the whole truth on that? Not sure, but seeing NMSU/TX STATE being thrown around would suggest the PAC rebuild is not going to plan.
Yeah I honestly don't know of AFA's value. Smallish local market, but a bit of a national brand, though weaker brand than army and navy.
Still take USU then, but you get my drift.
I would hold on UTEP I agree they have potential, but there current value is probably not very good and would lower their bottom line for this first contract.
Running with 8 football teams, even for just a year, isn't too bad. Just one more OOC game to schedule. Get the AAC teams for PAC year 2 and you are in business.
UNM for basketball only, tough sell. Hard to see that happening, only if the MW folds, but I just don't see Gloria ever let that happen. Agree on Gonzaga, Saint Mary's and GCU though.
No question their initial approach was bad.
Deal being "bad" has multiple components. First Memphis Tulane are currently getting 9 per year and would be facing extra travel costs. Offering 2.5 mil in support of exit fees that are going to be elevated being under the 27 month window is stupid. The 4 that left got it negotiated down to 18 mill per team, which is a fair estimate. < but giving up 15.5 mil up front to get maybe 12-15 mil and travelling to do so is a bad deal. Plus they didn't have their free pass at that point too, so for schools that have legit potential as a Big12 or ACC addition, that makes very little sense.
I think the 12-15 mill number had legs. I think that was coming directly from the CW since all moves where done with their "media partners" and that was only CW at the time.
They should have tried to get Octagon early on, tried to get more media partners early, and they would have stronger case. CW was unproven as well as a media outlet. So that makes the deal look wishy washy as well.
Does anyone have an idea when this get's decided? Is there a drop dead date for the PAC to have enough teams for football?
Go read the article. PAC took that estimate from a consultant Navigate.
Industry insiders that Wolken spoke to said what they presented for valuation was viewed with a ton of skepticism...
Pac-12 might be resurrected, but former power conference is no longer as relevant
The zombie Pac-12 was resurrected, then it ran into an opposing force that we haven’t seen too often in college sports: Common sense.
www.usatoday.com
