A strong reason for the Pac-12 to be optimistic about future football earnings

Nobody studies the numbers or knows the math of Pac-12 television and media rights better than Jon Wilner of the Wilner Hotline.

His recent analysis of Pac-12 football television revenue brings up a really important point that should make George Kliavkoff and the conference optimistic about the next round of media rights they will be negotiating.

One thing should be said in advance: Pac-12 Networks will probably not show much football in the future. There’s a good chance football and basketball will be taken off the network so ESPN and other TV and streaming partners with wider distribution (and better prices) will carry the Pac-12’s revenue sports. Pac-12 networks will likely become a central home for Olympic sports and still be a useful outlet for Pac-12 fans.

Now we come to Wilner’s analysis:

The Pac-12’s current 12-year deal with Fox and ESPN is valued at an average annual value of $250 million. The vast majority – about 85 percent – are tied to football inventory. That’s $212.5 million a year.

According to the Term Sheet, the two networks have the rights to 45 football games a year, including the conference championship. We don’t know how much the title game is worth, so for the sake of simplicity we’ll split the $212.5 million evenly across 45 games.

That equates to an average of $4.72 million per football game on ESPN and Fox over the life of the 12-year contract.

However, an additional 36 soccer games — or 44.4 percent of the total number of conferences — are broadcast by the Pac-12 networks each season.

For these, the net income of the schools is … starvation wages.

Again, the average annual payout to each campus from the Pac-12 networks is approximately $2.5 million. With 12 schools, that works out to a nice amount of around $30 million per year in the total distributed.

So the wholly owned media company founded by Larry Scott makes about $30 million a year in revenue and broadcasts 36 football games.

That’s $833,333 in real dollars for the schools per game.

That leaves only the campuses, which receive $4.72 million for each football game on ESPN and Fox and $833,333 for each game on the Pac-12 networks.

Here you can connect the dots. Simply by shifting inventory from Pac-12 networks and priced much more competitively in the market through ESPN or a streaming service like Apple, the Pac-12 is poised to make millions more dollars per football game for the life of new media rights deal she will eventually negotiate.

To be clear: The Pac-12 does not add any value. USC’s departure from the Pac-12 obviously hurts the Pac-12’s ability to add value. However, this is a reduction in depreciation and lost revenue. The Pac-12 can recover millions of dollars lost due to the Pac-12 network. It does mean more money in the coffers, but in the context of smaller losses, not outright profits.


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Story originally appeared on Trojans Wire

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