The Pac-12 Conference is considering ideas to bring in more revenue, and one possibility is selling stakes to private investors.
According to a report from the Oregonian, leadership pitched university presidents and chancellors a plan aimed at bailing out the struggling conference and one that would help it keep pace with its Power Five counterparts.
The report read:
“The “Pac-12 NewCo” plan was introduced to the conference presidents and chancellors at their mid-November meeting and was subsequently discussed in a conference call in December, per sources. Private investors would own 10 percent equity in the newly formed entity in exchange for a $500 million investment.“
The Oregonian obtained the six-page document outlining the plan that was presented by conference commissioner Larry Scott. The “Pac-12 NewCo” addresses media rights and a plan to take on private investors. This new structure could create a cash infusion of $500 million that would be immediately available to distribute to conference members.
The new plan for distribution rights would also create a large increase in revenue.
“It reads, ‘based on the Pac-12’s current media rights deals and making conservative assumptions going forward, we estimate that a Capitalized NewCo could be valued at approximately $5 billion to $8.5 billion.’
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 missed the College Football Playoffs for the third time in four years. The conference will have Washington battling Ohio State in the Rose Bowl on Tuesday. The Pac-12 is 1–2 in the 2018 bowl season with four games remaining.