5 Business Lessons from College Football Realignment

The Pacific Twelve Conference (PAC-12) is no more, with the best school leaving for the ACC, Big-Ten, and Big-12, leaving Washington State and Oregon State left is the PAC-12, or the 2-PAC as some have called it.

5. Sometimes the best offer is on the table!

??????????????? Allegedly, The PAC-12, led by the commissioner George Kliavkoff, had an offer of $30 Million dollars per school from ESPN, with a total of 360 Million annually. The commissioner thought that he could get $50 per school, with a total of $600 Million annually. The $360M was the best offer as cable subscribers are wanning as the commissioners should have taken this as it would have saved the conference. There was also an offer from Apple TV for streaming, albeit a risky one that may have provided about $25 Million.

?

4. Technology Can Change Everything!

??????????????? There was a time when the only way to watch college football was either on the major networks (NBC, ABC, CBS, FOX) or on cable via ESPN, FS1, etc., but this has changed rapidly as many have “cut the cord,” and moved to streaming options. The aforementioned Apple TV offer was just too risky as schools are looking to make capital improvements where guaranteed money is best. The PAC-12 most likely thought that since they made a huge splash with their record break deal in 2011 that was worth about $21 Million per school per year that they could indeed reset the market with $50 per school in 2023. Unfortunately, the landscape had changed enough where this kind of guaranteed money for cable was not feasible and the landscape for streaming was not mature enough. Essentially, the PAC-12 was left in the abyss.

?

3. Some ideas are just too ahead of their time!

Once upon a time there was a conference that had 16 teams in two time zones with sub-regional teams in quadrants. It was seen as too many teams as the 16-team league divested into two conferences as 8 teams were seen as a better fit. What was this conference, it was the way ahead of its time Western Athletic Conference. The conference received flak from congress as words such as collusion were even introduced. Current Power 4 (conferences that receive automatic BCS invites) such as Utah, BYU, TCU and SMU (once they join the ACC) were in the league. Fresno State and San Diego State were reportedly mentioned. Just imagine if they would have been able to hold on for another 5 years or so. 8 teams left the WAC to form the Mountain West Conference in 1998, to build what was seen as a more sustainable league at the time.

?

2. Written Agreements are still Paramount

??????????????? The Big-10 and the PAC-12 have had agreements in Basketball with the now defunct BIG-10/PAC-12 Basketball Challenge as some will wonder why the two conferences didn’t solidify this agreement and go all in on a joint agreement. We could have had a setup where the PAC-12 was preserved with some cross conference games. USC-Michigan, UCLA-Ohio State and Washington-Penn State would have been great to see on an annual basis not in the Rose Bowl. The WAC in its current form and the Atlantic Sun Conference have done this with the United Athletic Conference. Instead of combining conferences, a football agreement was made that allows them to play a joint football conference level where it makes sense to play football across the country, but non-revenue sports maintain their regional play. These two conferences realize that sports such as volleyball just don’t make sense to travel across the country.

?

1. Handshake Agreements Just Don’t Hold Up

The BIG-10, PAC-12 and the ACC had a handshake agreement in place that was supposed to stop the re-shuffling amongst the 40 schools involved. This handshake agreement was supposed to stop poaching amongst the school as they were to work together on bigger picture topics such as college football expansion, non-conference games, think Clemson-Ohio State, USC-Miami, and Iowa-Washington, but unfortunately without a written agreement, this imploded once PAC-12 schools realized that the PAC-12 was no longer feasible.

Final Thoughts

Just imagine for a second that the handshake agreement had been solidified, we may still have a PAC-12 with all the regional games on the west coast as I would rather see Washington-USC in a championship game past 2023 instead of them competing against say Michigan. An Apple cup with Washington-Washington State may still happen, but more likely is a game between Washington State and Boise State as the remaining PAC-12 schools will have to find someone to play in 2024.

??????????????? From a business perspective, this serves as a great reminder that sometimes the best offer is on the table, that technology and technology trends can drastically change the landscape. Great ideas such as a massive league can be too soon if all participants are not bound by an agreement with substantial length. Last, a handshake agreement must be solidified in order to preserve its integrity with contracts reach upwards of $300 Million per year!