When the SEC announced its new $3 billion media rights deal with ESPN in late 2020, it set its member schools up to receive payouts of more than $70 million annually when the new agreement kicks in. The deal kick-started a wave of NCAA conference realignment—beginning with Texas and Oklahoma departing the Big 12 for the newly flush SEC—and set the table for the seven-year, $7 billion media rights deal the Big Ten would sign soon thereafter, putting its schools on a similar financial trajectory.
That was only the beginning. A year after USC and UCLA announced they would leave the Pac-12 for Big Ten pastures, the departures accelerated. One week after Colorado announced it was heading back to the Big 12, Oregon and Washington jumped to the Big Ten. Later in the day, the Big 12 announced that Arizona, Arizona State and Utah had been accepted for membership. Their departures leave the Pac-12 with just four remaining schools.
The allure of Big Ten money and the uncertainty around the Pac-12’s own expiring TV deal was what set USC and UCLA in motion. The schools that remained were wary about what the future of their own television revenue would look like after a year of stalled media rights negotiations, the notable Southern California departures and the backdrop of emerging super-conference competitors. A streaming-heavy deal from Apple on the horizon doesn’t appear to have provided the reassurance some of the conference’s biggest members needed to stay put.
Amid all the super-conference conversation, the Big 12 was cementing itself as an attractive landing place of its own despite reporting just $480.6 million in total revenue for the 2022 fiscal year—lowest among the Power Five. (The Big Ten reported $845.6 million in total revenue for 2022 for payouts of $58.8 million for its full-fledged members; the SEC, $802 million with payouts to each school landing just shy of $50 million; the ACC, $617 million; and the Pac-12, $580.9 million for an average of $37 million apiece for members.)
The Big 12 still distributed a record $44 million to each of its schools for fiscal year 2022, the third most of the top-tier conferences, and that number will soon jump. While the league’s revenue won’t reach the heights of the SEC or Big Ten quite yet, new commissioner Brett Yormark secured a six-year media deal worth more than $2.2 billion despite the Big 12’s big-name defections—a renewal signed ahead of schedule that simultaneously locked in an almost 75% annual increase in rights fees and long-term security for the conference’s member schools. The certainty of the Big 12’s future was likely a major determinant in the defection of Colorado, Arizona, Utah and Arizona State.
As the three power players forge ahead, the Pac-12 finds itself in desperate straits, with dissolution a possibility. But there’s also another Power 5 player still in the picture: the ACC, which distributed about $42 million to each of its members this past year.
But the ACC has one big thing working against it: it’s locked into its contract with ESPN through 2036.
The space between the ACC’s finances and those of its peers has already grown steadily, leaving some of its member institutions on edge. The gulf between the conference and its peers in the SEC and Big Ten is on track to become even greater. In time, the Big 12 will join the game of leapfrog. Knowing this, Florida State proposed an unequal revenue distribution model based on the percentage of revenue each member school generates for the ACC as a potential stopgap solution earlier this year. The result would have been bigger pieces of the pie for programs like Clemson and Florida State, to help them stay competitive with their SEC and Big Ten rivals as two of the ACC’s bigger athletic departments.
That proposal didn’t find much traction, so, as Sportico first reported, Florida State is now exploring how it could use capital from institutional funds to bolster its current ACC membership or potentially fund an early exit. Jumping ship for another conference would require a $120 million exit fee plus the cost of buying back its media rights through 2036, which would amount to tens of millions annually.
All the while, there’s another looming threat from the SEC and Big Ten: both will renegotiate their contracts again before the ACC’s deal with ESPN expires, which will only further widen the gap.
In college athletics, money most certainly talks.
