The Latest on Conference Realignment - August 5th

Slowly but surely, things are getting clearer in the wake of USC and UCLAs departure from the Pac-12.    There are three near-term events happening that will meaningfully impact Cal’s future in athletics:

The Board of Regents will meet again on August 17^th at which time UCLA Chancellor Gene Block will present how and why the Bruins' move to the B10 benefits the entire UC System.  Given the very pointed rancor with which Governor Newsom and the Regents greeted Block two weeks ago, there’s every reason to believe Block will be in appeasement mode.  It does not appear the Governor or the Regents can directly change or modify the decision Block has made if UCLA chooses to continue on this course.  However, as it concerns Block’s career and UCLA's political capital going forward, there are clearly a lot of reasons for UCLA to find a win: win solution.   Whether that encompasses lobbying Fox and the B10 on behalf of Cal for membership to the B10 and/or a sharing of UCLA's newfound largesse is unclear.

Secondly, the Pac-12 is all but certain to extend the exclusive negotiating period with ESPN.   Media consultants working on behalf of the individual schools and the Pac 12 are putting their best foot forward to show the potential value of the conference’s sports content to ESPN.  The ability to own the time slots after 430pm, the meaningful size of the remaining markets on the West Coast, and the historical legacy and the underlying value of the brand will be pushed to drive as high of a price as possible from ESPN.  That bid is relevant not only in looking to bridge the gap financially for the Pac-12 schools should the conference stay together, but it also creates leverage for the Pac-12 to then discuss possible additions to the conference and perhaps even fulsome mergers with the likes of the ACC and B12.  Without a strong media partner and market-relevant dollars in their pocket, the Pac-12’s options become limited at a time of conference consolidation.  Look for the Pac-12 to augment any bid it receives from ESPN (or post the exclusive period, Fox) with a streaming deal.  Apple seems the most likely winner of that part of the auction.  Perhaps more meaningful for Cal, if ESPN can put forward a relevant offer, that will force Fox and the B10s hand.  They will have a short window to bring on additional West Coast programs before they make a long-term commitment to a new broadcast deal and they will understand the magnitude of dollars they will have to offer to those schools to move to the B10.  

Meanwhile, the B10 is finalizing its negotiations with Fox on their new broadcast deal.  This is expected to happen within the next 3 weeks.  Once this is complete, the B10 can look at its goals beyond the value of its Football Media rights and can then with Fox decide how bringing on a Cal, Stanford, Oregon, or Washington fits their mission as well as their new financial reality.  Prior to the conclusion of the B10/FOX negotiations, the B10 is not going to reach out to anyone

We continue to hear that Notre Dame is not a near-term viable option for the B10 and that they will renew their rights with NBC (with a hefty uptick in revenue) as well as their commitment to the ACC outside of Football.    Fox is then left searching for the largest possible media markets they can leverage against their huge new commitment to the B10 whilst the B10 looks to manage for a.) strong academic and reputational fit; b.) a solution to mitigate meaningful travel and time away from classroom concerns for non Football teams, and c.) a further consolidation of power to influence the overall future of College Football and the NCAA (e.g. NIL, Playoffs, Scheduling).   Cal and Stanford are in close contact with one another and in lockstep on goals and intentions.   That doesn’t mean that the two rivals will move as one on any decision as each school has to look out for its own best interests and a surprise move by Notre Dame to join the B10 followed by a singular invitation from the B10 to Stanford would almost certainly see the Cardinal leave the Bears behind.

Over the past few weeks, the media narrative around Cal’s future has changed.  It’s become more clear that FOX and ESPN are driving the bus and that potential market size and viewership dynamics will be paramount to any new decisions.  It’s also become clear that the B10 wants to add academic prestige and like-minded institutions, as it looks to simultaneously maximize the revenue potential of its athletic programs and its influence on key decisions surrounding the future of College Athletics.   Thus, Cal and Stanford are being increasingly mentioned as FOX and the B10s likely top choices for expansion.   Further, it’s not lost on USC and UCLA that their non-Football Sports are going to be meaningfully negatively impacted by long-distance travel that pulls students away from the classroom as well as family and friends who want to watch them participate in their respective sports.  Finally, UCLA may become Cal’s biggest cheerleader to join the B10 given the clear stance taken by the Governor and the Regents.