The Pac-12 met its revenue distribution targets for the 2020 fiscal year despite disruptions cased by the coronavirus pandemic, according to financial documents obtained by the Hotline from a cross-section of universities.
The official distribution payments to the athletic departments won’t become public until the spring, when the conference releases federal tax filings that include breakdowns of revenues, expenses and executive salaries.
But the campuses have closed the books on FY20 and finalized their financial reports for the NCAA.
The Hotline examined reports from four schools (Colorado, Utah, Washington State and California) and determined the Pac-12 payouts again will be more than $30 million and mirror previous year-over-year percentage increases.
“Most of the revenue was realized before the pandemic hit,” according to a campus source who requested anonymity.
(Per policy, the conference office does not comment on financial information provided by the campuses.)
The FY20 financial reports from the four schools show approximately $32 million in revenue from the conference, mostly from the Tier 1 contracts with Fox and ESPN and the College Football Playoff.
The schools won’t be so fortunate this year:
Based on public comments from campus financial officers and information collected by the Hotline, athletic departments are expecting approximately $20 million from the conference office in FY21 – a decline rooted in the abbreviated football season and loss of media revenue.
(Combine the reduced payouts from the conference with the loss of campus-generated revenue like ticket sales, and most departments are bracing for budget shortfalls in excess of $30 million for the current year.)
Because of differences in accounting methods, the distributions cited in the Pac-12’s tax filings this spring won’t be an exact match for the revenue figures on the NCAA reports that have been made public by the schools.
But there’s more than enough information available to make a narrow estimate: The Pac-12’s official payouts should show an average campus distribution of about $33.7 million.
That would represent a 4.65% year-over-year increase from the FY19 average payments of $32.2 million – in line with prior annual increases.
It suggests, however, another year in which Pac-12 schools lagged many of their peers:
– The Big Ten is expected to announce campus distributions in excess of $50 million when its FY20 tax filings are made public in the spring.
– The SEC, which typically reports in early February, should show campus payouts averaging about $45 million.
– The Big 12 likely will report distributions of more than $35 million (excluding local rights).
– The ACC should show a revenue bump from the launch of its network in the summer of 2019, with payouts in the same range as the Pac-12.
For each Power Five conference, the impact of the pandemic on FY20 distributions should be limited.
The Pac-12 basketball tournament, which was shuttered after the opening round, is not a source of substantial revenue for the schools.
On the other hand, March Madness is an important revenue stream, and the NCAA reduced its payouts to conferences by more than half when the event was canceled.
But the Pac-12 offset that loss (approximately $12 million) with cost-cutting moves, including salary reductions, and by dipping into its reserve fund.
But the primary reason the conference met its distribution obligations in FY20 was timing:
The COVID-19 shutdown unfolded after the completion of the three components of the sports calendar that account for the vast majority of the conference’s annual media rights revenue: the football regular season, the football postseason and basketball regular season.
When the conference payouts for FY21 come into focus in coming months, the campuses won’t be so fortunate.