The Pac-12 Financial Debacle Was Even Worse Than Previously Realized
The Pac-12's collapse may spawn an entire book detailing all of the conference's remarkable mistakes.
From unbelievable mismanagement, to arrogance, to a misunderstanding of competing television contracts - it's a masterpiece of mistakes.
READ: PAC-12 PRESIDENTS’ DEMANDS WERE BASED ON INACCURATE DATA, PUSHED ESPN AWAY: NEW REPORT
Another significant issue that Pac-12 leadership faced was the revelation earlier this year that the conference owed Comcast roughly $50 million because of inflated subscriber numbers.
READ: PAC-12 CONFERENCE OWES COMCAST $50 MILLION DUE TO THEIR OWN INCOMPETENCE
Essentially, Comcast paid the conference based on the conference's estimate of subscribers receiving the Pac-12 Network. Except they'd overestimated wildly, meaning that the entertainment giant was due tens of millions of dollars in back pay. Now it turns out they underestimated yet again.
According to newly released court documents reported by Jon Wilner at the San Jose Mercury News, the conference has budgeted for a $72 million hit as a result of the overpayment by Comcast, among other Pac-12 Network related mistakes. Conference commissioner George Kliavkoff confirmed the amount during a declaration in a pending lawsuit filed by the two executives fired in the wake of the overpayment revelation.
LAS VEGAS, NEVADA - DECEMBER 03: Pac-12 commissioner George Kliavkoff speaks at a press conference before the PAC-12 Football Championship football game between the Oregon Ducks and the Utah Utes at Allegiant Stadium on December 03, 2021 in Las Vegas, Nevada. (Photo by Alika Jenner/Getty Images)
Pac-12 Mistakes Doomed An Already Flailing Conference
Kliavkoff detailed that the conference will be forced to issue $6 million less per school this year than they'd previously expected. Mostly to offset 10 years of overpayments from Comcast and other associated fees from overcounting.
According to Wilner, Kliavkoff stated that they were "employing a calculation for license fees owed to the Pac-12 that double-counted certain subscribers."
The conference was notified of their mistake during an audit in 2017, but never told Comcast until summer 2022 following another internal audit. To pay Comcast back, the Pac-12 essentially emptied its emergency reserve fund. Wilner quoted a source saying "There's nothing left."
If you want a one simple explanation of why the conference is effectively finished, this story might be it. Former commissioner Larry Scott presided over a decade of tremendous mistakes. First, by refusing to partner the Pac-12 with an established sports television network. Then by mishandling expansion and turning down Texas and Oklahoma, and finally by waiting too long to start new media rights negotiations.
And so here we are, with a Pac-2 starting in 2024.
The good news for Oregon State and Washington State is that by paying the debt this year, they won't be held liable once the other 10 schools leave. They must be thrilled.