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Volume 26 No. 60

Colleges

Pac-12 Commissioner Larry Scott said the bids coming in from potential investors have validated the conference’s media strategy. SBJ College reported last night that the conference has multiple bids at its asking price of $750M from a broad range of companies and private-equity firms. The Pac-12 is going through the process of determining whether it will take on one of these investors -- which would provide its schools with a huge influx of cash -- or continue on its current path toward the next media rights deal. The current deals with Fox and ESPN run through ‘23-24. “Given the pressures our campuses feel, we're trying to be creative and come up with ways to get them more revenue,” Scott said. “We've been going through a process where we've received expressions of interest, bids, and it's really confirmed our belief in our future value and our strategy.”

BRING SOMETHING TO THE TABLE: Scott said the conference is seeking an equity investor that has an expertise in media and tech and can be an asset when the Pac-12 negotiates its next media-rights deal. That would seem to lessen the likelihood that the conference would partner with a private-equity firm. “This whole process is really about getting ready for 2024,” Scott said. “We're the only league that's got all of our rights owned and available and coming up at the same time. We like the flexibility and we're attracted by the idea of maybe having a partner by our side that could help us prepare for a future that's got new and different business models.” The Pac-12’s CEO Group agreed last month at its spring meetings to continue with the process of fielding bids, but they are not committed to taking on a partner yet. Because this is uncharted territory for a college conference, the process is moving slowly, but the Pac-12 will work with Raine Group to evaluate the bids over the next few months. “We continue to narrow the focus,” Scott said. “I'd say we had probably more interest in the way of actual business than maybe we anticipated. … Now we're narrowing the parties we're most interested in and focusing on the strategic value a partner could bring.”

MATH CLASS: An injection of cash, paid up front, would close the revenue gap that separates the Pac-12 from the SEC and the Big Ten. The Pac-12 distributed $30M to each school in ’17-18, compared to $43M per school in the SEC and more than $50M in the Big Ten. A $750M investment distributed evenly over five years would represent $12.5M more per school. The existing $30M plus the new $12.5M would add up to $42.5M. “We haven't had a definitive time table at any stage,” Scott said. “We might determine going forward that we don't want to proceed with a deal, but we've got a lot more intel now about the marketplace and the interest and validation of our strategy and confirmation of our values.”

LEADERSHIP QUALITIES: Scott, who has been criticized for working largely at the presidential level within the conference and not giving ADs a voice, described this process as highly collaborative. Presidents, ADs and CFOs all are at the table. Oregon AD Rob Mullens backed him up. “The process has been very inclusive,” Mullens said. “It's been informative for all of us. This is a rapidly-changing landscape, and when you look at the future, the vision is that we would be unique, and we are.”

Extra spending is related to one-time football transition costs as well as the team's coaching staff additions
Photo: getty images

Univ. of Kansas Athletics added nearly $8M to its FY '19 budget "after proposing the change at a board meeting," with "almost all of that money needed to cover football expenses," according to Jesse Newell of the K.C. STAR. KU's original approved budget for FY '19 was for "just more" than $99M. That was bumped to north of $107M Thursday, with KU CFO Pat Kaufman noting that a "majority of the extra spending was related to one-time football transition costs and also coaching staff additions," which include Les Miles coming on as head coach. KU Athletic's plan to cover the $8M deficit will be with an "increase in contributions." After originally budgeting that number at $20.2M for '19, KU's new budget listed the amount at $28.49M -- an improvement of more than $8M. Kaufman said that "excitement from a recent Final Four run in men's basketball and an understanding from fans that money was needed for football" were "reasons for the increase." KU also will get a "windfall with its Adidas contract extension," receiving $11M in '20 as compared to $4.3M in '19. However, KU is also "budgeting for a significant stepback with contributions," planning on $22.7M in '20 compared to $28.5M in '19 -- a decrease of almost $5.8M (K.C. STAR, 6/7).

DEVELOPING A PLAN: In Lawrence, Dylan Lysen notes KU Athletics will "soon meet with four consultant organizations that are vying to be selected to help the department develop a facilities master plan." KU AD Jeff Long said that the plan is to "give the department a guiding reference to construct new facilities and renovate current facilities over the next 15 to 20 years." It will also "help the department" with its planned $300M renovation to David Booth Kansas Memorial Stadium, which is "expected to begin in the next few years." KU Athletics will "look into what fans want out of the stadium, what they are willing to pay to use those amenities, and how the department is going to raise money to fund those renovations." Long said that the plan could also "look into finding new ways to use the stadium for more than just football games in the fall" (LAWRENCE JOURNAL-WORLD, 6/7).