'This thing's falling apart': Why college sports administrators are skeptical of potential Pac-12 deal with Apple

As one athletic director pondered the future of the Pac-12, he paused for a moment (maybe trying to come up with less of a doom-and-gloom response) before finally exhaling and being honest.

“My gut tells me this thing’s falling apart and they’re not going to pull it back together,” he told On3.

The news from Tuesday about a potential Pac-12 TV deal with Apple did little to change that belief. Not just for that specific athletic director either.

Since the news of that potential Pac-12 and Apple partnership broke, On3 has polled several college sports administrators, including three athletic directors, to gather perspective on that primarily streaming and subscription-based model and what the possibility of it means for the future of George Kliavkoff’s conference.

They were mostly skeptical.

“If I’m Arizona, I’m probably getting the hell out of there,” the aforementioned AD told On3.

The money

It was less than two weeks ago that Kliavkoff shared a belief that Pac-12 schools would soon be “rewarded” for their patience in regard to a media rights deal. 

Ultimately, it’s very much fair to question whether Kliavkoff delivered on that.

While the deal with Apple could eventually put the Pac-12 in line with the Big 12’s annual payout of $31.7 million, it would be dependent on subscription numbers. The revenue estimates for schools were as low as $20 million per year, according to Yahoo! Sports.

“To me, it’s too much risk (for schools), especially with a conference that has significantly changed,” a Mountain West administrator told On3. “Maybe if USC and UCLA were there and you had massive brands. You just don’t have that many. … 

“I can’t imagine as an AD having to budget based on not necessarily being locked in on a number with the cost of doing business escalating as much as it has. That’s going to be really difficult for the CFOs of that conference. I don’t know how they’re going to make this work in my humble opinion, but that’s just my opinion.”

It would be the latest sports streaming venture for Apple, which has worked with Major League Baseball since last year and is now in the first year of a 10-year deal worth at least $250 million with Major League Soccer.

“If you look at what the MLS has done with Apple and its partnership with Apple, it seems like they’ve done really well for themselves, just thumbing through Sports Business Journal and reading some of the articles about what’s happened there,” an athletic director said. “Obviously, Apple TV took off with Ted Lasso and some other things, and Apple’s got a lot of power in and of itself to make a lot of things happen. It wouldn’t surprise me if Apple one day bought ESPN altogether. So, I certainly see the possibilities. But there’s just a lot of unknown. …

“I’m not terribly down on it. I just don’t know logistically how you budget for something like that unless they give them a bottom number as a starting point. But even then, if the bottom number is lower than the Big 12 number and then you can jump up several million dollars each year, I just feel like that gets really hard to manage or to invest or to use the money in the way that you would want to use it to kind of build up your programs, sign coaches to contracts, facilities, all those kind of things. It just makes it really hard practically speaking.”

An ever-changing college sports landscape makes the revenue piece even more critical.

“We are going to end up paying our student-athletes and we are going to end up revenue shared with them. And that’s fine maybe for the Ohio States of the world. But that’s not fine for the vast majority of other schools,” another athletic director said. “We do not have the resources. When we’re starting fiscal years off several million in the hole operationally because of the cost of doing business and the lack of institutional support and we have to go out and fundraise and then we’re projecting that within the next three to five years, now that we’ve asked the federal government to get involved, that we’re going to have to share a percentage of our revenue, we don’t have it. So the revenue is going to be that much more important.”

The exposure

One Power Five athletic director did have a slightly less negative outlook. At least at first.

“The positive about it is Apple is arguably one of the top three brands in the world. So, if you’re going to go all in with streaming, you might as well do it with them,” he said. “Apple’s a top three brand. It’s a great brand. And then you know that’s the future. The future is streaming. So, you get to the future earlier. Somebody’s got to do it, right? I’m not as down on it as everybody else probably. I think we’re going to all be looking at streamers in five years anyhow.”

Then came the “but,” though.

“Would I rather have linear? Yeah, obviously,” he said.

He’s not alone.

The exposure part of a deal with Apple is another big cause for concern.

“My instinctive reaction to all of it is that whether you’re linear or streaming, if fans want to find your product, they’ll find it,” an administrator source with Pac-12 experience told On3. “However, for the casual fan, for the 17-year-old recruit in Ohio, they’re not just going to surf Apple TV to find a game to watch on a Saturday, right? Your fans, they’re going to be committed and invest and they’ll subscribe to watch their team play. I don’t think that’s really the issue. Now, the size of those fan bases might be a challenge. But, to me, it’s the everyday casual fan and how you maintain relevance among that cohort of the audience. That’s at question.”

Maintaining relevance with those potential recruits would be a separate obstacle.

Being visible and on TV is an advantage with potential players of interest. So is being able to pitch prospects on consistently playing in highly-viewed games. Limitations in those areas create a disadvantage for coaches compared to their counterparts from other conferences.

“Traditional cable, as you know, you can almost like flick through channels and like accidentally find a game,” an ACC administrator said. “You can find an Ole Miss versus Auburn. … But with this, you wouldn’t be getting the casual fan who just wants to watch a game.”

The outlook

It’s safe to say that the Pac-12 situation has become dire.

Colorado is leaving for the Big 12. The three other four-corner schools – Arizona, Arizona State and Utah – may end up there, too. Plus, the Big Ten has started having exploratory discussions about four other Pac-12 schools – Oregon, Washington, Stanford and Cal.

“I just feel like if you’re one of those schools on the fringe, do you run the risk of that or do you jump to the safe side of the river knowing you’ve got a set amount and knowing there’s a little bit more stability there?” an athletic director said. “I just think that’s a hard case to sell. And the other thing with the Pac-12 is no matter what happens, I think everybody expects – even if they come together right now –  that we’re having the same conversation in four or five years. And I think that’s the hard reality: Are we just kicking the can down the road to the inevitable?”

That athletic director and others in the administrator space think the opportunity to find a more stable situation may be tough for schools like Arizona to pass up.

“I think you can just jump to the Big 12 right now and then save yourself,” he said. “It’s not that bad. I could paint a picture that 15, 20 years from now that the Big 12 with the schools in it could be better set up for the future than maybe some of these other leagues. When you talk about cities or schools like Orlando [with UCF] or Houston or even BYU and what they bring to the table, there’s a lot of opportunity there, too, for schools like that to kind of take another step forward.”

One administrator also threw out a potential scenario where Brett Yormark and the Big 12 could further cripple the Pac-12. 

“If they were willing to go to 18, if they take the three remaining Four Corner schools, to me what would be really interesting, if they really want to deliver the final knockout blow to the Pac-12, it would be to go get San Diego State and UNLV and add some more Western schools that can balance out the schedule but also get a foothold in Southern California,” he said. “So I think if Yormark wanted to really knock ’em out, you add the corner schools and you go to 18 with a San Diego State and UNLV or something like that. And now you’ve got a foothold in California and Vegas in addition to all that you’ve already taken. That, to me, is interesting. 

“But I know their TV deal isn’t structured to increase on a pro-rata basis, so you probably take those two and just put them at a lesser share and you roll. They have no need to do it. But if they really want to destroy the Pac-12, they could.”

Either way, the Pac-12 finds itself in a precarious position.