Cal getting reduced ACC revenue is more viable if UC Regents mandates Calimony from UCLA

The California Golden Bears have to receive the recommended $10 million from UCLA's Big Ten contract to make the math work for an ACC invite.

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This is an opinion piece authored by this writer. His opinions are his alone.

As has been widely reported, Cal and Stanford seem to be on the verge of an ACC invite. The agreed terms will likely be at a reduced revenue cut of Tier 1 ACC rights from the ESPN deal. Cal and Stanford have reportedly agreed to each take about 30% of the $24 million ACC pro rata share to start, or roughly $7-10 million. That payout will increase over time to nearly a full share.

Now the wait. What is likely being finalized is the California Golden Bears finding a way to make the financials work, so that they don’t have to rapidly downsize their athletic department.

There are additional payout distributions that would likely come from 12-team playoff appearances. Clemson has made many playoff appearances, Florida State, Georgia Tech, North Carolina, Miami, Pitt have made New Year Six bowls in the past decade. Notre Dame also partially pays out its share to the ACC. On average the ACC ends up with one to two teams every year.

If those trends can continue, that could lead to an additional $8-10 million payout in a 12-team playoff era, with the room for maybe another one. It’s certainly not a yearly guarantee, but the automatic ACC playoff bid brings the Cal/Stanford payout to about $15-20 million a year.

SMU foregoing their media rights for seven years would lead to a distribution of their $24 million to the remaining schools, which would then get redistributed back to all other ACC team members, including Cal and Stanford. That’d mean maybe about another ~$1 million or so, so let’s say it’s $16-21 million.

There is a theoretical multimillion dollar payout to all ACC members if Clemson and Florida State pull the trigger prematurely and eat the $120 million of exit fees for exiting the conference early. But that is theoretical, and Cal is almost certainly thinking about the immediate.

If Cal were to join at this reduced rate, this should keep football and basketball afloat. But this payout would endanger a host of Olympic sports. While that doesn’t seem like a major financial issue, a lot of well-monied donors that support these programs in tandem with football would be very disgruntled. It’d be useful to have another source of revenue.

So that leaves the still yet to be fully resolved Cal/UCLA situation.

The UC Regents did approve UCLA’s move, contingent on UCLA paying Cal $2 to $10 million for damages caused by not consulting their UC big brothers up north. But this was conditional on a Pac-12 TV deal making up the difference. The reduced ACC payout pales in comparison to the $65 to $75 million that UCLA will earn from their Big Ten deal.

It can be argued that UCLA deciding to leave the Pac-12 along with USC accelerated the destruction of the conference, and the erosion of media rights payouts to the flagship university of the UC system. UC Berkeley is still the jewel of the state of California, and there are plenty of heavy political hitters who will not want this university’s revenue streams be negatively impacted to this degree.

So UCLA granting Cal the needed revenue to make up the expected value of the Pac-12 contract would be a bargain. Adding $8 to $10 million (maybe more if renegotiated in a Regents meeting) from UCLA still gives the Bruins $57 to $65 million and should stabilize their athletics department.

If maximum Calimony is approved, that gets Cal to $24-31 million, which is about the minimum of what the Bears were expecting from the truncated Pac-12 media deal after UCLA and USC left.

It’s likely changes will still happen inside the athletic department. But combining the reduced media deal with playoff payout revenue and Calimony is the critical three-pronged approach to make the financials work for an ACC deal.