UC Regents: UCLA to leave for Big Ten, will pay Cal $2 to $10 million, reportedly annually
UC Regents: UCLA to leave for Big Ten, will pay Cal $2 to $10 million, reportedly annually
What a strange and unexpected outcome.
UC Regents: UCLA to leave for Big Ten, will pay Cal $2 to $10 million, reportedly annually
And yet, another twist.
The UC Regents finally deliberated and allowed UCLA to move onto the Big Ten along with USC. This has long been expected.
What wasn’t expected is the Regents did indeed deliberate on the long-speculated payout to UC Berkeley (and by proxy Cal Athletics), and agreed that UCLA should pay $2 to $5 million, contingent on the eventual Pac-12 television contract. Full summary from the Regents notes.
The President will return to the Regents at a future meeting, after Pac-12 media agreements are finalized, with a recommendation for a contribution by UCLA to the Berkeley campus in the range of $2 million to $5 million, to be used to enhance student-athlete support at that campus. Such recommendation will be based on the best available information on projected revenues for both campuses.
That figure was then revised to $2 to $10 million.
And although there was nothing explicitly mentioned in the notes, there are reports coming in that this payment could be annual.
UPDATE: This has been confirmed by the New York Times.
That could mean $20 to $100 million in the next decade coming to Cal from UCLA’s move. All in all, not a bad bargain.
It’s hard to imagine this decision not coming without strong pressure from the Governor’s office. Gavin Newsom was not happy about UCLA’s unilateral decision to buck the Regents, not involve the state or their sister UC school in the move and potentially damage Cal’s revenue generating opportunities with a likely diminished Pac-12 contract. It feels like the politics came into play here.
So what does this mean? Who knows!
For UCLA, this payout in any manner would still be pocket change compared to the financial windfall they’re about to receive. The Big Ten contract for UCLA is expected to net around $70 million a year, and should drastically upgrade the Bruins in every which way from a competitive standpoint compared to any remaining Pac-10 program.
But if this payout is annual, it will provide Cal with a much needed influx of cash. The Bears have a lot of debt they’d like to service out, particularly from the Memorial Stadium renovation, and in absence of steady TV revenue and sagging ticket sales, this financial boost is just what they need.
That being said, we’re still a long way from anything actually happening. UCLA doesn’t leave for the Big Ten until 2024. It’s likely UCLA will contest the ruling of the UC Regents if they find the right legal bearing. It’s unclear how this will hold up since this ruling is fairly unique.
And this is still a band-aid. Cal and what remains of the Pac-10 are still very much dependent on a good television deal. Otherwise, this conference is in danger of sinking out of the major powers, and those schools that remain will be looking to abandon ship. That includes Cal, who will certainly try to join UCLA in the Big Ten and seek additional revenue sources, because difficult decisions await without increases in steady revenue.
It is definitely a situation that is worth monitoring in the coming months. A lot is in play for the Bears. This UC Regents decision is a bright spot in a season with not many for them.
Cal fans, what are your thoughts on all of this?
Millions of dollars in annual revenue while avoiding regular cross-country trips to New Brunswick, NJ, State College, PA, and Urbana-Champaign, IL? Seems like a reasonable consolation prize.
We're the new Bobby Bonilla! Come up with that cash, Bruins! I love it!