New Pac-12 commissioner George Kliavkoff had a list of priorities at his introductory press conference Thursday. He wants the conference to be more competitive, nationally, in football. He wants to push for expansion of the college football playoffs. And he said he wants to get the collective back of the student athletes. He intends to push for Name/Image/Likeness legislation that allows for branding rights for the individuals. One that got glossed over in the press conference is the Pac-12’s crippling financial morass. It is something which Kliavkov must deal with, or none of the other issues will matter. There is a lot to do in fixing the Pac-12 problems.
Fixing The Pac-12 Problems
Larry Scott’s financial malfeasance has been discussed in sections over the years. But the end result of his years of poor decisions has the economic chickens at the doorstep ready to roost.
It has been well chronicled here that Scott created the Pac-12 television network with the intent of providing a media and financial platform for the conference universities. It would allow the schools to play football games at off-hours when there was little interest from the major sports broadcast networks. And it was a place to showcase his first priority, the Olympic sports. They have been the path to a staggering amount of NCAA championships.
Running Up The Debt
Anyone who has ever been part of a product launch knows that you do not do it until you have a full distribution commitment. Scott launched the network without DirecTV or FIOS, and then eventually lost AT&T. The financial commitment to the schools for revenue from the network was never met over the last 10 years.
Next there was the decision to move the conference headquarters from the perfectly fine community of Walnut Creek, CA to San Francisco, with one of the highest costs of living in the entire country. It drove the overhead for the conference and the network into a whole other stratosphere. The idea, per Scott, was that the conference was now in the hub of the technology sector and would get some great partners. They never got any.
Hat In Hand
With the financial situation in a fast spiral, Scott took to a nationwide tour. He set up at least a dozen meetings with investment and equity companies, looking for a staggering $750 million in rescue funds. It was an amateur move. Investment companies of this magnitude do not hand over that kind of money without something in return. Scott’s presentation touted a lot of NCAA championships in the past and more coming in the future. And he committed to a low/safe percentage of return on investment for the investors.
Again, he was swimming solo without proper knowledge of the waters. These firms were not going to give $750 million to the guy who shipwrecked the boat and then let him continue to drive it later. They wanted seats at the decision-making table, and he was not in a position to give that. The chancellors and presidents of the conference schools hold those seats. Scott, and the conference walked away with no investment money at all.
Once the COVID pandemic hit, athletic programs were suspended, schools were partially closed, and matters went from bad to extreme. Most of the 12 athletic departments have a high level of debt. Some will take years to get out from under it. Their parent universities are in different levels of the same kind of trouble.
That brings us to the new commissioner, the task at hand, and his stated priorities. Kliavkoff backs a fast expansion of the college football playoffs. That makes sense. With the weekly intra-conference cannibalism that takes place during the football season, it is the most likely way to see any Pac-12 team in the playoffs any time soon. Not so ironically, new ACC commissioner James Phillips came out as skeptical this week when it comes to playoff expansion. He has Clemson and the 14 underlings. His playoff revenue is secured pretty much every year.
Kliavkoff also spoke out strongly in favor of athletes’ rights with regards to Name/Image/Likeness. As we have noted previously, those issues, the individual states, and the NCAA will all be going to court before anyone gets to sign an endorsement deal.
With Kliavkoff coming from Las Vegas, the question of legalized gambling as a potential source of revenue was also discussed Thursday. Kliavkoff is in favor of it in theory, but acknowledged the particulars are complex. The conference would need state legislatures in its six states to all be in line with similar laws in order for there to be one conference policy. We have, in the past, also spoken to coaches who are vehemently opposed to the concept and had vowed to not cooperate with elements within their power that would be necessary for such a rule to exist.
Those Who Know Him
What can Kliavkoff get done? A lot according to some who know him. We spoke with two former work associates from MGM Resorts. Both insisted on anonymity because they still work in the resorts industry in Las Vegas and did not want any blowback.
One who worked one level under him at MGM Resorts. They said he was someone, “Who studies everything he does before he makes a move. There are few chances taken. Everything is calculated.” That same person called him, “Very bright and not prone to emotional decisions.” The former employee said Kliavkoff is likely to succeed because he makes smart decisions.
The second former associate worked with Kliavkoff on various projects, as opposed to on a daily basis. They said Kliavkoff is a, “Solid guy, and the ultimate insider.” They pointed out that Kliavkoff was the point person for getting the Pac-12 men’s and women’s basketball tournaments in Las Vegas. They said they are not sure Kliavkoff has a full grasp of the problems at hand in the conference. The source attributed that to his collaborating with people in the conference trying to paint a bright picture. “It may take him longer to get fixes in place than many would like, but I do think he can make improvements. He will focus on the bigger issues first because that is what he does,” the source said.
Revenue Sports And The Need For Change
Indeed, at his introductory press conference, at the end, Kliavkoff made a statement about women’s basketball which many took as dismissive. “I think elevating [women’s basketball] is about giving it more media exposure.” But “we know where the bread is buttered. We’re focused on the revenue sports and winning in men’s basketball and football.” Factually, he was not wrong. There are only two schools in the conference that were revenue positive in the last full season of 2019-20; Oregon and Stanford. Still, it was quite a PR blunder. He was meeting a community who mostly had never heard of him until an hour before he was introduced.
We talked to UCLA football head coach Chip Kelly Friday about the new commissioner. Certainly, if football is Kliavkoff’s priority, then a university in the media market in his conference is going to draw his attention.
“We’ve got to change the landscape from that perspective,” Kelly said referring to the lack of Pac-12 teams in the college football playoffs. “There is a lot to do as a league from that standpoint so that we have a consistent representation in the playoffs. I am excited. He sounds like he is sharp. We are excited to get to work with him.”
Kliavkoff pledged a “listening and learning tour,” with conference coaches and athletic directors in the coming months. Kelly said change will need to be a collaborative effort. What may a be a fix at one school may not work at another. “If there is an individual effort at one school but it’s not the same at the other 11, then that doesn’t get to the front burner.” Kelly said because teams tend to operate in their, “own little bubble,” there has not been a lot of conversations about global fixes solicited from the conference in the past. “I think it is just a matter of getting a group together. There’s a lot of really smart coaches in this league and some really smart athletic directors in this league who can present something to the new commissioner on what we think is the best step to move forward.”
Long overdue change is going to come to the Pac-12. And while Kliavkoff apparently has a reputation for being methodical, there is not a moment to waste.