One of the biggest challenges facing the new leadership when it took over the Pac-10 was how it would it go about negotiating a new television deal that would be competitive with other BCS conferences, while providing a foundation for incremental revenue based on what individual teams could create for themselves within their own markets. From a USC perspective, the ability to leverage its attraction as a marque television draw and generate revenue would be a key component of any future conference television agreement.
This picture started to get painted during the almost-but-not-quite formation of the PAC 16 Super Conference. Ironically, as the PAC 12 Conference Commissioner started to give glimpses of his vision for a conference television agreement and what was in the best interest of conference members, it also helped put into motion a separate new television agreement for what many hoped would have been the conference's next college football icon, Texas.
Once Texas was informed their vision for a new television agreement was not aligned with the PAC 12, it used its clout as an iconic program to stay in its conference and get a 20-year, $300 million agreement with ESPN to launch its own network...with complete control over its branded content, licensing and broadcast rights. This really laid the groundwork for how USC could maximize its status as a multi-generational college football blue-blood and icon.
The first step USC took was agreeing to a less-desirable expansion of the Pac 10 by adding Utah and Colorado to form a new Pac-12. Both schools seem to have done well with the move, having been assured they'd be in the Southern division with Colorado also getting help for its buyout from the Big 12. It appears this was a start to how USC believed it would maximize its status as a multi-generational college football blue-blood and icon.
Unfortunately, here is the likely next step for USC, according to multiple, well-established sources. It appears that USC is prepared to take, or has already taken, a different strategy from the one that helped land Texas its record-setting TV deal. Information is starting to emerge that USC's administration has turned over, or is very close to turning over, all broadcast rights to the Pac-12 for the next 10 years. It's an "All Rights In" revenue-sharing plan currently used by the Big Ten and SEC. It should not be much longer before we find out if this happened, and just how restricting and limiting the agreement could be for USC.
One of the most important conditions of a deal like this for USC would be an escape clause so USC could leave to take advantage of a better opportunity in the future. The word I'm hearing is that USC could leave the league but the league would retain all of USC's broadcast rights for 10 years. Let's evaluate that escape clause from a business perspective.
USC would be offering all its home Notre Dame games into a common Pac-12 pot for everybody to divide up equally. The same USC program with the highest-rated regular season game in ESPN history, the 2009 Ohio State game in Columbus, that would be measured and valued equally with a Cal team that will be playing a home game with Presbyterian this year. Factor in the possibility of how other Pac-12 teams play for guarantees, as Washington State does at times, and keep the $500,000 checks while USC puts everything into the pot. There is one limit to the deal. For five years, or until total broadcast revenue reaches $170 million, USC and UCLA would each be getting an additional $2 million because of their unique position in Los Angeles TV market. But only for five years while signing away all rights for 10 years.
One independent TV analyst has USC possibly losing out on $10 million to $15 million annually if it just went to an eight-team conference with the three other California Pac-12 schools and Texas, Texas A&M, Oklahoma and an eighth team, maybe even Notre Dame. USC must have considered how it would be giving up this chance, or the opportunity to form what has been referred to as the "Elite 8," an inter-sectional, independent made-for-TV football conference comprised of some of college footballs best and most established programs. Obviously, by agreeing to this "All Rights In" deal, USC must believe it has committed to a better opportunity at the expense of giving up all the leverage it may have as clearly the most valuable entity in the Pac-12's TV bid and its ability to generate multiple channels of additional revenue off the power of the USC brand.
If this is how USC is really recognizing and maximizing its financial opportunities for the benefit of the university, the athletic department and fan base, now might be the time for USC fans and alums to pursue and demand answers. The Pac-12 Commissioner apparently has convinced everyone this is the only way to a Big Ten-type package for the league; if all teams give up all broadcast rights.
Maybe the level of commitment USC is prepared to make to the new PAC 12 Conference, and to ensure its status as an "All In" team player, might best be symbolized by its apparent willingness to undersell itself. If USC would only insist upon an escape clause that would allow itself to capitalize on a better tv deal, it could potentially secure something in the neighborhood of an extra $100 million over 10 years in the event that a Texas-type TV deal comes along. Instead, USC seems willing to undersell itself and give up any potential opportunity to maximize its position as a proven college football television ratings powerhouse.