Analyzing the final two decades of Cal Athletics finances under Pac-12

On Friday, the Golden Bears will have officially left the Pac-12 athletic conference, beginning their first season as part of the Atlantic Coast Conference, or ACC. The move is widely regarded as an attempt to remain afloat in the competitive collegiate athletic scene after the financial struggles that the Pac-12 faced in its last years of life.

Since 2012, the Pac-12 has struggled with generating revenue through media compared to its more successful athletic league counterparts, such as the Southeastern Conference and the Big Ten Conference. In 2020, the SEC secured a media rights deal worth an estimated $68.75 million per school per year until the deal’s expiration in 2034. A few years later, in August 2022, the Big Ten announced the biggest sports TV contract in history, bringing an estimated $71.875 million for each of its schools until the contract expires in 2030.

Meanwhile, the Pac-12 was unable to land a long-term media rights contract to extend the one that expired in the 2023-24 season. Without a media contract, the Pac-12 lost its lifeline.

The beginning of the Pac-12's end came decisively June 30, 2022, when the Big Ten approved UCLA's and USC’s applications to join its conference. The two universities cited broader athletic opportunities and media platforms as motivators for joining the Big Ten, the country’s oldest football conference and biggest generator of revenue out of the Power Five, which consists of the Big Ten, SEC, ACC, Pac-12 and Big 12 conferences.

The former Pac-12 universities are to compete in the ACC, Big Ten or Big 12 conferences starting from this year. Oregon State and Washington State University comprise the nominal Pac-2 and are the only former Pac-12 universities that have not joined a new athletic conference.

The departure from the Pac-12 is a significant disruption from Cal's long-standing history as part of the conference. With its roots in the founding of the Pacific Coast Conference in 1915, the conference changed management, names and membership throughout the years until arriving at the familiar moniker "Pac-12" in 2011.

The dissolution of the Pac-12 is complex and does not have one singular cause, but one of the biggest narratives shaping the story has much to do with its finances.

As a longtime member of the Pac-12, UC Berkeley and its athletic financial operations are closely tied to those of the Western Conference as well as to Cal’s own internal affairs. The National Collegiate Athletic Association, the governing body of college sports, mandates that Division I members must release financial statements of its revenue and expenses every year. Cal's statements are publicly available at the end of each fiscal year on the Cal Athletics website.

Sources of revenue and expenses are divided among six major divisions of Cal Athletics: football, men's basketball, women's basketball, other men's sports, other women's sports and non-program specific. The expenses in this last category are related to the support units such as compliance staff and strength and conditioning staff.

Revenues pertaining to the non-program specific category, on the other hand, such as sponsorship revenue, including apparel and equipment, include other revenues not directly sport-specific.

As UCLA and USC departed the Pac-12, they cited lucrative media rights deals as a primary driver behind their move to the Big Ten. The transition highlights the growing importance of television contracts and financial incentives in conference alignment.

For the past decade, revenue from media rights has been in the eight figure dollar amount for Cal Athletics. Media rights have also consistently increased since 2015, albeit with a dip in the athletic season following the pandemic lockdown.

Despite this, Cal Athletics has never generated more than $32 million in media rights revenue, while Big Ten schools will earn nearly $72 million annually through 2030.

Cal is expected to receive around $25 million per year from ACC media rights for the upcoming decade, but when the alternative is no media rights with the defunct Pac-12, joining the ACC was in the best financial interests of Cal.

In contrast to media rights, revenue distributed from the conference and NCAA to Cal have fluctuated over time. Because the NCAA financial reporting guidelines change frequently, some years report distributions from both the conference and NCAA as one quantity, and other years report them separately. The data presents distributions as one sum by year.

Both media rights and NCAA and conference distributions are listed under revenue on the Cal Athletics financial statements. Media rights encompass broadcasting, TV, radio and internet rights. NCAA and conference distributions are from both the Pac-12 conference and the overall NCAA. Any gaps in the data are due to periods when Cal Athletics did not report relevant financial details.

Football accounts for the biggest share of both revenue and expenses out of any single sport at Cal, with an overall net positive over the decades.

“The football program is a very important economic cog in the overall health of the athletics department,” said Senior Associate Athletics Director Josh Hummel in an email. “Football does so much for not only our department, but for the campus and community. It is important and we encourage the entire campus community to support the Cal football program.”

Membership in the ACC ensures Cal football’s participation in a major conference league and the survival of the biggest revenue-generating sport at Cal.

Revenue and expenses for the six categories listed on the Cal Athletics financial statements: football, men’s basketball, women’s basketball, other men’s sports, other women’s sports and non-program specific. Dollar amounts were adjusted for inflation to 2024 values.

Still, football has left a financial deficit for the school. On the public financial statements released by Cal Athletics, debt starts to make its appearance on the ledgers beginning in 2012, marking the $474 million renovation project on the California Memorial Stadium. Yearly, scheduled payments of debt are a part of the department’s annual expense budget, Hummel explained.

Overall Cal Athletics debt vs. the debt from football, adjusted for inflation to the 2024 dollar amount.

Although football may be the most revenue-generating sport at Cal, most of the Golden Bears’ athletic excellence stems from its non-revenue sports like baseball, softball and volleyball. Cal has won 104 national titles in its history, and its prolific athletic achievement contributed to the overall pride of the Pac-12; once known as the “Conference of Champions,” the Pac-12 boasted the most team championships out of the Power Five.

An analysis of the different categories listed under the financial statements reveal that most non-revenue sports operate at a net loss for Cal.

Net revenue was computed as the difference between revenue and expenses within that particular category. Debt was listed separately in the financial statements and is not included as an expense in this chart. All dollar amounts were adjusted for inflation to the 2024 value.

The Pac-12 may be no more, but the ACC will allow student-athletes to continue to compete at the highest collegiate level, Hummel expressed. Only time will tell for sure how the California Golden Bears will fare under the new athletic conference — athletically and financially.

The sun sets on this chapter of West Coast athletics, but Cal fans may look to the East Coast for the sunrise and promise of a new era of collegiate athletics at UC Berkeley. Goodbye Pac-12 — it's been a good run.

Lauren Lee is a projects developer. Contact her at laurenlee@dailycal.org

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