somebody
Well-Known Member
Let's see how much revenue the SEC gets at 2am.
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Great news on Pac-12 finances
- Thread starter Buffnik
- Start date
I like how there’s a debate going on about whether more money would be beneficial to the CU athletic department or not.
I think it highly unlikely that other conferences will sell their tier 2 rights to a competing conference. I find it even more unlikely that the university presidents will let the conference take the risk in case the cable tv model continues to implode.
I think it would have to accompany an opportunity for those conferences to buy in to the network.
somebody
Well-Known Member
8Jah
Well-Known Member
There are things that government is uniquely good at, but marketing and selling a product is not one of them. You pit an academic organization like the PAC12N, one that is under close review by the chancellors...who are essentially politicians, against a lean media company with years of experience and the PAC12N is going to get its ass kicked 100 times out of 100 in terms of revenue growth.
There is no way the PAC12N will ever buy a FS1 yet alone another conference network. Homeless folk don’t buy diamond rings. We should eliminate all restrictive PAC12N bylaws now and then adopt an SEC-like model as soon as we can.
Even if television networks are yesterday’s news, those same media companies, or startups made from their ruins, will be eons better at exploiting the new media than will be academia.
There is no way the PAC12N will ever buy a FS1 yet alone another conference network. Homeless folk don’t buy diamond rings. We should eliminate all restrictive PAC12N bylaws now and then adopt an SEC-like model as soon as we can.
Even if television networks are yesterday’s news, those same media companies, or startups made from their ruins, will be eons better at exploiting the new media than will be academia.
If the B12 conference actually had 12 schools instead of 10, I assume that there 69% payout would have been lower, that being dependent on what 2 additional schools would be allowed to join that conference to make 12 teams?
I didn't think the big 12 had equal distribution either.
It doesn't. So it is skewed toward UT and OU.
Bump for Jon Wilner going into the details:https://www.mercurynews.com/2018/05...rks-hidden-expenses-and-unanswered-questions/
Larry Scott's lap dances are expensive!
I wouldnt think larry scott would be that much of a draw.
ScottyBuff
Well-Known Member
There is no question here that Jon Wilner is creating hype about something he doesn't understand.
The form 990 that he keeps referring to has certain rules about how revenues get categorized and what has to fit into each bucket. While I am not an expert as I only did a little bit of non-profit accounting and that was over 10 years ago at a CPA firm in Colorado Springs this just seems like him trying to create a stir over trying to compare apples to oranges.
The 990 is an IRS designed form, with an instruction sheet that is over 100 pages long: Instructions for Form 990. And as every tax preparer knows, the instructions are just the "basics" and that there are many letters and other forms that feed into the main form that all have their own instruction forms and other bulletins from the IRS; and then of course there is precedence and other normal practices that depend upon the preparer, tax court interpretations, etc.
The fact that he proposes that "Perhaps the Pac-12 Networks income has been diverted to pay down start-up debt" shows his absolute ignorance for accounting methods and proves he didn't have an expert review this before he wrote his article. No half-way decent CPA would ever allow a client to not report legitimate income that should be on the Statement of Revenue and Expenses (Income Statement) and then report it on the Balance Sheet as a reduction of debt. It's like he just couldn't figure something out that he has little knowledge about and decided to write a negative public article accusing the Pac-12 of nefarious accounting instead of just asking an expert to look into and explain it to him.
What he doesn't say in his article is that the conference DOES also report several other types of revenues beside the TV rights:
Over $100 Million in Post Season Bowl Revenue
Over $30 Million in Championships, events, etc.
Over $20 Million in Advertising revenue
Over $5 Million in "other revenue".
Also they report "Contract Receivables" of over $14 million and over $12 million in "Due from Affiliate".
So...
The issue is most likely categorizing the revenue. I would bet that the Tier 1 deal with Fox and ABC/ESPN absolutely "carve out" how much they are paying per year for the broadcast rights of the football championship game (and the radio deal would do the same). Those revenues are included in the "Tier 1" contract but are most likely allocated to to the "Championships, events, etc" category of revenue on the 990; thus the "traditional accounting methods aren’t used" explanation from the conference about where the revenues are on the IRS form as opposed to the internal financials the conference prepares. The fact that Jon Wilner is hunting for around $25-30 Million in revenues and those figures are about the correct estimate for added TV revenue from a football championship game = poof mystery solved.
If that doesn't solve 100% of his "discrepancy" then there are also timing issues related to accounting and the fact that there are over $26 million in accounts receivable (consistently every year) could also partly explain it.
Could the Tier 1 deal also include some "free advertising" for the conference or for the member schools that has to be reported in a different category? probably so.
The form 990 that he keeps referring to has certain rules about how revenues get categorized and what has to fit into each bucket. While I am not an expert as I only did a little bit of non-profit accounting and that was over 10 years ago at a CPA firm in Colorado Springs this just seems like him trying to create a stir over trying to compare apples to oranges.
The 990 is an IRS designed form, with an instruction sheet that is over 100 pages long: Instructions for Form 990. And as every tax preparer knows, the instructions are just the "basics" and that there are many letters and other forms that feed into the main form that all have their own instruction forms and other bulletins from the IRS; and then of course there is precedence and other normal practices that depend upon the preparer, tax court interpretations, etc.
The fact that he proposes that "Perhaps the Pac-12 Networks income has been diverted to pay down start-up debt" shows his absolute ignorance for accounting methods and proves he didn't have an expert review this before he wrote his article. No half-way decent CPA would ever allow a client to not report legitimate income that should be on the Statement of Revenue and Expenses (Income Statement) and then report it on the Balance Sheet as a reduction of debt. It's like he just couldn't figure something out that he has little knowledge about and decided to write a negative public article accusing the Pac-12 of nefarious accounting instead of just asking an expert to look into and explain it to him.
What he doesn't say in his article is that the conference DOES also report several other types of revenues beside the TV rights:
Over $100 Million in Post Season Bowl Revenue
Over $30 Million in Championships, events, etc.
Over $20 Million in Advertising revenue
Over $5 Million in "other revenue".
Also they report "Contract Receivables" of over $14 million and over $12 million in "Due from Affiliate".
So...
The issue is most likely categorizing the revenue. I would bet that the Tier 1 deal with Fox and ABC/ESPN absolutely "carve out" how much they are paying per year for the broadcast rights of the football championship game (and the radio deal would do the same). Those revenues are included in the "Tier 1" contract but are most likely allocated to to the "Championships, events, etc" category of revenue on the 990; thus the "traditional accounting methods aren’t used" explanation from the conference about where the revenues are on the IRS form as opposed to the internal financials the conference prepares. The fact that Jon Wilner is hunting for around $25-30 Million in revenues and those figures are about the correct estimate for added TV revenue from a football championship game = poof mystery solved.
If that doesn't solve 100% of his "discrepancy" then there are also timing issues related to accounting and the fact that there are over $26 million in accounts receivable (consistently every year) could also partly explain it.
Could the Tier 1 deal also include some "free advertising" for the conference or for the member schools that has to be reported in a different category? probably so.
Zapata
Well-Known Member
Great summary; I now expect a full report first thing Monday morning. Seriously though, thanks for the education, a very enlightening post.
ScottyBuff
Well-Known Member
I dont think its bias, I just think he’s not an accountant. I am curious as to why he would ask a business reporter colleague a few questions before running his article.
Because they were probably laid off.
It’s no secret that Wilner has been very critical of how the conference has handled its finances. Confirmation bias and all that. He saw something that he thought backed up his assertions that the conference is not good stewards of its funds and ran with it before digging a little deeper.
Some great points in this article, and it's good to see a national writer call out this conference because maybe the league and other presidents besides WSU's Schulz will start to wake the **** up. At least other prominent figures like ASU AD Ray Anderson and Cal chancellor Carol Christ have spoken up.
Meh, I wouldn't really call Dodd a national writer, he is definitely a Big-12 homer who supports the old Big-12 North teams a ton being based in KC. There are some good points in the article and the Pac-12 has it's issues but let's not act like the ACC and Big-12 are in some amazing financial position.
The good thing about all of this is that the issues appear to be fixable, we just don't know why they aren't being fixed.
It's mostly a "pile on" situation at this point regarding the Pac-12. Writers don't have good access to Pac-12 games and, frankly, they don't like staying up late to watch them anyway so there's inherent bias against a league they consider outsiders. What's really driving this is a historically bad showing in bowl games and the Dance this past year. Conference has some things to improve - and is improving them - but overall it is still a very strong conference.
CUFan
Welcome back
This is a conference that has a monopoly on the western US, which includes many of the fastest growing states in the country. Coming up last in the conference race, in both financials and football/basketball, is a big problem and there is really no excuse. Issuing a press release touting the wonderful health of the conference, when it's obvious there are major problems, is very concerning.
Falling behind a few million to $10 million per year is a big deal. Not having national exposure (awful game times) is a very big deal. If you can't compete financially and if people can't see your games, how to you gain exposure? Without exposure, how do you plan to grow your university? I assume growth is a major reason why these schools invest in athletics.
Putting your head in the sand is not a sound strategy. You grow or you die.
Falling behind a few million to $10 million per year is a big deal. Not having national exposure (awful game times) is a very big deal. If you can't compete financially and if people can't see your games, how to you gain exposure? Without exposure, how do you plan to grow your university? I assume growth is a major reason why these schools invest in athletics.
Putting your head in the sand is not a sound strategy. You grow or you die.
Well to be fair, the Pac-12 is ranked 4th out of 5 power conferences in terms of revenue.
Isn't the "excuse" that fewer people tune into Pac 12 football games than tune into other power conferences' football games? Or that average Pac 12 football attendance is tied with the ACC and 27,000 less than the SEC?
Sure, the Pac 12 can and should do things to maximize exposure/money. Why would we expect to make as much as the SEC which is obviously a more valuable product?
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