Cal Athletics faced a potentially dire future as the Pac-12 conference collapsed this summer.
The Golden Bears needed a new home for the 2024 season and beyond, and were desperate to find it in one of the Pac-12’s four peer “power” conferences. If no one was willing to take on UC Berkeley, the athletic department would see some of its most important revenue sources decimated and be among the first programs of this era to be effectively booted out of the top tier of college sports.
Last Friday, a day before Cal kicked off its final football season in the Pac-12, campus officials got the news they were hoping for. Schools in Atlantic Coast Conference voted to offer invitations to the Golden Bears, along with Stanford and Southern Methodist University; all three swiftly accepted.
Membership in the ACC means the worst fears for UC Berkeley’s athletic future will not come to pass, at least not in the short term.
But Cal’s move has understandably left many fans scratching their heads, and could make the athletic department depend even more on funding from the university to balance its budget.
A few weeks ago, Berkeleyside broke down the factors that led to the dissolution of the Pac-12. Now we’ll try to explain why Cal is joining a conference in which the closest current member is more than 2,000 miles away, and the lingering doubts about the program’s future in a changing college sports landscape.
“I think this is a grasping at straws for survival — with a very uncertain outcome,” said Stanford economics professor Roger Noll.
Why is Cal going to the ACC?
Because the ACC was the only palatable option for UC Berkeley.
As a member of the Pac-12, Cal now gets a hefty conference payout, much of which comes from contracts for the rights to broadcast football and men’s basketball games. But with eight of the Pac-12’s programs bolting for the Big Ten and Big 12 conferences, that revenue was at risk.
The ACC’s offer, then, was a life raft — and the conference is charging for the ride.
Cal will join the league at a discount, agreeing to in effect receive a far smaller share of conference revenues than current members such as Virginia and Boston College, which get about $40 million per year.
UC Berkeley has not specified how much revenue it’s expecting to receive from the ACC, and declined to provide that information to Berkeleyside.
According to Stewart Mandel of The Athletic, Cal will take a multi-million dollar pay cut from the move: It will get the equivalent of 30% of a full ACC member share of revenue over its first seven years in the conference, which will grow to a full share by its 10th year. Mandel reported Cal can expect a conference payout of just over $20 million annually in those earlier years — much less than the $37 million per year it was making from Pac-12 membership.
That steep drop from its Pac-12 payout may be disheartening for Cal, but sports economist Andy Schwarz noted “that offer wasn’t on the table anymore” once the conference collapsed.
Nor were any of the other options appealing. Cal could have tried to go independent, form a new version of the Pac-12 with its remaining members or join a lower-tier conference, but none of those moves would have paid anywhere near as much as membership in a power conference.
“Even 30% of what the ACC gets is more than 100% of what the AAC gets,” said Schwarz, referring to the American Athletic Conference, a lower-level league that was rumored to be interested in Cal.
What does the move mean for Cal Athletics’ financial picture?
Cal’s ticket into the ACC could avert some of the most painful potential budget cuts that would have followed a drop down to a lower conference.
“There is no cutting of sports, at least on my horizon,” Chancellor Carol Christ told reporters last week, though she is set to step down from her role next year.
Still, the expected decline in revenue won’t make life easier for an athletic department that already carries a significant debt load, nor will it help campus officials accomplish their goal of reducing the share of UC Berkeley’s budget that goes to athletics.
“While I am confident that the financial terms are the best we could have secured, we recognize that this agreement may create budgetary challenges for our university,” Athletic Director Jim Knowlton wrote in a statement last week. “I will be engaging members of the campus and Cal Athletics administration in a collaborative process as we examine the impacts, weigh options for the future, and take the steps necessary to maintain the strength of the university’s financial foundations as well as the essential role intercollegiate athletics plays on our campus.”
In response to questions from Berkeleyside, UC Berkeley spokesperson Dan Mogulof said the university would not speculate on how support for the athletic department might change in the coming years.
Mogulof also noted an annual payment from UCLA that could affect Cal Athletics’ financial picture.
When the University of California Board of Regents approved UCLA’s planned move to the Big Ten, it ordered the Los Angeles campus to pay UC Berkeley between $2 million and $10 million annually to make up for revenue losses campus leaders could already foresee the Golden Bears suffering as a result of the Bruins’ move. The Regents have not yet determined the specific amount UCLA will have to pay in what’s been dubbed the “Berkeley tax,” but it could soften the blow for Cal.
While the move to the ACC has its financial downsides, the new conference could also provide more stability for Cal than the crumbling Pac-12 has.
The ACC is in the midst of a broadcasting rights contract that runs through 2036, an eternity in the fast-changing landscape of college sports. Although that deal is nowhere near as lucrative as those in the two most dominant conferences, the Big Ten and Southeastern Conference, it has effectively kept ACC schools from defecting — which was the source of the Pac-12’s instability.
“They’ve locked themselves into a mediocre deal, which is bad,” Schwarz said, “but they’ve made it very hard for their best [programs] to join the higher-level [conferences].”
The ACC is also closely aligned with ESPN, a major driver of realignment activity with which it has created the ACC Network — a contrast with the Pac-12’s handling of its own media rights and cable networks, which became a national punchline. And the ACC has been more relevant lately in the upper echelons of college football than the Pac-12: Two of its members, Florida State and Clemson, have won national championships since 2013, while the Pac-12’s last title happened before most college freshmen were born.
What can Cal fans and athletes expect from the change?
The most optimistic Cal fans are probably excited to watch the Golden Bears face off against storied programs like Florida State in football, Duke and North Carolina in men’s basketball, and Notre Dame — which is an ACC member for sports other than football — in women’s basketball. Making the move with Stanford also preserves Cal’s most important rivalry.
And staying in a power conference means UC Berkeley athletes will continue to compete at the highest level of college sports.
But the demise of the Pac-12 has left a bitter taste in the mouths of many West Coast fans because it means the end of regional rivalries that have long been the bedrock of college sports. Starting next fall, UCLA, USC and Oregon will be off to the Big Ten, replaced on Cal’s schedule by the likes of Wake Forest and Virginia Tech.
And the downsides are more dramatic for athletes, who will pay the price for Cal’s move in the form of frequent long-distance travel to play their new ACC foes. According to UC Berkeley, more than half of its 30 sports won’t travel significantly more as a result of the change. Still, teams like baseball, softball and men’s and women’s basketball can expect to log a lot more miles, endure more jet lag and miss more class.
Campus officials say they’re exploring ways to “minimize the effect additional travel could have” on athletes. One potential solution might come in the form of fellow new ACC member SMU: Cal and ACC leaders have said they’re looking into using the Dallas university’s facilities as a hub for competitions, according to the San Jose Mercury News, which could reduce the need to travel all the way across the country.
Will the ACC be Cal’s home for the long term?
Like a superhero movie that lays the groundwork for a sequel in its final act, there is already plenty of foreshadowing about Cal’s next steps as the dust settles on a chaotic chapter of conference realignment.
The first potential source of trouble is its new home.
“A couple of months ago people were talking about the ACC in roughly the same way that they talked about the Pac-12 — that it was in danger of imploding,” said Noll, the Stanford economist. “That danger is still there.”
It’s not hard to imagine marquee programs Florida State and Clemson bolting for the SEC — much like how USC and UCLA ditched the Pac-12 — if they can find a way out of the ACC’s lengthy agreement, known as a grant of rights. Florida State officials loudly declared this summer that they were open to leaving the conference because its payouts are so much lower than those in the SEC and Big Ten.
“If Florida State and Clemson figure out a way to break the ACC’s grant of rights and they leave, I suspect that could start the next wave” of conference realignment, Schwarz said. “If not, I think there’s going to be a lull.”
The other threat is the direction of college sports as a whole.
Few expect the approaching era, in which Cal’s conference rivals are on the eastern seaboard and Oregon is part of the once-Midwestern Big Ten, will be what college sports looks like for the long term. Instead, many believe this is an awkward stage in the midst of a broader transition for major college football and college athletics as a whole, since the revenue from football typically drives decision-making for every sport on campus.
Today, 133 schools ostensibly compete for a national title in the Football Bowl Subdivision. About half of them are in the “power” conferences — increasingly uneasy alliances which force the juggernauts that actually stand a shot at becoming champions, like Georgia and Alabama, to share revenue with smaller programs like Vanderbilt and Mississippi State.
The sport seems to be trending toward a consolidation into a league made up of several dozen of its most prominent universities that casts less-successful programs into lower tiers of competition and revenue.
“The next realignment is going to be the shedding of schools,” Noll said.
That future has already arrived for Pac-12 members Oregon State and Washington State, which still have yet to secure a new conference home.
While Schwarz contends Cal might make the cut in this “super league” vision of college football, few share his optimism.
“I would bet against it for Cal,” Noll said.
The question is how long it will take for that process to unfold.
“It may be a decade before we see the next thing,” Schwarz said, “but I think people said that a couple of years ago too, and obviously it happened sooner.”