UC regents meeting to include discussion of Cal’s move into the ACC (which could be costly for UCLA)

Cal accepted reduced revenue from its new conference

The University of California regents will meet next week on the UCLA campus to discuss Cal’s admission to the Atlantic Coast Conference. Given that the governing board is expected to consider imposing a subsidy on the Bruins — the so-called Berkeley tax, or Cal-imony — it’s an appropriate location.

The session is described in the agenda for the September 21 meeting as follows: “Discussion: UC Berkeley’s Atlantic Coast Conference Membership.”

The regents will not vote on whether to eventually force UCLA to turn a portion of its Big Ten jackpot into an annual “contribution” to Cal’s athletic department because the session is closed to the public.

However, sources believe it will be thoroughly discussed.

The contentious issue arose last summer, when UCLA announced that it would join the Big Ten (along with USC) in 2024, leaving its sister campus behind.

Expecting the Pac-12 to lose significant media revenue without the Los Angeles market, the regents voted in December to retain the authority to force Berkeley to subsidize the Westwood campus:

The metric is as follows:

“After Pac-12 media agreements are finalized, the President will return to the Regents with a recommendation for a contribution by UCLA to the Berkeley campus in the range of $2 million to $10 million, to be used to enhance student athlete support at that campus.”

“Such a recommendation will be based on the most recent available data on projected revenues for both campuses.” The contribution amount will be finalized by the Board of Regents.”

The Pac-12 has since disintegrated, with Cal (and Stanford) joining the ACC beginning next summer.

However, in order to be admitted to their new home, the Bay Area schools were forced to accept lower revenue from the ACC’s media rights contract with ESPN for the next nine years. According to reports, the discounted rate begins at 30% of the full share price.

On September 1, Cal described the situation as follows:

“The university will receive a full share of all revenues, including media revenue, while contributing a portion of its media revenue back to the conference and its current member institutions to support and strengthen them.” UC Berkeley’s membership contribution will gradually decrease until the tenth year, when it will begin to retain 100% of its media revenue share.”

Instead of the $25 million to $30 million in annual revenue they would have received from the Pac-12 or as a full-share member of the ACC, the Bears are looking at only seven figures in media rights revenue into the early 2030s.

This for an athletic department that needs more than $20 million from central campus just to stay afloat.

(Cal and Stanford will receive full ACC revenue shares from the NCAA Tournament and College Football Playoff, which currently account for roughly one-third of the conference’s total annual revenue.)

“There are certainly financial challenges to this agreement,” said California Chancellor Carol Christ on the day the Bears joined the ACC. “We believe this was the best financial agreement we could have made and look forward to overcoming the challenges.”

How might Cal “work through” the difficulties? Christ refused to provide specifics.

“We’ve barely begun to think about strategy,” she admitted. “There’s a missing piece, which is what the regents decide about UCLA’s contribution to Cal.”

UCLA is not obligated to cover the entire difference. According to the measure, the maximum “contribution” is $10 million per year. (It was set at $5 million until the full board approved a last-minute suggestion to double the ceiling.)

It’s possible that the regents will deliberate the issue for several months before declining to levy the Berkeley tax on the Bruins.

It’s possible, but it’s unlikely.

Both campuses expect the subsidy to be imposed — one is relieved, the other is frustrated — but neither knows how much it will be.

Next week, clarity may begin to emerge.

Similar Posts

Leave a Reply