With the possibility that college football will not be played this fall, many schools will need financial assistance to ensure that not only their football programs are not affected, but the rest of their sports survive as well. With that in mind, Jon Wilner of the San Jose Mercury News reports that the Pac-12 is considering a massive loan of nearly a billion dollars to help schools as needed.
Wilner reports that the conference should have no problem securing a loan of this size because the remaining value of the TV contract, which runs until 2024, exceeds the value of what they would need. Each school could take up to $ 83 million, although Wilner reports that most schools either would not need the help or take much less than the maximum amount allowed.
It looks like the conference would actually be responsible for repaying the loan, 3.75% interest over a 10-year period, until the new media rights deal goes into effect from 2024, when the debt would be transferred to universities which in theory. , benefit from a much more lucrative contract (which might not be found at all on traditional networks).
As much as we like to pile on Larry scott and the top conference officials for their lack of vision and leadership, that makes a lot of sense. Pac-12 member institutions are going to have to go into debt on academics in the future due to the effects of COVID-19, leaving little money to ensure their sports programs remain healthy or exist after the end of the pandemic. For schools like WSU, which are already crammed into sports department debt, this relief value is especially valuable because they won’t have much, if any, additional borrowing capacity to cover potential losses.
The conference intends to play a schedule reserved for the league this fall, kicking the box on the road to see if it’ll be possible to field a season at all. If they are to eventually eliminate football, this loan will go a long way in bridging the gap between lost tickets and TV income.