College Football Wars | Fragile Alliance | 4

0:11It's August 2021, and on a Zoom call, Pac-12 Commissioner George Klievkoff is making the case for expansion. Klievkov joined the Pac-12 three weeks ago, and since then, the college football world's been turned upside down. The Southeastern Conference has just persuaded Texas and Oklahoma, two of the biggest colleges in the sport, to join its league. Their exit has left their current conference, the Big 12, facing oblivion. And Klievkov believes the Pac-12 could emerge a winner from the fallout. So he's assembled a committee of six Pac-12 college officials to hear out his plan to add teams to the conference.

0:50He smiles as he outlines his rationale. In the past few days, I've spoken with all the remaining schools in the Big 12. They're desperate and want to join us. This is a rare opportunity to expand the Pac-12's footprint in the Great Plains. Now, my proposal is we take in the cream of the Big 12 colleges, the ones that will help us reach new markets and new fan bases. Klievkov notices Carol Folt, the president of USC, unmute her microphone. USC is one of the two most important schools in the Pac-12. The other is UCLA. Officially, every school in the Pac-12 is equal, but USC and UCLA are the most popular teams by far, thanks in no small part to both schools being based in Los Angeles, the second biggest media market in America.

1:35So when the president of USC's got something to say, the rest of the Pac-12 listen. Klievkov leans back in his chair. Yes, Carol, go ahead. Thank you. I think we're getting ahead of ourselves here. Why would we expand? I'm surprised we're even considering this. Klievkov blinks in shock. The Southeastern Conference is about to become a super conference of 16 colleges. It will be able to use that heft to push the college football playoffs and NCAA around. He believes the Pac-12 needs to keep up to survive. We're about to see a shift in the balance of power within college sports. Increasing our size helps us maintain our...

2:18If I may, expansion means that our revenue will need to be shared between even more schools. The payouts are small enough as it is. I think we should shut this down right here. Kliukov sees a couple of other committee members nod in agreement. One speaks up. George, if that's how Carroll feels, I'm against expansion too. Kliebkopf's heart sinks. He knows that this debate is already lost. USC can veto his plan. To get the measure through, he'll need the other colleges to lean on USC until it backs down. But few are going to risk that kind of internal conflict. It's unlikely other colleges will gang up on the mighty SC to press it into approving the plan.

3:04Kliakov's plan to expand the Pac-12 by absorbing the Big 12 is dead on arrival. But the Pac-12's refusal to expand has just turned it from predator into prey. The rest of college football's Power Five conferences are hungry for growth. And with the Pac-12 looking weak and directionless, it seems an easy target.

3:36When planning for your future, you want someone with a history of keeping their word year after year. For nearly 160 years, Pacific Life has been a trusted name in the industry. But that isn't just a number. It's experience that matters. It's 160 years of promises held, helping generations retire with confidence, protect their loved ones, and plan for whatever comes next. Whether you're looking for life insurance, employee benefits, or retirement income solutions, when your future is on the line, you want history on your side. And believe me, Pacific Life has been there, always there through changing times, always focused on your needs.

4:15Ready to secure your tomorrow? Ask a financial professional how Pacific Life can help you feel prepared for what's next. Pacific Life Insurance Company, Omaha, Nebraska, and in New York, Pacific Life and Annuity, Phoenix, Arizona. because with Pacific Life, you're not just planning for the future, you're partnering with trusted experience. Closing the books, getting your people paid, and bringing on new hires. Running a small or mid-sized business can be exciting and also a little chaotic. Workday Go makes simplifying your business, well, simple. Imagine all the important aspects of your company, HR, finance, and payroll, all on the AI platform.

4:57No more juggling multiple systems. No more worrying about growing too fast. Just the full power of Workday Go, helping small to mid-sized businesses like yours scale and run more smoothly. Think about what that means. Seamless onboarding for new team members. Real-time insights at your fingertips. And payroll that works perfectly every single time. So you can focus on the big picture and go after your big ambitions. And with Workday, you can activate quickly in as little as 30 to 60 business days. So simplify your business. Go for growth. Go with Workday Go.

5:40From Wondery, I'm David Brown, and this is Business Wars.

6:08On the last episode, the Big Ten signed a new TV deal that made it the highest-earning college football conference. But the Pac-12 found itself trapped in a long-term deal with ESPN and Fox that left the budgets of its school's athletic departments falling behind competing universities. So the Pac-12 colleges replaced Commissioner Larry Scott with former MGM resorts man George Klievkov in the hope of climbing back to the top of the Power Five rich list. But Klievkov's already encountering severe turbulence as Texas and Oklahoma abandon the Big 12 to join the Southeastern Conference, or SEC. And soon, that turmoil will leave him struggling to keep the Pac-12 together.

6:53This is Episode 4, Fragile Alliance.

7:04It's August 2021, and three of the kingpins of college football are on a video call. They're working on an urgent plan to contain the fallout from the SEC's raid on the Big 12. Jim Phillips, head of the East Coast Conference, the ACC, underscores his point. An alliance would help all three of us. That's the best way to restore stability before the Big 12 starts trying to poach our teams to fill the vacuum left by Texas and Oklahoma. Big Ten boss Kevin Warren interjects. I'm confident no Big Ten schools are going to join the Big 12. That's because your colleges earn more than the Big 12. But it is a risk for us and the Pac-12.

7:43We're locked into our media deals for a few more years. And until then, the Big 12 can offer schools more money than we can. The third man on the call, Pac-12 Commissioner George Klievkov, unmutes his microphone. He hoped to use the Big 12's woes to grow the Pac-12, but USC blocked that strategy. So now he's playing defense, and this alliance is his best bet. And that means getting Warren to play ball. Even so, Kevin, this alliance is in the Big Ten's interest too. With Texas and Oklahoma under its wing, the SEC is now well-placed to dominate decisions about NCAA rules and the college football playoffs expansion from four to 12 teams.

8:26Now, if we join hands, we can be an effective counterweight to their ambitions. The other two commissioners nod. They're all on edge about the SEC's expansion. The fear is that the SEC wants to further professionalize the amateur world of college football and establish itself as the premier league of the sport. And it's enough of a threat to make this alliance appeal to the Big Ten Commissioner Warren. Okay, I think this could work. The Big Ten colleges don't want to see the sport lose its collegiate roots. And if this helps us prevent that, then we're in. A few days later, the Big 12, the Pac-12, and the ACC announce their alliance with an online news conference.

9:12They will now align their schedules to enable more exciting matchups between their most popular universities, work as one to keep the SEC in check, and promise not to poach each other's teams. But when they open up the news conference to questions, one journalist probes just how deep this alliance runs. Yeah, hey guys, I'm curious what kind of document has been signed or will be signed to formalize this alliance. How will it be legally enforceable? And will it include any language that prevents one league in this alliance from poaching members of another league? We'll go ahead and start with Commissioner Kliabkov for this.

9:50There's no signed contract. There's an agreement among three gentlemen. And there is a commitment from 41 presidents and chancellors and 41 athletic directors to do what we say we're going to do. The lack of a legally binding agreement raises eyebrows. This is an alliance built on trust, and it won't be long before those bonds are tested.

10:19It's July 2022, and in rural Montana, a lone car heads down a long, straight road towards Idaho. At the wheel is George Klievkov. It's the second day of his vacation. His wife is in the passenger seat, and he's eager to unwind. Tomorrow, he'll have been the commissioner of the Pac-12 for a year. It was a year that counts as among the most turbulent in college football history. But now, he's feeling confident. The alliance with the Big Ten and the ACC restored stability. And when he returns to the office, he'll get to start talks about a new meteorites deal that he hopes will deliver a major revenue boost.

11:01But as Kleopkoff motors through the wide-open plane, His phone catches a rare burst of signal. It pings like crazy as it receives an avalanche of texts and alerts. He glances at the center console where his phone's vibrating as if it's about to take flight. Huh? A moment later, Klyukov drives out of the pocket of reception. Instantly, the phone falls silent and still again. His wife picks up the phone. Wow, you got 90 messages. How many? 90. That can't be good. What are the messages about? Kliebkov's wife checks the messages and gulps. What is it? What's happening? It's USC and UCLA. They're joining the Big Ten.

11:51Kliebkov pulls the car over to the roadside and parks. He takes the phone from his wife and swipes through the messages clogging up his phone. Panic messages about the news that the Pac-12's top two teams are leaving. Kliopkov reads the messages quietly as the seriousness of the situation sinks in. The alliance with the Big Ten and the ACC is dead. And maybe the Pac-12, too. USC and UCLA's teams are hugely popular. They are why the Pac-12 has such a big following in Los Angeles, the nation's second largest media market after New York. They are the schools that bring the big money from TV networks.

12:32If they go, the Pac-12 will struggle to get the kind of money its colleges expect in the next round of TV talks. And if the Pac-12 can't deliver the money, its colleges will start to wonder if they, too, would be better off somewhere else. Kliukov puts down the phone and starts driving. His vacation is canceled. He's got to find an airport and get back to the office. Fast.

13:00In the days that follow, Kliebkopf races to try and stop USC and UCLA from leaving. But the two schools aren't willing to reverse course. College football is evolving into a semi-professional sport with expanded playoffs and players who are about to take back the rights to their name, image, and likeness after years of being controlled by their colleges. For the first time, college athletes will be able to profit from their labor. To stay competitive in this changing world, USC and UCLA need to invest in facilities, top-tier coaches, and financial support for student-athletes. So, they're following the money.

13:41Last year, the Big Ten paid its schools an average of$47.8 million. The Pac-12 managed just$19.8 million. And that pay gap's about to grow. The Big Ten is in the middle of negotiating its latest media rights deal. Even before UCLA and USC asked to join the conference, media players like Amazon, Apple, CBS, ESPN, Fox, NBC, and Turner were offering serious money for the chance to air its games. But Big Ten Commissioner Kevin Warren immediately realized that having UCLA and USC in the package would lift the amounts being offered even higher. The addition of the two California schools would turn the Big Ten into a 16-team super conference with millions of fans on both coasts.

14:33So he paused the talks with the media companies and secured approval from the colleges already in the Big Ten to bring in USC and UCLA. Then he returned to the TV talks with a new and more expensive offer, the chance to show games from the only conference whose schools cover the three biggest media markets in America, New York, Los Angeles, and Chicago. Warren started by informing Disney Network's ESPN and ABC that they need to cough up$380 million a year to get a selection of games. The ESPN lead negotiating team balked. ABC had been showing live Big Ten football games since 1966, ESPN since 1982.

15:15But now, the partnership was over. Still, other media networks weren't deterred in the slightest. They all wanted the chance to deliver the nation's biggest college football games to their audiences. And in late August, Warren secured a record rights hall. Well, get ready to see more Big Ten Conference Championship games right here on WNM-TV 5. The Big Ten striking a deal with CBS, Fox, and NBC on a seven-year contract worth at least$7 billion. Conference games will also be streamed on Paramount Plus and Peacock and will continue to be shown on the Big Ten Network and Fox Sports 1. The Big Ten's deals with Fox, NBC, and CBS are the biggest in the history of college football.

16:01Over the next seven years, the conference will pocket more than$7 billion a year. On average, its schools will receive more than$62 million a year, more than three times what the Pac-12 pays. The Big Ten is now confirmed as the richest conference around. The ACC, the Big 12, and Pac-12 lag far behind. Only the SEC poses any competition, and it's got a smaller geographical reach. But while the Big Ten's media deal is signed, Pac-12 Chief Klievkov hasn't given up hope just yet. And that's because he's spotted an opportunity to block UCLA from leaving the Pac-12 and tank the Big Ten's plans. But he's going to have to move fast because the Big 12 is about to strike.

17:00December can be a busy month for all of us. Finishing projects, planning for next year, maybe even wrapping a few presents. while your teams take a well-deserved break. Cyber threat actors don't. Stay protected this holiday season with Manage Engine. Their cybersecurity solutions ensure that your data is secure, even while your office lights are turned off. With 18 data centers around the world and over 20 years of experience securing global enterprises, Manage Engine can keep your business running safely, no matter how busy or hectic the world gets. This holiday, gift yourself and your business peace of mind.

17:39Visit cybersecurity.manageengine.com. That's cybersecurity.manageengine.com. This message comes from Capital One. The Capital One VentureX Business Card has no preset spending limit, so the card's purchasing power can adapt to meet business needs. Plus, the card earns unlimited double miles on every purchase, so the more a business spends, the more miles earned. And when traveling, the VentureX Business Card grants access to over 1 ,000 airport lounges. The VentureX Business Card. What's in your wallet? Terms and conditions apply. Find out more at CapitalOne.com slash VentureXBusiness.

18:35August 2022, the Big 12 Conference headquarters, Irving, Texas. In his office, Brett Yormark is on a video call laying out a plan to put the Big 12 back in contention. Yormark's 55 years old with close-cropped white hair, and until a few weeks ago, he ran Jay-Z's entertainment company, Rock Nation. And he's not come to the Big 12 to mess around. He looks at the ESPN executive on his screen. I want to start negotiating with the renewal of our media rights deal now. The ESPN executive raises an eyebrow. That's a little early. The current agreement lasts until the end of the 2024 season, and our exclusive window to negotiate renewal doesn't kick in until February 2024.

19:17I know that. But the Big 12's going places. We're adding four more colleges next year, and I'm not going to stop there. I want to do a deal early so I can tell the colleges we invite in how much money we can offer them. But it makes sense for you and Fox, too. How so? Well, from a TV perspective, we're going to be going up in value. We're not going backwards or staying flat. Our rights will be more expensive in 2024 than we are now. The ESPN executive smiles at your mark's confidence. It's big talk for a conference that just a year ago was knocked sideways by the departure of Texas and Oklahoma.

19:53But next year, the Big 12 will add Brigham Young, Central Florida, Cincinnati, and Houston to its lineup. All colleges in major TV markets. Okay, but to be clear, this isn't us activating our right to exclusive talks beginning in February 2024. We can talk now, but if it leads to nothing, you don't get to talk to other networks. You understand that. You just have to wait. I understand. But don't worry, this isn't going to lead to nothing. Let me loop in Fox and I'll get back to you. By the end of the week, Your Marks persuaded both ESPN and Fox to discuss renewing the Big 12's media deal early.

20:35It's a move that catches the Pac-12 off guard. The Pac-12 expected it would be the next conference in line to renegotiate its media rights, but now the Big 12's barged its way to the front. And that matters. TV networks only have limited time in their schedules. The SEC, the Big Ten, and the ACC have already grabbed many of the best time slots. Whoever gets a deal done last gets the leftovers. Your Mark moves fast. In October 2022, ESPN and Fox extend their deal with the Big 12 until January 2031. It's a$2.2 billion agreement that will net the average Big 12 college nearly$32 million a year, up from around$28 million under the old deal.

21:23The Pac-12's talks to renew its ties with ESPN and Fox fare less well. Fox seems disengaged, having just splashed out on the rights to Big 10 and Big 12 games. But then, ESPN makes an offer. It will pay$300 million a year, but only if it gets all of the games. including those that currently air on Pac-12 networks. Commissioner George Klievkoff takes the offer to the college presidents and chancellors. They reject it as too low and tell him to go back to ESPN and ask for$500 million a year. ESPN responds by walking away. Both of the Pac-12's existing media partners now seem uninterested in renewing a deal on terms the conference's colleges will accept.

22:12And with USC and UCLA on their way out the door, the outlook for the Pac-12 seems bleak. But UCLA's escape to the Big Ten isn't a done deal yet.

22:33December 2022, the UCLA campus, Los Angeles. In the Luskin Conference Center, the University of California regents are debating for the final time whether to block UCLA from joining the Big Ten. UCLA's decision to leave the Pac-12 has split the regents, who oversee the entire University of California system. And that's because UC Berkeley's also a member of the Pac-12. One regent who opposes the move restates his position. This doesn't just affect UCLA. UCLA's departure will seriously diminish the Pac-12 and most likely cause its payouts to UC Berkeley to fall. UCLA's athletic department might gain financially, but Berkeley will suffer.

23:16It is therefore right that if UCLA is permitted to join the Big Ten, then it should share some of that financial gain with Berkeley. The proposal that Berkeley gets somewhere between$2 million and$10 million a year seems fair. Another Regent counters. We all saw the figures at the last meeting. The UCLA Athletic Department's carrying debts of$28 million. It stands to make between$65 and$75 million a year by joining the Big Ten. That's roughly twice what they'll get by staying in the Pac-12. UCLA needs to remain competitive. All you're doing with this Berkeley tax is placing an additional cost on UCLA that other Big Ten colleges won't have.

23:58The amount is small compared to the rise in revenue. And we are a university system, aren't we? One campus's action shouldn't be to the detriment of another. The chair of the Board of Regents decides to bring the discussion to an end. I think it's time we voted. We've been discussing this since August. Will those in favor of approving UCLA's move to the Big Ten subject to compensation for UC Berkeley raise your hand? The chair silently counts the raised hands. That's 11 votes in favor. And those opposed? The remaining five regents raise their hands, already knowing they've lost the argument. The Pac-12's hope that the UC regents would ride to its rescue have been dashed.

24:45UCLA is going to the Big Ten. By now, other Pac-12 teams are starting to consider what life might be like elsewhere, too. Big 12's Yormark is courting Arizona, Arizona State, Colorado and Utah. And the Big Ten might be tempted, too. And that's increasing pressure on Klievkov and his team to get a media rights deal that can persuade the colleges that remain to stay the course. But there's a mismatch between what the Pac-12 colleges want to be paid and what TV networks are willing to offer, a gap in expectations that Klievkov's finding hard to bridge. The talks drag. Months pass with seemingly no progress.

25:30And by the summer of 2023, the lack of communication is making many inside and outside the Pac-12 wonder if Klievkov is ever going to deliver the TV deal the conference so desperately needs.

25:48It's July 2023, and in Las Vegas, Klievkov is hosting the Pac-12's annual media day. He stands at the podium in a gray suit, behind him a huge blue wall covered in Pac-12 logos. In front of him are rows of somber-looking sports journalists who will spend the coming hours trying to get him to break his months of silence about the league's elusive media deal. He smiles and begins. Good morning and welcome to the 2023 Pac-12 Football Media Day. And thank you all for being here today. But the journalists aren't the only people observing Klievkoff today. Rick George, the athletic director at Colorado, is also watching.

26:33He's been losing faith in the Pac-12. Klievkoff keeps telling him and the other Pac-12 members that a media rights deal is just around the corner. George hopes that today, Klievkov can say or do something that will convince him to ignore the Big 12's ongoing attempts to convince his college to jump ship. George sits up as Klievkov gives the journalist an update on the media rights negotiations. The Pac-12 board of directors has met regularly throughout the process and has been united in their commitment to one another and to the Pac-12. And this commitment and patience will be rewarded with an announcement in the near future.