As Pac-12 heads to court, Fresno State has golden opportunity in conference realignment

Fresno State finds itself in an enviable position as conference realignment enters a courtroom phase, with the Pac-12 haggling over its assets and who among the rubble of that league has a claim to them.

The Bulldogs, who were left behind in a conference shuffling decades ago, may in fact be in a perfect spot as a realignment again plays out, and that may not be the case for all of their peers in the Mountain West Conference.

If Oregon State and Washington State, the only schools not ditching the Pac-12 next year, gain control of the conference’s assets, then they could try to rebuild the league by poaching schools with the brightest brands and biggest markets, boosting the value of a potential media rights contract.

That could be a boon for Fresno State and its under-funded athletics department, with potentially more media rights revenue available than the Bulldogs are receiving in the Mountain West, as well as a higher conference profile.

If the Pac-12 schools leaving for other conferences in 2024 are able to dissolve the league and split assets that include about $50 million in NCAA Tournament revenue and an emergency reserve fund, then Oregon State and Washington State could slip seamlessly into the Mountain West.

In either scenario, Fresno State going backward would be a long shot.

What happens next? Follow the money

Oregon State and Washington State won the first foray in court. They received a temporary restraining order on Monday, preventing the Pac-12 from convening a board meeting, at which the 10 departing members conceivably could have called a vote to dissolve the conference and split its assets in a brazen money grab.

They all have new homes - UCLA, USC, Oregon and Washington in the Big Ten; Arizona, Arizona State, Colorado and Utah in the Big 12 and Cal and Stanford across the country in the Atlantic Coast Conference.

But the UC regents in clearing the way for UCLA to bolt to the Big Ten will require the Bruins to contribute between $2 million and $10 million a year to Cal. Under their deal with the Big Ten, Oregon and Washington are receiving reduced shares of media rights revenue compared to existing conference schools.

Arizona, Arizona State, Colorado and Utah, will receive full shares in their deals, but a full share of media rights revenue in the Big 12 is considerably less than it is in the Big Ten.

All of them could use a share of Pac-12 assets, no matter how bad the optics.

Oregon State and Washington State are in dire need of revenue, too, as their long-time conference home implodes.

These two remaining Pac-12 schools have received about 40% of their athletics revenues from media rights and conference distributions and both will take drastic cuts whether they’re able to rebuild the conference or fall to the Mountain West.

They also have significant long-term financial commitments.

Oregon State is playing in a newly-renovated stadium, which was financed largely by donors but also $45 million in bonds that must be repaid over a 35-year period, an annual bill the university projected to be around $2.6 million.

It signed football coach Jonathan Smith last December to a six-year contract through 2029 that is worth $4.85 million this year and includes annual $100,000 raises, bringing the total value to $30.6 million. It also increased the salary pool for its 10 on-field assistant coaches to $4.85 million and for support staff to $2.5 million annually with yearly increases of $100,000 per year for both pools.

Those contracts alone will cost Oregon State $12.2 million this season.

Fresno State by comparison invested $14.8 million in football last year when winning a Mountain West championship and the L.A. Bowl, including $4.3 million in salaries for coach Jeff Tedford and his assistant coaches.

Washington State is not quite as deep as Oregon State with its contractual obligations, but by no means is in an enviable position. Cougars’ coach Jake Dickert is signed through 2027 and last season was paid $2.7 million and the salary pool for his assistant coaches was a little more than $4 million.

Those contracts were sustainable when receiving between $36 million and $38 million in media rights revenue and conference distributions, which they did in 2021-22.

It accounted for $36.2 million of $83.5 million in athletics revenues in 2021-22 for Oregon State and $37.3 million of $85 million for Washington State, according to Sportico.

The Mountain West doles out just a fraction of that every year - Fresno State in 2021-22 received about $5 million in media rights revenue and conference distributions.

Will Mountain West Conference split up?

The outcome of Pac-12 litigation and control of its assets could become dicey for some schools in the Mountain West.

If Oregon State and Washington State control the Pac-12 assets, would they go after six big market schools from the Mountain West, American Athletic Conference or Conference USA in an effort to maximize media rights value in the new league?

That would bring exit fees into play - in the Mountain West, a school departing the conference with less than one year’s notice would have to pay around $34 million. But they would at least have assets that could be targeted to rebuild the conference.

It would take votes from nine of 12 football-playing members of the Mountain West to dissolve the conference, but would Oregon State and Washington State try to break up the league? They could invite only the nine most desirable Mountain West schools to join them and eliminate its exit fees, and revenue from a media rights deal for the restructured conference would then be split 11 ways instead of 14.

Or, would Oregon State and Washington State simply welcome all of the Mountain West schools under what would be a Pac-14 banner?

But Fresno State, which was left behind in the Western Athletic Conference in 1998 when eight schools broke away to form the Mountain West, is in a solid position if Oregon State and Washington State were to invite six, nine or all of the schools to join them.

If combining Sacramento-Stockton-Modesto, Fresno-Visalia and Bakersfield, a San Joaquin valley media market ranks among the Top 20 largest in the country. The Bulldogs’ brand also is growing, with a five-year surge in football attendance driving success on the field that includes 10 or more wins four times in the past five non-COVID seasons, two Mountain West championships and four bowl victories.