Six Colors
Six Colors

by Jason Snell & Dan Moren

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by Jason Snell

Apple’s college football TV deal, and a century-old athletic conference, fall apart

After recent reports that Apple was close to striking its first TV deal for American College Football, the whole deal collapsed like a house of cards last week.

According to numerous reports like this one from The Athletic, Apple offered the nine remaining members of the Pac-12 conference “a five-year deal with an annual base rate of $23 million per school… with incentives based on projected subscribers to a Pac-12 streaming product akin to Apple’s MLS League Pass.” The report continued:

At 1.7 million subscribers, the per-school payout would match the $31.7 million average that Big 12 schools will reportedly receive from ESPN and Fox beginning in 2025. But Kliavkoff encouraged the room to think much bigger — at 5 million subscribers, the schools would eclipse $50 million per year, closer to the deep-pocketed SEC and Big Ten than the ACC or Big 12.

This seems to be Apple’s approach to sports rights. Unlike traditional players, who generally just write checks and receive the rights in return, Apple approaches rights negotiations as opportunities to mix direct payments combined with a share of revenue driven by a paid subscription product. Apple certainly could have afforded to offer the Pac-12 nothing but cash, but it instead preferred to offer less money—still roughly $1.1 billion total over five years!—along with a percentage of the upside.

The story is complicated, with numerous reports that the Apple offer was meant to sit alongside a more traditional rights offer—but apparently that other offer fell through due to the recent tough times in the TV industry, and so the Pac-12 conference executive committee was given Apple’s offer alone. With one school (Colorado) having defected from the conference earlier in July, the pressure was up to execute the deal. According to the Athletic’s report, Apple sweetened the deal by another $2 million per school per year, and that was enough to get the three schools that were wary (Arizona, Arizona State, and Utah) to commit to the plan.

As reported by John Canzano, here’s what Arizona State University president Michael Crow had to say about the Apple offer:

We were offered a media contract by the Apple corporation, which was a technological 23rd century Star Trek-thing with really unbelievable capability that we were very interested in. We thought there was some risk but huge opportunity.

What happened next was a bit surprising. According to John Ourand at Sports Business Journal, Oregon and Washington decided to contact the Big 10 to see if it could make a better offer. Thus prodded, the conference and its media partner, Fox, made them an offer—one the conference had previously insisted it wasn’t interested in making.

The money and opportunity to be in a larger conference with better long-term prospects was just too much for Oregon and Washington to ignore, at which point the entire deal collapsed and the century-old Pac-12 was left with only four members: Cal, Stanford, Washington State, and Oregon State.

And so that’s where we are now. The Pac-12 is now four schools attempting to expand to get back up to a reasonable number. Would Apple make a deal with a re-formed Pac-12? Possibly—it’s basically the only access the company would have to college football—but it will definitely not be offering $25 million per school for the privilege.

As someone who has been a lifelong fan of a team in the Pac-10 (and later Pac-12) conference, seeing the historic bonds between all these west coast colleges destroyed like this is heartbreaking. Games will still be played on Saturdays all over the country, but things will never, ever be the same.

—Linked by Jason Snell

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