(All of the numbers below are for illustration purposes only.)
You have a group of investors, and you all agree on a distribution model on how you will split up the profits of the investment. Many of the investors do this based on the belief that you will make $500 Million dollars a year in profits BECAUSE YOU TOLD THEM THAT. The investors set their future plans for other investments based on what you told them.
You leak news of this distribution agreement to your friends in the press. They make a huge deal about the agreement.
What is the problem? You KNOW you are not going to make the $500 Million you promised.
A. Investors Washington and Oregon initially thought they going to make $66 Million per year.
B. Investors Arizona, Arizona St., Utah, and Colorado initially thought they going to make $52 Million per year.
C. Investors Stanford and California initially thought they going to make $44 Million per year.
D. Investors Oregon State and Washington State know they are the smaller investor and initially thought they going to make $36 Million per year.
Over the past year the investors learn the new goal is $350 Million per year.
In the past few weeks, the investors are learning the reality now is $250 Million per year.
A. Investors Washington and Oregon now think they going to make $33 Million per year.
B. Investors Arizona, Arizona St., Utah, and Colorado now think they going to make $26 Million per year.
C. Investors Stanford and California now think they going to make $22 Million per year.
D. Investors Oregon State and Washington State know they are the smaller investor and now think they going to make $18 Million per year.
Now tell me how important the distribution model is. Do you think every one of them cares about the distribution model or what they will make individually?
The problem with almost all reporting from the Pac 12 is this. NOTHING matters until there is agreement with the media rights fees that will be collected. SHOW ME THE MONEY NOT THE PERCENT OF THE TOTAL.
Here is the truth.
EVERY school in the Pac-12 KNOWS they are getting 50% less than what they were initially promised. Many are scrambling financially because of it.
If you are Colorado and Arizona are you ok making $26 Million or are you willing to go to the Big 12 to make $32 Million?
If you are Washington and Oregon are you ok making $33 Million or are you willing to go to the Big Ten to make $50-60 Million initially and up to $100 Million in five years?
If you are Stanford and California are you ok making $22 Million or are you willing to go to the Big Ten to make $40-50 Million initially and up to $100 Million in five years?
THESE are the questions these schools may soon be answering. Stay tuned.
I could argue all six of these schools no longer CARE what the GOR says. They know they aren't going to sign it.
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