The University of California regents will discuss Cal’s move into the Atlantic Coast Conference next week on UCLA’s campus. It’s an appropriate location given that the governing board is expected to consider whether to impose a subsidy on the Bruins — the so-called Berkeley tax, or Cal-imony.
The agenda for the Sept. 21 meeting describes the session in this manner: “Discussion: UC Berkeley Atlantic Coast Conference Membership.”
Because the session is closed to the public, the regents won’t vote on whether to eventually force UCLA to turn a portion of its Big Ten jackpot into an annual “contribution” to Cal’s athletic department.
But sources believe it will be discussed in detail.
The controversial issue first surfaced last summer, after UCLA announced it would enter the Big Ten in 2024 (along with USC) and leave its sister campus behind.
Expecting the depleted Pac-12 to lose significant media revenue without the Los Angeles market, the regents voted in December to retain the authority to force the Westwood campus to subsidize Berkeley:
The measure reads as follows:
“The President will return to the Regents at a future meeting, after Pac-12 media agreements are finalized, with a recommendation for a contribution by UCLA to the Berkeley campus in the range of $2 million to $10 million, to be used to enhance student athlete support at that campus.
“Such recommendation will be based on the best available information on projected revenues for both campuses. The Board of Regents will have final approval over the contribution amount.”
Since then, the Pac-12 has collapsed, with Cal (and Stanford) fleeing to the ACC starting next summer.
But to gain admittance to their new home, the Bay Area schools were forced to accept reduced revenue from the ACC’s media rights contract with ESPN for nine years. The discounted rate reportedly begins at 30 percent of a full share.
Cal described the situation in the following manner on Sept. 1:
“The university will receive a full share of all revenues, including media revenue, while contributing back a portion of its media revenue to support and strengthen the conference and its current member institutions. UC Berkeley’s membership contribution will taper off until the 10th year, at which point it will begin retaining 100% of its media revenue share.”
Instead of the $25 million to $30 million they would have received annually from the Pac-12 — or as a full-share member of the ACC — the Bears are staring at just seven figures in media rights revenue into the early 2030s.
This, for an athletic department that requires more than $20 million annually from central campus just to balance its books.
(Cal and Stanford will receive full shares of the ACC’s revenue from the NCAA Tournament and College Football Playoff, which currently constitute about one-third of the conference’s total annual intake.)
“There certainly are financial challenges to this agreement,” Cal chancellor Carol Christ said the day the Bears joined the ACC. “We believe this was the best agreement in financial terms that we could have made and look forward to working through the challenges.”
How might Cal “work through” the challenges? Christ declined to provide details.
“We’ve barely begun to think about strategy,” she said. “There’s a piece of it that’s missing, which is what the regents decide about UCLA’s contribution to Cal.”
UCLA isn’t on the hook to cover the entire discrepancy. As the measure indicates, the maximum “contribution” is $10 million annually. (It was set for $5 million until a last-minute suggestion to double the ceiling was approved by the full board.)
It’s possible the regents will mull the issue for several months, then decline to slap the Bruins with the Berkeley tax.
Possible, but unlikely.
Both campuses expect the subsidy to be imposed — one’s relieved; the other’s frustrated — but neither of them knows the amount.
Clarity might begin to emerge next week.
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