Report: Pac-12 might seek investors

Plan to help keep pace with other conferences

The Pac-12 Conference might seek private investors because it is lagging behind other Power-5 conferences in revenue and distribution of TV rights, according to a report.

The Oregonian newspaper reported that the Pac-12 has pitched a plan to school presidents and chancellors that might bail out the struggling conference.

Conference Commissioner Larry Scott introduced a plan called Pac-12 NewCo to university leaders in November, the Oregonian reported, citing unnamed sources. The plan was further discussed in a conference call in December.

In the proposal, the Pac-12 NewCo would hold the conference’s broadcast rights, sponsorship rights, merchandising and all other commercial assets. The conference would retain 90 percent of the equity.

Private investors would own 10 percent equity in the newly formed entity in exchange for a $500 million investment. A cash infusion of $500 million would be available for immediate distribution to Pac-12 member schools.

In a statement Saturday, the conference said, “As the value of Pac-12 media assets has continued to grow significantly over the years, we regularly evaluate proposals we receive and consider strategic options to maximize value for and with our members. As a matter of policy, we do not comment publicly on the nature of these discussions.”

Some Pac-12 university heads have complained that the conference has fallen well behind its peers around the country in its payouts to member schools.

The SEC, for example, distributed $11 million more than the Pac-12 to each of its members in the last fiscal year, while the Big Ten will pay out more than $15 million above Pac-12 payouts in its new media rights deal.

In documents obtained by the Oregonian, the conference estimated that a capitalized NewCo could be valued at about $5 billion to $8.5 billion based on the Pac-12’s current media rights deals and on “conservative assumptions going forward.”

However, as the Oregonian points out, the projections include $36 million in annual revenue from DirecTV beginning in 2020 and a onetime payment in 2024 from ESPN in the amount of $347 million.

The Pac-12’s current TV rights contracts with Fox and ESPN expire in 2024.

Tom FitzGerald is a San Francisco Chronicle staff writer.