The Pac-12 could be one of the first conferences to get a cut of the pie. They do, after all, hold the men’s basketball tournament in Las Vegas and, for a time, allowed NFL-geared fantasy sports sites to advertise on the Pac-12 Networks.
The NCAA won by losing this week with the Supreme Court’s decision to lift the federal ban on sports wagering. The governing body took one in the gut, but member schools stand to grow their coffers.
The decision in Murphy v. NCAA, handed down Monday by a 6-3 vote, was reminiscent of the 1984 SCOTUS ruling that the association’s ownership of television rights violated antitrust law.
The act of turning control of TV rights over to the conferences (to act on behalf of the schools) created modern college football in both structure and economics.
Legalized gambling could have a similarly momentous impact. The issue is in congressional hands at the moment, but more than 30 states are expected to eventually allow sports wagering. (Some, it seems, could do so within the next year.)
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It’s a galaxy changer for all sports, not merely those of the “amateur” variety.
“Mindboggling,” according to Ryan Rodenberg, who would know as well as anyone.
An associate professor in Florida State’s department of sports management, Rodenberg specializes in sports law analytics and filed an Amicus brief to the Supreme Court (in support of neither party).
That he grew up in Seattle, got his doctorate from Washington and knows one Power Five conference from another — well, all the better.
Rodenberg began his explanation of the SCOTUS decision by describing three potential sources of revenue.
The first could take the form of support funds: Payments from state oversight boards to the universities to bolster compliance staffs and educational initiatives.
The second would unfold as marketing income: Numerous entities, from hotel/casinos to gaming associations to fantasy sports leagues, could spending advertising and sponsorship dollars with the schools (or buy commercial time on the conference-affiliated TV networks).
Does that mean Autzen Stadium could become DraftKings Stadium, or that we’d see Powerball Pavilion at UCLA? Maybe not … Or maybe yes.
Those revenue streams pale in comparison to the Nile of cash that could result from a direct cut of the action.
“Conferences could unilaterally pursue sports-gaming opportunities on their own, outside of the NCAA,’’ Rodenberg said.
Let that one settle as you envision tens of millions wagered across the country over the course of 14 Saturdays.
The NBA and Major League Baseball are already pursuing the so-called integrity fee, a percentage of the amount bet that’s cloaked as payments to maintain integrity and oversight of their sport in each state.
“Neither the NCAA or any conferences have joined them,” Rodenberg said, “but perhaps they will.”
Of course they will. There’s too much money at stake, not to mention too much existing debt and too many escalating costs.
And because the Power Five control college football, not the NCAA — thank you, SCOTUS — they could be free to pursue their own integrity fees just as they cut their own TV deals.
Imagine each conference collecting one percent of the total handle (i.e., amount wagered) on football games in states throughout its footprint.
(Also think about the potential impact on realignment: Smaller schools in big-handle states could become more desirable. By 2030, Buffalo just might be a member of the SEC.)
Rodenberg believes the Pac-12 could be one of the first to pursue a direct cut. After all, the conference holds its men’s basketball tournament in Las Vegas and, for a time, allowed NFL-geared fantasy sports sites to advertise on the Pac-12 Networks.
“In terms of the allergic reaction to gambling,” Rodenberg said, “the Pac-12 has already crossed that bridge.”
Just how much cash is at stake?
According to Rodenberg, New Jersey estimated the annual handle on sports wagers could be $10 billion. “California,” he added, “would dwarf that.”
Let’s assume that California, Washington, Oregon, Arizona and Colorado eventually legalize sports wagering — let’s keep Utah out of the discussion for now — and that the annual handle across the Pac-12 footprint is $50 billion.
Then let’s estimate 20 percent of that total is bet on college sports: $10 billion per year.
(Basketball wagering will be significant, especially in March, but the NCAA’s control of that sport adds uncertainty to the revenue dynamic.)
Finally, let’s imagine the Pac-12, like every Power Five, were to cut integrity-fee deals comparable to those of the NBA, MLB and NFL.
That translates to $100 million annually for the conference.
And it could be larger.
And it doesn’t include the cash from gaming-related sponsorship/advertising deals.
And it doesn’t include an increase in media-rights contracts resulting from more eyeballs on the live events.
“I’m not sure losing a Supreme Court case can be heaven-sent,” Rodenberg said, “but if (the conferences) can get their ducks in a row, it could be a boon.”