The Pac-12 should hire a commissioner who makes sense for the moment but not many dollars.
At least, not as many dollars as the outgoing commissioner.
Larry Scott’s compensation has generated immense attention over the years, but it’s not his fault.
Anyone out there going to turn down $5.4 million a year?
Didn’t think so.
The presidents negotiated Scott’s original deal in 2009. They approved his extensions, his bonuses, his raises and his multimillion-dollar, interest-free loan.
It was an egregious misuse of resources, and they need to get it right this time around.
Unlike the fate of the Pac-12 Networks and the location of the conference office — two momentous issues that will require input from the next commissioner — the compensation package should be established in advance, with limited room for negotiation.
The presidents cannot cede leverage during their search, not for a moment.
Not after the inefficiencies of the past decade.
Not with conference revenue lagging and campus budgets cratering and business models shifting (courtesy of name, image and likeness legislation).
Scott will step down in June, but his contract runs through the summer of 2022.
Exactly how much he will collect from the universities to not work for a year, we don’t know.
The news release issued by the conference last week said only that Scott “would not seek a new contract.” It offered no clarity on the separation agreement.
But he will walk away having earned in excess of $45 million during his tenure, according to Pac-12 tax filings obtained by the Hotline over the years.
Perhaps more alarming for the budget-strapped athletic departments is Scott’s compensation relative to his brainchild, the Pac-12 Networks — and the reasoning behind it.
From the point Scott launched the networks in August 2012 through the expiration of his contract, Scott will have received more than $40 million in base pay and bonuses.
Meanwhile, the networks will have distributed approximately $20 million to each campus, based on Hotline research.
(The figures for Scott’s total compensation and the Pac-12 Networks distributions are estimates because we don’t yet know the specifics for fiscal years 2020-22.)
But one layer down, there is more mismanagement to be found.
During his 2018 testimony in the Alston lawsuit against the NCAA, Scott told a federal judge that he was paid for not one but two jobs:
“An important component of determining my compensation is based on a unique dual role that I have serving as commissioner of the conference, but also executive chairman of a media company that’s wholly owned by our 12 schools where we’re unique in that regard.”
That media company is the Pac-12 Networks, which have grossly underperformed the revenue projections provided to the athletic directors prior to launch.
We don’t know the portion of Scott’s salary attached to his role as commissioner and the portion tied to his duties as “executive chairman of a media company.”
But let’s say it’s 50-50.
In that case, Scott will have received approximately the same amount for being the chief executive of the networks as the networks themselves would have distributed to each university.
That smells like a 13-way split.
Good on Scott — you get what you can get.
Bad on the presidents.
Fortunately for the schools, only two members of the old guard are still in charge: UCLA’s Gene Block and Arizona State’s Michael Crow, who helped negotiate Scott’s original contract and has been Scott’s chief supporter over the years.
Instead, the search for Scott’s replacement will be led by the executive committee of the CEO Group: Washington’s Ana Mari Cauce, Washington State’s Kirk Schulz and Oregon’s Michael Schill (chair).
They joined the CEO Group in the mid-2010s, after the halcyon early years of Scott’s tenure — when Pac-12 revenue began to lag, expenses continued to climb and frustrations over Scott’s contract boiled over.
We suspect they won’t make the same mistakes as their predecessors.
That said, here’s our three-point plan for returning a proper balance to the conference and getting the issue out of the public realm for good.
1. Upon revealing the identity of Scott’s successor, the conference should provide the contract basics (years and dollars).
That’s not as simple as it sounds. The commissioner’s compensation isn’t subject to a Freedom of Information Act request in the same manner as, for example, the salary of the football coach at a public school.
The Pac-12 could keep the commissioner’s salary private until there is no choice, when the 2021-22 tax filings become available in the spring of 2023.
That would be a mistake.
The presidents should take a proactive approach and inform all candidates that the contract basics will be released when the appointment becomes official.
It’s the easiest way to get the issue out of the headlines and restore public (i.e., taxpayer) trust.
2. Don’t pay the commissioner for any role above and beyond being the commissioner.
This seems obvious but, well …
3. Settle on a reasonable compensation plan.
What do we mean by reasonable?
Here are the annual salaries for the Power Five commissioners whose earnings were disclosed in the most recent tax filings (i.e., for the 2018 calendar year):
Pac-12/Larry Scott: $5.4 million
Big 12/Bob Bowlsby: $4 million
ACC/John Swofford: $3.8 million
SEC/Greg Sankey: $2.6 million
(Figures for all except Scott were first reported by USA Today.)
Remove Scott’s compensation from the equation, and the average annual salary is $3.5 million.
The Pac-12 should not go one dollar higher.
Sure, there are cost-of-living considerations, but the conference office doesn’t have to remain in downtown San Francisco.
It doesn’t have to stay in the Bay Area.
But if it does, so be it.
If $3 million or $3.5 million doesn’t work for the next commissioner, then he/she shouldn’t be the next commissioner.
The presidents need to hold their ground.
Every dollar saved on the commissioner’s salary is another dollar available for the athletic departments.
In the Pac-12, it often seems like the schools work for the conference office, but it’s supposed to be the other way around.