University of California President Michael Drake will ask the Board of Regents next week to require UCLA to pay $10 million annually to UC Berkeley to bolster the finances of the Golden Bears' athletic programs following the dissolution of the Pac-12 Conference.
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The dissolution was brought on by the 2022 decision by UCLA and USC to leave the Pac-12 in favor of the Big Ten Conference. That move was followed by multiple other schools also jumping to other conferences. Cal Berkeley eventually reached an agreement to move to the Atlantic Coast Conference.
In late 2022, the UC Board of Regents gave its approval of UCLA's move to the Big Ten, but that approval included a condition that UCLA make an annual payment to Berkeley ranging from $2 million to $10 million, generally offsetting losses in media-rights suffered due to the Pac-12's demise. The final figure was to be based on an analysis of media-rights packages secured by UCLA in the Big Ten.
In a report to the Board of Regents ahead of next week's meeting, Drake's office concluded that "there will be an approximately $50 million difference between UCLA's Big Ten contract and UC Berkeley's agreement with the ACC. As a result, the president is proposing that UCLA contribute $10 million a year to UC Berkeley, the top end of the range established by the Regents in December 2022."
The annual payments would begin with the 2024-25 school year, and continue through the end of the 2029-30 year, representing the term of UCLA's Big Ten media-rights contract.
"In the event that there is a significant change in revenues and/or expenses for either campus, exceeding 10 percent over 2024-25 pro forma assumptions, UCLA's contribution commitment will return to the Regents for further evaluation and potential action," according to the UC president's office report.
The Board of Regents is scheduled to discuss the issue on Tuesday during its meetings at UC Merced.
The report estimated that the current Big Ten media-rights deal will net UCLA nearly $60 million a year, while Berkeley will collect about $11 million per year during its first seven years in the ACC.
"Beyond UCLA's contribution, Cal Athletics will continue to work diligently to be fiscally responsible, priding itself on being able to achieve excellence on and off the playing fields while operating the department in a cost-efficient manner," according to the report. "In addition UC Berkeley is evaluating other solutions to address the financial gap. These include the development of new department revenue streams, additional philanthropic support, consolidating athletic scholarships to the campus Financial Aid and Scholarships Office, and an additional extraordinary payout from athletics- related endowed funds."
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