The Pac-12 Conference is planning a loan program that would provide cash-strapped athletic departments financial options in the event the football season is canceled because of coronavirus, according to internal documents and conference source information secured by The Mercury News of San Jose, Calif., and its Pac-12 Hotline.
If all member schools opt in, the program could approach $1 billion, large enough to cover each school's ticket and media rights revenue losses should football be suspended in 2020-21.
Football accounts for the majority of each department’s revenue, generating in excess of $50 million dollars in ticket sales and media rights alone.
According to a series of emails obtained by the Hotline through public records requests, the loan would provide a maximum of $83 million for each university at an interest rate of 3.75 percent over 10 years.
“The conference is trying to be nimble and give schools some options,’’ a source said.
However, multiple sources indicated that not every school would make use of the loan, particularly private schools Stanford and the University of Southern California, and some would seek substantially less than the maximum allowable. If the Pac-12 plays a full football season, the plan could be pushed aside entirely.
The idea is popular with university presidents because the loan would allow schools to bridge the coronavirus crisis without having the implement massive budget cuts that could include widespread layoffs and possibly the elimination of Olympic sports teams, which do not generate a profit, The Mercury News reported. The plan also alleviates the pressure on the universities to rescue their own departments.