Financial issues led USC, UCLA to leave Pac-12 for Big Ten

Southern California and UCLA will leave the Pac-12 for the Big Ten, the schools officially announced via press releases Thursday evening.

The two schools reached out to the Big Ten and were not pursued, multiple people with knowledge of the deliberations told USA TODAY Sports. The move would occur for the 2024 season. The Big Ten may not be done expanding.

The people were granted anonymity because they were not authorized to speak publicly about the negotiations.

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USC and UCLA are the two dominant brands in the Pac-12 and the largest and most successful athletics departments on the West Coast.

Losing the two schools to the Big Ten would be devastating for the Pac-12 and could lead to another round of conference realignment impacting every league in the Power Five.

Adding the two schools will bring the Big Ten membership to 16, equaling the number of schools set to be in the SEC once Texas and Oklahoma join the conference from the Big 12 in 2025.

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The addition would expand the league’s footprint well beyond its traditional Midwest roots and create the first Football Bowl Subdivision “super conference” constructed largely without regard for geography.

UCLA running back Kazmeir Allen (19) catches a touchdown pass against USC cornerback Isaac Taylor-Stuart.

The financial incentives for UCLA and USC to make this move are powerful.

In fiscal 2019, the last year unaffected by the pandemic, the Big Ten distributed about $55.6 million to each of its 12 longest-standing members (Maryland and Rutgers received smaller shares) while the Pac-12 distributed about $32.3 million, according to the conferences’ federal tax records.

The gap in per-school distributions was even wider in fiscal 2021, the most recent year for which the conferences’ tax records are available. The Big Ten’s basic distribution was about $48.9 million per school – and that was with Maryland and Rutgers receiving full shares for the first time – while Pac-12’s was about $19.8 million.

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As a private school, USC does not make public its annual athletics financial reports to the NCAA.

UCLA’s recent reports have been bleak. After having balanced budgets for more than a decade, UCLA’s athletics program has faced significant financial problems in each of the past three fiscal years, racking up a combined operating deficit of more than $103 million according to data compiled by USA TODAY Sports in partnership with the Knight-Newhouse College Athletics Data project at Syracuse University.

In 2019, it reported an annual operating deficit of $18.9 million. In 2020, that figure grew to $21.7 million. And in 2021 – the year in which college sports programs faced the height of the COVID-19 pandemic – the annual deficit ballooned to $62.5 million.

In 2020, The (San Jose) Mercury News reported that the 2019 deficit would be covered by an interest-bearing loan from the campus’ central fund. Although USA TODAY Sports asked in writing in 2021 how the 2020 deficit would be addressed, a school spokesperson did not provide that information.

This past January, when UCLA reported its financial figures for 2021, a school spokesman provided USA TODAY Sports a statement that pointed not only to the pandemic, but also a set of other factors, including the athletics department receiving far less money from the university and student fees than other schools – about $2.5 million to $2.7 million annually.

The University of California System’s other Pac-12 school, California-Berkeley, has received more than $18 million in such funding in each of the past two years. University and athletics department officials there have acknowledged that nearly $85 million in annual operating deficits from 2015 through 2019 weren’t treated as accumulated debt, to be repaid by the athletics department at some point. They were simply covered by the university.

In 2021, Arizona State provided its athletics department with $62.3 in institutional funding to help with the effects of the pandemic, along with $11.3 million in student fee support (the athletics department reported transferring $6.2 million back to the university). But in a typical year, Arizona State’s athletics department has received net totals of more than $15 million in school and student-fee money.

Contributing: Dan Wolken and Steve Berkowitz

Follow colleges reporter Paul Myerberg on Twitter @PaulMyerberg

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