When freshly minted Pac-12 Conference commissioner Larry Scott dispatched a chief lieutenant years ago to help locate office space that would become the new conference headquarters, he asked for two Bay Area options.
One, in Oakland.
The other in the heart of downtown San Francisco in one of the most expensive real estate footprints on the planet.
“Larry wasn’t going to Oakland," an executive-team source said.
Scott directed Gary Stevenson to negotiate an 11-year lease with Kilroy Realty Corporation to secure two floors and 113,000 square feet of prime office space in downtown San Francisco. The deal cost the conference $6.9 million in rent last year and another $11.7 million in deferred rent.
Those offices sit mostly empty this week, amid a social-distancing mandate.
I couldn’t help but think about that glaring expense amid the COVID-19 outbreak. The NCAA announced some bad news on Thursday. It revealed the payment it would make to members would only be $225 million, down from $600 million that was budgeted before the cancellation of the men’s and women’s basketball tournaments.
Blame the pandemic. Its created a mess for a lot of businesses. But the financial shortfall created by the latest loss of revenue underscores what was already glaring issue for the conference even in the best of financial times.
Big Ten headquarters in Chicago will cost that conference less than $1.5 million this year. The SEC, which secured a sweetheart deal in Birmingham, Ala., pays only $1 annually in rent.
If I’m a member of the Pac-12′s CEO Group -- the presidents and chancellors of the 12 universities -- I have one question: Why are we still there?
None of the Pac-12 Conference member institutions are located in downtown San Francisco. Staff at the Pac-12 offices have to be paid more because of the high cost of living. And the theoretical advantages of being located within blocks of some high-profile tech companies hasn’t manifested itself in a single lucrative partnership.
That downtown San Francisco location is a vanity play for a conference that can’t afford one. Which is why I’ve long wondered why the Pac-12 doesn’t just relocate to Salt Lake City, Phoenix or perhaps move to a less expensive Bay Area suburb. You know, like Morgan Hill, Calif. or something?
Even Las Vegas as a Pac-12 headquarters location would make more sense given the enormous cost savings and number of conference championship events that feel destined to take place there. But the point is, when you’ve lost control of your revenue streams you’d better get in touch with your expenses.
That rent payment is a doozy.
All of college athletics is terrified by the financial fallout from coronavirus. University of Portland Athletic Director Scott Leykam told me on Thursday that he was bouncing from conference call to conference call, with everyone in the West Coast Conference trying to get a handle on what comes next.
“There is no manual for this one,” Leykam said.
That uncertainty played a role, no doubt, in UP deciding to retain flailing men’s basketball coach Terry Porter. He had one year remaining on his contract. Leykam is standing by Porter, essentially punting to next year.
“We don’t know if we start to ramp back up in four weeks? Eight weeks? Four months? Eight months?" Leykam said. “What does that mean for our 70 full-time staff? And how do we balance those expenses with no revenue coming back up against it?”
Those are questions the Pac-12 has to be asking itself, too.
So what happens with the Pac-12 Conference burns through its reserves?
The distributions from the NCAA help pay conference salaries, rent, and help keep the lights on. But when you’re shelling out $575,000 a month in rent plus logging another $975,000 a month in deferred rent, you wake up every day upside down.
It’s well known that the SEC and Big Ten generate significantly more income than the Pac-12 does for its members. A handful of Pac-12 universities (i.e. Arizona State, Oregon State, etc.) have become increasingly reliant on student fees to subsidize athletics. And now, given that we just don’t know how the coronavirus will impact future revenue streams, the Pac-12 is in crisis mode.
Get out of that lease.
Relocate the headquarters and the Pac-12 Networks studios somewhere less expensive.
Start there. Because those are things you can control.
I understand the Pac-12 executive team wanted to go to work near the Moscone Center, and mingle and network with tech executives over lunch. I know Pac-12 leadership wanted a modern, beautiful office space that it believed would help the brand. But that brand was long ago broken.
Headquarters now looks like a luxurious wasteland.
"expensive" - Google News
March 28, 2020 at 01:54AM
https://ift.tt/2UFfvzU
Canzano: Coronavirus makes now-empty Pac-12 Conference headquarters an expensive problem - OregonLive
"expensive" - Google News
https://ift.tt/2GwwnlN
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Canzano: Coronavirus makes now-empty Pac-12 Conference headquarters an expensive problem - OregonLive"
Post a Comment