UC Regents approve $10 million annual payments from UCLA to Cal athletics
LOS ANGELES — A University of California Board of Regents panel today approved a plan for 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, but it called for a review of the payment after three years.
UC President Michael Drake had recommended that the $10 million payments 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. Members of the regents’ Special Committee on Athletics, however, called for another review of the payment amount after three years, prior to the 2027-28 school year.
Some committee members expressed concern about locking in the $10 million amount for such an extended period, noting that financial conditions at both universities could change.
“If the world is drastically different, we should have another look at it,” Regent Richard Sherman said during the panel’s meeting at UC Merced.
Sherman initially asked that the amount be reviewed after one year, but other members objected, eventually settling unanimously on the three-year review.
With that amendment, the panel approved the arrangement, with Regent Keith Ellis dissenting, saying he felt the payment set a bad precedent.
During the discussion, Student Regent Merhawi Tesfai said he was concerned about the payment, saying, “I think we’re essentially hurting UCLA as they move to a more competitive conference.”
He ultimately voted in favor following the amendment.
The full Board of Regents is expected to consider the matter Thursday.
The dissolution of the Pac-12 was brought on by the 2022 decision by UCLA and USC to leave the conference in favor of the Big Ten Conference. That move was followed by multiple other Pac-12 schools also jumping to other conferences. Cal 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 this week, 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.
“In the event that there is a significant change in revenues and/or expenses for either campus, exceeding 10% 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 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.”