This is a real problem for the rest of the PAC-12. Rumors already circle about Oregon and Washington making a move as well. Hopefully they will wait while the PAC-12 talks things over.
I see this potentially going a number of ways....
1) First is the PAC-12 staying a conference and raiding the Mt. West for teams that contribute something to their TV market, like UNLV and San Diego State. I suppose Boise State. Fresno State and San Jose State might contribute some value in terms of fringe TV markets. Unfortunately none of them dominate a major TV market, nor do they have national name recognition. This idea would only work if the trend to "super conferences" of 20+ teams does not continue, and financially it wouldn't make the PAC-12 competitive with the existing conferences. USC and UCLA were big contributors to the value of the last PAC-12 media package, which is in negotiations now.
2) Second is the PAC-12 making a pitch to the Big 12 to merge after Texas and Oklahoma take off for the SEC. Then the Big 12 would be the dominant conference in two-thirds of the US, from the Mississippi River west to the Pacific. I think this is the best case scenario, as it would create a super-conference of about 22 teams and would have decent coverage in terms of major TV markets in the west...except for Los Angeles, which UCLA and USC would still "own." There are already rumors of individual PAC-12 teams wanting to look into the Big 12, and Colorado used to be in the Big 12.
3) Third is a merger with the Mt. West, which is the next strongest conference outside the Power 5, and it and the PAC-12 would cover the western US pretty well. The Big Sky conference also operates in the west, but frankly, it's not much of a factor. This would do very little to complement the PAC-12 but would provide another large conference of 20 teams. This would be a weak conference compared to other large conferences in terms of TV revenue. (On a personal note, I'd love to see Colorado and Colorado State in the same conference, but that doesn't matter to most people.)
I'm sure there are other potential outcomes, but those seem the most likely to me. Of course, there's bound to be a lot of stuff going on that I don't recognize.
I may change my mind tomorrow!