Pac-12 Networks president Mark Shuken chatted with the Hotline last month in Las Vegas about a range of topics directly and indirectly related to the networks’ future.
The majority of our 45-minute discussion focused on Shuken’s plans to increase engagement, but we touched on the larger media landscape, as well.
The following Q&A has been re-ordered from the original conversation so the topics flow in a manner that will be easy for readers to follow, without impacting the context.
The Hotline’s deep dive into Shuken’s engagement plans — using football as the primary vehicle — can be found here.
For other Hotline content on the Pac-12 Networks, consider this landing page.
*** How do you know the increased emphasis on football is working?
“We’re excited about specific data around all the engagement on the other platforms (beyond linear TV). The question is, how do you monetize? How do you quantify the value of anybody who clicks, or anybody who watches?
“The industry isn’t there yet. But it has to get there — not just with sports necessarily but the whole thing.
“You look at Katelyn Ohashi” — the UCLA gymnast whose routine went viral — “there has got to be some way to make that matter from a business perspective.”
*** How do you envision that process unfolding in the next few years?
“The ultimate objective is to elevate the value of our media rights between now and 2024 (when the current deals expire).
“Elevating the value means creating the best product you can and identifying as many potential partners as are out there. Apple just announced it’s in the business of owning a media service. Amazon just hired (programming executive Marie Donoghue) from ESPN. And the fact we have inbound interest from other entities (as potential equity partners).
“Some (interest) might be just financial and some might be synergistic, but other entities wanting to buy in is a heck of a good sign for Larry Scott’s initial conceit: ‘Keep ‘em all'” — retain 100 percent ownership in Pac-12 media rights — “‘because the world’s coming to us.’
“And I know that one will be proven when it’s proven, and then we’ll be able to celebrate when there’s proof.”
*** Major League Baseball just extended its agreement with Fox (through 2028, at $729 million per year). Doesn’t that suggest legacy media might be the best option for collegiate conferences because of the audience those companies can provide?
“What that indicates is that some of the traditional linear carriers, whether it’s a distributor or a content provider, are trying to figure out what to own that will set them apart. What we’ve seen more than ever is that live sports sets you apart. Apple and Netflix are competing for original shows.
“Well, the original show that beats the band is live sports.
“So the linear players are saying, ‘Let’s lock that up long-term, because that’s going to be our tent pole.’ I saw rights in other collegiate conferences extending into 2030-something. That’s an investment in opportunity and the future; it’s also a protective measure.”
*** Does that sharpen your focus for potential partners when you look at legacy media options (Fox, ESPN) versus digital media options (Amazon, Facebook)?
“What I like about it is, these are not mutually exclusive opportunities. We might end up having some traditional carrier partners and some non-traditional carrier partners. And what I find fascinating is how the content is ultimately sliced and diced.
“You don’t have to do it the way we do it today, both from a technical perspective and from an offering perspective. The fact that it’s becoming so efficient and relatively inexpensive to distribute games, whether on linear TV or streaming, means you can do more for less.
“One example is Pac-12 Plus. We have 600 (Olympic sports) events available streamed. That’s not a particularly expensive model. We do it in partnership with the schools. That could be ultimately 6,000 events, and that couldn’t have happened five years ago based on the cost of delivery and bandwidth.
“Anything can be put out there fast and with high quality and pretty inexpensively.”
*** Speaking of streaming, how might DAZN impact the landscape for college sports rights?
“They will spur competition. Obviously, with the leadership and funding, they’re going to be aggressive. I think it’s really clever.”
*** So far, they’re focused on international rights (mostly soccer) and MMA-type sports in the U.S.
“You look at what’s out there, and you realize that those that hold (rights), hold them tight. And the costs get prohibitive in some cases.
“I always wonder, is it better to go invent? Let’s say you and I are going to start a business: Let’s make lacrosse the next media entity because the investment is virtually zero, rather than going to try to buy EPL (English Premier League) rights for a billion.
“It’s pretty expensive to get into those established leagues. Because if you lose one, you’re in rough shape as a distributor or content provider.”
*** Didn’t that issue — not wanting to lose the rights you own — help the Pac-12 during its Tier 1 negotiations in 2011? Comcast swooped in with a bid, so ESPN and Fox teamed up on the $3 billion offer.
“There was a moment in time when that was celebrated as an enormously positive financial moment, and we intend and expect that to happen again when the cycle comes back around. That’s something we’d like people to appreciate.”
*** The Tier 1 deal tends to get overlooked because of the Pac-12 Networks’ issues with revenue and distribution.
“Our mission is different from purely financial, but it’s not not financial.
“We do our best to run an efficient business. There’s no content we create that’s solely for linear TV. Everything we do must be made available for all our platforms. It’s bad business (otherwise), and you’re missing the customer. And I think that’s the entire philosophic shift for us.
“When they first started (the Pac-12 Networks) with 850 events — and this is the question that keeps coming back, as referenced around economics and net profit — no one ever said doing 850 events would create the most profitable approach to it. It was about delivering the mission after having been paid by Fox and ESPN.
“And that’s OK. That’s exactly the mission around it. That’s part of the elevation of the brand.”
*** Your current rights agreement expire in 2024, so negotiations will probably start a year before that, if not 18 months. When is the sample size for measuring engagement large enough to present to potential suitors?
“Our timeline is pretty good. There are a few big things in the media marketplace that will help inform our strategy before we’re up, the NFL rights probably being the most significant (in 2022). You already see Twitter and other entities bidding on NFL rights.
“By that time, when you start thinking about the future, there will be some real data points in the marketplace and in our own engagement. We’re six months into process of change, and I’m glad we have a couple years.”
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