In 23 days, George Kliavkoff officially takes charge of the Pac-12. His to-do list is longer than an elephant’s memory.
One priority cannot be solved immediately: The Pac-12 needs months, and likely years, to execute a long-haul media rights strategy that positions the conference for competitive and financial success.
Success in that endeavor depends partly on forces beyond the Pac-12’s control, including advances in technology, changes in consumer behavior and valuation shifts in the sports media marketplace.
In recent weeks, the Hotline examined the impact of the NFL’s $100 billion deal on college sports media rights and the potential role Amazon could play in future Power Five broadcast agreements.
Now, in the final installment, our focus turns to the Pac-12 — specifically, to these topics:
* Should the Pac-12 renegotiate its media deals as soon as possible or hold tight until the current contract cycle expires in the summer 2024?
* Are the digital media giants, Amazon first among them, serious options for future partnerships?
* Should the conference shut down the Pac-12 Networks, sell them to an established media company or maintain the status quo?
* Where does the conference’s strategic position stand relative to its Power Five peers?
For insight, we spoke to experts from the sports media field. The interviews were conducted separately, but the responses are laid out below in a free-flowing, Q&A style.
Two analysts asked for anonymity and have been identified below as Source 1 and Source 2, while three analysts spoke on the record. They are:
— Patrick Crakes, owner of Crakes Media Consulting and former Fox Sports senior vice president for programming, research and content strategy.
— Ed Desser, head of Desser Media Inc. and the NBA’s former executive vice president for business development and president of NBA TV. (He has degrees from both UCLA and USC.)
— Chris Bevilacqua, the co-founder of Bevilacqua Helfant Ventures and longtime media consultant.
Their insights have been arranged in a manner that makes the discussion easy to follow, but please note: They are not responding directly to comments from each other.
Which is more likely for the Pac-12: Partnering with legacy college sports media networks (ESPN, Fox, NBC, CBS) or aligning with a digital-only company (Facebook, Amazon, etc.)?
Crakes: ”The established platforms are in secular decline, but they’re still making all the money. That paradigm isn’t changing anytime soon.”
Source 2: “It’s an interesting time. Cable subscriptions are going down. You have the rise of Direct-to-Consumer services. But content is at the top of the pyramid. When the music stops, who’s standing?”
Source 1: “If Amazon can get the biggest sports property of them all (the NFL), why do they need the Pac-12?”
Bevilacqua: “I don’t think you can extrapolate out from the NFL deal that Amazon will do something similar with college football.”
Crakes: “ESPN+, Peacock, Warner Media-Discovery and Paramount+ are more sexy than Facebook because they have complementary established media distribution platforms.”
Source 2: “If you’re planing to be all in with FAANG, who has done that? Amazon is a shrewd buyer. The FAANGs aren’t really used to spending on content, unless it’s scripted. But the legacy media companies know how to monetize sports. The best bet is a combination: some content on the (broadcast) networks, a little on cable and a lot on streaming.”
Should the Pac-12 attempt to renegotiate its media rights early, which could only be done with existing partners ESPN and Fox because of contractual stipulations? (In order to negotiate on the open market, the conference must wait for the current deals to expire.) And how should it handle the Pac-12 Networks?
Source 2: “If you’re the new commissioner, do you go early? You can’t get the maximum, but you don’t get left out. Do you wait and see? Or do you do something radical?”
Crakes: ”The Big Ten has a business model that’s working. It’s steady as she goes there, and value creation is strong. The Pac-12 isn’t in the same position. Waiting (for a new deal) has some risk, but I don’t think they should shut down the Pac-12 Networks. The (Regional Sports Network) model, with multiple local networks, was a great idea, for 2007. But in 2012, that was the apex of peak bundle. The established bundle is in decline, but it isn’t going away. And it’s evolving on the digital side at a rapid pace.”
Desser: “It’s always attractive for a network to be able to lock things in, because it cuts down on the variables. But if you’re not the most valuable (football) product out there, you have to ask if they (the networks) have the motivation — if it’s worth it to them to lock things in.”
Bevilacqua: “The NFL and NHL were both blockbuster outcomes” — the NHL recently signed a new media agreement, as well — “but both of them were free agents. As everyone thinks about the future, that’s an important fact. The Pac-12 isn’t a free agent for a couple years. It’s a whole different conversation if you’re not.”
Desser: “There’s a level of perceived future compensation, but you don’t know if it will be there. Say ESPN takes away the Big 12 completely with an exclusive deal. Now, their appetite might be less. On the other hand, if Fox loses the Big 12, then maybe it’s that much more motivated to go all-in with the Pac-12.”
Crakes: ”If I’m the (Pac-12) commissioner and ESPN says they’d like to do a deal that instantly makes Pac-12 Networks profitable but (ESPN) would hold the rights for a long time, I would have to think about that. I don’t think you need to close the Pac-12 Network; there’s enough content. But you need a partner — and a model more like the Big Ten or the SEC. If ESPN owns, or is a partner, then they have an incentive to place high-value games there in order to maximize distribution across all platforms via levering the affiliate distribution sales power of ESPN Brands. But if the Pac-12 Networks are by themselves in the marketplace, then there’s risk of getting treated like apples in a grocery store — someone comes by and says, ‘I’ll take this one but not this one,’ and then you run a good chance of ending up with some apples that don’t get taken. An RSN type model, where you’re asking distributors to take multiple versions of the same network, is hard to push if you’re aligned with a big media partner such as ESPN Brands — and it’s near impossible if you’re alone without media partners.”
Generally, how would you assess the value of the Pac-12’s media rights compared to its Power Five peers?
Source 1: “The rights to college games are getting to the point where the networks don’t mind paying top dollar for top content. But it depends on which league, and it could get to which package in which league.”
Bevilacqua: “The good news is that high-value sports rights are again leading the way. The question is, Who are the haves and who are the have nots?”
Source 2: “I assume the Big Ten will pass the SEC. That will influence what happens with other conferences.” (The Big Ten’s current contract expires in 2023.)
Source 1: “I’d be more concerned if I’m the Big 12 than the Pac-12. The Pac-12 will get its deals.”
Crakes: ”The Pac-12 is clearly in a very desirable box of top properties that established media partners and distributors want to be involved with. The question is, Where does it fit into the overall Tier 1 sports distribution matrix compared to other properties if there are no new non-traditional bidders in a few years, which I don’t think you can count on. Do they (Pac-12) wait three years and see if non-traditional digital only platforms jump full force into acquiring Tier 1 sports rights? Or do they try to work with current partners realize their full value now? The commissioner has to figure that out.”
Desser: “The Pac-12 doesn’t want to hear that it’s not in the same pantheon as the SEC and the Big Ten. But the problem from a media standpoint is that it’s in the Mountain and Pacific time zones, which represent one-quarter of the TV homes. That’s just a fact. It can position itself in a positive fashion as the second half of a doubleheader, but there’s a gap in what’s possible. It will be really interesting to watch what happens.”
Source 1: “The question is, how do you split a package off the top and get big money for that, then make a volume play with the rest of it? If you’re the Pac-12, you cannot change your geography, and you cannot change the clock. It has nothing to do with competitiveness and everything to do with viewing patterns.”
Desser: “No matter what, the Pac-12 has certain teams with legacies, several large markets and an attractive product. It’s got history. But it’s all relative.”
Source 2: “Everyone should remain calm.”
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