There was a happy public tone coming out of the Pac-12 meetings last week, and on some levels, maybe it was justified.
The conference set records by putting 10 of 12 football teams in bowl games, two women’s basketball teams in the Final Four and seven men’s basketball teams in the NCAA tournament.
The Pac-12 is expected to return more than $20 million per school this year, the vast majority of which stems from tier-one media rights deals with ESPN and Fox.
Meanwhile, the conference-owned Pac-12 Networks has ramped fully up to its goal of 850 events per year, showcasing the “Olympic” sports that often went unseen before and ensuring all men’s basketball games are carried somewhere.
Yet there has been a perceived undercurrent of tension between conference commissioner Larry Scott and the school’s athletic directors, who see conference networks from the SEC and Big Ten return three or four times the $1.5 million they get from the Pac-12 Networks.
Their relationship may have gotten chillier last month after Scott publicly chided UCLA athletic director Dan Guerrero for voting against football satellite camps when the league had instructed him to vote for it, a complicated issue of which Scott said, “I regret that it happened in a way that became an issue about Dan and his character.”
Maybe that relationship is smoother now, but the Pac-12 is still dealing with issues. Here are five of them:
1. They’re losing a revenue battle to the Big Ten and SEC. When the Pac-12 signed a $3 billion, 12-year media rights deal with ESPN and Fox in 2011, while launching its wholly owned Pac-12 Networks, the conference was the envy of college sports.
But while the ESPN and Fox deal has delivered money and exposure as expected — about $18 million per school this year — the Pac-12 Networks has added only about another $1.5 million.
While discussing his department’s $13 million deficit in March, Washington State athletic director Bill Moos told reporters that the school had been expecting Pac-12 Networks to earn between $5 million and $6 million by now.
Both the SEC and Big Ten networks result in more than $7 million returned to each school in their respective conferences, while their tier one deals are especially lucrative because of their big footprints and passionate fan bases.
According to a San Jose Mercury News projection that counts tier one media deals and conference networks, the Pac-12 will return a total payment to its schools of $23 million in 2017-18, compared with $33 million for the Big Ten and $35.6 for the SEC.
“If I look objectively at what the goals were for the network when we started, we’ve achieved many of them,” Scott said. “But by the same token, there’s a lot of pressure out there and the competitive landscape is always changing. When we did our network (deal), the SEC Network didn’t exist, and all of a sudden it has been an extraordinary success.”
One solution for quick money is to sell equity in the Pac-12 Networks — after all, Big Ten Network is a joint deal with Fox, and the SEC Network is owned by ESPN. But Scott indicated that keeping the Pac-12 Networks wholly owned gives the conference more upside potential and will allow it to be nimble in a changing media landscape, citing the NFL’s recent deal with Twitter as an example.
“There are a lot of benefits to owning and controlling it ourselves,” Scott said, “and up to this point there’s been no more attractive option than continuing on the course that we’re on.”
2. A lot of people don’t get the Pac-12 Networks. For all its unprecedented volume of event coverage and well-received production quality, the Pac-12 Networks still is in only about 12 million homes, according to Sports Business Journal, about five times fewer than the SEC and Big Ten networks are each in.
That’s not only costing the Pac-12 a lot of money it could be earning in subscriber fees, but also partially muting its efforts to create exposure.
The biggest issue here, of course, is the Pac-12’s inability to get on DirecTV, with talks having reportedly fallen apart again last fall when new DirecTV owner AT&T pushed for additional rights that the Pac-12 CEOs resisted.
Scott said he was “extremely disappointed and somewhat surprised” that the deal didn’t go through, especially because AT&T has been a conference partner, but that the league is still intent to pursue different angles to get an agreement with the satellite provider.
“So far, we have not been successful, but it’s not for a lack of effort or creativity or desire to do it,” Scott said.
A DirecTV/Pac-12 deal could earn each school about $3 million annually in subscriber fees, according to the Mercury News, and also appease Pac-12 fans who won’t give up DirecTV because of its NFL and other sports offerings.
“Everybody’s been waiting for some kind of deal to happen,” UA football coach Rich Rodriguez said. “The Pac-12 Network puts out a great product. They’ve got real talent.
“I’m just hoping like everyone else that something can happen fairly quickly. You get worried that all the other power five conferences are getting all this TV revenue.”
Arizona athletic director Greg Byrne declined to comment in detail, but said, “We just think there are many positives about the Pac-12 Networks and our Pac-12 model.”
3. Late and weeknight kickoffs aren’t going away. Arizona filed a complaint last season when the Wildcats were forced to play a football game on Oct. 31 at 8 p.m. in Seattle, and they played six night games overall last season.
While the heat means some early-season night kickoffs are a good thing for Arizona, Stanford had to cope with five straight kickoffs of 7 p.m. or 7:30 p.m. by the end of October.
That’s tough not only on coaches, who don’t want to spend a full Sunday recovering from a late Saturday night game, but also to fans in the conference’s northern cities who aren’t warm to the idea of cool or rainy night games.
But the Pac-12 is all but boxed in on this one. The conference received that $3 billion in part because it agreed to allow ESPN and Fox to fill late-night slots out East with live games.
“Historically, we were the least flexible in terms of dealing with broadcast partners — that’s the feedback I got — so it was, ‘How flexible are we prepared to be in exchange for more competitive TV deals?’” Scott said. “I think everyone went in with eyes wide open that there’d be some pushback but I think it’s been hotter for our campuses than it was maybe anticipated.”
Scott said ESPN and Fox still want what they paid for, but that the Pac-12 is working for a slight reduction by making trade-offs with them.
“Are there some things we can do around the edges? Sure, with any partner there’s a give and take,” Scott said. “But ... for those fans who don’t like nighttime games, they’re not going to see significant change.”
4. All Pac-12 Networks are not alike anymore. The Pac-12 Networks’ ambitious original vision included seven channels — six regional feeds that each focus on two in-market schools and a national feed that would carry the best of everything.
That vision also included every provider carrying at least one regional and the national feed. But even though the Pac-12 says it offers all seven feeds at the same price, most providers carry only one or two.
Some, such as Cox Arizona, offer only the regional feed. Others have a regional and the national feed, but place the national feed on a secondary tier, sometimes in standard definition.
Initially, all this wasn’t an issue because the Pac-12 filled its regional channels with out-of-market games to fill airtime. But because the network now carries a full load of 850 games, the regionals are truly regional — Pac-12 Arizona, for example, now carries only games involving the UA or Arizona State.
“The plan was always to have one national and six regional channels,” said Lydia Murphy-Stephans, president of Pac-12 Networks. “Five hundred was the max on one channel so all along the plan was when we got to 850, we would differentiate the networks from each other.”
When the issue came to the forefront in March, with the regional channels no longer carrying all Pac-12 Tournament basketball games, Murphy-Stephans said she was encouraging providers to “switch” by putting the national feed on a primary tier or carry both the regional and national tiers there.
Cox Arizona wound up offering the games not involving UA or ASU on an alternate channel as a temporary compromise, and Scott was optimistic things will improve going forward.
“Our team is going about it because they think it’s going to result in a better situation for our fans and a better result financially and exposure-wise,” Scott said. “But, yeah, it’s going to be a little awkward. We realized some of that awkwardness during the basketball tournament.”
Scott said the conference looked at shrinking to just one feed but rejected it, in part because 850 events couldn’t be crammed onto one channel — and the Pac-12’s contracts with providers require 850 events. According to Sports Business Journal, the Big Ten Network has only 500 and the SEC Network just 470.
“We signed up for 850,” Byrne said. “That’s what we have to adhere to.”
5. Exposure can be pricey. The same push for exposure that has the Pac-12 Networks spending resources to cover 850 events is driving the conference’s efforts to push into the Pacific Rim.
The Pac-12 sent an “all-star” basketball team to China in 2014, had Washington open last basketball season against Texas in Shanghai and has Cal opening its football season against Hawaii in Australia next season. During the upcoming basketball season, Stanford will play Harvard in China, too.
Scott said school CEOs have supported the overseas initiatives because they’re good for the students, while using athletics as a “front porch” to expose the schools as a whole.
“You look at our campuses and you’ll see multinational student bodies, multinational faculty and half the time I’m on a conference call with our presidents, I’m calling them overseas,” Scott said. “It’s clear that doing some things internationally will help as well as creating amazing experiences for students who wouldn’t have it otherwise.”
Scott said feedback from Pac-12 student-athletes has indicated frustration that they don’t have time for internships or overseas study, so the trips are a chance to partially make up for it.
“Here’s something we’re doing to support students and people get concerned that ‘Why are we focusing on something that’s noncommercial?’ ” Scott said. “Then five seconds later, someone could say ‘College sports are too commercial, you’re spending too much time focusing on money.’”