There were a couple of separate articles today regarding Pac-12 television rights that point to some implications for other conferences. First, Jon Wilner from the San Jose Mercury-News had a fairly in-depth article today regarding the status Pac-12 television contract negotiations. Second, Percy Allen from the Seattle Times had an interview with Pac-12 commissioner Larry Scott that focused on the conference’s basketball TV rights. Here are the main points from those articles:
(1) Fox is the most likely long-term TV partner for the Pac-12 with a possibility of some over-the-air football games on the mothership network, while Comcast/NBC is the second option;
(2) ESPN is not willing to pay as much for the Pac-12 as it did for the ACC for a variety of reasons (including lack of time slots and the value of the ACC’s syndicated basketball package);
(3) Larry Scott wants the Pac-12 Network to happen, but Time Warner Cable will be a large obstacle in the Los Angeles market; and
(4) Going forward, all media rights for all Pac-12 members will be controlled by the conference (as opposed to a portion being controlled by the individual schools as it is today).
Let’s examine each of these points from the perspective of the Pac-12 and how they apply to the college sports world at large.
Point #1 about Fox’s involvement isn’t a surprise considering the current relationship that it has with the Pac-12 and the media giant’s increasing focus on obtaining college sports rights over the past several months (including paying $140 million over the next six years solely for the Big Ten Championship Game). The overarching questions going forward are (a) how serious is Fox about expanding its overall college sports presence and (b) are they willing to use Fox over-the-air for games? Fox bid on the ACC package last year with an offer that was heavily reliant on FX as the main national platform. Indeed, David Hill, Chairman of Fox Sports Group, sees an increase in sports programming on FX as a key in making that network competitive with the likes of TNT. While Fox didn’t win that deal, they did procure a smaller agreement with C-USA plus rights to the Big Ten and Pac-12 championship games. A hungry Fox can certainly bid up the price of rights for other conferences… as long as ESPN is willing to play, too. (More on that in a moment.)
As for Comcast/NBC, call me skeptical of them ever becoming a truly major player in college sports. Comcast-owned Versus certainly is looking for more sports programming, but that’s a fairly unattractive national cable partner compared to ESPN or FX on its face and you’re more likely to see sports move away from NBC as opposed to any events being added. Sports programs in general are loss leaders for over-the-air networks and the last thing that NBC needs is more losses. In fact, NBC Universal CEO Steve Burke told Wall Street analysts covering Comcast specifically yesterday that NBC’s current “sports properties lose hundreds of millions of dollars per year.” NBC lost $220 million on the 2010 Vancouver Winter Olympics and even its gold-plated NFL Sunday Night Football package loses around $100 million per year. So, it doesn’t exactly sound like the new Comcast ownership is going to be spending very much money on more sports on NBC. If anything, those quotes from the head of NBCU indicate that they’re preparing to cut back heavily. Therefore, any conference hoping for Comcast/NBC to come through with some great offer is going to be severely disappointed.
From the Big Ten’s perspective, I see Fox only as a viable option in the conference’s next TV deal if there is essentially a replication of the SEC’s agreement with CBS: the top game of the week gets coast-to-coast over-the-air coverage. I can’t realistically see the Big Ten considering a deal with Comcast at all. While much has been made of the Big Ten’s partnership with Fox regarding the Big Ten Network, it must be emphasized that the conference still receives substantially more money from ESPN compared to the BTN. There are also more Big Ten events on ESPN today than there were prior to the BTN being formed. From the very beginning, the BTN has always been intended to be a supplement to ESPN coverage as opposed to a replacement. The Big Ten is smart enough to know that the time slots that it has secured with ABC and ESPN provide incredible exposure and the conference doesn’t want to kill the proverbial long-term golden goose for short-term financial gains. Any new deal going forward has to provide even more exposure than today’s deal. Thus, I could see the Big Ten pushing to a movement of the games that are regionalized on ABC right now to national over-the-air Fox coverage. However, I highly doubt that the Big Ten would ever seriously consider moving ESPN games to FX (and definitely not to the patchwork quilt of Fox Sports Net affiliates). It’s interesting to note, by the way, that the two conferences that make the most money outside of ESPN (Big Ten with the BTN and SEC with CBS) also make the most money from ESPN. Money certainly talks, but the Big Ten seems to be a property that ESPN will pay up to get them to stay (and the desire to stay on ESPN will be reciprocated by the conference).
That leads to Point #2, where apparently the Pac-12 is a conference that ESPN is not willing to pay up for. More specifically, ESPN appears to believe that the Pac-12 TV package is worth less than comparable ACC rights. This doesn’t surprise me at all. I’ve been fairly consistent on this blog that the ACC is in much better shape than what a lot of sports fans (that have concentrated on the conference’s relative weakness on the football field over the past few years) believe.
National marquee brand names are extremely important for determining college sports rights and the ACC has 2 big ones for football (Miami and Florida State) and arguably the 2 very biggest ones for basketball (Duke and North Carolina). The ACC basketball package is also unique in that it draws football-level ratings in several of its markets, which is something that none of the other BCS conferences can claim (even those that might be better on the court in a given year, such as the Big East). If and when Miami and Florida State get back on track, you’ll see a dramatic turnaround in the football perception (and TV ratings) of the ACC. In contrast, the Pac-12 is largely reliant on the strength of USC for football and UCLA for basketball in terms of drawing national interest. Beyond the LA schools and Oregon’s wacky uniforms, the Pac-12 continues to struggle with getting much notoriety in the Eastern 2/3rds of the country.
The Pac-12’s inability to get much of a large bid out of ESPN should be a small warning sign to the Big 12 and a large red flag to the Big East, who are both hoping to receive large TV rights increases from the Worldwide Leader. Several conferences last summer were under the impression that ESPN paying such a large amount to the ACC meant that the network’s greenback gushers were wide open and they could switch the style up, but if they hate let ‘em hate and watch the money pile up. Instead, it looks like ESPN is going to keep all its money in a big brown bag inside a zoo. Dan Beebe and the Big 12 members may sweat it out a bit as there were some financial assurances from ABC/ESPN this past summer that aided in keeping the conference from splitting apart. Personally, I’m a believer that ESPN understands the big picture and seeing that they presently want to avoid the formation of superconferences, they’ll pay enough to the Big 12 so that the conference makes good on its promises to Texas, Oklahoma and Texas A&M. With ESPN’s investment in the UT network, the Big 12 needs to stay alive and a few extra bucks on the conference contract would be money well-spent.
The Big East is a different matter. That conference has already bore the brunt of having football games moved by ESPN to Thursday nights initially, and then when the SEC, ACC and Pac-12 saw that Thursday was a great night for exposure, the Big East has been kicked around to several Friday nights and even some Wednesday evenings. Much of the hope of a Big East TV contract increase rested on leveraging its valuable and massive basketball package into better football exposure. However, if ESPN isn’t willing to pay the Pac-12 TV rights in line with the ACC, then it stands to reason that they’re going to value the Big East even less. Unless Fox or Comcast swoop in with competing bids for the Big East, the conference’s schools are going to have a difficult time coaxing the increases that they’re hoping for from ESPN. I’m sure that you’ll see the Big East get what amounts to an inflationary increase (maybe 150% of what they receive now), but not enough to get on the same tier as the other BCS conferences.
Under Point #3, Larry Scott seems extremely determined to start a Pac-12 network. However, Jon Wilner pointed out a large potential obstacle: Time Warner Cable. He noted that TWC is the largest cable provided in the Los Angeles market and they’ve had a habit of getting into carriage fights regarding regional sports networks. What Wilner neglected to mention (and I find to be even more important) is that TWC just sent a Valentine’s Day present to Jerry Buss of what’s rumored to be around $150 million per year to create two new regional sports networks in the LA market (one English language and the other Spanish language) built around the Lakers. With 3 Fox Sports networks in that market already, that means that the LA market will be supporting 5 RSNs and making it even more crowded than the New York City market. This crowded environment in the Pac-12’s most important market has huge implications on whether a conference network can realistically be formed. The Big Ten Network only had to compete with 1 RSN in each of the markets within its footprint (even in its largest market of Chicago, which only has Comcast SportsNet Chicago). Thus, it was a more palatable for the cable providers to give in when the BTN was RSN #2 on their systems… and even then, it took over a year of carriage fights for them to get to that point. It’s a much different value proposition for the Pac-12 attempting to enter into market that already has 5 other RSNs – TWC has a whole lot more leverage to demand lower subscriber rates or refuse basic carriage entirely. Note that a potential Big East Network would face the same issues in the NYC market with so many RSNs already clogging up cable bills. This was a factor in the Big Ten ultimately deciding to not go after schools like Rutgers or Syracuse in this last round of expansion, as the BTN absolutely had to get basic carriage in the NYC market in order to financially justify those additions, and they didn’t see that happening anytime soon.
Finally, with respect to Point #4, Larry Scott confirmed that all media rights for all Pac-12 members would be controlled by the conference. This is important for one massive reason: the University of Texas. With the Pac-12 taking that position, it has effectively wiped out any reasonable possibility of Texas joining the conference in the future, as the new Longhorn Network would be unable to exist under those conditions (and I don’t see UT giving up in excess of $10 million per year for any reason). For the fear mongerers (who are all wrong, by the way) that continue to believe that UT’s ultimate goal is to end up independent or in the Pac-12, at the very least, that Pac-12 option is gone. (I’ve listed a multitude of reasons of why UT wants to stay in the Big 12 in perpetuity and, in fact, needs that league to live, but many people seem to believe what they want to believe on that front.)
Fans of all conferences should keep a close eye on the West Coast since how the Pac-12 proceeds will be a significant indicator of how TV networks will pay for college sports in this next round of contracts.