Hindsight 20/20...interesting piece by Wilner...

[M-I-Coug]

Multiple Pac-12 presidents declined deal from ESPN last year to pursue "unrealistic" offer​

Jon WilnerAug. 11, 2023 at 1:40 pm

Do-overs? Absolutely, Kirk Schulz has a list of decisions he’d like back following the collapse of the Pac-12.

The Washington State president and chair of the Pac-12 board was heavily involved in the media rights saga that spanned 13 months and ended last week in a failed effort to save the conference.

“We should have had a more robust conversations about our value in the marketplace,” Schulz told the Hotline on Friday.

UW joining Big Ten latest news and commentary​

The failure to accept market reality led the Pac-12 presidents last fall to reject an offer of $30 million per year (per school) from ESPN for the entirety of the conference’s football and men’s basketball media inventory, according to JohnCanzano.com.

Instead, the presidents instructed commissioner George Kliavkoff to pursue a deal in the $50 million per-school range.

“Two or three schools were interested in that number,” Schulz said. “The discussions were that we really had to close the gap on the Big Ten. The commissioner went off with those numbers, which were unrealistic for sure.”

A source familiar with the negotiations told the Hotline this week that one president even believed the valuation “should be in the 50s” — meaning, more than $50 million per school. (The source declined to identify the president.)

ESPN declined the Pac-12’s counteroffer.

“They couldn’t save those guys from themselves,” the source said. “The people with expertise were telling them there was a path to a deal in the $30 millions …

“(But) if George had come to the presidents in October and said there was a deal out there at $32 million or so, they would have thrown him out of the room.”

Asked if Kliavkoff should have pushed back against the presidents, Schulz said: “I don’t know what the individual conversations were like between George and those schools.”

Kliavkoff declined to comment for this story.

The push for $50 million per school came after the Big Ten announced a deal with Fox, CBS and NBC valued in the $65 million range (per school per year) but before the Big 12 presidents agreed to a partnership with ESPN and Fox for $31.7 million per year.

Schulz served on the Pac-12’s three-person executive committee for the first year of the media negotiations, along with Washington’s Ana Mari Cauce and Stanford’s Marc Tessier-Lavigne; he became chair in July.

“Nobody wants to hear it,” Schulz said, “but sometimes you need a reality check … rather than spending too much time chasing fantasy numbers.”

Jon Wilner: jwilner@bayareanewsgroup.com; on Twitter: @wilnerhotline

 

[How_did_this_happen?]

The school presidents were clueless on the market value of Pac-12 schools. Big shocker, eh?

 

[BleedCrimsonandGray]

Multiple Pac-12 presidents declined deal from ESPN last year to pursue unrealistic offer​

Jon WilnerAug. 11, 2023 at 1:40 pm

Do-overs? Absolutely, Kirk Schulz has a list of decisions he’d like back following the collapse of the Pac-12.

The Washington State president and chair of the Pac-12 board was heavily involved in the media rights saga that spanned 13 months and ended last week in a failed effort to save the conference.

“We should have had a more robust conversations about our value in the marketplace,” Schulz told the Hotline on Friday.

UW joining Big Ten latest news and commentary​

The failure to accept market reality led the Pac-12 presidents last fall to reject an offer of $30 million per year (per school) from ESPN for the entirety of the conference’s football and men’s basketball media inventory, according to JohnCanzano.com.

Instead, the presidents instructed commissioner George Kliavkoff to pursue a deal in the $50 million per-school range.

“Two or three schools were interested in that number,” Schulz said. “The discussions were that we really had to close the gap on the Big Ten. The commissioner went off with those numbers, which were unrealistic for sure.”

A source familiar with the negotiations told the Hotline this week that one president even believed the valuation “should be in the 50s” — meaning, more than $50 million per school. (The source declined to identify the president.)

ESPN declined the Pac-12’s counteroffer.

“They couldn’t save those guys from themselves,” the source said. “The people with expertise were telling them there was a path to a deal in the $30 millions …

“(But) if George had come to the presidents in October and said there was a deal out there at $32 million or so, they would have thrown him out of the room.”

Asked if Kliavkoff should have pushed back against the presidents, Schulz said: “I don’t know what the individual conversations were like between George and those schools.”

Kliavkoff declined to comment for this story.

The push for $50 million per school came after the Big Ten announced a deal with Fox, CBS and NBC valued in the $65 million range (per school per year) but before the Big 12 presidents agreed to a partnership with ESPN and Fox for $31.7 million per year.

Schulz served on the Pac-12’s three-person executive committee for the first year of the media negotiations, along with Washington’s Ana Mari Cauce and Stanford’s Marc Tessier-Lavigne; he became chair in July.

“Nobody wants to hear it,” Schulz said, “but sometimes you need a reality check … rather than spending too much time chasing fantasy numbers.”

Jon Wilner: jwilner@bayareanewsgroup.com; on Twitter: @wilnerhotline

So every conference gets a pay raise and the P12 takes a 20% cut?

I'd love to see the numbers to justify that math.

 

[Coug90]

The school presidents were clueless on the market value of Pac-12 schools. Big shocker, eh?

Also same presidents who continued to support Larry Scott. None of those presidents will walk away with a penny less. Destruction of 100 years of tradition and likely many jobs at impacted schools. Attain a political position, suck at your job, F other people along the way, walk away with a golden parachute. The American way.

 

[wazzucougs96]

So every conference gets a pay raise and the P12 takes a 20% cut?

I'd love to see the numbers to justify that math.

I don't really understand this either. It sure feels like the networks were trying to slash available inventory.

 

[95coug]

I don't really understand this either. It sure feels like the networks were trying to slash available inventory.

What some see as slashing inventory, others see as investing in what's profitable.

No lawsuit will get far unless there's incontrovertible proof of tampering. If you don't have that, don't waste the time and money.

 

[BleedCrimsonandGray]

What some see as slashing inventory, others see as investing in what's profitable.

No lawsuit will get far unless there's incontrovertible proof of tampering. If you don't have that, don't waste the time and money.

Again, I'd love to see the numbers to back that up. Rtings has P12 consistently in the top 15 games every week, and top 10 if its a big OOC. In other words, as far as TV money goes, the Pac was plenty profitable despite having a good chunk of games not get watched because of scheduling too late.

 

[95coug]

Again, I'd love to see the numbers to back that up. Rtings has P12 consistently in the top 15 games every week, and top 10 if its a big OOC. In other words, as far as TV money goes, the Pac was plenty profitable despite having a good chunk of games not get watched because of scheduling too late.

Yeah, but they're convinced they can make those top 15 games bigger without most of the Pac-12. ESPN and Fox want to be able to push Michigan-USC, Alabama-Oklahoma, Oklahoma-Texas, and Ohio State-Oregon every week. No more sending Gameday to backwoods places like Pullman, Stillwater, and Tucson. From now on, it's Ann Arbor, Columbus, LA, and Tuscaloosa all the time. Marquee matchups every week.

 

[BleedCrimsonandGray]

Yeah, but they're convinced they can make those top 15 games bigger without most of the Pac-12. ESPN and Fox want to be able to push Michigan-USC, Alabama-Oklahoma, Oklahoma-Texas, and Ohio State-Oregon every week. No more sending Gameday to backwoods places like Pullman, Stillwater, and Tucson. From now on, it's Ann Arbor, Columbus, LA, and Tuscaloosa all the time. Marquee matchups every week.

yawn.

great plan until mid season when half the teams are out of contention and no one give a f.

 

[ttowncoug]

What some see as slashing inventory, others see as investing in what's profitable.

No lawsuit will get far unless there's incontrovertible proof of tampering. If you don't have that, don't waste the time and money.

The sequencing to when the Big-10's offer (re-apped) to UW and Oregon is suspicious.

Also, the fact that the conference hired a yes man, who didn't push back and manage his bosses correctly, was another critical error.

 

[425cougfan]

These presidents are so clueless. It's almost like satire at this point.

 

[95coug]

yawn.

great plan until mid season when half the teams are out of contention and no one give a f.

Yeah, that’s the part I don’t think they’ve thought through.

Although, with 20 teams and creative scheduling they can make sure that the big time matchups occur early in the season, so they don’t end up with Michigan and Ohio state eliminating each other.

 

[Cougsocal]

Damning Chun and Schulz even more on the preparedness front. If you are offered 30 million and other Prezs are saying demand 50 million.... for the Pac-12 rights, with our half empty stadiums and disinterested demographic, you know it might not end well. Aren't you thinking at this point, maybe we should be working on a back up plan, just in case, because some members a have unrealistic image of what the conference is worth.

 

[random soul]

I would wager that the Presidents demanding over 50mil are the same ones that are now in the Big 10. I still think this whole model blows itself up in the next 15 years, with God knows what to follow

 

[OrangeGravy]

Damning Chun and Schulz even more on the preparedness front. If you are offered 30 million and other Prezs are saying demand 50 million.... for the Pac-12 rights, with our half empty stadiums and disinterested demographic, you know it might not end well. Aren't you thinking at this point, maybe we should be working on a back up plan, just in case, because some members a have unrealistic image of what the conference is worth.

Do you really believe that begging the B12 6 months ago would alter the order of which Pac schools they would want if available? Honestly?

These conferences are taking commands from their TV partners on who they should and shouldn't accept, in the form of opening the pocket book for schools x,y, and z, but not g or k. How exactly do you propose changing that calculus as the president of school g? I'm all ears.
The only solid backup plan we or the beavs have is the MWC and there's no laying the ground required there. Anything more ambitious than that is waiting to see how the chips fall

 

[How_did_this_happen?]

Do you really believe that begging the B12 6 months ago would alter the order of which Pac schools they would want if available? Honestly?

These conferences are taking commands from their TV partners on who they should and shouldn't accept, in the form of opening the pocket book for schools x,y, and z, but not g or k. How exactly do you propose changing that calculus as the president of school g? I'm all ears.
The only solid backup plan we or the beavs have is the MWC and there's no laying the ground required there. Anything more ambitious than that is waiting to see how the chips fall

No, it wouldn't have changed things. You are correct.

But anytime you have academic types trying to understand the hard facts of business, you are facing disaster. Most of them are clueless. That's why they are academics.

 

[Loyal Coug1]

No, it wouldn't have changed things. You are correct.

But anytime you have academic types trying to understand the hard facts of business, you are facing disaster. Most of them are clueless. That's why they are academics.

They know everything about nothing.

 

[M-I-Coug]

Why do you have a president of a university manage a complex sports business?

Lessons learned.

 

[Coug90]

yawn.

great plan until mid season when half the teams are out of contention and no one give a f.

Ah….there’s a solution for that. Expanded playoff! Three loss Bama will be in every year!

 

[Cougsocal]

Do you really believe that begging the B12 6 months ago would alter the order of which Pac schools they would want if available? Honestly?

These conferences are taking commands from their TV partners on who they should and shouldn't accept, in the form of opening the pocket book for schools x,y, and z, but not g or k. How exactly do you propose changing that calculus as the president of school g? I'm all ears.
The only solid backup plan we or the beavs have is the MWC and there's no laying the ground required there. Anything more ambitious than that is waiting to see how the chips fall

You clearly have the same Chun attitude. WSU had two options, que sera sera or go down swing. We very well may have gotten completely rebuffed, regardless, had we tried during 12 month time line, not 6 months. While SDSU and SMU have been fighting hard for their brands, admitted clumsily in SDSU's case, only to get slapped down over and over, we just hoped and prayed that there would be a last minute reprieve. I for one respect their doggedness, not a big fan of your and Chun's, we really don't belong in the power 5, so why bother trying attitude.

Also the other option was for Chun and Schulz to have come to jesus meetings with the prezs who were demanding 50 million, regarding the actually media value of the conference, the unrealistic and potentially viewed as insulting response to ESPN's good faith offer, and what the consequences could be, which Schulz now admits he did not do, and should have done. But again, when you are too busy being on your knees thumbing your rosary beads, praying for the best, you don't have time or desire to be proactive.

 

[95coug]

You clearly have the same Chun attitude. WSU had two options, que sera sera or go down swing. We very well may have gotten completely rebuffed, regardless, had we tried during 12 month time line, not 6 months. While SDSU and SMU have been fighting hard for their brands, admitted clumsily in SDSU's case, only to get slapped down over and over, we just hoped and prayed that there would be a last minute reprieve. I for one respect their doggedness, not a big fan of your and Chun's, we really don't belong in the power 5, so why bother trying attitude.

Also the other option was for Chun and Schulz to have come to jesus meetings with the prezs who were demanding 50 million, regarding the actually media value of the conference, the unrealistic and potentially viewed as insulting response to ESPN's good faith offer, and what the consequences could be, which Schulz now admits he did not do, and should have done. But again, when you are too busy being on your knees thumbing your rosary beads, praying for the best, you don't have time or desire to be proactive.

I think you’re both right. They could have done something. It probably wouldn’t have made a difference, but better to try than not.

The bigger problem I see is that they assumed that everyone else would act in good faith, and didn’t question anything. They believed that everyone involved would act on behalf of the conference instead of on behalf of themselves. They continued to make that mistake even after USC and UCLA showed it wasn’t true. They might still be making that mistake now, with regard to Stanford & Cal. They seem to accept that S&C are going to make their decision…but they seem resigned to that as well.

They seem to assume (as do you) that ESPN’s $30M offer was in good faith. That’s naive. The opening offer is going to be low end, almost always. They say 30, you come back at 38-40, you work the details and hope to come out in the 35-36 ballpark. Countering with $50 - with no basis for it - probably doesn’t leave any profit for your bidder, and shows you’re so far apart that negotiating is probably a waste. Especially when there’s another group beckoning from the wings (who ultimately ended up with the ~$35M that could have been ours).

In the end, what it boils down to is that they had people working on their media contract who don’t know anything about media. The result? No media contract, endless delays, no progress, and an unstable situation that made us weak and vulnerable.

Negotiating with ESPN and getting $33-36M a year ago would have resulted in a new GOR. We would right now be the PAC-11, with SDSU on board in place of USC and UCLA. We’d be shopping for #12, and we’d be stable for 5 years. Instead…if we can save the PAC at all - which seems pretty doubtful - we’re going to be looking at a contract that’s not only less than $33M, it’s probably less than the $20M offered by Apple.

 

[Cougsocal]

I think you’re both right. They could have done something. It probably wouldn’t have made a difference, but better to try than not.

The bigger problem I see is that they assumed that everyone else would act in good faith, and didn’t question anything. They believed that everyone involved would act on behalf of the conference instead of on behalf of themselves. They continued to make that mistake even after USC and UCLA showed it wasn’t true. They might still be making that mistake now, with regard to Stanford & Cal. They seem to accept that S&C are going to make their decision…but they seem resigned to that as well.

They seem to assume (as do you) that ESPN’s $30M offer was in good faith. That’s naive. The opening offer is going to be low end, almost always. They say 30, you come back at 38-40, you work the details and hope to come out in the 35-36 ballpark. Countering with $50 - with no basis for it - probably doesn’t leave any profit for your bidder, and shows you’re so far apart that negotiating is probably a waste. Especially when there’s another group beckoning from the wings (who ultimately ended up with the ~$35M that could have been ours).

In the end, what it boils down to is that they had people working on their media contract who don’t know anything about media. The result? No media contract, endless delays, no progress, and an unstable situation that made us weak and vulnerable.

Negotiating with ESPN and getting $33-36M a year ago would have resulted in a new GOR. We would right now be the PAC-11, with SDSU on board in place of USC and UCLA. We’d be shopping for #12, and we’d be stable for 5 years. Instead…if we can save the PAC at all - which seems pretty doubtful - we’re going to be looking at a contract that’s not only less than $33M, it’s probably less than the $20M offered by Apple.

I agree except for one point. You can't suggest the ESPN offer was not being made in good faith, it was in the ball park of market value, while the Pac-12 rejoiner was in la la land. ESPN was negotiating in good faith, Pac-12 really wasn't. It was the equivalent of a buyer (ESPN) offering 300k on a 320K home with the owner (Pac-12) countering at 500K. What is the point of further negotiation, the owner has an unrealistic expectation of the home's value. Its time to lock up the home #2, the Big 12, because they are signaling that a deal can be ironed out.

 

[95coug]

I agree except for one point. You can't suggest the ESPN offer was not being made in good faith, it was in the ball park of market value, while the Pac-12 rejoiner was in la la land. ESPN was negotiating in good faith, Pac-12 really wasn't. It was the equivalent of a buyer (ESPN) offering 300k on a 320K home with the owner (Pac-12) countering at 500K. What is the point of further negotiation, the owner has an unrealistic expectation of the home's value. Its time to lock up the home #2, the Big 12, because they are signaling that a deal can be ironed out.

I suspect that ESPN was lowballing, especially considering the financial straits they’re now in with their existing contracts. But the point remains as we both said - an unrealistic counteroffer kills the negotiation.

 

[How_did_this_happen?]

I think you’re both right. They could have done something. It probably wouldn’t have made a difference, but better to try than not.

The bigger problem I see is that they assumed that everyone else would act in good faith, and didn’t question anything. They believed that everyone involved would act on behalf of the conference instead of on behalf of themselves. They continued to make that mistake even after USC and UCLA showed it wasn’t true. They might still be making that mistake now, with regard to Stanford & Cal. They seem to accept that S&C are going to make their decision…but they seem resigned to that as well.

They seem to assume (as do you) that ESPN’s $30M offer was in good faith. That’s naive. The opening offer is going to be low end, almost always. They say 30, you come back at 38-40, you work the details and hope to come out in the 35-36 ballpark. Countering with $50 - with no basis for it - probably doesn’t leave any profit for your bidder, and shows you’re so far apart that negotiating is probably a waste. Especially when there’s another group beckoning from the wings (who ultimately ended up with the ~$35M that could have been ours).

In the end, what it boils down to is that they had people working on their media contract who don’t know anything about media. The result? No media contract, endless delays, no progress, and an unstable situation that made us weak and vulnerable.

Negotiating with ESPN and getting $33-36M a year ago would have resulted in a new GOR. We would right now be the PAC-11, with SDSU on board in place of USC and UCLA. We’d be shopping for #12, and we’d be stable for 5 years. Instead…if we can save the PAC at all - which seems pretty doubtful - we’re going to be looking at a contract that’s not only less than $33M, it’s probably less than the $20M offered by Apple.

All true. I'm sure the schools were getting tremendous pressure from the networks to sign and bail on the conference or get left out. Colorado's exist really got the attention of the skittish schools that had options. They were ruled by fear. Not a good character trait.

 

[250vertical]

Yormark - the desert fox. He cut Colorado out of the herd and started the stampede.

 

[OrangeGravy]

You clearly have the same Chun attitude. WSU had two options, que sera sera or go down swing. We very well may have gotten completely rebuffed, regardless, had we tried during 12 month time line, not 6 months. While SDSU and SMU have been fighting hard for their brands, admitted clumsily in SDSU's case, only to get slapped down over and over, we just hoped and prayed that there would be a last minute reprieve. I for one respect their doggedness, not a big fan of your and Chun's, we really don't belong in the power 5, so why bother trying attitude.

Also the other option was for Chun and Schulz to have come to jesus meetings with the prezs who were demanding 50 million, regarding the actually media value of the conference, the unrealistic and potentially viewed as insulting response to ESPN's good faith offer, and what the consequences could be, which Schulz now admits he did not do, and should have done. But again, when you are too busy being on your knees thumbing your rosary beads, praying for the best, you don't have time or desire to be proactive.

How do you know they weren't discussing this stuff with people in the B12 since the USC/UCLA news dropped? Your assumption is based on the fact that we didn't get a seat on the B12 boat? That assumption would require you to believe that WSU was ever in a position to get invited before any of the other Schools that are now B12 bound. There is zero merit to that theory. What exactly makes you think there was anything in this world, other than a ton of cash, that would've secured us a seat at the table in any other conference BEFORE the rest of the PAC schools?

 

[etowncoug]

How do you know they weren't discussing this stuff with people in the B12 since the USC/UCLA news dropped? Your assumption is based on the fact that we didn't get a seat on the B12 boat? That assumption would require you to believe that WSU was ever in a position to get invited before any of the other Schools that are now B12 bound. There is zero merit to that theory. What exactly makes you think there was anything in this world, other than a ton of cash, that would've secured us a seat at the table in any other conference BEFORE the rest of the PAC schools?

The fact we were never rumored to have interest in the B12 is a good indicator that Schulz and Chun weren't reaching out.

 

[UberCougars]

I just can’t get over the fact they voted Schultz(Chun) Captain of the team then all bailed on him behind his back like this was middle school AAU basketball.

 

[roses04]

I would wager that the Presidents demanding over 50mil are the same ones that are now in the Big 10. I still think this whole model blows itself up in the next 15 years, with God knows what to follow

It won't even take 15 years, they'll cut back to 40 teams in the power 4 conferences, within 5, and then when no cares anymore they'll start all over again.