The Pac 12 Network Financials
- Thread starter Coug95man2
- Start date
Having the schools buy their way out of their old contracts was a Larry Scott special. Not much mention of that when he was crowing about the ESPN/Fox deal, or flying around on his private jet.
The solution is simple:
Sell 30% of the network to Fox Sports. Distribute that money to the schools.
Strike a production and distribution deal with Fox Sports. Call the network Fox Sports Pac-12. Allow for some non-Pac-12 related content to be shown (i.e. high school sports, or elite 11 type recruiting events that southern football nuts will pay to see)
Eliminate all the TV network expense in San Francisco. Sounds like their offices are in prime real estate market, sub-lease lease (if long-term) for a profit.
Fire Larry Scott. Pay him his severance.
This is not a difficult decision. What's difficult is to get our Presidents to do something about this. They are hand-ringing their ADs to cut expense. My take: do you job and fix the Pac-12 mess.
Sell 30% of the network to Fox Sports. Distribute that money to the schools.
Strike a production and distribution deal with Fox Sports. Call the network Fox Sports Pac-12. Allow for some non-Pac-12 related content to be shown (i.e. high school sports, or elite 11 type recruiting events that southern football nuts will pay to see)
Eliminate all the TV network expense in San Francisco. Sounds like their offices are in prime real estate market, sub-lease lease (if long-term) for a profit.
Fire Larry Scott. Pay him his severance.
This is not a difficult decision. What's difficult is to get our Presidents to do something about this. They are hand-ringing their ADs to cut expense. My take: do you job and fix the Pac-12 mess.
Just guessing that Fox or any broadcast partner would want 51% (I don't know what ownership stake the broadcasters have in the B1G or SEC networks). Which is totally fine. That will turn it into a money making machine for the owners, instead of Larry Scott's expense account. That seems to be the way the conference is moving for the next TV deal anyway with the talk of bringing in an equity partner. So it's a tacit admission that Larry blew it retaining 100% of the Pac-12 Networks.
I looked it up. Disney owns 80% of the SEC Network. Fox owns 51% of the B1G Network.
Couple things. First, we don't know any underlying contracts that would hurt anything. It's easy to say "do this, do that". For instance, I've heard lots of people saying to cut the regional channels and consolidate. It cuts out lots and lots of cost. The problem with this? They are contracted by Comcast to put out 875 live shows a year. Can't do that without regional coverage. They cut the number of shows, Comcast will literally kill them in court. Breach of contract. And that's just one contract I know of. Contracts go far and deep.
And Gib's is spot on. No one will buy a smaller share. They'll want controlling share. But the pool of potentials are awful small. As gibs points out, Fox and Disney (ESPN/ABC) already own a network. Would that be an FCC violation to have the SEC network AND competitor Pac 12 Network? There would be a strong case for that. So who would buy?
All this article REAALLY showed me was how they completely dropped the ball with Directv. It was at a loss comparatively speaking to other deals? So what. Keep the ball rolling. Keep the eye balls glued to the TV. Gotta have distribution. Then you can start talking better price down the road at negotiations time. And right now (or ever), they don't have enough distribution.
Now all they're doing is trying to play catch-up. They are on defense, rather than controlling the ball on offense. Basic business 101. Stay. In. Control. They are now in a position of trying to "control the narrative" and that's never good.
re: DTV
It wasn't a pricing issue, it was a "we want all your internet on every campus" issue, and many schools had existing contracts. DTV wasn't willing to offset that expense, and the schools/ conference wasn't willing to eat it.
As to reneg the price later, DTV is notoriously stubborn with its content providers, to the point of just not airing the channel at all. You can't get into an upside down deal with them and expect to make it up on the back side - not going to happen.
As to consolidation - there has to be a middle ground - P12N and P12S, or maybe 4 channels. Do the math (I don't know how to divide up the 875 among channels so that it works) so that you can meet your obligations with the least amount of overhead. 875 maths out to about 2.25 live events a day, so 16 per week. On 2 channels you can get 4 MBB games on thurs, 4 on Sat, same amount for WBB on whatever days those are on, so right there are your 16 and you still have 5 days to fill with content. Out of season would be tough, but that could be handled by mid-week scheduling of non-revenue sports to air. I don't know, just spit-balling here, but just saying "IT CAN'T BE DONE!!!" is what got them in this situation to begin with. The current business model is untenable.
As I recall, the internet deal came up a couple years after initial negotiations blew up. That was when ATT and Directv merged. That was in July of 2015. So yeah and no. I've brought that up several times. But that wasn't a part of the initial negotiations.
Agreed on the Directv being a bear to work with. But you HAVE to get your foot in the door. And the product is already being made. At that point, it's just about dissemination to Directv so they could distribute. No skin off anyone's nose. Just extra cash, extra eyeballs on the product. And it's the lion's share of the national eyeballs! THEN you can negotiate when contract is coming due. But when someone is playing hard ball, like Directv is known for, you get in. Period. The alternative is where we are now. And as you say, it's untenable.
Regarding scheduling... I don't see it being possible on 2 "channels" but maybe. With some serious finessing, it might be possible. But for those that belly ache over schedules and times, you'll hate it worse when you put this kind of pressure on it. Apple Cup will be on Thanksgiving Day at 9pm. lol.
But that wasn't my point, either. It isn't that taking it down to 2 channels will really bring costs down. Some of the comments were about bringing it down to 2 channels and fill it with content people will actually watch. Meaning football, basketball, and ditch soccer and volleyball, kind of thing. Downsize. And that can't happen, due to contracts. There is no downsizing that is truly available. The point is the cost of 875 live events. If all you're doing is consolidating 875 shows to 2 channels, that doesn't really do a lot (yes it does something but not to the tune of billions of dollars over the past 5-10 years). And it doesn't make a lot of sense, when you know the technology, either.
Basic numbers:
All basketball, conference games for the conference: 216
Add in a few non-con games: 275
All Football games, non-con & conference: 156
Add bowl games and lets go to 175, just for fun
That's 450 (being generous). We need to get to 875. Deficit of 425 more shows. Meaning on average, each school needs roughly 35 more shows.
EDIT: also realize, this means ESPN, Fox, whomever doesn't air ANY games. That would be suicide.
Directv is a must to get more eyeballs on those revenue and non-revenue shows. Didn't matter the contract size, really.
The numbers in that article are amazing. There are tidbits in there that have not been out before so it's pretty amazing to have a view of some details within these contracts.
Last edited:
I think I prefer your spitballing to Larry Scott's.
I am not going to try to really understand the numbers, but what jumped out is the notion of the dismal "net" revenues for schools that had existing deals. Have to read through that again. Scott sold the league on 3-10 million, and we have yet to hit 3 million - before this "net" thing. Wow wow wow. Guess Moosy Moos might deserve a little more slack from those dumb ass bean counting budget hawks.
I think I prefer your spitballing to Larry Scott's.
I am not going to try to really understand the numbers, but what jumped out is the notion of the dismal "net" revenues for schools that had existing deals. Have to read through that again. Scott sold the league on 3-10 million, and we have yet to hit 3 million - before this "net" thing. Wow wow wow. Guess Moosy Moos might deserve a little more slack from those dumb ass bean counting budget hawks.
Officially, the schools were advised to avoid budgeting for a specific revenue amount and that in an extreme, worst-case scenario, the networks would still manage to break even.
Riiiiight.
The network breaks even while the schools end up upside down because the have to buy their own content back?
It's that pesky math stuff.....
Vernon Adams could have figured this one out.
Similar threads
