In 23 days, George Kliavkoff formally takes cost of the Pac-12. His to-do record is longer than an elephant’s reminiscence.
One precedence can’t be solved instantly: The Pac-12 wants months, and certain years, to execute a long-haul media rights technique that positions the convention for aggressive and monetary success.
Success in that endeavor relies upon partly on forces past the Pac-12’s management, together with advances in know-how, adjustments in shopper conduct and valuation shifts within the sports activities media market.
In latest weeks, the Hotline examined the impact of the NFL’s $100 billion deal on school sports activities media rights and the potential role Amazon could play in future Energy 5 broadcast agreements.
Now, within the ultimate installment, our focus turns to the Pac-12 — particularly, to those subjects:
* Ought to the Pac-12 renegotiate its media offers as quickly as potential or maintain tight till the present contract cycle expires in the summertime 2024?
* Are the digital media giants, Amazon first amongst them, severe choices for future partnerships?
* Ought to the convention shut down the Pac-12 Networks, promote them to a longtime media firm or preserve the established order?
* The place does the convention’s strategic place stand relative to its Energy 5 friends?
For perception, we spoke to specialists from the sports activities media discipline. The interviews have been carried out individually, however the responses are laid out under in a free-flowing, Q&A method.
Two analysts requested for anonymity and have been recognized under as Supply 1 and Supply 2, whereas three analysts spoke on the report. They’re:
— Patrick Crakes, proprietor of Crakes Media Consulting and former Fox Sports activities senior vp for programming, analysis and content material technique.
— Ed Desser, head of Desser Media Inc. and the NBA’s former govt vp for enterprise growth and president of NBA TV. (He has levels from each UCLA and USC.)
— Chris Bevilacqua, the co-founder of Bevilacqua Helfant Ventures and longtime media advisor.
Their insights have been organized in a fashion that makes the dialogue simple to observe, however please observe: They don’t seem to be responding on to feedback from one another.
Which is extra seemingly for the Pac-12: Partnering with legacy school sports activities media networks (ESPN, Fox, NBC, CBS) or aligning with a digital-only firm (Fb, Amazon, and so on.)?
Crakes: ”The established platforms are in secular decline, however they’re nonetheless making all the cash. That paradigm isn’t altering anytime quickly.”
Supply 2: “It’s an attention-grabbing time. Cable subscriptions are happening. You’ve gotten the rise of Direct-to-Shopper providers. However content material is on the high of the pyramid. When the music stops, who’s standing?”
Supply 1: “If Amazon can get the largest sports activities property of all of them (the NFL), why do they want the Pac-12?”
Bevilacqua: “I don’t assume you’ll be able to extrapolate out from the NFL deal that Amazon will do one thing related with school soccer.”
Crakes: “ESPN+, Peacock, Warner Media-Discovery and Paramount+ are extra horny than Fb as a result of they’ve complementary established media distribution platforms.”
Supply 2: “If you happen to’re planing to be all in with FAANG, who has performed that? Amazon is a shrewd purchaser. The FAANGs aren’t actually used to spending on content material, until it’s scripted. However the legacy media corporations know how one can monetize sports activities. The most effective wager is a mixture: some content material on the (broadcast) networks, a little bit on cable and so much on streaming.”
Ought to the Pac-12 try to renegotiate its media rights early, which might solely be performed with current companions ESPN and Fox due to contractual stipulations? (In an effort to negotiate on the open market, the convention should await the present offers to run out.) And the way ought to it deal with the Pac-12 Networks?
Supply 2: “If you happen to’re the brand new commissioner, do you go early? You’ll be able to’t get the utmost, however you don’t get unnoticed. Do you wait and see? Or do you do one thing radical?”
Crakes: ”The Massive Ten has a enterprise mannequin that’s working. It’s regular as she goes there, and worth creation is powerful. The Pac-12 isn’t in the identical place. Ready (for a brand new deal) has some danger, however I don’t assume they need to shut down the Pac-12 Networks. The (Regional Sports activities Community) mannequin, with a number of native networks, was a terrific concept, for 2007. However in 2012, that was the apex of peak bundle. The established bundle is in decline, but it surely isn’t going away. And it’s evolving on the digital facet at a fast tempo.”
Desser: “It’s at all times enticing for a community to have the ability to lock issues in, as a result of it cuts down on the variables. However when you’re not essentially the most useful (soccer) product on the market, it’s a must to ask in the event that they (the networks) have the motivation — if it’s price it to them to lock issues in.”
Bevilacqua: “The NFL and NHL have been each blockbuster outcomes” — the NHL not too long ago signed a brand new media settlement, as nicely — “however each of them have been free brokers. As everybody thinks in regards to the future, that’s an vital truth. The Pac-12 isn’t a free agent for a pair years. It’s a complete totally different dialog when you’re not.”
Desser: “There’s a stage of perceived future compensation, however you don’t know if it will likely be there. Say ESPN takes away the Massive 12 utterly with an unique deal. Now, their urge for food is likely to be much less. However, if Fox loses the Massive 12, then perhaps it’s that rather more motivated to go all-in with the Pac-12.”
Crakes: ”If I’m the (Pac-12) commissioner and ESPN says they’d love to do a deal that immediately makes Pac-12 Networks worthwhile however (ESPN) would maintain the rights for a very long time, I’d have to consider that. I don’t assume you want to shut the Pac-12 Community; there’s sufficient content material. However you want a companion — and a mannequin extra just like the Massive Ten or the SEC. If ESPN owns, or is a companion, then they’ve an incentive to position high-value video games there with the intention to maximize distribution throughout all platforms by way of levering the affiliate distribution gross sales energy of ESPN Manufacturers. But when the Pac-12 Networks are by themselves within the market, then there’s danger of getting handled like apples in a grocery retailer — somebody comes by and says, ‘I’ll take this one however not this one,’ and you then run likelihood of ending up with some apples that don’t get taken. An RSN sort mannequin, the place you’re asking distributors to take a number of variations of the identical community, is difficult to push when you’re aligned with an enormous media companion resembling ESPN Manufacturers — and it’s close to unattainable when you’re alone with out media companions.”
Typically, how would you assess the worth of the Pac-12’s media rights in comparison with its Energy 5 friends?
Supply 1: “The rights to varsity video games are attending to the purpose the place the networks don’t thoughts paying high greenback for high content material. However it relies on which league, and it might get to which bundle during which league.”
Bevilacqua: “The excellent news is that high-value sports activities rights are once more main the way in which. The query is, Who’re the haves and who’re the have nots?”
Supply 2: “I assume the Massive Ten will move the SEC. That may affect what occurs with different conferences.” (The Massive Ten’s present contract expires in 2023.)
Supply 1: “I’d be extra involved if I’m the Massive 12 than the Pac-12. The Pac-12 will get its offers.”
Crakes: ”The Pac-12 is clearly in a really fascinating field of high properties that established media companions and distributors need to be concerned with. The query is, The place does it match into the general Tier 1 sports activities distribution matrix in comparison with different properties if there are not any new non-traditional bidders in a couple of years, which I don’t assume you’ll be able to depend on. Do they (Pac-12) wait three years and see if non-traditional digital solely platforms leap full power into buying Tier 1 sports activities rights? Or do they attempt to work with present companions notice their full worth now? The commissioner has to determine that out.”
Desser: “The Pac-12 doesn’t need to hear that it’s not in the identical pantheon because the SEC and the Massive Ten. However the issue from a media standpoint is that it’s within the Mountain and Pacific time zones, which symbolize one-quarter of the TV properties. That’s only a truth. It may place itself in a constructive style because the second half of a doubleheader, however there’s a niche in what’s potential. It is going to be actually attention-grabbing to observe what occurs.”
Supply 1: “The query is, how do you break up a bundle off the highest and get huge cash for that, then make a quantity play with the remainder of it? If you happen to’re the Pac-12, you can not change your geography, and you can not change the clock. It has nothing to do with competitiveness and the whole lot to do with viewing patterns.”
Desser: “It doesn’t matter what, the Pac-12 has sure groups with legacies, a number of giant markets and a beautiful product. It’s received historical past. However it’s all relative.”
Supply 2: “Everybody ought to stay calm.”
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