Pac-12 media strategy: Moving on from DirecTV, passing on ESPN’s offer and making a “different bet”
The Pac-12 and DirecTV have been at an impasse for years, but it doesn't appear the conference views a distribution deal as a high priority anymore.
Even all these years later — seven, to be exact — the question comes at Pac-12 commissioner Larry Scott as pointedly and relentlessly as if it had been beamed down from above.
Anything new with DirecTV?
It’s about time we put the kibosh on that one, folks.
Not only is nothing new, there won’t be anything new anytime soon, if ever.
Based on comments by Scott and Pac-12 Networks president Mark Shuken, the conference no longer views a distribution deal with the satellite provider as a high priority … or any kind of priority.
Scott didn’t slam the door entirely during a recent roundtable discussion, but he described the pursuit of a carriage deal with DirecTV as akin to skating where the puck “has been.”
The Pac-12, he added, prefers skating “to where the puck’s going.”
That was just one nugget (boulder?) from Scott and Shuken that we’ll explore in a multi-part series on Pac-12’s media strategy.
That strategy strikes the Hotline as endlessly fascinating, for it combines the evolving media landscape across the Power Five with financial pressures on Pac-12 athletic departments.
It combines ESPN and Fox, day games and night games, linear and digital, audience and revenue, immediate needs and long-haul goals.
It combines the recent rejection of a lifeline from ESPN with the current pursuit of an equity sale and the future of the Pac-12 Networks.
It combines all that and more, then crams everything into a neat package to be unwrapped by Scott and Co. over the next few years.
“We’ve made a different bet than others have made,” Scott said.
That bet apparently does not include a deal with DirecTV — at least not before the conference renegotiates its full complement of football and men’s basketball rights, which expire in the spring of 2024.
If you’ll recall, the Pac-12 was unable to reach a distribution deal with DirecTV upon the launch of the Pac-12 Networks in 2012.
A few years later, after AT&T took ownership of the satellite carrier, the two sides went back to the negotiating table.
DirecTV made an offer Scott thought worthy of consideration, but the universities rejected the deal by an 11-0 vote, according to sources. (Washington State was without a permanent president at the time and abstained.)
Since then: Nothing.
The prospects for a deal went from bleak to dark side of the Moon last summer when AT&T and the conference agreed to end their five-year partnership — a partnership that included sponsorship deals and Pac-12 Networks carriage on U-verse.
Now, it seems, the situation has moved into uncharted territory.
When the inevitable question was posed recently to Scott and Shuken — anything new with DirecTV? — their responses seemed to indicate not only a lack of progress but a lack of interest in making progress.
“They’re hemorrhaging subscribers, record-setting losses, so they have to cut their programming costs,’’ Shuken said.
“They’re in a dispute with CBS” — it has been resolved — “so they have to bolster their programing lineup to get subscribers, but they’ve got to cut their programming costs because their video product is at a deficit.
“We’re seeing the satellite providers struggling (the most) because they don’t have the bundling or packaging. Video-only is a challenge in that industry.”
Before another question was asked, Scott added his perspective:
“Our presidents, our athletic directors, when we talk, we talk about skating to where the puck’s going, not where it’s been, and that’s very much where it’s been.”
Scott immediately pivoted to the media landscape in 2024, when the Pac-12 will renegotiate its football and men’s basketball rights (everything currently on ESPN, Fox and the Pac-12 Networks).
He expects a robust marketplace with multiple bidders.
”The Big 12 is doing something interesting with ESPN+,” Scott said. “Well, ESPN+ didn’t exist two years ago. DAZN didn’t exist two years ago.
“By the time our rights come up, we are predicting that not only will streaming services be important bidders for our rights, but there (are) going to be other players — some of the technology companies, and others that we can’t even name today, are going to be bidding for our rights.
“So we’re always trying to figure out what more we can do now to get more revenue for our schools, more exposure.
“But we very much have our eye on the best position for us longer term.”
That would explain the conference’s decision to pass on what some viewed as a lifeline from ESPN.
Late last year, ESPN offered to take control of distribution for the Pac-12 Networks and extend its Tier 1 broadcast agreement with the conference into the 2030s, according to the SportsBusiness Journal.
The move would have dramatically boosted the networks’ audience and revenue — both are struggling — and it would have secured a spot on ESPN’s stage for premium Pac-12 football and men’s basketball inventory.
But the conference declined, preferring short-term flexibility over long-term visibility.
It didn’t want the valuable Tier 1 rights locked up into the 2030s, even in a partnership with ESPN.
“We’ve resisted the opportunities we’ve had to take some short-term increase in our revenue now, and maybe some help with distribution now,” Scott said, “in exchange for giving up another 10 years.”
We’ve made a different bet than others have made.
Coming next: Comparing the Pac-12’s negotiating position to the other Power Five conferences in the next round of media right deals.
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