Pac-12 Universities have been paid just $9.7 million/per in Pac-12 Network distributions since the conference launched the series of cable networks back in 2012. That figure pales in comparison to the distributions – estimated to be 3-4x more lucrative – paid out to Southeastern and Big Ten Conference schools from their respective conference networks and fails to account for the costs each school incurred to re-acquire their local football and basketball broadcast rights (+/- $6 million) from existing sponsorship and marketing partners (think: Learfield, IMG).
The Pac-12 Conference’s decision to forego a broadcast partner and operate a wholly-owned media entity has cost its member institutions much needed revenue and domestic exposure, but league officials maintain that the strategy to retain control over all league content has put the conference in a position of strength heading into the next round of media rights negotiations in 2024. In the meantime, the Pac-12 Conference is reportedly exploring selling a 10% stake (for $500 million) in a newly formed holding company (Pac12NewCo) – that would control all Pac-12 media rights at the completion of ’24 – to solve the schools’ short-term cash needs.
Howie Long-Short: To understand why Pac-12 Networks lags behind some of the other conference networks, one must understand its charter. Pac-12 Networks was constructed on a mission of gender equity, on the exhibition of the student athletes. The business model calls for the network to deliver 850 live events/year – content that aids recruiting efforts and elevates the schools�� brands, but delivers little in the way of revenue. Delivering profits back to schools has always been a secondary priority for Pac-12 Networks. President Mark Shuken explained it was the conference’s belief that its “partnerships with Fox and ESPN would deliver most of the fundamental economic expectations and address national distribution for football and men’s basketball.” Remember, when the conference inked those deals with Fox and ESPN in ‘11, no conference was set to take in more in media rights revenue.
The Pac-12 is tied into its existing broadcast partnerships through the ’23-’24 academic school year, so the conference’s schools are going to have to make do with less until then, but Shuken sees a pot of gold at the end of the rainbow. “Everybody believes that top tier rights are going to continue to gain financial value and we’ll be able to maximize rights fees when we can monetize all of them concurrently in 2024.”
One of the reasons Shuken is excited about the conference owning 100% of its broadcast rights is that it gives them the ability to “slice and dice” content for targeted audiences. The conference has “seen momentum in gymnastics and volleyball, so there also may be the chance to package and promote some of those events.”
The Pac-12 also has a diverse student population relative to the other 4 P5 conferences, so “country based content offerings may provide another opportunity for us. We have established Pan-Pacific relationships. Our agreement with Alibaba has turned China into a big market for us. Washington, Washington State, Oregon and Oregon State have all made concerted efforts to create a presence in Asia and the conference has done some things in Canada. We see international waters as fallow ground from both a recruiting standpoint and the fan acquisition perspective. International viewers are clamoring for programming about student athletes from their countries.”
Pac-12 conference schools can expect greater distributions come ’25, but “it’s important to understand what drives revenues for athletics departments. Media revenues are certainly part of it, but filling up 100,000 seat stadiums to capacity – no matter who’s playing – as some conferences do, has a tremendous impact on the overall economic picture.” In other words, the Pac-12 may be able to close the gap in terms of media rights fees distributed, but there’s little chance conference athletic departments will take in more total revenue than their Big Ten and SEC counterparts.
Pac-12 Networks doesn’t just generate less revenue than the SEC and B10 Conference network, it lacks the distribution that they have. Joint ventures with ESPN and Fox have helped the SEC Network and Big Ten Network gain carriage in more than 60 million households. Without that leverage, the Pac-12 Network has been able to find its way into just 17.9 million homes (down -7% since ’16 peak). To put that figure in perspective, The Pursuit Channel, The Sportsman Channel and Fox Deportes are all more widely distributed.
Fan Marino: As an Arizona football fan living in NYC, I frequently find myself watching games that end past 2a EST on Sunday morning. I had to ask Mark why the conference plays many nationally televised games after the east coast media goes to bed (hence, the east coast bias)?
Mark: Evening events taking place on the west coast offer broadcasters the opportunity to carry A1 content against very little competition, so the late-night EST windows are important to Fox and ESPN. But playing games on Fox and ESPN also provides tremendous reach for our schools. We often draw audiences larger than we would if we were competing against 15 other games on a Saturday afternoon.
Interested in Sports Business? Sign-up for our free daily email newsletter list, here!
