Pac-12 Network looking to change college sports landscape
The major college sports programs on the West Coast have long had a nettlesome problem: The sun rises in the east and sets in the west. With their clocks operating three hours behind those in the major eastern media markets, the Pacific Coasters have been, quite literally, behind the times.
Since moving heaven and earth is apparently not an option, these schools have embarked on a venture that they hope will bring about seismic change: The Pac-12 Network, which launched on Aug. 15 in 10 million homes. The model is unique. Alongside the national Pac-12 Network, the league also lauched six regional networks for its primary markets. (Pac-12 Los Angeles, Pac-12 Arizona, Pac-12 Bay Area, etc.) Having long felt as if it were operating on a different planet, the Pac-12 is now trying to have the best of both worlds. "That tribal passion is the secret sauce of college sports," Pac-12 commissioner Larry Scott told me by phone last week. "So we're charting a new course there."
Even under conventional circumstances, creating a network from scratch can be daunting. "This is not for the faint of heart," Scott said. That's especially true in this case, because along the way the Pac-12 did something that is virtually unheard of in sports business. It turned down lots of money. To wit:
-The Pac-12 did not partner with a major media company to form its TV network. That meant starting off with no offices, no infrastructure, no footage archives -- and no cash.
This was a different tack than the ones taken by other leagues. The Big Ten hooked up with Fox to create the Big Ten Network. (At launch the conference owned 51 percent, but that has since diminished to 49 percent.) The Mountain West Conference teamed up with College Sports Television, which has since changed its name to CBS Sports Network, to split The Mtn. Network on a 50/50 basis. (Disclosure: I am currently employed by the CBS Sports Network.) Those ventures had mixed results. The BTN has been a smashing success and provided Scott with a viable template. The Mtn., on the other hand, folded in May.
In other words, it was classic risk-reward. So far, the Pac-12 has the risk part down pat. "We took on all of the financial and operational risk," Scott said, "but it made sense because it made us the master of our own destiny."
-During its recent negotiations with ESPN and Fox, the Pac-12 left a considerable amount of money on the table in order to keep some valuable content for itself. The deals that were struck with those entities were still incredibly lucrative (12 years, $3 billion) but they would have been even more profitable if the Pac-12 had not witheld 35 football games.
By turning down the extra money, the league was able to offer enticing content to major cable providers that led to distribution deals with Comcast, Cox and Time Warner. Those deals enabled the Pac-12 to build its network without asking for any money from its member schools. Pretty impressive.
Time will tell whether that was a smart long-term strategy, but it's worth nothing that while SEC commissioner Mike Slive recently revealed that he was exploring the possibility of a league-owned network, his options are limited in the short term because ESPN currently owns the vast majority of the SEC's multimedia rights.
-It said no to Texas. During the summer of 2010, the then-Pac-10 was in deep discussions with the University of Texas over whether that school should join the league. That would have made the Pac-10 exponentially more valuable in the marketplace, but there was a catch: Texas was well down the road to launching its own TV network. And even if it was willing to give that up (which it wasn't), the school could never have brooked the Pac-10's strategy to share revenue equally among its members.
Once the discussions with Texas fell apart, the Pac-10 added Colorado and Utah to become the Pac-12. Texas later partnered with ESPN to form The Longhorn Network, which still has not signed distribution deals with the major cable and satellite companies in its home state. To this point, anyway, it looks like the Pac-12 got the better end of that deal.
While the incentives for the Pac-12 Network, like everything else in college sports, were driven by football, the league's basketball programs could experience an even bigger boost. Football was already garnering wide exposure, particularly with respect to Oregon and USC. Pac-12 basketball, on the other hand, has been much harder to find on television. (Given the quality of Pac-12 basketball the last few years, that's probably a good thing.) Part of that lack of exposure was a result of a rigid scheduling format dictating that games be played almost exclusively on Thursdays and Saturdays. By agreeing to go to a Wednesday through Sunday model, the league could offer more flexibility to its television partners.
For Pac-12 fans, the new schedule will be, in Scott's words, "like going from famine to feast." Last season, the league's national cable exposure was limited to 50 games on Fox Sports Net. This season, the league will have just 22 on Fox Sports Net, but there will be another 46 on ESPN plus two more on CBS. The remaining 140 will all be aired on the Pac-12 Network. In other words, there will not be a single Pac-12 basketball game played anywhere that will not be on television. Last season, there were 90.
No wonder the league's basketball coaches are so amped. "This has been a long-time coming," said Washington Lorenzo Romar, the Pac-12's longest-tenured coach. "All the [basketball] coaches in the league were hoping we would get something like this. In the past, programming from other conferences was always on, not just around the country but on the west coast, too. Now they can watch our conference as much as they want to."
Then again, the Pac-12 Network isn't really broadcasting around the country just yet. The league does not have distribution deals in place with big national satellite providers like DirecTV, the Dish Network, AT&T U-Verse and Verizon. The Pac-12 hopes to get some of those on board by the start of football season, but that has not come to pass. Until it does, this network is going to be a lot more local than it wants to be.
On the other hand, we are inexorably moving to a time when it won't matter where you live or what cable provider you have because you won't be watching most of your games on "television." Content is rushing like mad into the digital space. The desire to be a major player in that world was a driving force behind the Pac-12's decision to base the network's operations in San Francisco, where it will have prime access to the muckety mucks in Silicon Valley. In the months prior to launch, Scott and his team met with high-ranking executives at Apple, Google, Facebook and YouTube, many of whom are Pac-12 alumni frustrated they can't see more games. The conference launched the Pac-12 Digital Network six hours before the Pac-12 Network went on the air. That's a clear sign of the times.
Eventually, Scott wants the Pac-12 Network to extend the league's footprint not just toward the east but the Far East as well. When I spoke with him last week, Scott was about to leave for the airport to fly to China, where he was going to attend several basketball games during UCLA's seven-day, three-game tour of that country. Scott also planned to meet with business executives and government officials to discuss ways to move the Pac-12 into the world's largest emerging market. "Most of our schools already have some type of academic collaboration program in China," he said. "It's the fastest-growing foreign population of participants for our schools."
This initiative is in Scott's wheelhouse. Prior to taking over as commissioner of the then-Pac-10, he spent six years as the Chairman and CEO of the Women's Tennis Association, which caused him to do a lot of business overseas, especially in China. The specter of making inroads in the world's most populous nation has heightened the excitement over the new venture. "The Pac-12 is geographicaly situated so that it can take advantage of the linkages with the Pacific Rim that many of our universities presently have," UCLA athletic director Dan Guerrero said. "Obviously, you have to take baby steps first, but you've got to be looking ahead."
Of course, the way the television business is going, there's no limit to what a conference commissioner can see if he's willing to look far enough ahead. Larry Scott and his fellow west coasters have finally come to grips with their geographic reality. They know now that no matter what time zone they're in, it pays to think big in a world that is getting smaller by the day.