Pac-12 contract getting closer ...
Jon Wilner of the San Jose Mercury News, the best source of news concerning the Pac-12 contract negotiations, is tweeting that a deal may be close …
One tweet: “Got a text msg from source: The Pac-12 is close to finalizing its TV deal. Could be signed and sealed within a week/10 days.”
Another: “Don’t know $$ amount or network, but I’m guessing it’s $230+ million and either Fox or Comcast.”
And then there is this: “This much I’m sure of: Some element of the Pac-12 deal will be unprecedented in college sports. These guys are creative and aggressive.”
And this: “Based on what I’ve heard in past 2 weeks, no reason to think that Scott won’t make good on promise to get every fball and bball game on TV.”
Bring it on, Larry Scott!!
Deals being made, but not with the Pac-12…yet
Partnerships are being formed, alliances are being made and checkbooks are being opened.
But not for the Pac-12…yet.
The NHL, one of the few remaining big fish out there to be had in the media’s rush to obtain broadcast rights, will be staying with NBC and Versus for the next 10 years. The NHL had drawn interest from ESPN, Turner and Fox Sports, but decided to stay with its partner for the past six years.
“When we looked at the entire package and the relationship, it was clear we were going to stay with the incumbent,” said NHL commissioner Gary Bettman said. “But it’s nice to go out and find you’re pretty.”
The package, which will run for 10 seasons, will bring in about $200 million to the league, which far exceeds the $75 million or so the league was paying under the existing contract.
What Does the NBC/NHL Contract Mean to Colorado and the Pac-12?
It’s not totally unexpected and really doesn’t change the playing field all that much. In a perfect world, ESPN or Turner would have obtained the rights to the NHL, which would have made NBC/Comcast all the more desperate to sign on with the Pac-12. NBC/Comcast, seen as the main competitor for the Pac-12 contract with Fox Sports, now has a contract—and programming—in its back pocket. Will NBC/Comcast be satisfied with a seasonal sport which rarely registers in the national consciousness? Probably not.
But they may be just a little less willing to break the bank to get the Pac-12.
Meanwhile...Back at the Mother Ship…
ESPN, according to SportsBusinessJournal, is looking to extend its contracts for football and basketball with the Big East. The current contract doesn’t expire until the end of the 2013 football season, but ESPN is looking to lock up its longtime partner into a long-term contract.
The current contract with ESPN nets the Big East $36 million per year, almost an insult under the current climate. The new deal is reportedly going to be in the $110-$130 million range. Significantly higher, but also significantly less than what the Pac-12 would be looking for.
What does the ESPN/Big East contract talk mean to Colorado and the Pac-12?
Does ESPN”s willingness to extend its contract with the Big East mean that ABC/ESPN is not interested in the Pac-12? No more than was the case before. With a significant inventory of college football games already under contract with the Big Ten, the Big 12 and the ACC, ESPN was not likely to be a primary bidder for the Pac-12, anyway. If ESPN does participate in the new Pac-12 contract, it will likely only be to purchase a certain number of games from the winner of the Fox/Comcast battle.
Should the ESPN/Big East contract projections— $110-$130 million per year—mean that the speculation that the Pac-12 contract may go as high as $220 million per year is out of line? Probably not. Remember, football is the fuel which drives the television bus (remember that from last summer, Jayhawk fans?). The Big East, while a power in basketball, is a secondary power in football. There are large media markets targeted by the league, with hopes that the addition of TCU will bring in fans from the Southwest, but the Big East is not as powerful a draw as the Pac-12.
Quick test: Name the football teams in the Big East. Go ahead, I’ll wait.
Now, name the teams in the Big Ten or SEC. A lot easier, isn’t it?
Television executives think so, too.
“There is upward pressure in the value of college sports rights.”
The next few weeks could be very interesting—and very lucrative—for the University of Colorado.
While most experts are still betting that Fox Sports will become the first Pac-12 television partner, the Wall Street Journal is reporting that Comcast, which controls NBC Universal, is making a “big push” for the Pac-12’s television rights.
Steve Burke, the new CEO of NBCU, is “interested in building a more viable competitor to Walt Disney Co.’s ESPN.” The problem for Mr. Burke is that there is little sports inventory out there for which Comcast might place a bid. Other than the Pac-12, the Big East is the only major conference with college football media rights available before 2016 (when the Big 12’s contract with ABC/ESPN expires).
As a result, Comcast has three sporting contracts options to pursue—the NHL, the Olympics and the Pac-12.
Versus/NBC currently has the contract with the NHL, with the league currently receiving $77.5 million per year from Versus. ESPN and Turner might also be bidding. Fox is reportedly not interested in the NHL (which could mean that the league is holding onto cash in order to pay for its Pac-12 bid. Not a bad thing).
Every Olympics this century have been shown on NBC, and it is likely that NBCU will make a bid for the next set of Olympics, with the International Olympic Committee hopes to award in June. The problem for Burke and Comcast/NBC is losing money on the Olympics (the 2010 Vancouver games lost $223 million despite being in a decent time zone—as compared to Syndey or even London, the site of the 2012 Summer Games). Keeping the Games is important to NBC, but a two-week show every two years is not exactly going to allow the network to dominate sports programming…and the Games come with red ink attached.
College football, meanwhile, is a cash-cow for cable networks who can raise their fees for having the extra programming. As Jon Wilmer of the San Jose Mercury News put it: ”Let’s say, as a very basic example, that the ($90 million) Big 12 deal allows Fox to charge $.10 more per subscriber for FX. Multiply 100 cable households (oops: 100 MILLION cable households) x $.10 fee increase x 12 months … and you have $120,000,000 in additional annual revenue.”
So, for every dime added to every cable bill which carries FX, Fox Sports can generate an extra $120 million. Simply put, sports programming, with its “carriage fees” available with cable contracts, is where the smart money is going. College football has never been more popular.
And the Pac-12 contract is the only game in town for the next four years…
Fox Sports Network president Randy Freer, at the press conference announcing the network’s contract with the Big 12 (see below), had some great quotes:
College football provides a place “advertisers can count on for a mass audience”;
College sports “is undervalued compared to other content in the marketplace”; and
College sports in general and college football in particular have “a great deal of value going forward”.
It’s a great time to be a Buff. The $170 million hoped for annual contract (to avoid having to pay USC and UCLA a surcharge of $2 million apiece) seems all but assured. Last week, the number $220 million annually was put out as a projection—and no one laughed. Now the Big 12, which is 10 teams and has restrictions on what Texas and Oklahoma content can be shown, has signed a $90 million per year contract just for the cable rights. And they negotiated their contract through Big 12 commissioner Dan Beebe, not exactly a commissioner held in high esteem by Colorado fans.
The Pac-12 just happens to have Larry Scott as its commissioner. Scott has been just this side of brilliant in his first two years as the league’s head man.
Could it be?? Deficit spending a thing of the past for the Colorado athletic department??
Big 12 Announces Television Deal With Fox Sports
The Big 12 has announced a 13-year agreement with Fox Sports Media for exclusive cable rights to 40 football games per season.
The new pact, which takes affect in 2012, grants Fox Sports the exclusive cable rights for a minimum of 40 regular season games—double the number under its current agreement. There will be options for three Thursday games, one Labor Day Sunday game and one Thanksgiving Friday contest each season. Most of the games will be shown on FSN, with several other games on FX. Fox also has a similar exclusive contract for a minimum of 40 Olympic sports events, including conference championship events and up to 25 women’s basketball games. The contract is reportedly for $90 million per season—over four times what the league was receiving previously from Fox Sports. The new agreement guarantees that every Big 12 home game will now be televised, with Fox picking up what ABC and ESPN pass on.
The current ABC/ESPN contract provides for: 18 football games per season, 95 men’s basketball games per season (including the conference championship) and six women’s basketball games per season. This agreement, which has precedence over the Fox Sports agreement with the 10-team league, still has four years left to run.
What does this mean for the Pac-12’s negotiations?
“When you look at the transition that we’re all going through in this video world, sports is one of the only things that drives the adaptation of technology,” said Fox president Randy Freer. “Sports rights are still somewhat manageable as it relates to your ability to put content out digitally. I think we’re all making a bet on the future, where we believe that college sports and sports in general is one of the leading rights generating large audiences in a way that advertisers can connect with. That’s what you’re seeing drive up college sports’ cost to the values where they are today.”
It could be a very lucrative summer for the University of Colorado and its Pac-12 partners …
Larry Scott targeting Pacific Rim
The latest installment from Jon Wilner of the San Jose Mercury News talks about how Pac-12 commissioner Larry Scott is already looking past the negotiations for the domestic market.
The Pac-12 will be a global network.
A planned media company will oversee the league’s broadcasting and digital/mobile rights, which could expand the network into China, Japan, South Korea, India and beyond. The new company will have to partner up with the Pac-12’s domestic partner (an “in” for Fox Sports—Fox already has existing relationships with cable operators in the Pacific rim). There might not be a great deal of money for the league – at least initially – but the move will certainly expand the league’s presence, with a potential windfall on the marketing and sponsorship fronts.
Other tidbits from the Wilner article …
- While most analysts believe that the Pac-12 negotiations will come down to a bidding war between Comcast and Fox, “multiple industry sources” believe ESPN and Turner will “poke around and come to the table.”
For those hoping to generate the most $$$ for the league, one source said “Game theory of negotiations says you’ll get the best price if there are at least three serious bidders.”
- Another source said, “The next holy grail for (Turner) is college football”.
- It is likely that any new contract the league signs will have a contingency for future expansion (see comments section, below).
- While the new number we’re all waiting to hear—$220 million per year—is not guaranteed, even a contract for $190 million would more than triple the league’s current income.
“The deal they sign will eclipse all others.”
In order to avoid having to pay USC and UCLA an extra $2 million apiece, the new Pac-12 television contract must garner over $170 million per year. The guarantee was built into the league agreement, in part to off-set the potential lost revenue due to splitting the southern California schools from the northern California schools when the Pac-12 divisions were created.
$170 million per year?
Okay, how about $220 million per year?
As the Pac-12, behind dynamic commissioner Larry Scott, negotiates its new television contract, Jon Wilner from the San Jose Mercury News is quickly becoming my favorite journalist.
In his latest update about the Pac-12 television negotiations, there are so many superlatives that it’s hard to know where to start.
A few months ago, AJ Maestas of Navigate Marketing, which has done media rights schools for teams like Arizona State and Ohio State, estimated six months ago that the Pac-12 television package would be worth about $175 million per year. Not quite in the league of the $205 million annual deal signed by the SEC with CBS and ESPN, but much more than any member school was used to seeing.
Now, Maestas has revised his estimate for the Pac-12 up to around $220 million per year.
Why the huge increase?
“This is the best possible time for the conference—they’ve caught lightning in a bottle,” explained Maestas. “The rest of the economy is tough, but the media world is booming.”
The perfect storm for the Pac-12 is a combination of a lack of other options for media outlets— the ACC, Big Ten, SEC and Big East are tied into long-term deals—and several competitors anxious to expand their live sports footprint.
Turner Broadcasting and ESPN are potential network partners, but the betting money remains on either Fox or Comcast. Fox is quite clearly interested in expanding its sports inventory. Witness the recent $90 million deal Fox recently made with the Big 12, which has 10 schools, two of which (Texas and Oklahoma) which will have their own networks.
“It makes no sense economically,” one analyst said of the Fox/Big 12 deal. “It’s all about Fox’s national push with FX and subscriber fees…But it’s all good for the Pac-12.”
Fox’s chief rival, Comcast, recently merged with NBC/Universal, and is also looking to expand its inventory of programming.
There are several aspects to any new deal which has Pac-12 fans ripe with anticipation. First, as we’ve discussed before, the Pac-12 presidents last fall gave the league commissioner, Larry Scott, permission to negotiate a deal for the entire league package. Every other deal in the country leaves some games uncovered if no television partner picks up the game, and the home team can’t find a local outlet willing to pay for the broadcast. Now, every game will be shown, either by the corporate sponsors’ networks, or on the Pac-12 Network.
Oh, yeah, about the Pac-12 Network.
It will be coming to a cable/satellite provider near you in August 2012, the analysts all seem to agree. Football and basketball games not picked up by the network sponsor would be shown on the Pac-12 Network. In addition, the “League of Champions” would finally have an outlet for all of those Olympic sports the league keeps dominating.
“We have some of the best amateur athletes in the world, and people aren’t able to see them because we don’t have a platform,” said Scott.
With the new deal will also come some concessions. Thursday and Friday night football games will not be uncommon, but those changes will pale in comparison with what will happen with the basketball schedule.
“We’re at a crucial point,” said Arizona coach Sean Miller. “For the conference to be the best it can be, there has to be significant change in televisions across the nation being able to watch Pac-10 basketball.”
How will this be accomplished? Travel partners will go the way of the Southwest Conference, as instead of a Thursday/Saturday weekend in Washington State for travel partners Arizona and Arizona State, games will be spread out throughout the schedule—and throughout the week.
“We’re going to spread out the nights they play—like every other BCS conference,” said Scott. In order to help minimize the time away from campus, the league might use chartered flights (you can do that with $220 million rights fees).
The other interesting aspect of the negotiations is the league’s push to get its games on mobile networks. Right now, you can’t watch college sports on your iPhone, but, if Larry Scott has his way, you will soon be able to do just that. “We have a lot of alums and students who are very technologically savvy,” said Scott, “and we’re planning to make a big commitment to distribute our content through mobile networks.” The league might even create its own media company to control the digital and mobile programming.
“This deal they sign will eclipse all others,” said Maestas, the media advisor, “and that’s shocking to me because the league was always the least pro-active, and the least liberal with its scheduling policies.
“But it’s a new regime.”
Indeed it is.
April 1 marks opening day for television negotiations
Jon Wilner, who writes for the San Jose Mercury, has been the most up-to-date on keeping tabs on the future television deals which the Pac-12 might be making this spring. In his latest blog entry, Wilner discusses why April 1 is a big day for Pac-12 fans.
And, no, not because it’s April Fool’s Day.
On March 31, the exclusive window for Fox to negotiate a new television contract elapses, and it is no surprise that the deadline has come and gone all-but unnoticed. The Pac-12 has no reason to worry about the end of the negotiating window, as the league is very interested in seeing wants to get the best offer possible, while Fox wants to see what networks will be its competition.
Wilner calls the Pac-12 package available “unprecedented”, as, for the first time, the league is taking control of all of the media rights. Previously, if a game was not picked up for broadcast, it was left to the schools to sell those rights to local media outlets. When the schools could not find a local partner, the game went untelevised, and potential revenue was lost.
Now, as the Pac-12 teams have all signed on to be part of a package deal, there is significant inventory—some 2,700 events in all—to be included in a television package.
Plus, as Wilner points out, the SEC, ACC and Big Ten are currently under long-term contracts, so the Pac-12 is the only option for a broadcast network looking to expand its college footprint.
Handicapping the contenders…
Fox Sports – the leader out of the gate, and, for now at least, the likely favorite to win the competition. Fox has recently purchased the Pac-12 and Big Ten championship games and has signed onto a $90 million deal with the diluted Big 12 (even without the Texas Network and the soon-to-be Oklahoma Network). Fox also has the channels in place (like FX) and has the backing (and dollars) from Cablevision.
ESPN – the favorite of most fans, and likely most coaches and players. ESPN already has a number of commitments in place, and the Pacific time zone hurts the Pac-12’s chances for a big score from the “mother ship." However, ESPN could partner up with another network (Turner Sports?) to create a package so that ESPN would still retain rights to Saturday night games from the Pac-12. Turner Sports, which worked with CBS during the NCAA basketball tournament, has been described as being “as hungry as anyone” when it comes to wanting to expand more into college football.
Comcast – the largest cable operator in the country and one of the most unpopular. Comcast has merged with NBC and has the money, the production experience and the infrastructure to make a significant bid for the Pac-12’s services. Comcast may want to become a major player in college sports and use the Pac-12 as a vehicle to make its mark.
It’s going to be an interesting spring, and perhaps summer, of negotiations.
While most Buff fans would likely rather see their team on ESPN, the smart money still appears to be on Fox.
Stay tuned …
Buffs on Sunday?
Pac-12 commissioner Larry Scott is always thinking outside the box.
From expanding the Pac-10 to 12 (or even 16) to the Pac-12 Network to expanding the league’s presence in the Pacific islands and Asia, Larry Scott is always in the news when there is a chance to gain greater exposure for the new league.
Now, with the NFL players locked out, and the possibility of there being no football on Sundays this fall, Scott is exploring the idea of having the Pac-12 move some of its games to Sundays for the 2011 season.
“We certainly are monitoring the situation,” said Scott. “We have no plans in place at this time, but you want to be prepared and consider all options.”
“We haven’t made any alternative programming plans right now,” said Sean McManus, president of CBS News and CBS Sports. “When presented with whatever scenario develops, we will adjust. But right now, we’re not making any contingency plans or any thoughts of next season without football.”
The major problem for the Pac-12 teams, of course, is that a move to a Sunday game would cause logistical problems for the home team. Fans coming from out of state often make their arrangements for travel and lodging months in advance, and the lockout issue is likely to drag on throughout the summer.
“Thursday night football hasn’t been around forever, but we adjusted to that,” said Arizona athletic director Greg Byrne. “Sunday is a day a lot of people look to watch football. You would get good exposure.
“But Sunday games would be something we would have to think long and hard about before we jumped into.”
The main problem would be that, for the Sunday college games to work, there would have to be enough lead time for the schools and the fans to adjust. However, a significant lead time is the one thing that the networks might not be able to provide.
“From the network’s perspective, I’m sure they would welcome the programming opportunity if they knew the NFL was not going to play,” said Patrick Rishe, founder of Sportsimpacts.com, a sports consulting firm. “(But) it’s not as though you can announce these things months in advance, because, as we have seen, the NFL and the NFLPA could resolve their dispute at the last minute.”
Big 12 close to new television deal with Fox
According to a Sporting News report, the Big 12 is nearing a deal with Fox Sports which could triple the conference’s revenue over its current contract.
The new deal, if true, would pay the league more than $60 million per year, a considerable raise from the $20 million received under the existing agreement. Fox is also in discussion with eight of the league’s schools about establishing a conference specific channel along the lines of what the University of Texas has already negotiated (In case you are wondering about the math, Oklahoma wants its own network).
One area which would need to be clarified: Would it be the “Big 12 Network” if only eight teams participate?
The two arrangements—Fox’s cable deal and the potential league network—are separate conversations. The Big 12’s cable contract with Fox runs through 2011-12 and will pay the league $20 million during the upcoming year. The ABC/ESPN contract, which covers most of the football and some of the basketball games, runs through 2016. The network and cable deals would bring in an average of $130 million per year to be divided amongst the ten teams. This is only slightly behind the ACC deal with ESPN, which made a deal for $155 million a year (divided amongst 12 teams.
Ten teams—geographically challenged and with no conference championship game?
This all bodes well for the Pac-12 negotiations. The new league is getting $14.5 million for the 2011 Pac-12 championship game, so there are extra dollars right there that was not part of the Big 12 negotiations. There is also the fact that Fox is willing to pay about $60 million per year for what is, in essence, eight teams—and, the Kansas basketball team notwithstanding—are not the cream of the crop in terms of national Q rating.
Time to shift into overdrive, Larry Scott!
Side Note: While not related to the above, it is interesting to note that at the same time the Big 12 is negotiating a big new cable deal, that it is bailing out one of its “haves”.
Oklahoma was not able to pay for all of its tickets for the 2011 Fiesta Bowl against Connecticut, so the league, according to a Sporting News report, paid for 10,403 tickets, to the tune of $1.9 million. Oklahoma bought 1,530 unsold tickets, at a cost of $335,000, in order to wind up with a net gain of $9,350 for the trip.
The payoff only came to life after it was disclosed that Connecticut lost better than $1.6 million on the game, with the Big East not picking up the tab.
Pac-12 looking for more television exposure
There will be a pot of gold at the end of the rainbow, but it may take a few more months to make the journey.
Pac-12 commissioner Larry Scott says that he is “laser-focused” on negotiating a new television contract for the new league.
“We’re determined to get a lot more national exposure for basketball and football than what we’ve been getting,” said Scott.
“There’s a sense that the Pac-10 has fallen behind. We’re fifth among the BCS conferences right now in TV revenue, and that’s not satisfactory to our leadership,” said Scott. “We’ve fallen behind in terms of national exposure as well as revenues.”
Scott is also determined to create a “Pac-12 Network” and has been working with Hollywood’s Creative Artists Agency to develop the network.
“We’re determined to get broader exposure four our Olympic sports and women’s sports, which the Pac-10 excels at, and we’re determined to get every football game and basketball game on the air and not have any of those games dark,” he said.
Brings a smile to my face every time I read a story about this guy …