It was a long time ago, but I recounted a convo I had with a DirecTV muckity muck at a social gathering when all of this was in play.
In a nutshell, DirecTV had no in interest in the P12 network at all. They viewed it as a regional product, at best, and were seeking to not only have national products to offer, but really wanted to tap the SA and Asia markets. Thus, the P12Network simply wasn't on their shopping list, and any overtures from the P12 were met with a "if you will sell it at a huge discount, fine" response.
Larry the cable guy simply overestimated the appeal. He should have partnered with a network. He had the Hobson's choice of blowing up other deals to get in with DirecTV or keeping the $ already negotiated. The biggest problem was the product.