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Larry Scott: Pac-12 in Great Shape
- Thread starter Buffnik
- Start date
While we rightly focus on a lot of the negatives with PACN, the fact that the asset has been built and will become increasingly profitable with full conference ownership is a big success.
To give an idea, it's being estimated that the infrastructure alone to be able to run broadcasts for its new network will cost ACC schools $5-$7 million each... not including staffing. http://awfulannouncing.com/ncaa/building-acc-network-infrastructure-cost-school-5-7-million.html At least the Pac-12 is coming out the other end of that initial investment.
To give an idea, it's being estimated that the infrastructure alone to be able to run broadcasts for its new network will cost ACC schools $5-$7 million each... not including staffing. http://awfulannouncing.com/ncaa/building-acc-network-infrastructure-cost-school-5-7-million.html At least the Pac-12 is coming out the other end of that initial investment.
Great piece by Wilner on the PACN revenue issue. He destroys those interview answers given by outgoing PACN president Murphy-Stephens (even while trying to give her the benefit of the doubt). http://www.mercurynews.com/2017/06/20/pac-12/
We keep harping on this issue without a thought or care about REALITY.
Two things...
First, Many here think we can and should just TEAR UP THE EXISTING CONTRACTS and then hold our hands out to those exact same partners and EXPECT more money. I dont know about where you do business but where I did we got sued when we stopped complying with a contract.
Second, we harp on the Pac12N as THE SOLE SOURCE OF THE REV PROBLEM. Which in truth is only PART of the issue. Consider the items below...
The Big Ten will send $51.1 million to its members in FY18.
The Pac-12 expected to send approximately $29.5 million to its athletic departments in FY17. Four revenue buckets are responsible for the majority of the funds that are distributed to the campuses:
The Pac-12 expected to send approximately $29.5 million to its athletic departments in FY17. Four revenue buckets are responsible for the majority of the funds that are distributed to the campuses:
- Pac-12 postseason football contracts (6 p12 teams went bowling, versus Big10; 10 teams, SEC: 12 teams)
- Tier 1 rights deals with ESPN and Fox
- Pac-12 Networks income
- March Madness earnings (4 P12 teams went to the March Madness, versus Big10; 7 teams, SEC: 5 teams
Do you folks really believe that the B1G Ten Network is responsible $25m revenue difference? Over tier 3 programming?
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There should definitely be a revenue gap between the SEC and Big-10 but when it approaches $20 million it is going to piss people off. There is also little reason that the Big-12 should be $5 million above the Pac-12 (without tier 3 rights). I think the thing that should anger Pac-12 fans is that Fox and ESPN want the Pac-12 to be their late night sports programming which is going to lower ratings and they obviously got a good tier 1 deal with the Pac-12 (this is ultimately where LS messed up) and then they get in a bidding war with each other on the Big-10 deal because they bring better ratings than the Pac-12 when comparing those ratings is really unfair based on the position they but the conference in.
Ultimately, I think the revenue gap with the Big-10 should be around $10 million a year (even the SEC has a gap with them) and I would say about $7 million of that is tier 1 rights and $3 million of that is from the Pac-12 network and this is probably understated a little but considering a deal with DirecTV would add $2 million per school.
Ultimately, I think the revenue gap with the Big-10 should be around $10 million a year (even the SEC has a gap with them) and I would say about $7 million of that is tier 1 rights and $3 million of that is from the Pac-12 network and this is probably understated a little but considering a deal with DirecTV would add $2 million per school.
Lets not forget that the Pac12 did its rights way back in 2011 and they run thru either 2020 or 2022. The B1G just redid their tier 1 football and basketball last year. The SEC went before them a couple of years ago (2014 I think). And I *believe* the Big 12 also just did their Tier 1 which is when their failed expansion effort happened. The ACC, which is dead last, also did some of theirs and it took a lot to get ESPN to stop putting off the ACC Network they had been dragging their feet on.
If our rights are up in 2020 that means negotiations will probably begin in late 2018. So, more pain to come.
It's all about conference expansion. That will cure all our ills. Haven't you been paying attention?
BuffLuke80
Well-Known Member
Say we do expand to 16 eventually. How do y'all think they'll structure that?
You also have to remember that we're splitting that money 12 ways and they're splitting it 14 ways. Especially impactful if we're talking about how many teams from the conference made postseason appearances. On that, though, the bowl tie-ins are very weak for the Pac-12.
Our problem is led by PACN, which was expected to be bringing in $4 million or so more per school right now than it is. Compared to the B1G, 2 fewer mouths to feed and 100% owned vs 49% owned. Yet we're getting lapped here.
I can actually appreciate that the Pac-12 has some innate disadvantages that would make me understand $5-$10 less per school when compared to B1G and SEC. But when we start getting to $15 million and growing, I can only conclude that the conference is mismanaged.
East/West divisions with pod scheduling model is my bet.
BuffLuke80
Well-Known Member
Makes sense.
Good question. This is probably a topic that deserves it's own thread.
BuffLuke80
Well-Known Member
Cool but I'll defer to the mods on that one.
Oh, Christ.
Somebody make the idiocy stop. For the love of God. Think of the children!!!
8Jah
Well-Known Member
Lets expand the PAC12N by adding all the G5 schools, each dividing the revenue share of four additional full member teams. That would add at least 57 schools to the PACN, reach a lot more viewers, hit every time zone and establish the Pac69 as the true super-conference. Imagine the revenue potential.
Something, something, causation correlation something.
That's the thing, right? We don't know that this has made those conferences stronger & more valuable. But it's suggestive that it has. Pac-12 had the record media deal and then the B1G & SEC expanded to 14 heading into their new agreements. Don't be surprised if the Pac expands to 14 or 16 heading into its new deal which will begin in 2024-25.
CVBuff
Well-Known Member
Isn't the disparity as simple as the PAC 12 having less value because of fan support. Ohio State, Michigan, Nebraska, Penn State, Wisconsin always sell out huge stadiums, and sometimes Michigan State. In the PAC 12, Washington and Utah, with its small stadium, always sell out, but that's about it isn't it? A parking pass for an Ohio State game goes for more than the most expensive seat in Folsom. There are strong economic forces that create the value of a conference to advertisers and networks. The Big 10 and SEC have millions and millions of alum who, if they live nearby will spend big dollars on seats. If they aren't close, they are part of a hundred year tradition that loves football. In edition, are all the blue collar guys and alum who can't afford seats who buy some beer and watch their team with buddies on a flatscreen. PAC 12 fans don't seem as fanatical.
Didn't the SEC add TAMU and Mizzou mostly because it allowed them to renegotiate their tier 1 tv deal?
I would actually say Seattle, Portland, Salt Lake City and Phoenix hold their own in terms of bringing revenue. LA could definitely do better but Denver and the Bay Area are severely lacking.
8Jah
Well-Known Member
Sweet map lol not really sure what population density means in this argument. The viability of this conference definitely is not all about LA, there are 8 of the top 30 tv markets in the Pac-12 footprint and a couple are largely contributing to the problem in Denver and the Bay Area. Yes LA would help the revenue growth but that city already responsible for a lot of the revenue in the first place.
Population shown on a LOG scale. PAC12N revenue growth is all about LA.
8Jah
Well-Known Member
Dude, there are as many people in Southern California as there are in the ENTIRE states of Washington, Oregon, Utah, Colorado and Arizona COMBINED, and those Southern Californians are not watching PAC12 football at the rate they were before the PAC12N.
The ranking of TV markets doesn't give an indication of the size of TV markets, or their potential for growth. You could get the most gains simply by increasing the butts in front of TV rates in the LA metro by a few points. This simply means success of USC and not making it so hard to watch the PAC12 in LA. The PAC12N's biggest mistake was by offering way fewer providers throughout Southern California than even Colorado during the first four years of the network.
That is also why I argue (half jokingly) that if we added more teams we should invite SDSU and UC San Diego (even if they had to start a football team). That is the only population in our footprint that would move the needle.
So Cal has a lot of people but just like New York there will always be issues trying to gain viewership in that area just due to the people that live there. Yes you could theoretically get the most gains out of that area but it is near impossible to do so.
Ranking TV markets actually gives an exact size of the TV markets and growth has never been an issue for the Pac-12, all of the markets are projected to grow substantially over the next 25 years. There is really no proof that Southern Californians are not watching Pac-12 football at the rate they were before the network, the big games were always on TV and they still are. There is more access to all games everywhere instead of it being on a localized channel it just hasn't been as good as expected. It's not like people in So Cal were able to watch an Arizona-Washington State game before the network anyway without having Dish or DirecTV to get the local channels everywhere.
No matter what conference you are talking about when your second biggest TV market is largely apathetic to college sports and has a school with a small student population it is going to hurt the revenue of the conference. If the bay area cared about sports as much as So Cal the conference would be in way better shape. Couple that with the fact that the 5th biggest market in the conference is the same way and only has one school in that market and it gets even worse.
The Big-10 has massive TV markets that no one in the country can replicate but the SEC and Big-12 still outperform the Pac-12 without them because they have smaller and more engaged markets to go along their top markets which is why Portland and Salt Lake City are so important. A conference with the issues of the Pac-12 cannot focus on one area.
Darian3Hagan
'89 Player of the Year
I don't think the PAC12 will be adding Texas schools any time soon.
http://www.sacbee.com/news/politics-government/the-state-worker/article157688724.html
http://www.sacbee.com/news/politics-government/the-state-worker/article157688724.html
Here we are again debating the improvement in revenue that Boise State, Northern Arizona, UNM, UNLV, Nevada, SDSU, and Fresno State will bring.
BuffLuke80
Well-Known Member
Who the hell said NAU? I must've missed that one.