You have some very good points about why the Pac-12 could have done that instead of this.
Don't get me started about CSU. I will provide the link to the official story:
http://www.csurams.com/sports/m-footbl/spec-rel/082712aab.html Read the quote VERY carefully:
Channel 20-KTVD is one of the networks of Denver's NBC affiliate 9NEWS, the top-rated station in the nation's 17th largest media market. All games televised will be carried live over-the-air by Channel 20 covering their Colorado broadcast footprint via satellite on Dish and DirecTV and on cable through Comcast.
I don't know how old you are and what kind of deals Cal had with the media before the Pac-12 Network stuff came about but this is the same way that helped convert me from a Sooner fan to a Buff fan as a young kid and that was the ability to watch CU games above the air back in the late 1980's. All it took was the 1989 CU-Nebraska game to win me over and I was still smarting over the Huskers beating the Sooners the previous year (1988). I don't care about the production values...I want to see my team play and CSU fans can do that (good for them) and at the same time there are many 6-12 year old kids in Colorado who hasn't declared their loyalty to either school just yet. And for the out-of-state CSU fans & alumni, they get to show their kids a part of who they are and what kind of exprience they had in their lives. If I was in the same boat today, I'm not sure if I would end up being the CU fan that I am today. The old Big 8 was a very regional conference back then just like the MWC is today.
Given that a lot of Colorado kids come from Florida, California, and Texas these days, exposure cannot be underestimated at all. Like I said about being an OU fan back then, I came from Texas to Colorado. I know TOO well how important exposure is to non-alumni such as myself. The Pac-12 and Comcast is not doing CU any favors right now in the exposure department and that I why I am upset with both the conference and Comcast. There is only a limited amount of time for CU to convert such fans and once they get to a certain age, they decide on their school's loyalty. If it wasn't for CU's local deal back then, I would still be an Oklahoma Sooner fan due to my family.
And while you are right about CSU picking up the production costs,
$60 to 70k per game is small potatoes when it comes to exposure for the school.
http://www.coloradoan.com/article/20120824/SPORTS/308240033/11-CSU-s-12-games-fall-will-televised CSU still can offset those costs by selling advertising and you bet CSU will be advertising their academics to prosepctive students and giving alumni that tingling feeling to give back to their school. CU's Benson has talked a lot about last year's USC-CU game which was the only game on ESPN that night and what it did for exposure to CU.
The money is nice but exposure is still a pretty big deal if not a bigger deal than money.