The ESPN/Fox Contract

As a student at USC and an avid college football fan, I find myself very intrigued by the new, innovative changes taking place in the Pac-12 Conference. Ever since Larry Scott, the current commissioner of the Pac-12 Conference, took over the conference in 2009, he began to treat the Pac-12 like a business rather than simply a collegiate athletic conference. Scott said that the Pac-12 “didn’t look at itself as a league, they looked at themselves as this sort of governing body that was responsible for rulemaking” (Greenfeld). “Scott recognized the conference’s potential. These were successful academic institutions with gigantic fan bases and top-tier athletic programs. He believed the conference’s TV rights, which were due to be renegotiated in 2011, presented an opportunity not only to close the gap with the other power conferences but potentially to pass them” (Greenfeld). Through these blog posts, I will highlight and analyze the measures Scott has taken to increase the Pac-12’s profits and heighten exposure of the conference both nation-wide and worldwide.

On May 4, 2011, ESPN.com reported that the Pac-12 Conference, under Scott’s leadership, “has agreed to a 12-year television contract with ESPN and Fox that will more than triple its media rights fees and be the most valuable for any conference in college sports. The contract, which will begin with the 2012-13 season, will be worth more than $225 million per year -- or $2.7 billion over the life of the deal, Sports Business Daily and The Associated Press reported on Tuesday.” (Miller). Furthermore, each school in the conference is expected to receive $20.8 million dollars a year (Gaines).

Thus, the Pac-12 Conference now has the largest media rights contract of any major collegiate athletics conference. Here are the earnings per year for each major conference:

• ACC - $155 million
• Big-12 - $130 million
• SEC - $205 million
• Big-10 - $220 million
• Pac-12 - $225 million (Miller)

With this deal, the Pac-12 went from dead last in athletic conference media earnings, to becoming the golden standard on how to package a conference’s television deal. So, what does this new type of money mean for the schools competing in the Pac-12 Conference? It means the athletic departments of Pac-12 schools now have more money to spend on it’s coaching and facilities. Because of the new media deal, many Pac-12 schools have decided to use the money to upgrade their football coaching staffs. There were four Pac-12 coaching changes made this offseason, and each new Head Coach is making significantly more money than his predecessor. Here is a comparison between the salaries of each school’s former coach and new coach:

• University of Arizona: From $1,456,000 to $1,910,000
• Arizona State University: From $1,503,000 to $2,000,000
• UCLA: From $1,285,000 to $2,400,000
• Washington State University: From $600,000 to $2,250,000 (Miller)

However, the media deal has really affected the smaller Pac-12 schools the most because “[…] for programs with smaller budgets, like Oregon State, Washington State and Utah, it also means a more level playing field with schools like Oregon, which has a generous booster in Nike co-founder Phil Knight, and USC, which has a self-sufficient athletic department and lots of national TV exposure” (New Pac-12...). Before the deal, Utah’s athletic budget was half of Oregon’s (New Pac-12...). However, with the new media money, Utah and the other smaller Pac-12 schools are now on a much more even playing field with the rest of the Conference. Here are Utah’s immediate plans on how to spend their new revenue, according to the University of Utah Athletic Director, Chris Hill:

• "A football center, modestly planned at around $16 million, will now have a few extra touches, bringing the cost to $30 million. Hill said that overall the [Utah] Utes will focus on closing the gap in facilities, for student support services and for attracting — and keeping — quality personnel" (Miller).

In addition to strengthening existing sports, some Pac-12 Universities are planning to use their new revenue to add new sports on campus. For example, Oregon State is hoping to “revive a full track program with the additional funds […] Oregon State has already brought back a women's team and is building a new track. Some football players have competed in meets. But the reinstatement of a full track program won't happen until the sport can be fully endowed […] Still, proponents are hopeful it will happen by 2014” (New Pac-12...).

Obviously, this new revenue stream is a game-changer for the Pac-12 Conference. Once notoriously known as a conference that cannot compete with the more sports-oriented conferences such as the SEC and Big-10, the schools in the Pac-12 will now be able to compete with the “big boys” of collegiate athletics. University of Arizona Athletic Director, Greg Byrne says it best, when he states, "It is a historic deal for the conference and our university […] It gives us a much-needed revenue stream and at the same time improves our ability to compete on a national level for many years to come" (Miller).

Works Cited

Gaines, Cork. “The $3 Billion Pac-12 TV Deal Is A Windfall For Two Lucky Schools Read more: http://articles.businessinsider.com/‌2011-05-05/‌sports/‌29970677_1_pac-12-pac-10-current-tv-deals#ixzz1qtusQB34.” Business Insider. N.p., 5 May 2011. Web. 2 Apr. 2012. .

Greenfeld, Karl Taro. “Head of the Pac.” Bloomberg Businessweek. N.p., 15 Dec. 2011. Web. 2 Apr. 2012. .

Miller, Ted. “Four new coaches highlight Pac-12 spring.” ESPN. N.p., 23 Feb. 2011. Web. 2 Apr. 2012. .

“New Pac-12 TV deal a boost for league’s smaller schools.” Oregon Live. N.p., 30 Nov. 2011. Web. 2 Apr. 2012. .

The Pac-12 Network

A few months after Pac-12 Commissioner, Larry Scott, announced the new Pac-12 media deal with ESPN and Fox, Scott unveiled the Conference’s next step to generate significant revenue: it’s own Conference Network. On July 27, 2011, it was revealed that “Beginning in August 2012, the Pacific 12 Conference will offer one primary national channel and six regional channels matching up teams paired in the same area (USC and UCLA, for example) that will televise 350 events annually on the main channel and 500 more regionally. So far the Pac-12 has signed cable providers Time Warner Cable, Comcast, Cox and Bright House to distribute the seven network channels” (Pucin).

Each of the six regional channels will be dictated by school rivalries. Thus, the six channels will include the following schools, respectively:

1. University of Arizona and Arizona State University

2. University of California-Berkeley and Stanford University

3. University of California-Los Angeles and University of Southern California

4. University of Colorado and University of Utah

5. University of Oregon and Oregon State University

6. University of Washington and Washington State University

“Scott said the regional networks such as the Southern California channel dedicated to USC and UCLA content would be carried on expanded basic cable and that the national network will probably be found on digital basic cable in Pac-12 markets and on digital sports tiers that require extra fees in the rest of the country” (Pucin).

Larry Scott insisted that “the conference will keep ownership of the Pac-12 Networks” (LA Times). Furthermore, he said "With this arrangement, every [Pac-12] football game and every men's basketball game will be available to a national audience on television” (Pucin).

The previous deal made with ESPN and Fox will work in cooperation with the Pac-12 Network. Luckily enough, Commissioner Scott spoke in my Sports Journalism class recently and I was able to ask him how these two separate deals will co-exist. There are several terms in this co-existence:

1. ESPN and Fox each get to pick 4 football games right off the bat which they wish to air instead of the Pac-12 Network
2. After that there will be a weekly draft of games, in which each television entity (ESPN, Fox, the Pac-12 Network), will rotate for which gets first pick. For example, in the first week ESPN might get the first pick of which game they wish to air. Then, Fox would get their pick, and then the Pac-12 Network would get the third pick. It would then go around in that order until all games were covered. The next week Fox might have the first pick, and the week after the Pac-12 Network might have the first pick.
3. The Pac-12 also agreed to play eight weekday football games next season, all of which ESPN and Fox get to air exclusively (except for one, which will air on the Pac-12 Network) (Scott).

While football games were clearly the biggest factor in this deal, since football is the major revenue sport in the college athletics, Scott told our class that he is most excited for how the Pac-12 Network will impact the non-revenue sports, such as men’s baseball, men’s tennis, and all women’s sports. Scott said that usually only college men’s football and basketball air on television, so the Pac-12 Network will grant unprecedented exposure for the non-revenue sports (Scott). It will be the first time that a USC Baseball fan, for example, will get to see the majority of USC Baseball games on television.

Besides airing the various athletic games of the Pac-12 Conference, the Pac-12 Network will also attempt to draw attention to the academic achievements of the Pac-12 Conference. In essence, “it sounds like the network is also serious about spotlighting academics. That doesn't necessarily mean televising a chemistry lecture, but rather spotlighting, say, a prominent Silicon Valley executive with a Pac-12 diploma.’ There's some very famous iconic personalities that have come out of this conference that we're going to tie in to this network,’ said Scott” (Mandel).

This new deal will give even more revenue to the Pac-12 Conference (and each of the schools in it), but no specific figure has been given as to how much money that will be. Thus, the schools in the Pac-12 conference will have yet another revenue stream to upgrade their facilities, hire new coaches, and start new athletic teams.

Works Cited

Mandel, Stewart. “Larry Scott, Pac-12 networks look to break sports media frontiers." Sports Illustrated. N.p., 15 Feb. 2012. Web. 2 Apr. 2012. .

Pucin, Diane. “Pac-12 Networks are coming.” LA Times. N.p., 28 July 2011. Web. 2 Apr. 2012. .

Scott, Larry. Class at USC interview. 28 Mar. 2012.

Pac-12 Going Overseas?

In previous posts, I highlighted the new media deals Larry Scott, the Pac-12 Commissioner, was able to negotiate. His television deal with ESPN and Fox, worth $2 billion dollars to the Pac-12 Conference, is the most expensive deal ESPN or Fox have ever signed with an athletic conference. In addition, The Pac-12 Network was equally as ground-breaking because this is the first time a Collegiate Sports Network will provide equal revenue sharing to the Universities in it’s Conference.

However, Larry Scott is not even close to being satisfied with what he has accomplished thus far, and is instead taking it upon himself to explore uncharted territories in terms of a new Conference revenue stream. Thus, Larry Scott is attempting to broaden the Pac-12’s media exposure to China.

In early December of 2011, Scott flew to China to meet with "various officials to put together a “road map” for a way to expand the presence of Pac-12 universities in China” (Thamel). “Scott said in a telephone interview Saturday that he expected the Pac-12 to play games in China in the next three to five years, and that he hoped the league’s cable network would someday be available there” (Thamel).

Several sports teams from various leagues and organizations, such as the MBL and NFL, have played games overseas, but it is believed that Scott is attempting to make “the first concentrated effort by a league to establish itself overseas. Pac-12 presidents and athletic directors say there is a strong desire for the results to transcend sports, hoping that an increased presence in China will lead to recruitment of future students and positive cultural experiences for their athletes who travel there” (Thamel).

When asked about the Pac-12’s potential media expansion into China in my Journalism 380 class, Scott said that ever since he took over the Pac-12 Conference as Commissioner, he kept hearing the Los Angeles is the gateway to the Pacific Rim. He said that tons of students from the Pacific Rim were making their way into Pac-12 Universities, most notably UCLA, USC, Cal, and Stanford. Notably, “Southern California president, Max Nikias, said his university had more international students than any other in the United States (more than 8,600 of U.S.C.’s more than 37,000). U.S.C., he said, has more than 25,000 alumni in the Pacific Rim” (Thamel). Thus, he thought that there is an untapped media market waiting in China.

Furthermore, the Pac-12’s tight-knit relationship with NIKE might make the move into China easier. NIKE is one of the most influential, powerful companies in China, and it helps the Pac-12 that NIKE Owner, Phil Knight, is an alumnus of Oregon (one of the twelve schools in the Pac-12. He is also an avid donor to Oregon, and “By the time Knight is done [donating to the Oregon] football facility, he will have spent more than $300 million transforming Oregon athletics” (Rosenberg).

The Pac-12’s ties to NIKE in its hopes to broaden its media base to China go even further, since “Scott hired Carrie Xu, who recently received a master’s degree from Southern California in sports business and marketing. Xu, who has worked for Nike in China on its basketball initiatives there, is the Pac-12’s senior manager/international, and is believed to be the first conference official hired to focus on overseas development” (Thamel). It is no coincidence that Scott hired Xu to head this surge into China. Scott knows that with the help of NIKE, he could really turn Pac-12 sports into a major presence in China. Just think about it: seeing Pac-12 athletes on billboard in Hong Kong and Shanghai with a NIKE swoosh next to them makes the Pac-12 an instantly credible commodity in China.

Furthermore, “The Chinese are intensely focused on the Olympics, Scott said, which blends well with a league that has athletes who have won more than 1,000 medals in its history. Scott said there could be a particular demand on the expertise of coaches and athletes in swimming, track and field, and volleyball” (Thamel).

In addition, “he saw other leagues having a hard time following suit” (Thamel). He expanded to say, “I don’t know if this is a model for every conference […] It’s unique to us. I don’t know if there’s a playbook for others to follow, as this is the vision and ambition of our presidents because of our unique and different assets.”

I believe Scott is right. The Pac-12’s number of Olympic athletes is far more than any other collegiate conference, which is appealing to the Chinese culture, but more importantly, the Pac-12’s relationship with NIKE makes this a very unique situation. Because of Phil Knight’s allegiances to Oregon, he wants to Pac-12 to succeed, probably more than any other conference. Bottom line: if Knight wants the Pac-12 to be a force in China, it will be.

Works Cited

Rosenberg, Michael. “Nike’s Phil Knight has branded Oregon into national power .” Sports Illustrated. N.p., 7 Jan. 2011. Web. 2 Apr. 2012. .

Thamel, Pete. “This Time, Pac-12 Expansion Could Be in Another Country.” The New York Times. N.p., 11 Dec. 2011. Web. 2 Apr. 2012. .