Blog Entry

How the Pac-12 mega-deal went down

Posted on: May 13, 2011 12:32 pm
Edited on: May 13, 2011 12:32 pm
 
Posted by Chip Patterson

Pac-12 commissioner Larry Scott figured that the conference's new television negotiations would last well into the summer. With all the major players making their pitch, the process did not appear to be moving rapidly at all. That all changed when ESPN's John Skipper reached out to Fox's Randy Freer about a partnership to win the Pac-12 television rights away from NBC/Comcast. Until late April, Comcast appeared to be the leader in the race - offering the Pac-12 a package that would pay $225 million annually and broadcast on Versus and NBC. The Sports Business Journal detailed how the unlikely partnership came about.
However, Skipper, ESPN's executive vice president of content, was intrigued. Not only would a joint effort increase the bid, it would keep Comcast from picking up rights to a BCS conference. It had just bid $187 million per year to win the NHL rights and wanted to add to that with a Pac-10 acquisition. ESPN and Fox wanted to stop that momentum.

So Skipper called Freer to talk about a joint bid. Freer, Fox Sports' co-president, was interested. Other than CBS's deal with the SEC, Fox and ESPN control the football rights to every BCS conference, and a familiarity was there.

"We have historically worked with ESPN on sublicensing games and events to them and from them," Freer said. "This was done at the conference's request to see if more value could be created for the conference."

They agreed to meet on April 28, when Skipper and John Wildhack, ESPN executive vice president, flew across the country to meet at the Fox lot in Los Angeles. The ESPN duo met with Freer, Fox Sports COO Larry Jones and Karen Brodkin, senior vice president at Fox Cable Networks.

"Neither side looked at this as a way to try and do a land grab," Wildhack said. "Fairly quickly, both of us found that we had a lot more in common than not."

Over a seven-hour meeting that day, they came up with a bid that would split the rights — 22 football games each — and pay the Pac-10 a whopping $3 billion over 12 years, or $250 million a year. The deal would blow past Comcast's best effort, which eventually rose to $235 million. Last week, Comcast's Brian Roberts told CNBC that his company did not land rights to the Pac-10's TV package because it was "financially disciplined."

The two media giants moved quickly to get the deal done, and Larry Scott freed up some time in his schedule this summer. The interesting take here is the value of the Pac-12, which previously was earning $54 million annually as opposed to the $250 million in the new deal. Clearly the demand for the conference's athletics, particularly football, has grown beyond the West Coast.

As the gap between time zones continues to shrink due to interactivity, the "East Coast Media Bias" will slowly diminish as well. Seeing the moves made by two huge media organizations in order to secure this growing audience is an alert that the Pac-12 plans to continue their rising growth in popularity. College football may not have the lengthy past on the West Coast, but they are making up for it in the present.
Comments

Since: Nov 19, 2006
Posted on: May 14, 2011 9:20 am
 

How the Pac-12 mega-deal went down

My sincere hope for the Pac 12 is that the Conference gets the exposure that it so desperately needs.  Believe it or not, there actually are Universities in the Pac 12 that field a football team and are not named "Southern California".  This past season, the Pac 10 placed two teams in BCS Bowls, for only the second time.  One cannot forget how a 10-1 Cal team was snubbed back in 2004, or how a 10-1 Oregon team was snubbed in 2005.  By expanding their viewing audience, the Pac 12 can hopefully rid itself of the obvious anit-Pac 10 bias that it has suffered through for so long.


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