Tag:Oprah Winfrey Network
Posted on: May 25, 2011 6:37 pm
Edited on: May 25, 2011 6:38 pm
 

Pac-12 may be looking at another $1 billion

WALNUT CREEK, Calif. -- The Pac-12's financial momentum isn't about to slow.

 Commissioner Larry Scott said Tuesday that the league's media arm could earn the conference an additional $1 billion over a seven-to-10 period. The previously announced Pac-12 Media Enterprises is a kind of holding company, according to Scott, that would bundle the league's new network, the digital rights and the conference's sponsorship and licensing (Pac-12 Properties).

 The expanded conference is just beginning to realize its total worth as it seeks to start its own network. The $1 billion would be separate from the 12-year, $3 billion rights fees deal the Pac -12 finalized with ESPN and Fox earlier this month. 

 "I can tell you this, based on offers people have made to us we've got at least a billion-dollar business we're sitting on," Scott told CBSSports.com. "That's just Pac-12 Media Enterprises."

 He later added:  "That is a broad figure that has been thrown out to us by media investors. That's a potential minimum value over a seven-to-10 year period."

 Dividing $1 billion among 12 schools could mean an additional $83 million is gross revenue total per school. Depending the on length of the deal, that means Pac-12 Media Enterprises alone could produce an additional $8.3 million-$11.9 million per year for each school. The schools already are guaranteed an average of $21 million per school in the ESPN-Fox deal.

 Stanford AD Bob Bowlsby seemed to confirm another pending windfall for the conference telling CBSSports.com that the network and digital rights "may be worth well into eight figures per year." He added, "Time will tell on that. We may know something in the next 90 days."

 Scott called Pac-12 Media Enterprises a "for-profit subsidiary of the conference."

 "I'm not running from it," he added, "but I don't want to leave the impression that our primary focus is financial."

 Scott, as well as industry insiders, is anxious to see the possibilities of the conference's network. The commissioner consulted with -- and gives a lot of credit to -- his peers at the Big Ten and SEC (Jim Delany and Mike Slive) who previously started similar ventures. All parties know the road to network profitability can be a long, hard slog. It took the Big Ten more than two years to realize a profit with its network. That was relatively fast for a start-up but no one knew in the beginning when that profit would come.

 The Pac-12 is seemingly better positioned because Scott negotiated rights to first-tier games in football and basketball for his network. In other words, the Pac-12 Network (or whatever it is called) will have first choice of the best games for its air.

 That situation will help with potential partners, distributors and advertisers. Scott said the league is still deciding how to deploy the network. First reports were that the Pac-12 would own it alone. That approach would maximize profits instead of having to share them with a partner. But Scott said several business models are still on the table.

 Scott even foresees a situation where the Pac-12 Network could be shown on an existing channel. He used the example of the Oprah Winfrey Network (OWN) replacing what used to be Discovery Health.

The digital possibilities, he continues to say, are limitless. There are 2,700 Pac-12 "events" available for broadcast each year according to Pac-12 TV consultant Chris Bevilacqua. To date, only 131 of those have been sold. Scott wants Pac-12 content on every device imaginable. There already have been discussions with Google as a possible partner.

 "It's hard to imagine now but I wouldn't be surprised that five-to-seven years from now we've got more fans on different devices other than TVs," Scott said.

 

 

 
 
 
 
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