FISCHER: Pac-12 Networks worth the interest

SAN FRANCISCO -- "So, do you agree with what your colleague wrote?" asked an inquisitive Pac-12 Enterprises staffer after the conference's network launch last week.

The colleague in question was senior writer Dennis Dodd, who wrote on the day of the networks' launch to taper down the enthusiasm. Although we often see eye-to-eye, after taking a tour of the facilities and seeing what's to come, I can't help but disagree.

To start with, long-term profitability is indeed assured. Thanks to the agreements signed with Comcast, Cox, Time Warner and Bright House cable networks, the Pac-12 launched without any cost to the schools and have a profitable economic baseline regardless of the ad revenue that comes in.

"It is incredibly rare, if not never happened before, where you launch a new network -- of any kind -- and especially unheard of as an independent, and you do a long term affiliation agreement with a cable operator one year prior to launch. And we did four of them," said Chris Bevilacqua, the Pac-12's media advisor. "They had never aired an event, which shows you the Pac-12 had incredibly powerful content and the distributors respected that and wanted to have that relationship with the conference."

The distribution -- already on three of the five largest operators in the country -- will continue to grow. DirecTV is likely to carry the national network sometime around the first week of the season to give them a fourth. According to the San Jose Mercury News' Jon Wilner, the groundwork is already being laid. The Pac-12 is ahead of where the Big Ten (10 million subscribers at launch) was in the grand scheme of things and, because they have significant football and basketball games they can air, it won't be too long before most operators carry the channel(s) in some form.

Thanks to large, long-term deals with Fox and ESPN, the Pac-12 will also receive more exposure on those two platforms than ever before. Gone are the days of regional games where only a certain part of the country had a game from out West. Add in the fact that there will eventually be distribution to the very large market in China (oh yes, it will happen), and this isn't your father's forgotten Pac-10 of USC and nine dwarfs. Ask somebody about the Pac-12 in the South or on the East Coast and most will at least have a comment on Oregon's uniforms or, 'Hey Mike Leach is at Washington State!'

What's different about the folks at Pac-12 Enterprises is that they are people from the latter (i.e. enterprises) and not the former. There are a few folks from the league office, of course, but the vast majority have come from startups, television networks and various other fields -- this is not an operation staffed with people who came up in athletic departments but those that came up with a deep understanding of innovation and not settling for the status quo. Yet, at the same time, they are also folks that know this isn't all about maximizing revenue (though they'll undoubtedly want to) it is about telling the league's stories.

"I can't speak for other conferences but I do think we have a bit of a unique view here and a bit of a longer view in that content is not a television show. I think we understand that there is so much content that is at those 12 institutions around so many different thing," Pac-12 Enterprises CEO Gary Stevenson said. "Our job is to figure out how to put the structure together, which is what we're doing here. Eventually, with six regionals and digital and us doing the 12 school websites just think of the content that will come."

Because they're not beholden to another controlling interest, they can focus on what matters to them on a regional and local level instead of what a suit in Los Angeles or Chicago or Miami or New York might want. That matters tremendously.

"The first day I took this job, the most important thing to me was that we start on building a culture and hiring the right people. If you do that, you can succeed. I think we've done that and that's probably what I'm proudest of," Stevenson added. "I think we've built a feeling and an energy and a culture of collaboration here. You see the way the digital and production teams work back and forth. At most companies, it's like the Hatfield's and McCoy's."

"We all came onboard collectively with the aspiration of doing our very best and bringing the conference brand to life. If by, doing that, we happen to be number one, that would be icing on the cake," Lydia Murphy-Stephans, the General Manager of the Pac-12 Networks, said. "We want to be the best but let's not lose sight that it's collegiate sports. We're showcasing student-athletes and they have really interesting stories to tell. It wasn't to beat ESPN or beat Fox, or CBS Sports, it was how do we find the best platform and develop those platforms to provide the most exposure for the student-athletes."

The real key as to why the Pac-12 Networks and the larger enterprise venture is a big deal comes because of their built-in model. They understood that content is content and that fans -- of Pac-12 teams and college sports in general -- should be allowed to consume how and when they want. The Pac-12 also knows that the fan in Washington is different from the fan in Southern California and will guide their regional networks to suit each.

"In L.A., the idea of having a network with heavy USC and UCLA influence is very appealing for Time Warner. The same for Comcast, having a network in the Bay Area that's heavy Cal and Stanford, very appealing," Larry Scott said. "The idea really came, it was kind of co-designed, by the cable partners we talked to and our media advisors kind of cooked it up."

"I can't tell you how many companies I've talked to in the past two years that say they don't buy television anymore. They only buy digital and it's only digital when it's very targeted because they know that's their specific audience," said Stevenson. "The business proposition for us is to be able to say to a company that you can reach males in Los Angeles for this month and if you want to do a promotion to reach females in San Francisco for this month (you can do that with us). The ability we have to target markets and local or regional on all screens is to us going to be interesting when we talk to the corporate world."

That's the secret to what the folks in the Bay Area are doing. They've thought about how to better serve their fans now and take care of the advertisers today and tomorrow. The Big Ten Network and others will evolve but they can't get as hyper-local as what the Pac-12 can. And because they have a direct relationship with the cable companies, they'll know who each person is with their billing profile on hand. It may sound scary to some but it's what the Apple, Google and wireless providers have been doing for some time now. The Pac-12 took what the tech world was doing and applied it not just to television, but to all of their content. Their thinking seems to be five years ahead of any other college conference.

What will be interesting to see is how the media landscape shakes out and if Pac-12 Enterprises steers clear of head butting others. In their electronic guide, they'll eventually provide streaming links to other services like WatchESPN. At some point however, one wonders if ESPN and Fox see the Pac-12 not as helping promote the brand but puling viewers away. When dollars and cents start to get taken away, that's when things could get dicey. At the end of their 12-year first/second tier deal, perhaps the conference will simply bypass another step in the process and take an even bigger bite out of the pie. The Mtn. tried and subsequently went off air this year for doing much the same thing.

"It's interesting because we're both partners and we're both competitors," Murphy-Stephans said of ESPN/Fox. "We're partners because it's very important to us how they showcase the Pac-12 and the exposure they give to the conference and its student-athletes. On the other hand, we're running a network and we want the best games on the Pac-12 Network. There's a selection process to ensure that yes, they get great games for football and men's basketball, but so do we. There's some jockeying going on. I would say we're collegial and competitive."

It will be an interesting venture to follow over the coming years. The SEC will launch their 'Project X.' The Big 12 will do something and The Longhorn Network will stick around in some form. The bottom line, as Dodd mentioned last week, is get ready to open your wallet. At least we'll all be able to watch Rich Rodriguez and Mike Leach when it's 45-45 in the 3rd quarter.

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