Estimated read time: 8-9 minutes
It became a running joke among some of the Pac-12 Conference sports information directors over the years. They'd travel to Las Vegas for the conference basketball tournament, check into the team hotel, flip on the television, and find that the event itself wasn't available to watch.
The Pac-12 was welcome.
The Pac-12 Networks were often not.
This week marks the 10th anniversary of the launch of the conference's seven-feed television network. A lot has been written about what went wrong, and the exorbitant cost to the conference. But nobody has offered what should be done to fix the Pac-12 Networks.
I reached out to several insiders, executives, and former network employees, who spoke on the condition they not be identified. I also consulted with Bob Thompson, the former president of Fox Sports Networks, and asked what he'd do to fix the Pac-12 Networks.
Said Thompson: "I think the network looks great on air and they've done some great things. Unfortunately, the business strategy was an unmitigated disaster that was destined to fail because of the lack of experienced network operators."
Larry Meyers is the Pac-12 Networks' executive vice president in charge of content. He has a solid reputation and loads of experience. He came to the Pac-12 in 2018 and previously worked in programming for Time Warner, the Tennis Channel, ESPN, Fox Sports and the NBC Olympics.
Meyers is not the problem.
Nor is Pac-12 Networks president Mark Shuken, who arrived five years after the launch. He inherited a costly operation that included a "national" feed plus six "regional" networks. That set-up was designed to amplify and promote the Olympic sports offered on the conference's 12 campuses.
Said one Pac-12 executive who was present at the launch: "The Pac-12 Networks weren't supposed to make a bunch of money. From inception, we were designed to provide exposure for the sports who don't get any coverage. It was never presented that the networks would ever generate the type of revenue we're seeing with the SEC Network and Big Ten Network.
"Over time, that directive changed."
Lydia Murphy Stevens, the president of the Pac-12 Networks at the launch, declined comment for this piece. But members of her team are adamant that the directive presented by then-commissioner Larry Scott in the summer of 2012 was less about generating revenue and more about keeping his bosses happy.
Said Thompson: "If the goal was to not make money, they certainly achieved that."
Scott sold the university presidents and chancellors on the idea that the networks would cater to their campuses and put a spotlight on sports that received little traditional coverage. Each of the operation's six regional feeds would focus on two conference members. Oregon and Oregon State, for example, shared one regional feed. So did the Arizona schools, the Bay Area members, and so on.
The model was ambitious and put an incredible amount of stress on the Pac-12 production staff. It also significantly raised costs, but the Pac-12 Network's mission was to air 850 live sporting events every year.
In fact, it was in writing.
"That 850 number was in the contractual agreement with the early carriers and that's where the conference got the money to launch the networks," said the insider.
The networks struggled to get distribution. The Pac-12 Networks weren't available, for example, on DirecTV and with a number of other prominent carriers. It became a source of frustration across the conference footprint. The networks also became a money pit. Scott's contract wasn't renewed last year and the Pac-12 CEO Group hired George Kliavkoff to replace him as commissioner.
The Pac-12 Networks are his problem now.
What can be done to fix it?
Reduce the number of feeds
Seven feeds is overkill. The transmission costs and overhead are too high. Bob Thompson, the ex-Fox Sports Networks head, said, "They should consider consolidating to a single feed that has a fair representation of the remaining 10 schools. That would result in a stronger national feed that would appeal to viewers across the conference's footprint on 'expanded-basic' and outside the territory on some sort of optional tier."
It's a model that worked well for the Big Ten Network, the ACC Network and the SEC Network. Per Thompson, having one feed may be the Pac-12's only shot to secure carriage on DirecTV.
"A single feed will also be important in continuing to receive carriage in the Los Angeles DMA," he said.
Create a new digital offering
The Pac-12 Networks currently produces 850 events a year. Those events are split between the national feed (350 events) and those six regional feeds (500). Currently, the networks that showcase the Big Ten, SEC and ACC produce 1,500 to 1,700 total events a year. Those conferences have a larger number of teams, but still. That's a lot of content to monetize. Some of those events run on the respective conference networks, others air on digital platforms.
Thompson proposes that the Pac-12 should have a single network feed that airs 700-800 events a year and create a digital offering with another 600-700 events. That would create a new opportunity for revenue and exposure.
Sell additional value to a high bidder
Commissioner George Kliavkoff finds himself in need of a home-run move. The Pac-12's media rights packages will be finalized and the distributions created from that are the lifeblood of the conference's athletic departments.
Kliavkoff told me a couple of weeks ago: "The Big Ten is going to set a number in their negotiation and we're going to draft off that."
He expects something to be finalized by the end of the year. Most believe we'll get some news sooner, perhaps in early September. The Big Ten's deal is estimated to be worth as much as $1.25 billion a year. This contract won't include inventory on ESPN. That network isn't partnering with the Big Ten on football and men's basketball games for the first time in 40 years.
As a result, ESPN has a full wallet of funds available to spend and is the most likely "Tier 1" partner for the Pac-12. It also badly needs inventory, particularly in the Pacific Time Zone. This made the conference members happy. But in order to maximize revenue, the Pac-12 still needs to carve out some additional value.
A potential Pac-12 Network digital package creates that opportunity. The conference should use it to create a new tier of rights that could appeal to a streaming service such as Amazon Prime, AppleTV+, ESPN+ or Peacock.
Said Thompson, "For the Pac-12 to maximize its take from media outlets, it will need to continue to embrace linear broadcast and cable networks, maintain the Pac-12 Network… and carve out a new package of events that would be exclusive to a streaming service."
Find a partner for the Pac-12 Networks
Ex-commissioner Larry Scott showed up at the conference championship football game in 2018 and famously pointed out that the Pac-12 wasn't just a football conference.
"We're a media company," Scott announced.
He was mocked for it — justifiably so.
The Pac-12 needs to get out of the media-company business. Or at least partner with a legitimate media company that knows what it's doing. The conference's network needs a partner to help leverage distributors to carry the channel. Also, having an experienced media-world partner can help resolve all sorts of distribution issues.
Said Thompson: "Overhead related to a number of areas — technical, production, and operational — could be reduced, as the media partners have the ability to combine with other existing operations."
Get real with itself
The product often looks great on air. It's probably the most painful part of the tale of the Pac-12 Networks. The on-air talent is gifted. The producers, directors and support staff are all industry experts. The content was never the issue.
The business model was a flop, though.
The initial carriers (Comcast, Cox, Time Warner and Brighthouse) locked the Pac-12 into the contract that required 850 live events and seven feeds. They had to know DirecTV would never go for carrying it all. The conference jumped at the deal and took the money anyway.
Said Thompson: "That singular decision doomed it to failure. If they had a media partner that would've never happened. Clearly, they did not understand how distribution deals are negotiated."
Kliavkoff previously worked at NBC Universal and was at Hulu when it launched. Anyone paying careful attention knows what the Pac-12 presidents and chancellors were thinking when they hired Kliavkoff last summer. He's familiar with the space they need to play in. But are the bosses willing to get real with themselves about their new reality?
USC and UCLA are gone in 2024. The Big Ten and SEC have landed on The Moon with their new media-rights' revenue deals. The Pac-12 isn't a media company. At least not a good one. And the competition is threatening to pull away.
Should the Pac-12 expand by one university?
Certainly, San Diego State and the 1.1 million TV households in its footprint are interesting from a television-programming standpoint. Also, SMU and the potential to get into Texas may have some appeal. How about Fresno State? And Boise State? Or UNLV? Anyone else out there worth poaching? Bottom line — the conference should only expand if the additions justify additional media-rights value. That's the calculus right now.
Only two members of the current group of conference presidents and chancellors (ASU and UCLA) were present when the Pac-12 Network was launched. They must know what has to be done. The network has done some nice things for non-revenue generating sports, sure. But, the conference needs to let go of the Pac-12 Networks.
Maybe someday we'll all actually get to see it.
Read more of columnist John Canzano exclusively at JohnCanzano.com.