New Pac-12 TV deal shows the value of sports
The soon-to-be Pacific 12 Conference has the richest television deal in college history. And that’s no accident.
Rights fees for televised sports keep climbing, even in a challenging economy. Proof came Wednesday as Pac-10 Commissioner Larry Scott confirmed a new 12-year deal with Fox and ESPN that is estimated to be worth $3 billion.
Randy Freer, Fox Sports Networks president, said televised sports is getting to be the equal of entertainment programming.
“I think we’re all making a bet on the future where we believe college sports and sports in general is one of the leading lights of generating large audiences,” he said.
Chris Bevilacqua, who helped put the deal together, agrees.
“Over the past 10 years, we’ve gone from one 24-hour sports network to seven,” said Bevilacqua, a consultant with Evolution Media Capital, an affiliate of Creative Artists Agency. “The category of sports was incredibly undervalued.”
Each school will share equally in the revenue and will ultimately receive an average of about $21 million a year. Still to come, Scott said, is an announcement of a Pac-12 network, similar to what the Big Ten started in 2007. In addition, ESPN and Fox will hold a draft each season to pick their games. That won’t be televised. Yet.
“Watching the NFL draft,” Scott said, “we did have grandiose visions of televising the pick selection draft. We’ll see how that works behind the scenes first. We’re looking for a different kind of content, but we’re not sure that’s ready for air.”
Bevilacqua said the Pac-12, which changes its name officially July 1 when Colorado and Utah join the conference, was smart in deciding to split revenue equally. In the deal that expires at the end of this season, USC and UCLA, being in the nation’s second-largest television market, received a higher proportion of television revenue.
“Larry was smart in consolidating all rights and getting the unanimous support of all 12 teams for equal revenue sharing and also in creating real premium content,” Bevilacqua said. “One of the things holding cable TV together is live sports.”
USC Athletic Director Pat Haden has no regrets, despite the Trojans’ football history with their Heisman Trophy winners and 11 national championships.
“Overall this contract is terrific,” he said. “It’s great for all the institutions, good for USC.”
Haden also said it is not an option for USC to branch out on its own as, for example, Texas did. Beginning in August, Texas will have its own network on ESPN while still being part of the Big 12.
“I can’t wave a wand for us to be independent,” he said.
But AJ Maestas, president of Navigate Marketing, a Chicago-based firm, has a different view.
“If my client was USC, I would have asked for more money,” he said. “The conference could not possibly get this kind of deal without USC as part of it. If you, as a school, are trying to maximize your revenue, UCLA and USC left a lot of money on the table with flat revenue sharing.”
Scott also said the conference is creating Pac-12 Media Enterprises to manage and sell sponsorship and licensing rights. Under terms of the expiring agreement, Fox had the right to decide the site of the Pac-10 men’s basketball tournament, which has been at Staples Center. But Scott said it will now be the right of the Pac-12 to determine the location and other cities would be considered.
Freer and John Wildhack, an ESPN executive vice president, said their preference would be for the event to remain at Staples.
Under the new contract, ESPN and Fox will carry a combined 44 regular-season football games and 68 men’s basketball games and will alternate televising the Pac-12 football championship game and the men’s basketball tournament. Fox will have the women’s tournament.
Like Haden, UCLA Athletic Director Dan Guerrero is pleased with the deal even if some would argue that the big-city schools might deserve a bigger cut.
“We made a commitment to the conference and to remain a conference of solidarity,” he said. “The other option is to take your ball and play someplace else.”
The playing will be done, instead, on Fox and ESPN for 12 years.
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