Tag: Pac12

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Pac-12 media rights deal on hold as league awaits resolution on UCLA’s Big Ten status from regents meeting

Pac-12 media rights deal on hold as league awaits resolution on UCLA’s Big Ten status from regents meeting

The Pac-12’s long, winding road toward long-term security was never supposed to last this long. It is mid-December, and the league still must wait on the conclusion of Wednesday’s University of California system regents meeting to proceed in its media rights negotiations.

Almost six months after news broke of USC and UCLA departing for the Big Ten in 2024, the league still has not reconfigured. While it is considered almost a formality by some that UCLA will ultimately be allowed to join the Big Ten, the regents’ concerns dragging the process out this long has added a layer of skittishness to the proceedings.

“It has significantly impacted the timeline,” Pac-12 commissioner George Kliavkoff said last week at the SportsBusiness Journal Intercollegiate Athletic Forum in Las Vegas. “The regents have delayed a couple of times that decision. We’re not going to do a media rights deal before that decision. So, that puts you in the second half of December. Media takes the second half of December off, as you guys know.”

On Nov. 17, the regents announced a special meeting Wednesday that will result in “a final determination regarding UCLA’s intention to join the Big Ten.” In essence, the Pac-12 can’t proceed until it — and its media rights partners — know who will be part of the league.

A source familiar with the hearings told CBS Sports there is a “2{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} chance” UCLA is compelled to stay in the Pac-12. And one person intimately involved in the process speculated, if UCLA is forced to stay in the Pac-12, the Big Ten would then poach more teams from the Pac-12 (Oregon? Washington?) in order to fulfill its media rights contract finalized in August. That deal is the highest valued of its kind nationally at $1.2 billion per year.

Either way, what will be left for the Pac-12 in terms of money, visibility and viewership is up for debate. A deal heavy on streaming is expected. The problem with the emerging technology is that streaming giants haven’t fully latched onto live sports programming just yet.

“It’s a demonstrated fact that, when you go from traditional TV to streaming exclusive, you’re going to take a little bit of a haircut,” Fox executive vice president Mike Mulvihill told the SBJ audience last week. “The people on the conference side and the league side who control these rights have to weigh that revenue opportunity that might exist with a streamer against the loss in average viewership.”

CBS Sports already has reported on the implications now that the Pac-12 is last in line among the Power Five conferences to land a media rights deal in this cycle. It will be more about who will see those Pac-12 games beginning in 2024.

One industry source expressed concern over the “depressed” digital market. That may be reference to reports of Amazon and Google laying off tens of thousands of employees in the coming months.

Earlier this year, Netflix co-CEO Ted Sarandos discussed taking a shot at live televised sports: “I’m not saying that we’ll never do sports, but we’ll have to see a path to growing a big revenue stream and a great profit stream with it.”

Industry insiders suggested the Big 12 was able to cut in line ahead of the Pac-12 for its media rights deal because of the depth of the conference without Texas and Oklahoma. Over the last two seasons, Oklahoma State, Baylor, TCU and Kansas State have played in the conference title game.

On the other hand, Pac-12 excellence has been concentrated at the top lately with Oregon and Utah each splitting the last four conference titles. In essence, the value of getting second, third and fourth picks from Big 12 inventory allowed more freedom and profitability than getting smaller Tier 1 (top games) inventory from the Pac-12.

The question remains: Will streaming tech giant go all in on that Pac-12 inventory without USC and UCLA involved? There is no doubt streaming will come in the future. It is where we all are going to consume the majority of televised events in coming years.

But how soon? Coaches and administrators everywhere are concerned about going too heavy into streaming at the moment amid concerns about recruiting and visibility. That’s one reason Big Ten commissioner Kevin Warren was urged by members not to pursue California, Oregon, Stanford and Washington earlier this summer.

Mulvihill pointed out that Amazon has capitalized on its “Thursday Night Football” deal with the NFL by getting games televised in the local markets of participating teams. That and NFL infrastructure allows those games to be seen in bars and restaurants.

It is highly doubtful the Pac-12 would allow its streaming content to be seen free on linear TV (cable, broadcast) in local markets. That’s the idea of streaming: gaining subscribers who have to pay a monthly fee.

“If you’re another professional league or college conference and you’re thinking about going streaming exclusive, you’re probably not going to have that distribution,” Mulvihill said. “… It’s going to make a big difference.”

The Pac-12 isn’t expected to go streaming exclusive. In fact, from the beginning, it was thought ESPN would be interested in the Pac-12 to fill a void that exists in its “fourth window” — the late-night broadcast space following primetime games.

The current situation may be resolved by UCLA simply cutting a check to Cal — its UC system partner — each year. UCLA’s all-in figure from the Big Ten may be as much as $100 million annually. In a new deal, the Pac-12 would get significantly less than half that number.

Kliavkoff was among those who suggested, because the Pac-12 is last in line, there is no urgency. (The current deal with ESPN and Fox expires in 2024.) In fact, he said it was an advantage negotiations were delayed this long allowing Deion Sanders to join Colorado.

“He absolutely adds value [to the conference],” Kliavkoff said.

Big 12 commissioner Brett Yormark reiterated at SBJ that his conference is interested in expansion. That could be the reported pursuit of a basketball-only deal with Gonzaga or continued interested in Pac-12 schools.

Yormark has expressed a desire to be in all four time zones to enhance his conference’s reach. Either option would satisfy that want.

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Pac-12 in danger of eventual collapse as Big Ten considers further expansion, Big 12 interest looms

Pac-12 in danger of eventual collapse as Big Ten considers further expansion, Big 12 interest looms

The Big Ten’s continued pursuit of four Pac-12 schools is leading to concern that another round of expansion could collapse the Pac-12, industry sources tell CBS Sports. This as Big Ten commissioner Kevin Warren continues to seek an offer from Amazon, or potentially another partner, for additional Big Ten football media rights revenue.

An offer deemed substantial enough would likely convince Big Ten presidents that California, Oregon, Stanford and Washington would be valuable additions to the league from the Pac-12. That figure is believed to be less than $100 million annually.

If the Big Ten makes such a move, it would almost certainly increase the likelihood the Big 12 is able to get some combination of Arizona, Arizona State, Colorado and Utah from the Pac-12, thus crushing the Pac-12 and hanging Oregon State and Washington State out to dry.

“If that [Big Ten move] happens, I think the other [four Pac-12] schools will want to jump to our league,” said a Big 12 source familiar with the situation.

Without a clear mandate, Big Ten presidents and athletic directors continue to evaluate whether expansion is “financially viable” and potential candidates are a “cultural fit,” conference sources tell CBS Sports. No vote has been taken on expansion at this time.

The Big Ten completed a historic media rights deal last month worth more than $8 billion over seven years beginning in 2023. Amazon reportedly bid more for the Big Ten’s 3:30 p.m. ET and primetime windows compared to other suitors. Those windows went to CBS and NBC, respectively.

If the Big Ten indeed turned down such an offer, the concerns were likely distribution and visibility. Those same concerns would be in play if the Big Ten accepted the four additional Pac-12 schools.

Industry chatter has Oregon State and Washington State moving to the Mountain West if the Pac-12 collapses. At that point, the MWC would replace the Pac-12 as the largest FBS conference completely located in the Mountain and Pacific Time Zones.

Adding to the intrigue, the Big Ten and Big 12 share the same media rights consultant, Endeavor, a global sports and entertainment company.

CBS Sports reported last month Endeavor was advising the Big 12 about whether it should add Pac-12 programs. Earlier this summer, CBS Sports reported the Big 12 was interested in the aforementioned “Four Corners” programs.

Since then, officials from Oregon and Washington have met with the Big Ten, according to multiple media reports. Earlier this month, Big 12 commissioner Brett Yormark said, for the first time publicly, he was interested in expanding to the Pac-12 footprint.

“Obviously going out west is where I would like to go — entering that fourth time zone,” he told The Athletic.

Whether the Big Ten expands again, the Big 12 is expected to remain interested in either two or four Pac-12 schools.

The potential for further realignment — following the migration of USC and UCLA to the Big Ten — has caused disruption in the industry.

Pac-12 commissioner George Kliavkoff told CBS Sports in July: “Let’s be very clear: No Pac-12 school is joining the Big 12.”

Publicly, the remaining 10 Pac-12 schools have showed a united front. The league moved up negotiations for a new media rights deal in July. The difference is the Big Ten already has its new deal in place. Signed in August, the media rights agreement further solidified the Big Ten’s top spot in earnings. Beginning in 2023, Big Ten schools are expected to earn an average of $75 million annually.

Meanwhile, the current Big 12 deal with Fox and ESPN doesn’t expire until 2025; however, the Big 12 opened media rights discussions with its partners early and hopes to strike a deal earlier and richer than what the Pac-12 can acquire. The conference reported $46.2 million distributed to each of its schools in the last fiscal year. That includes Oklahoma and Texas, which are due to move to the SEC in 2025 at the latest.

Industry sources value a 10-team Pac-12 at $21 million to $30 million per school annually after the loss of USC and UCLA. The Pac-12’s deal with Fox and ESPN expires in 2024.

The possibility of a merger between the Big 12 and Pac-12 was ruled out in July. Any combination of Big 12 and Pac-12 programs would not result in a significant revenue increase compared to those teams remaining with their conferences, multiple industry sources stated repeatedly over the last few months.

Big 12 sources pushed back at that assertion saying the league’s next media rights contract — including newcomers BYU, Cincinnati, Houston and UCF — will reflect an increase from the current deal.

It is believed the Big Ten’s current rightsholders, Fox and ESPN, remain opposed to the conference expanding further. It is in the best interests of both networks for there to be a Pac-12, if for no other reason than cost certainty. After losing out on the new Big Ten deal, ESPN aims to acquire games that can be played in the “fourth window” — after 10 p.m. Fox already has games in that window through its agreement with the Mountain West.

As the Big Ten’s primary partner, Fox would likely consider four additional Pac-12 schools “dilutive” to the Big Ten product. Opponents of Big Ten expansion continue to scratch their heads wondering how Cal, Oregon, Stanford and Washington can bring enough value to the conference.

The answer? They don’t. At least at first glance. However, Warren’s play may be to get in on the ground floor with Amazon during a time in which when streaming is further catching up with linear cable. That hasn’t happened yet despite Amazon’s NFL ratings success this season with “Thursday Night Football.”

Adding four more Pac-12 schools would result in expanded Big Ten content, giving the conference approximately 112 games annually. Amazon, or the newest media partner, would likely get the fifth, sixth or seventh pick of a Big Ten home game each week.

One industry observer compared the level of potentially available content equal to what is currently shown weekly on the Big Ten Network. Think about games like California vs. Rutgers, Northwestern vs. Stanford and Oregon vs. Indiana. (As CBS Sports reported last week, the newest media partner would not get any games involving Michigan, Ohio State or Penn State.)

A different industry critic stressed there is no strategic reason for the Big Ten to expand further. In fact, that person thought expansion might invite lawsuits from slighted programs and possible scrutiny from the federal government.

If the Big Ten and/or Big 12 make a move for Pac-12 programs, the potential collapse of the Pac-12 could come amid FBS commissioners expanding the College Football Playoff. SEC commissioner Greg Sankey is among those who have advocated for CFP expansion to make the sport more of a national game.

The Pac-12 has participated in the CFP only twice in eight years.